A professional investor tells us where he'd put his money. This week: Nick Train, portfolio manager of the Finsbury Growth & Income Trust, outlines his strategy.
I recently read a thrilling book about investment called 100 to 1 in the Stock Market by US stockbroker Thomas Phelps. It's a classic, first published in 1972. Here are three quotes from it that neatly sum up Phelps's message and go a long way towards introducing our approach too.
"It would be hard to find a worse slogan than You'll never go broke taking a profit.'"
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"Every sale is a confession of error."
"In Alice in Wonderland one had to run fast in order to stand still. In the stockmarket, the evidence suggests, one who buys right must stand still in order to run fast."
Profit from doing nothing
It's thrilling because Phelps lists the surprising number of US-quoted companies that have gone up in value 100-fold, admittedly over long periods. Think about that: up 100-fold turns £10,000 into £1,000,000.
"In the stockmarketinvestors must stand still in order to run fast"
Finding long-term success stories
Consider, for instance, Burberry (LSE: BRBY); Guinness, Johnnie Walker, Tanqueray, the drinks owned by Diageo (LSE: DGE); and Manchester United (NYSE: MANU). All these brands are more than a century old, but it still seems to us that they're really only just getting started in fulfilling their global potential. If the past is any guide, their growth will drive tremendous returns for patient investors.
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How to use mid-caps to diversify from the USMedium sized companies are overlooked by investors but could offer an attractive ‘sweet spot’. We consider the case for mid-caps amid market volatility.
