The specific drivers of a company’s success (or failure) are hardly ever found at a macroeconomic or political level, and as a result, we have always focused more on investing in companies that can succeed almost regardless of the wider environment. Political deadlines can come and go; we won’t chop and churn the portfolio based on a hunch as to what will happen next. Whether we are in or out of Europe, or in a hybrid Hokey Cokey, I’m sure most people just want to get on with their lives. People and companies are inventive in ways that aren’t necessarily easy to predict. Yes, we don’t have a clear vision as to the philosophical direction of the country, but collectively there is a clear sense (and necessity) to carry on and make progress.
Focusing on what matters most
The media needs to create news to sell, and brokers aren’t averse to encouraging their clients to trade. With the abundance of news around, it’s important to focus on the most important issues. The true interests of long-term investors are best served by investing in companies that generate high returns; being able to ignore the distraction of political deadlines and the hypothetical consequences can only be counted as a considerable extra benefit.
Investing for the long term
We believe investment, particularly in equities, should be for the long term. In this context, short-term deadlines are also less relevant. Our shareholders rightly demand strong performance, but to expect this each week, each month and each quarter would be to misunderstand the volatility and slightly random nature of individual share prices and stock markets. We can’t guarantee to perform to short-term deadlines, but over longer periods our results show the logic of this approach and strength of our process.