The fund managers using Fibonacci and the laws of physics to navigate Covid-19 stock market falls

Around half the fund is invested in consumer staples and the other half in companies in sectors expected to grow over the long-term such as technology. “These are less at risk during black swan events,” Mr Page said.  

Aside from physics theories and geography, some fund managers turn to basic human psychology when making investment decisions. 

Jeremy Lang, former psychologist and manager of the £453m Ardevora Global Long-only Equity Fund, pictures stock markets as made up of three sets of people: company managers, financial analysts and investors. He watches for signs of bias in their behaviour, such as excessive risk taking by managers, overconfidence from analysts and excessive anxiety or enthusiasm among investors – helping him to identify which companies to buy and which to avoid. 

“Cognitive psychology tells us that company managers are likely to take on too much risk and push a business harder than is sensible,” Mr Lang said. “To get a sense of whether a company is being run in a sensible way we look at how fast it is growing, how much cash is being generated and what management is saying.”

If he believes a company is not being realistic, he will not buy the stock. Instead of meeting with management, Mr Lang prefers to keep his distance, judging them instead by observable facts and behaviours.

Once he has identified companies he believes to be well managed, he applies the same lessons from cognitive psychology to financial analysts and investors to find mis-priced stocks.