Keith Ashworth-Lord interview
Sandford DeLand,
Chief Investment Officer, The UK Buffettology Fund
Keith was inspired by Benjamin Graham, which led him to Buffett. Keith views his investments as a Business Manager, rather than a Fund Manager. An approach which has rewarded him, with Return on Investment of c.200% since he launched the Buffettology Fund in 2014. This outstanding performance has seen investors flocking to his fund, with FUM at £1bn as at June 2019, up from £0.5 billion in January 2019!
In this interview Keith outlines his investing caveats, which underpin his inspiring investment performance.
Introduction – 00:18
Keith’s career history and his path to Warren Buffett – 01:08
What’s the optimum size of the fund? – 08:35
Constraints of the growth of FUM - 09:58
How much cash can you hold? - 12:44
What are your investment criteria? - 15:19
Porters five forces analysis – 23:24
How much is the qualitative v quantitative? 24:00
Does the extra FUM reduce the investment choice? - 25:00
New entrants to the portfolio – 27:00
Keith Ashworth-Lord biography:
He is a Chartered Fellow of the Chartered Institute for Securities & Investment, having formerly been an individual member of the Stock Exchange, and he holds the Investment Management Certificate of the United Kingdom Society of Investment Professionals.
Prior to setting up the business and the UK Buffettology Fund, he was a self-employed Consultant working with a variety of stockbroking, fund management and private investor clients. His work has been rewarded with the accolade of winning three top-three sectoral, and one top-ten general, Thomson-Reuters StarMine stock-picking awards in 2008, 2009 and 2010.
Keith experienced investment epiphany in the 1990s when he discovered the achievements of ‘The Superinvestors of Graham-and-Doddsville’. This group of successful investors drew their inspiration from the father of securities analysis, Benjamin Graham. They consistently outperformed the Standard & Poors 500 stock index year-in, year-out, despite having very different individual investment styles.
The common factor was their investment compass where Ben remained true north. Names such as Walter Schloss, Tom Knapp, Bill Ruane and Rick Guerin hardly register in most UK investors’ minds but they are certainly ‘superinvestors’.
Two better known superinvestors are Warren Buffett and his investment partner, Charlie Munger. Keith has had the privilege of meeting these doyens of our industry on two separate occasions in Omaha, Nebraska. In addition to Graham, the influence of Philip Fisher can be found at work with Buffett and Munger. Learning from these masters transformed Keith’s understanding of investment philosophy and with it, his investment performance.
Keith was responsible for founding Sanford DeLand Asset Management Limited with the encouragement of a small group of businessmen who are now shareholders in the company.
Signs of economic moat
Growth industries – market share
Manageable growth 5-6-7-8% steady eddie
James Halstead, Rawlings
Operating margins increasing – otherwise competitive edge faltering
Profit of capital: ROE average, and latest
18%+ (some 20-60%) capital light
FCF conversion 80% - rolling 5 yr period
Strong balance sheet – net cash/single digit gearing
Management who can spend capital to create future extra earnings
Don’t like acquisitions – ego
Bargaining power of suppliers; customers; degree ind rivalry, threat of new entrants; threat of substitute products
