Financially Prudent Bedtime Stories Part 6 of 7 [Goldilocks and the three bears]

Posted 9 May, 2019 by Clearly
in Finance, Just for Fun

Once upon a time, there were a family of three Bears, who lived together in a house of their own, in a wood. One of them was Baby Bear, and one was Mama Bear, and the other was Papa Bear.

Now, these were no ordinary Bears, but they fancied themselves to be trading and investment gurus. Instead of hunting rabbits or gathering berries like the other bears, this family made a living out of buying and selling paper assets.

They had each a bowl for their porridge; a little bowl for the Little Wee Bear; a middle-sized bowl for Mama Bear; and a great bowl for Papa Bear.


In addition to that, they each had a trading terminal for their own use; a little terminal for Baby Bear; a middle-sized terminal for Mama Bear, and a great big terminal for Papa Bear.

And they had each a bed to sleep in; a little bed for Baby Bear; a middle-sized bed for Mama Bear; and a great bed for Papa Bear.


One day, after they had made the porridge for their breakfast, and poured it into their porridge-bowls, they walked out into the wood while the porridge was cooling, so that they might not burn their tongues.

(They had time for a walk since the markets were not going to be open for another 45 minutes)

And while they were away a little girl called Goldilocks, who lived at the other side of the wood and had been sent on an errand by her mother, passed by the house, and looked in at the window. And then she peeped in at the keyhole and caught sight of the 3 bowls of porridge that were left unguarded.



It was all too much temptation for the little girl. So Goldilocks opened the door and set about helping herself.

First, she tasted the porridge of Papa Bear, but that was too hot for her. Next, she tasted the porridge of Mama Bear, but that was too cold for her. And then she went to the porridge of Baby Bear and tasted it. “Wow! It is neither too hot nor too cold, but just right,” exclaimed the greedy little girl and gobbled every last bit up.



Then Goldilocks caught sight of the 3 gleaming terminals that were set in the study room. Young (and somewhat criminally inclined) as she was, the little girl was actually a precocious trading genius. She knew a fair bit about equities, derivatives, pricing models, and general speculation/hedging techniques.

She sat herself down to Papa Bear’s Terminal and scrolled through his past trades.

“My! What an idiot! The fool is generating so many trades on a frequent basis, he is paying a tonne of dues via brokerage and commission charges,” she clucked her displeasure.

And it was true. Goldilocks knew that far too many novice traders feel that the mark of a good trader was to keep making trades. That agenda sits well with all brokerage houses since it was how they made their profits.


She leapt off the chair in disgust and climbed up to view the second terminal, belonging to Mama Bear.

“This is nothing short of lunacy, spreading all her trades out across 17 different sectors and 24 different industries,” she shook her head in disbelief.

Again, the girl knew what she was talking about. Diversification is great and all, but people have a nasty tendency to invest in businesses they knew nothing about. Fintech, Crypto, Biotech, alternative energies, modern art etc. The average person probably knows the ins and outs of one or two industries at most, and should really stick to investing in what she knows best. Dipping your toes into too many ponds is generally a stupid idea. Just do as Warren Buffet does, which is to stick to his circle of competence.

(Hint: It is a lot smaller for most people than they care to admit in public. “I don’t know enough” could be the 4 most wealth preserving words in financial history.)


Finally, she climbed into the smallest chair and examined the trades inside the smallest terminal.

“Hmm, sensible positions and holding periods across several industries, and the discipline to cut losers while letting winners run. This guy’s good!” Goldilocks smiled her approval.

And so he was. No fanfare of killer trades, no online boasting of huge profits, just good old regular investing wins the day for many people. The reality is, for you and me and millions of other investors out there, we simply don’t have the time nor inclination to keep trading incessantly. Getting rich slow is boring but ensures we sleep well at night.

Speaking of sleeping, Goldilocks felt drowsy after analyzing all those trades.


She went upstairs into the bedchamber in which the Three Bears slept. And first she lay down upon the bed of Papa Bear, but that was too high at the head for her. And next she lay down upon the bed of Mama Bear, and that was too high at the foot for her. And then she lay down upon the bed of the Baby Bear, and that was neither too high at the head nor at the foot, but just right. So she covered herself up comfortably and lay there till she fell fast asleep.



By this time the Three Bears thought their porridge would be cool enough for them to eat it properly; so they came home to breakfast. Now careless Goldilocks had left the spoon of Papa Bear standing in his porridge.

said the Papa Bear in his great, rough, gruff voice.

Then Mama Bear looked at her porridge and saw the spoon was standing in it too.
“SOMEBODY HAS BEEN AT MY PORRIDGE!” said the Mama Bear in her middle-sized voice.

Then Baby Bear looked at his, and there was the spoon in the porridge-bowl, but the porridge was all gone!

said Baby Bear in his little wee voice.



Upon this the Three Bears, seeing that someone had entered their house, began their search for the burglar. They went upstairs into their bedchamber. Now Goldilocks had pulled the pillow of Papa Bear out of its place.

said the Papa Bear in his great, rough, gruff voice.

And Goldilocks had pulled the bolster of Mama Bear out of its place.

said the Mama Bear in her middle-sized voice.

But when Baby Bear came to look at his bed, there was the bolster in its place! And the pillow was in its place upon the bolster!

And upon the pillow——?

There was Goldilocks’s yellow head—which was not in its place, for she had no business there.

said Baby Bear in his little wee voice.

It was so sharp and shrill that Goldilocks instantly awoke. She opened her eyes to 3 angry bears and began talking at the speed of light to keep out of trouble.



“Good day to you, kind bears! I came across your cottage and did you a great service by sampling your porridge, analyzing your trades, and ensuring the quality of your beds!

Quick tip about the cooking – go easy on the MSG next time, and try adding a few spring onions for colour and visual appeal.

About the trading, you must be glad that I have a great big list of mistakes that you three have made – dabbling in far too many asset classes, keeping your losers on the portfolio for longer than necessary, and cutting your…” the itinerant little girl was cut off mid-sentence by a ferocious gobble by Papa Bear!

“It’s one thing to eat our food and sleep in our beds, but to criticize our trades?” growled Papa Bear, obviously disgruntled at the honest (yet accurate) analysis of their family’s mistakes.

And so the tale ends here, with the 3 bears forever doomed to repeat their financial mistakes till the end of their days. Thats the way it works, because people hate to be told that they are wrong.

Too bad for poor Goldilocks.

*Insert Shrug Emoji here*

(The End)


Enjoyed this story?

Read about Part 1 in this series here: Little Red Riding Hood
Read about Part 2 in this series here: Hansel and Gretel
Read about Part 3 in this series here: Chicken Little
Read about Part 4 in this series here: Jack and the Beanstalk
Read about Part 5 in this series here: The Three Little Pigs
Read about Part 6 in this series here: Goldilocks and the three bears
Read about Part 7 in this series here: The Pied Piper of Hamelin aims to eradicate the knowledge gap between consumers and Life Insurance. Our Vision is that one day, every Man, Woman, and Child will be properly insured.

We are also having fun experimenting with a broader base of financial topics. Let us know if you have something you want us to cover!

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