Valuation is a key consideration. The price you pay for an investment is the critical determinant of its success, and alongside scope for meaningful upside, we recognise that an uncertain world can challenge even the most robust of business models from time to time. Having enough margin of safety in the valuation is key and we are diligent around assessing the underlying strength of the companies we invest in. In short, we need reassurance that the balance sheet, for example, can weather short-term upsets that may occur on the road to long-term success.
A glance at the portfolio’s top 10 relative positions illustrates our approach, with ‘value’ orientated names favoured over ‘expensive’ businesses that we believe mean investors are ‘overpaying’ for quality. Overinflated share prices always unravel in time and we believe a better use of that time is realising currently underappreciated value. Of course, that requires patience, but over time we’re convinced that it’s the right approach to deliver performance to our shareholders.”
If you would like to find out more from Phil, watch this video where he talks about his transition from playing hockey for GB to picking stocks for portfolios.