Reading shareholder letters, articles and blogs, and watching video interviews with fund managers is a great way to learn about investing and the stock market.
But some fund managers only post a few sentences a month on their fact sheets. Others share vast reams of information so you can really ‘get inside their heads’ and learn from what they are thinking. Here are some star fund managers who post valuable views that are freely available and well worth reading.
Terry Smith, Fundsmith Equity*
Terry Smith manages the Fundsmith Equity fund, which invests in equities on a global basis for the long term.
Mr Smith eschews short-term trading strategies, and this fund is a top performer securing a place in the Moneywise’s First 50 Funds list.
He has an ‘owners manual’ for his investors, which has lots of brilliant investment advice nuggets, such as “the greatest threat you face to your investment performance is from you”.
In his 2017 shareholder letter, Mr Smith warns investors against trying to base investment decisions on assumptions about macro trends, such as election results, Brexit and so on.
“Rather like the management of some of the companies we most admire, I waste little or no time trying to guess what will happen to factors I cannot control or predict and deploy most of my time and effort on things I can control. Two of those are whether we own good companies and what valuation we pay to own their shares.”
FIND OUT MORE: Fundsmith.co.uk
James Anderson, Scottish Mortgage Trust*
James Anderson manages the Scottish Mortgage Trust with Tom Slater, investing in a global portfolio of companies with the aim of maximising its total return to its shareholders over the long term. It’s in the Moneywise First 50 Funds list.
On the Scottish Mortgage Trust’s website Mr Anderson explains in detail his aims and objectives, throwing in fascinating facts such as: “Thirtythree per cent of the wealth created in the US equity markets between 1926 and 2015 came from just 30 companies out of a total of 26,000 quoted stocks.”
In the March 2017 annual report, Mr Anderson talks at length about the advantage of having a small number of stocks, (a ‘concentrated portfolio’), as opposed to diversifying too widely.
“We think over-diversification is a far more prevalent and insidious threat than excessive concentration in today’s investment world.”
He continues: “We do not believe that there are many stocks that offer the possibility of truly superior long-term returns.”
FIND OUT MORE: http://ift.tt/2iTJL6Y
Nick Train, Lindsell Train Global Equity*
Nick Train is co-manager of the Lindsell Train Global Equity fund, which aims for long-term income and capital growth by constructing a concentrated portfolio of 20 to 35 ‘exceptional’ companies from around the world. It’s a member of the Moneywise First 50 Funds.
In an article entitled, ‘Success breeds complacency’, Mr Train argues that the internet is driving business performance.
“The companies doing interesting things with digital – whether they are tech companies or far removed – are the ones making progress. While the cost of ignoring tech, despite the risks associated, looks to be irrelevance.”
FIND OUT MORE: Lindselltrain.com
Neil Hermon, Henderson Smaller Companies Trust*
Neil Hermon manages the Henderson UK Smaller Companies Investment Trust, which aims to maximise shareholder total returns by investing mainly in UK smaller companies. It’s a member of the Moneywise First 50 Funds list. In a recent article, he explains that it’s important to seek out growth at a reasonable price.
“…simply allocating to smaller companies or even picking great stocks is insufficient – our belief is that you need to buy them at an attractive entry price to generate strong returns over the long term. It was Benjamin Graham, a man often referred to as the ‘Father of value investing’, who said: ‘Buy not on optimism, but on arithmetic.’
“We are growth investors but we apply value principles so as not to overpay for the above average growth of earnings we are seeking to find. This investment style is known as growth-at-the right- price, or GARP.”
FIND OUT MORE: Janushenderson.com
Nick Price, Fidelity Emerging Markets*
Nick Price, manages the Fidelity Emerging Markets fund, which aims to offer long-term capital growth. It invests mainly in company shares in countries experiencing rapid economic growth including those in Africa, the Indian sub-continent, Latin America, south-east Asia, Europe and the Middle East. It’s in the Moneywise First 50 Funds list.
In a video interview, Mr Price explains that he has positioned the fund to take advantage of growth in consumer spending in emerging markets, particularly in India.
He says of India: “The Indian market is certainly very strong: Gross Domestic Product (GDP) growth is round about 7%. We think it can sustain those levels for the next three, four, five years. It is driven by a growing population of 1.4 billion to 1.5 billion people. On average they earn about US$3,000 a year and that is growing.
“It has a very strong education system and you have the [prime minister] Modi reform agenda, which is simplifying things in India. And that provides a solid backdrop for us as investors in India. It’s probably the standout country from an activity perspective.”
FIND OUT MORE: http://ift.tt/2iW0FBV
Neil Woodford, CF Woodford Equity Income*
Neil Woodford is one of the UK’s best known fund managers and runs the CF Woodford Equity Income fund, which is in the Moneywise First 50 Funds list.
Mr Woodford’s views are always insightful and his blog is required reading.
For example, in a piece written on the day after this year’s General Election, entitled: “Another election, another surprise” he explains why the election result could be a positive.
“From the perspective of my investment strategy, the election outcome requires no major changes. The fundamentals of the businesses within the portfolios remain very attractive. I remain cautious on the outlook for the global economy, but more positive about the prospects for the domestic economy than an increasingly bearish consensus. If anything, with its implications for looser fi scal policy and a softer Brexit, the election result has made me even more optimistic about the UK economic outlook and the portfolios are positioned to benefi t from this outcome over the long term.”
He also posts in a section of the website called “Awkward Corner” where he “answers the questions from investor that most companies would rather avoid answering”.
Recent questions tacked include: “Has Neil Woodford lost it?” and “Do you need to own such large stakes in companies?”
FIND OUT MORE: http://ift.tt/2iWwVF9
Howard Marks, Oaktree Capital
Howard Marks founded Oaktree Capital Management, and his ‘Oaktree memos’ give detailed insights into his investment strategies and the state of the economy. He’s a seasoned investor whose musings should be a must-read—after all, even Warren Buffett (see above) apparently takes time to peruse them.
In a letter from 2016, Mr Marks writes: “I’m not saying the market is never right when prices go down (or up). I’m merely saying the market has no special insight and conveys no consistently helpful message. It’s not that it’s always wrong; it’s that there’s no reason to presume it’s right.”
FIND OUT MORE: Oaktreecapital.com
Vitaly N. Katsenelson, Investment Management Associates
Vitaliy N. Katsenelson is chief investment offi cer at Investment Management Associates and author of The Little Book of Sideways Markets. His regular blogs contain some fascinating cultural insights, useful nuggets of general investing advice and useful shares tips.
In a recent article entitled, ‘Read this before you buy your next stock’ he warns: “If you buy a stock based solely on my write-up, without doing your own research, then you are committing yourself to a static analysis. I may have already changed my mind. My writing is about teaching you how to fi sh and is never about providing the fi sh. If you like the sound of a company I write about, do your own research to fi rm up your own conclusions. Stress test my assumptions and form your own assumptions.”
FIND OUT MORE: Contrarianedge.com
Gervais Williams, CF Miton UK Smaller Companies Fund
Gervais Williams runs the CF Miton UK Smaller Companies fund and is managing director of the Miton Group. In a recent blog, ‘The Retreat of Globalisation’, he argues that the investment landscape has changed: “The positive drivers of passive strategies that have been in place for three decades have now ended. And the radical change in our social attitudes demands an equally radical shift in our investment strategies.
“Going forward, investment strategies will need to be a lot more selective to be successful. Funds will need to select individual holdings with a combination of promising prospects and plenty of fi nancial resilience.”
FIND OUT MORE: Mitongroup.com
Warren Buffett, Berkshire Hathaway
Warren Buffett is not technically a fund manager – he’s an American business magnate, investor, and philanthropist. But he serves as the chief executive and chairman ofBerkshire Hathaway and is one of the most successful investors in the world.
There are many great insights provided in Warren Buffett’s world-famous Berkshire Hathaway shareholder letters – he writes one a year and has been doing this since 1977.
Mr Buffett wisely states in the2013 letter: “Games are won by players who focus on the playing fi eld (long term) — not by those whose eyes are glued to the scoreboard (short term).”
Another recent letter centres on advice to avoid investing in active funds and instead invest in ultra-low-cost index funds.
This year he took to task investment fees: “The bottom line: When trillions of dollars are managed by Wall Streeters charging high fees, it will usually be the managers who reap outsized profi ts, not the clients. Both large and small investors should stick with low-cost index funds.”
FIND OUT MORE: http://ift.tt/2iW0KFJ
Chris Menon is a freelance writer and former editor of Every Investor who specialises in personal finance and investing.
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