Behavioural swine-ance – What ‘The Learned Pig’ can teach us about human instincts


Andrew Lyddon

Andrew Lyddon

Fund Manager, Equity Value

Over the years, our holiday reading has taken The Value Perspective down many different roads although these have always tended to lead back to the comforting embrace of value investing. Our latest trip to warmer climes proved no different as, through Jan Bondeson’s intriguingly titled ‘Animal Freaks’ , we became acquainted with the learned pig craze of the 1780s and the animal that started it all off.

Variously known as ‘The Wonderful Pig’ or ‘The Sagacious Pig’, this apparently exceptional example of porcine intellect was exhibited in England, France and Ireland and held out as having the intelligence of a human being. It could, according to one press advertisement of the time, read, write, do arithmetic and tell the time and it won “the admiration of all who have seen him”.

An advertisement in another newspaper was even more effusive, describing the pig as “a prodigy never seen before” and indeed offering the opinion that “neither the tongue of the most florid orator nor the pen of the most ingenious writer can sufficiently describe the wonderful performance of the sagacious animal”.

Like any celebrity worth their column inches, The Sagacious Pig could even boast A-List fans of its own, including Dr Samuel Johnson, who – presumably tongue in cheek – felt moved to observe: “Pigs are a race unjustly calumniated. Pig has, it seems, not been wanting to man, but man to pig. We do not allow time for his education, we kill him at a year old.”

What really caught our eye on The Value Perspective, however, was that it was fairly shortly into the craze – round about the time The Sagacious Pig graduated from appearing at local fairs to doing the rounds of smart London dinner parties (as entertainment rather than on the menu) – that some people began to question whether reading, writing and so forth were really things the animal could do.

The pig’s owner was reasonably open about the fact that, no, his charge was not a genius, just very well trained, but it did not make a lot of difference – those who thought the pig was an evolutionary game-changer continued to believe so while many of those who could see the whole things was an act seemed happy enough to put this to one side and be swept along with the crowd.

You have probably worked out where we are heading here because, of course, we can look at the craze of the learned pig and think it an extraordinarily ridiculous thing for people to get so excited about – juts as we can, with a similar degree of hindsight, look back at any number of investment bubbles or unsustainable market surges and shake our collective head.

Being swept along with the majority is just the way the human mind is wired to work and, while we could link it to a number of different aspects of behavioural finance, the concept of ‘herding’ – the bias that can lead investors to follow the crowd, whether they genuinely agree with what they are doing or are just scared of being left standing alone – seems most appropriate to our porcine theme.

The power of the crowd can be a hugely persuasive force, as can the fear of missing out on something good that everyone else seems to be enjoying. Many investors who become swept up in things like the ‘dotcom bubble’ – particularly professional ones – will have had a pretty strong feeling in the back of their minds the valuations they were buying into were unsustainable in the long run and would at some point end in tears. But taking this stance against the crowd was often too uncomfortable and, as ever with investment, what ultimately counts is not what you think, or even what you say, but what you do.


Andrew Lyddon

Andrew Lyddon

Fund Manager, Equity Value

I joined Schroders as a graduate in 2005 and have spent most of my time in the business as part of the UK equities team. Between 2006 and 2010 I was a research analyst responsible for producing investment research on companies in the UK construction, business services and telecoms sectors. In mid 2010 I joined Kevin Murphy and Nick Kirrage on the UK value team.

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