The five best investment trust managers
More sensible investments with Dr John
Dr John, is back with this month’s Sensible Investments. Today he considers five, five-star managers.
Last time we looked at some solid long-term investments that you can hold for 20 years. These investment trusts are long-lived funds with a steady long-term perspective (did I say “long”?)
These trusts often operate with a team of 20 or more managers dedicated to the fund or as back-office research staff. RIT Capital Partners (LSE: RCP) and Ruffer Investment Company (LSE: RICA) come to mind.
I purposefully kept away from “star manager” funds, because star managers eventually retire or often just become complacent and tire. If you want to do some investigation here just google Neil Woodford’s foray into Patient Capital or Anthony Bolton and Fidelity Chinese Special Situations.
Some do so well that they “start believing their own bulls**t” as I was once told by a really well-known manager, and therein lies the problem. Sectors and investment styles go in and out of fashion. A strategy that works in one area (the UK) may not work elsewhere (China).
Star managers generally only get one or two chances at making their name, and sometimes, like a lucky surfer, they catch a good wave. For managers, though, the wave can last almost their entire career. Lucky waves such as biotech between 15 and 5 years ago, or the just-completed bubbles in social media, EVs, space, and solar which have run for many years can make managers famous if they just happen to be in this space.
But let’s not forget the place to be in the 2000s was commodities. In the 1990s it was infrastructure tech (mobile telephony, networking). In the 1980s, Japan.
Every one of these booms ended badly. The star managers of those times are mostly long-forgotten.
However, although I think that star managers may eventually outlive their usefulness, I also believe that there are some experienced, genuine, thoughtful, and most importantly humble managers around. These are my top five. I’ve owned them all for many years. I think they have the least chance of complacency. They all stick to their knitting and investment style and try not to stray too far from where they are acknowledged experts.
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