Charlotte Yonge manages the Trojan Ethical Fund and is assistant fund manager of the Trojan Fund and Personal Assets Trust.  We discuss the risks of higher inflation and ways to preserve and grow the real value of investors' capital.  We also explore ESG in a multi-asset context, and why Charlotte co-founded Girls Are INvestors (GAIN).

Show notes:

[0:59] Charlotte talks about how she got into the industry
[2:39] Recognising that emotions play an important role in investing
[4:34] Catching the investing bug 
[6:01] Inflationary risks are growing
[9:13] Balancing inflationary and disinflationary forces
[11:41] Are higher prices the cure for higher prices?
[13:49] The Fed is reactive rather than proactive
[14:46] Protecting against a broad range of potential inflationary outcomes
[17:35] The role of cash in an inflationary world
[20:08] Index-linked bonds
[22:22] The importance of common values
[25:30] How the portfolio has evolved
[28:07] Spaghetti mapping with Dr Pepper
[30:28] Payment networks
[33:39] ESG in a multi-asset context
[37:52] Engaging for positive change
[40:03] Girls Are INvestors (GAIN)
[44:18] Back yourself

Nick Train founded Lindsell Train, alongside Michael Lindsell, in 2000 and has generated outstanding returns by investing in a concentrated portfolio of exceptional companies.  In a rich and varied discussion, Nick talks about the power of optimism, the rewards of being patient, and the value of semi-eternal brands in a rapidly changing world.

Show notes:
[1:13] Nick talks about how he got into the investment profession
[3:48] GT Management
[6:18] Learning from Warren Buffett and Alex Dundas
[9:17] Investing in consumer brands
[11:02] The power of being an optimist
[14:49] Avoiding losing strategies
[16:15] The benefits of being a boutique
[17:59] The importance of having the support of like-minded people
[19:06] The power of patience
[21:42] Being a hoarder of valuable things
[24:20] Hanging on to losers as well as winners
[25:52] Investors’ perception of management is influenced by share prices
[28:04] Investing in outstanding businesses when they are cheap
[29:15] The rewards for corporate success are structurally higher in the 21st century
[31:31] Investing in technology proxies
[34:23] Digital permits higher cash flow returns on capital
[36:24] The value of semi-eternal brands in a rapidly changing world
[38:57] Owning defensive and diversified staples companies
[41:37] Unilever’s adaptability
[42:44] Do yoga

Ashish Swarup is an experienced emerging market investor and the founder of Aikya, a boutique focused on high-quality and durable companies managed by competent and trustworthy people.  Ashish discusses some of the pitfalls of investing in emerging markets and why aligning oneself with trusted stewards, who have 'soul in the game', is a winning strategy for long-term investors.

Show notes:

[1:02] Ashish talks about his career so far
[5:11] Keeping things simple
[6:26] Common pitfalls for emerging market investors
[9:15] Needing a different toolkit
[10:33] The importance of having a stable temperament
[11:50] Investing with quality people 
[13:46] Having soul in the game
[15:08] Appreciating the nuances associated with family ownership
[16:41] The advantage of having a deep network of local contacts
[19:20] Building lasting relationships with local contacts
[21:22] Investing in companies with a clear purpose and good governance
[24:14] Chinese education companies
[27:00] Governance standards are not improving
[27:27] Purposefully having a narrow investment universe
[28:23] Constantly questioning your assumptions
[29:55] India and China
[33:05] Competitive intensity and investing in companies that build trust in China
[34:22] The role of valuation
[35:29] Backing predictable businesses with a strong right to win
[37:18] The rise of local consumer staples companies
[40:14] Aikya and ESG
[43:14] The investment structure matters

James Harries has a wealth of experience as a global income investor and manages the Trojan Global Income Fund and Securities Trust of Scotland.  James talks about his journey from Royal Military Academy Sandhurst to a career in investing, how he has evolved as an investor and why income investing remains highly relevant in today's world.

Show notes:

[1:05] James talks about the start of his career and the lessons learnt at Sandhurst
[5:23] Being disciplined and allowing good habits to compound
[6:41] The importance of income investing
[9:47] Focusing on generating good returns whilst limiting drawdowns and volatility
[11:08] The income discipline 
[13:08] Balancing quality, income and growth
[15:16] The progression to a more concentrated, lower turnover and higher quality-focused portfolio
[16:14] Emphasising quality above dividend yield
[18:11] Insulating the portfolio and benefiting from technological change
[21:37] How the deployment of technology is benefiting a broad range of companies in the portfolio.
[24:14] The tobacco industry's evolution
[27:58] Incorporating ESG considerations
[29:04] Focusing on deeper and longer-term issues to gain an edge
[31:53] Domino's Pizza
[34:49] Structuring the portfolio for resilience
[38:29] The macro backdrop
[42:28] Do something you enjoy, concentrate on what matters and be happy

Sanjay Ayer is a portfolio manager at WCM Investment Management, a California-based asset manager investing in good quality companies with strong cultures and improving competitive moats.  Sanjay talks about his evolution as an investor, how a good culture can reinforce a company's competitive advantage, and why it is so important for investors to learn from mistakes and compound knowledge to sustain success.

Show notes:

[1:15] Sanjay talks about his early career and moving from Morningstar to WCM
[4:10] Why one should focus on companies that are expanding their competitive moat
[6:46] Testing the trajectory of a moat
[9:11] Amazon and Shopify
[10:55] Compounding knowledge to sustain success
[14:27] Learning from mistakes
[16:26] Niche industrial and influencer typologies
[20:00] The importance of culture
[21:13] Cultural optionality and culture as a durable competitive advantage
[25:23] Balancing centralisation and decentralisation in regulated industries
[27:21] Cultural trajectory
[29:12] Portfolio construction as a foundation for rational decision-making
[32:19] The role of valuation
[34:42] R&D to sustain an investors' competitive advantages
[38:41] Persistent inefficiencies in the investment profession
[42:30] Using growth and scale to advance culture
[44:51] Embrace cognitive dissonance and consider return on time  

Brinton Johns is a co-founder of NZS Capital, a US-based investment boutique applying lessons from nature to invest in companies with the capacity to thrive in a complex adaptive world.  As the future is inherently unpredictable, Brinton and his colleagues believe it is best to focus on adaptable and innovative businesses that create more value than they take, whilst structuring the portfolio to exhibit both resilience and optionality.

Those interested in learning more about NZS's Complexity investing framework should read their whitepaper (https://www.nzscapital.com/news/complexity).

Show notes:

[1:20] Brinton talks about how he got into the investing industry and his career at Janus Capital
[5:32] The benefits of focus, a defined investment philosophy and a flat team structure
[8:05] The genesis of NZS' Complexity Investing framework
[9:51] The key tenets of Complexity Investing and the importance of being adaptable and creating more value than you take
[13:37] Structuring the portfolio for resilience and optionality
[18:01] Psychological safety and empowering creativity by being allowed to make mistakes
[20:27] Texas Instruments as an example of an adaptable and resilient business providing oxygen in a digital age
[22:44] Testing for adaptability and resilience at Texas Instruments
[25:08] Assessing the quality of people, culture, the nature of a company's growth and valuation
[28:47] Great allocators versus great operators
[30:48] Understanding the asymmetry of optional investments
[32:57] The power of vertical integration in disrupting horizontal incumbents
[35:06] Spreading bets in the tail of the portfolio
[36:15] A culture of candour for limiting biases and recognising mistakes
[39:04] Companies that graduate from being optional to resilient and vice versa
[41:02] Investing in optional businesses allows for greater mental plasticity
[42:31] Web3.0
[44:00] Be curious and open-minded

In this episode of Far From The Finishing Post we speak to Gabrielle Boyle.  Gabrielle heads up Troy's investment research and manages the Trojan Global Equity Fund and Electric & General Investment Fund.  Gabrielle discusses her evolution as an investor and how being an outsider has helped her recognise and adapt to change to deliver strong compound returns. 

Show notes:
[1:09] Gabrielle talks about how she got into the industry
[3:23] The wild west of Europe
[5:50]Learning at Lazard
[7:54] Gender diversity and being an outsider
[11:49] Girls Are INvestors (GAIN)
[12:41] Working at a boutique with a clear sense of identity
[15:36] Troy's evolution
[19:00] Adapting to change
[20:20] The fundamental importance of ESG
[21:39] ESG and stock selection
[25:16] Technological disruption and extraordinary 'tech staples'
[28:16] Discipline through concentration
[31:35] Intangible quality
[32:43] Being a long-term owner
[33:39] The surprising durability of great businesses
[35:59] Trust your instincts and enjoy yourself

In this episode of Far From The Finishing Post we speak to Gary Channon. Gary founded Phoenix Asset Management in 1998 and is one of the UK's leading value investors. Gary discusses his early career as an investor and the development of Phoenix’s distinct investment philosophy and approach. He emphasises the importance of instilling a culture of continuous learning and improvement, as well as more recent initiatives to apply digital tools in the transformation of analogue businesses.

Show notes:
[1:23] Gary discusses how he caught the investment bug
[4:59] Thinking probabilistically 
[6:23] Going deep and being focused
[9:33] What makes a great company
[13:00] Putting a high value on stability and predictability, whilst mining mistakes to continuously learn and improve
[15:52] Observing competitive dynamics through deep due diligence and monitoring
[18:38] Withstanding and exploiting volatility
[22:12] Psychological safety through process and structure
[24:44] Learning from mistakes and using checklists
[28:46] Investing in companies that are not being disrupted by technology
[30:03] Backing people
[32:43] The Castelnau Group and applying digital tools to improve analogue businesses
[38:23] Using technology to accelerate trial & error and to find customers
[43:22] Cultural transformation and winning hearts and minds at Dignity
[45:56] Experimenting at the beginning of your career and leading your own life

In this episode of Far From The Finishing Post we speak to Nick Martin.  Nick manages Polar Capital's Global Insurance strategy and has been investing in the insurance industry for 20 years.  Nick does a great job of demystifying a complex industry and explaining why the best property & casualty insurers are strong and durable compounding machines.  

Show notes:

[ 1:30] Nick talks about becoming an investor and joining Hiscox
[4:08] Thinking about the downside and not taking excessive risk
[5:34] Mapping out the non-life insurance industry
[6:56] Focusing on underwriting rather than macroeconomic conditions
[8:05] The importance of diversification for managing cycles and risks
[10:17] Knowing when to be aggressive and when to be patient and defensive
[12:11] Greater pricing discipline in specialty commercial versus personal lines
[13:58] The ingredients of a good insurer
[14:58] Will underwriters be replaced by machines
[16:32] Being outward-facing and open-minded to change 
[18:27] How technology is changing the industry
[20:34] Success in insurance is cultural
[21:44] Berkshire Hathaway and decentralised models based on trust
[24:16] The importance of an owner mentality
[25:28] Incentivisation structures that encourage a long-term perspective
[27:07] Leveraging innovation to create competitive advantage in personal lines
[28:06] Network effects and pricing advantage
[29:58] Price-to-book as a key valuation metric for insurers
[31:52] The critical role insurers play in addressing climate change
[35:31] Assessing risk in a world where climate change is making historic data sets less relevant
[37:05] Encouraging risk mitigation rather than simply just putting up prices
[38:48] Low valuations and rising premiums
[40:44] The power of compounding in all aspects of life

In this episode of Far From The Finishing Post we speak to Anthony Kingsley.  Anthony is Chief Investment Officer at Findlay Park and has a wealth of experience investing in the US.  Anthony discusses a range of topics; his career as an investor, Findlay Park's evolved approach of investing in higher quality businesses, and an investment philosophy that emphasises the avoidance of steep losses in the generation of strong long-term compound returns. 

Show notes:

[1:10] Anthony talks about his early career at Foreign & Colonial as an analyst on the American desk
[2:48] The genesis of Findlay Park's investment philosophy
[5:43] American capitalism and dynamism. Why it is such a great place to invest
[8:57] Quality compounders across industries
[10:02] The difference between knowledge and understanding
[11:07] Findlay Park's competitive advantages
[13:08] Findlay Park's evolution and a culture of continuous learning
[16:10] An openness to new ideas and encouraging discussion and debate
[17:48] Shifting up the quality spectrum
[19:26] Focusing on returns on capital rather than capital intensity
[21:21] Digital intensity and its role in creating sustainable competitive advantages
[23:27] Finding companies with strong cores and embedded optionality
[25:20] Focusing on companies with a strong and purposeful culture
[27:10] Assessing culture throughout an organisation
[30:27] Sustaining culture in more acquisitive companies
[33:23] The mistake of not owning great companies for longer
[35:26] Requiring more asymmetric risk/reward for companies with lower checklist scores 
[37:14] Focusing on downside risk has been an unnecessary discipline for the last decade but will become more important
[39:28] The character traits of great investors
[41:05] Be passionate and keep learning