The world’s greatest investors: Carl Stick

Carl Stick

Who is he?

Carl Stick graduated from the University of Southampton with a degree in English in 1991, and joined Neilson Cobbold, a stockbrokers based in Tunbridge Wells, in 1996. In 1998 Neilson was taken over by Rathbones, and within two years Stick was put in control of the Rathbone Income Fund. He still runs the fund and is also lead manager for the Heritage Fund.

What’s his strategy?

Stick considers himself a value investor, though more in the mould of buying great companies at good prices, than the “deep value” approach of Benjamin Graham. He is particularly interested in companies that can generate a strong return on capital and keep growing their dividends. While he aims to find companies that he can stick with in the long run, he will sell if he thinks that they have become too expensive. He tries to limit the number of his holdings to 30 to 50 companies.

Has it worked?

Stick had a great deal of success between 2000 and 2006 before being brought down to earth during the financial crisis, when the Rathbone Income Fund lost more than a third of its value in 2008. However, from the start of 2000 to 2016 Rathbone Income returned 8.81% a year, compared with just 4.55% for the FTSE All-Share. A £10,000 sum invested in 2000 would have become £42,061 by January 2017, nearly double the amount you would have received had you put it in a tracker. Total assets under management have also shot up from £9m when he took over to £1.4bn (as of 31 March 2017).

What were his biggest successes?

His best investment was restaurant and bar company The Restaurant Group. He initially bought the firm in 2003 as a turnaround opportunity. However, he continued to hold onto the stock because he was impressed by the management and felt that the company would benefit as people tended to eat out more often. In the 11 years that he held it, the stock returned a total of 1,542%, just under 30% a year.

What lessons are there for investors?

Stick’s decision to take profits in The Restaurant Group in February 2014 turned out to be prescient because its share price would tumble by more than half 18 months later. This shows that there’s nothing wrong with changing your mind about the stocks you own, but you have to make sure you’re doing this for a genuine reason. Don’t be blinded by success and cling onto rising stocks that are heading for a fall.