Remembering the wisdom of Anthony Bolton
Posted on June 9, 2007 by Richard Beddard
Filed Under Investing |
Anthony Bolton writes in the Spectator today (Remember the wisdom of Keynes and Mark Twain). Here’s some background on Mr Bolton, one of Britain’s finest fund managers. In the Spectator article he ruminates on the reasons for his success:
- “Careful balance-sheet analysis can go a long way in limiting the downside risk of an investment: the stocks that have been my biggest disasters over the years nearly always had weak balance sheets.“
- “I value very highly hearing directly from management, and I meet two or three companies each day. I like managers who do not overpromise, but consistently deliver more than they indicate.“
- “Experience also counts for a great deal. Mark Twain said, ‘History never repeats itself but it sometimes rhymes’ — eight words that should be burned into every fund manager’s desk.”
- “Fundamental, research-led contrarian stock-picking works as well today as ever. Doing what everyone else is doing might work in the short term, but is nearly always costly in the long term.”
The times when his contrarian approach proved most valuable were during great ructions in the stockmarket: 1987 (when not only was there a crash (’Black Monday’), but Mr Bolton’s youngest child was born and a hurricane hit the South Coast of England), the dot.com bubble, and 9/11. He says:
When everyone thinks the shares of a company are unattractive, this can often create a great investment opportunity — but investments can be riskier when everyone has fallen for their ‘beauty’.
Words I think should be burned into every investor’s desk.
Footnotes:
- I found the Spectator article on Controlled Greed, a value investing blog I’ve added to our blogroll.
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