In the City of London, Richard Oldfield is a much admired fund manager, a professional’s professional, with an excellent investment pedigree. He was trained in the school of Mercury and SG Warburg, was chief executive of Alta Advisors, a major family fund, and now runs his own fund, Oldfield Partners. In our own family he is a much loved uncle to four of our grandchildren.

He has now solved, at least for this year, an age-old problem: what can one give as a Christmas present to a billionaire? He has written a combined memoir and guide to investment, which is the best book of its kind I have ever read: indeed, I am not sure that there is another book of its kind.

Most billionaires are interested in money, otherwise they would not be billionaires. I have spent more than 50 years writing about money, and I found new and true reflections on investment on nearly every page. I think even the great Warren Buffett, to whom Mr Oldfield pays a justified tribute, would learn from this book.

Simple But Not Easy is published by Doddington Publishing for £15. Even the title leads the author into an interesting discussion: “People outside the profession think investment is complicated. Generally speaking it is not. On the other hand, though not complicated, investment is difficult. Professional managers find it hard to beat the market in the long term.”

Good fund managers are in my experience different people from good brokers, exchange dealers or corporate financiers. Successful investors need a particular detachment, even from their own egos. Mr Oldfield emphasises ethical decisions. In modern business, many people think that ethics cannot be combined with a competitive approach to business. In my experience that is not true of the most successful businessmen, though there are undoubtedly some billionaires whose highest ethical rule is to stay inside the law.

Richard Oldfield argues that ethics are desirable for practical as well as altruistic reasons. “Ethics,” he writes, “is not just a county to the east of London. Markets are particularly intolerant of seriously unethical behaviour by management, and the revelation of scandal is something which can be relied upon to cause a collapse in a share price.”

He starts his book with his mistakes. It is a counsel of perfection for an investor to be as greatly interested in analysing his own mistakes as in relishing his successes, but Mr Oldfield argues: “Mistakes are the things that make one fractionally better at investment, at least as much as successes and any manager who only has successes to talk about is a charlatan or a novice. Howlers, anyway, are much more interesting.”

He does not quite identify with Sir Siegmund Warburg’s maxim, “Always cry over spilt milk”, because he thinks it could undermine the self-confidence good investors need, but he does quote it. Good investors need detachment, about their investments and even more about themselves.

Investment is an abstract business. As he describes it: “Investment involves the fluctuating ownership from a sedentary position of what were once pieces of paper and have now been virtualised so that they are no more than entries in some faceless computer records. It is an activity which can seem unreal.” It is characteristic of good investors that they enjoy the abstract nature of their business.

Mr Oldfield also quotes Mr Buffett on the investing temperament. “Investing is not a game where the guy with the 160 IQ beats the guy with the 130 IQ . . . once you have ordinary intelligence, what you need is the temperament to control the urges that get people into trouble in investing.” An Ancient Greek sage had the motto, “Know thyself”. Someone who knows himself is halfway to being a good investor.

The chapter that will cause most controversy in the City is that on hedge funds, on which Mr Oldfield is close to being a sceptic. He accepts that some of them have outperformed the market, but argues that many charge very high fees for sometimes sub-average results.

The key sentence is brutally frank: “In aggregate, hedge funds are a con.” He goes on to qualify this statement, but not in a way that will particularly comfort hedge fund managers. “That is not to say that individual hedge fund managers are con artists. But aggregate hedge funds cannot offer the advantages which are claimed for them. Only a tiny minority can fulfil expectations.” Hedge funds normally charge fees of 1.5 to 2 per cent of the asset value plus 20 per cent of the return. Their own fees make it hard for them to deliver the goods.

Mr Oldfield quotes the decline of the first hedge fund, A. W. Jones. In December 1968 it had $200 million under management: in September, 1970, that had fallen to $31 million. Later George Soros was to rebuild the reputation of hedge funds but there remain questions about whether they can find the exceptional talent they need and whether clients will pay their fees.

Mr Oldfield is sceptical about global forecasts. He does not trust conceptual investing. He quotes the classic examples, of which my favourite is Tom Watson, then chairman of IBM, speaking in 1943. “I think there is a world market for maybe five computers.”

Sceptical, contrarian, patient, self-aware, concerned with real values, aiming to buy shares when they are low, attracted by the reality of gold, suspicious of market bubbles, Richard Oldfield is the kind of fund manager I can believe in. He has some rules of thumb, to which he gives a one-page concluding chapter. Perhaps I should quote one of them, because it is also one of mine. “If something looks too good to be true, it probably is.” That is not original, but it is true of investment, of politics, certainly of journalism, and of life itself.

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