Fidelity's Anthony Bolton is the nearest thing the UK's staid fund management sector has to a genuine investment guru. A famously modest man, Bolton has fought shy of publicity over the years but last week he gave a rare public masterclass in stockpicking to a packed audience at the City's Securities and Investments Institute. Since 1979, Bolton's flagship Fidelity Special Situations fund has turned a £1,000 investment into about £149,000 today. How does the man himself reckon he's done it?
First, through personal meetings with thousands of companies plus, crucially, repeated follow-up meetings in order to uncover the occasional investment gem. Second, by moving in the opposite direction to the herd with the aim of pre-empting the market. And third and this is the big surprise by judicious use of technical analysis, or chartism'.
Chartism, which involves the close study of past patterns in stock prices to determine current investment decisions, is derided by many investment purists as pseudo-scientific mumbo-jumbo not to mention a complete waste of time. So Bolton's audience might have been a bit surprised to hear the great man "reveal himself as a closet chartist", reports Patrick Hosking in The Times. But Bolton, who manages £6.5bn on behalf of a quarter of a million people, was clear: "I've found charts very useful, particularly on bigger companies, especially for timing. When the technicals [ie, chart patterns] confirm the fundamentals, I use them that way." In particular, says Bolton, charts have helped stop him from buying
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into a blue-chip too soon. "To be too early on a stock can be costly. [Using charts] is a healthcheck. It's a bit like going to the doctor."
So what are Bolton's views on the current market turbulence? In short, not desperately encouraging: "I think it could be the end of the bull market. The correction could be months, not days." Right now, Bolton is finding value in blue-chips rather than small companies, and his contrarian instincts mean that he favours oil firms moving against the prevailing shift of money away from oil and gas and into miners. In addition, he is 15% overweight in media stocks, keen on NTL and ITV, and is also heavy in travel and leisure and pharmaceuticals, while shunning the banking sector.
