Your Quarterly E-Zine
Edition 11 • December 2019

This website contains the latest edition of Forsyth Barr Focus, a quarterly on-line magazine written by senior members of Forsyth Barr's investment team.

If you experience any difficulty in accessing Forsyth Barr Focus,
please call 0800 367 227, or e-Mail for assistance.


The clock that keeps ticking

The thought of “Armageddon” is strangely appealing to many people. Known as “doomsday psychology”, apocalyptic thinking allows people to emotionally reconcile themselves to the prospect of possible disaster. However rather than prompt mass-panic, as might be expected, the United States National Institute of Mental Health notes that being able to conceptualise calamity can actually result in greater peace-of-mind.

Just over 70 years ago, scientists concerned at the prospect of nuclear annihilation asked artist Martyl Langsdorf, the wife of an atomic scientist, to design an image which captured the scientific community’s alarm at the prospect of global destruction. Langsdorf conceived the idea of a ticking clock to illustrate the sense of uranium-enriched urgency, with the hands of the clock set at 7 minutes to 12, as opposed to any other time, simply because, she said, “it looked good to my eye.” 12 o’clock was conceived by Langsdorf as being “midnight”, signifying the end of the day, and possibly the end of time itself.

Martyl Langsdorf was born in St. Louis Missouri in March 1917, a time in history when rapid industrialisation of the global military machine was in full-swing. The United States had not yet entered the Great War, but within a month of Langsdorf’s birth President Woodrow Wilson had ended his country’s “isolationism” and joined the global conflict, which together with World War Two, in later decades, became a defining period of twentieth century history.

The concept of the hands of the clock being moved was not part of Martyl’s original design. Eugene Rabinowitch, whose magazine “The Bulletin” commissioned the art, reset the clock from seven minutes to midnight, to three minutes to midnight, after the Soviet Union successfully tested its first atomic bomb in 1949. Over the past 72 years, the time-to-midnight has moved as far back as 17 minutes (in 1991), to two minutes to midnight (in 2018), which is the time that the “Doomsday Clock” still registers today.

Of course, the key point to note is that the Doomsday Clock has never struck midnight and therein lays its attraction. Far from suggesting that humanity’s peril is inevitable and imminent, the clock serves as a metaphorical warning on the lack of progress being made in certain areas to ensure the long-term health and well-being of mankind.

From being a warning of atomic peril, the clock has now embraced a more diverse range of existential threats to life on earth including, from 2007, the first consideration of climate change and, more recently, the threats created by so-called “disruptive technologies” including cyber-attacks and the misuse of genetic engineering and artificial intelligence.

The clock has been remarkably successful in heightening global awareness of the shared responsibility of people across all sectors of society, including economic and financial, to confront threats to mankind’s existence.

Of note, investors are increasingly paying more attention to environmental, social, and governance (ESG) principles when considering investment of their funds. This has resulted in more investors specifying investment exclusions (“negative-screening”) or specific inclusions (“positive-screening”), when constructing their investment portfolios, a trend which has accelerated following the launch of the United Nations’ Principles of Responsible Investment in 2006. As evidence, the IMF1 reports that institutional investors are pledging to divest from fossil fuels to the order of US$9 trillion, with some banks and insurers also curtailing their business activity in the sector.

Analysis undertaken by the IMF suggests that the performance of equity portfolios constructed through either of the screens noted above, neither regularly underperforms nor regularly outperforms equity portfolios built using more conventional valuation methods, with the dispersion of investment returns clustered in a relatively narrow range relative to the efficient frontier. However, the research also reveals that excluding certain market sectors can increase portfolio volatility.

There is no doubt that by adopting sustainable investment strategies, investors are helping to move the minute-hand of the Doomsday Clock further away from midnight.

At the age of 90, Martyl Langsdorf was interviewed by the Art Institute of Chicago in 2007 observing that the Doomsday Clock had become a phenomenon in itself. “The clock has a life of its own now. It’s amazing,” she said.

Created for a publication which intended to prick the social consciousness of Americans in response to the threat of man-made mass destruction, it has become a contemporary warning signal for the world.

Mark Twain once observed that, “the fear of death follows from the fear of life”. The fact that the Doomsday Clock continues to tick seems proof that awareness of catastrophe can successfully prompt the instinct for self-preservation, in doing so avoiding what would otherwise be inevitable.



Gordon Noble-Campbell
Director, Private Client Services 

For a printable PDF of this article click here

1 International Monetary Fund – Global Financial Stability Report – October 2019