30 Apr 2024
A Very Long Hill
James Bullock
In 1626, so the story goes, the native Lenape people sold the island of Manhattan, to the Dutch East India Company for 60 guilders worth of trinkets, the supposed equivalent of $24. A famously bad trade for the tribe given the island’s current estimated value of well over a trillion dollars.30 Mar 2023
Unintended Consequences
Nick Train
Amidst the recent reportage about the winnowing out of the UK stock market, I was particularly struck by William Hague’s article in The Times in March. He somewhat shamefacedly quotes an expert on the pension industry who notes the UK has become “the only major economy where local pension funds have in effect abandoned investment in domestic companies.”30 Nov 2022
The Triumph of Experience Over Hope
James Bullock
In 2014 Michael Lewis’s Flash Boys introduced the public to the frantic practice of high frequency trading. Orders, millions per second, executed at speeds to outpace or even front-run others. A frenetic world about as far away from Lindsell Train’s languid approach as possible.28 Jun 2022
Muddy Waters
Madeline Wright
This piece is a companion to an earlier insight, “Scope 3 Under The Microscope”, in which I observed that our ESG work has highlighted a number of themes pertinent to a large proportion of our portfolio companies.02 May 2022
Drinking Less, Drinking Better
Madeline Wright
What does it really mean to say that consumers are “drinking less, but drinking better”? It is an important observation for us, given we have a number of our investments in premium alcoholic beverage brand owners.12 Nov 2021
Scope 3 Under The Microscope
Madeline Wright
One of the advantages of running portfolios as concentrated and long-term focused as ours is that we are able to dedicate a great deal of time to in-depth research on individual companies.01 Feb 2021
Rational numbers
James Bullock
At the tail-end of the 19th century, a small-town Carolinas chemist named Caleb Bradham hit upon an exciting new formulation. A marvellous tonic that served as both a refreshing pick-me-up and a remedy for indigestion, an affliction more formally known as dyspepsia.01 Oct 2020
Lost in the Supermarket
Madeline Wright
In February 2019 something seismic occurred in the world of packaged food – Kraft Heinz took an eyewatering writedown of $15bn on its Kraft and Oscar Mayer franchises, two iconic American brands that have appeared on the tables of families for decades.01 Jun 2020
Quantifying Quality
James Bullock
Quality is seductive. Few would complain if you labelled their business or strategy as ‘quality’. But as Mr Drucker (the father of modern management theory) points out it’s also elusive and ambiguous.01 Nov 2019
Are You Experienced?
Madeline Wright
I recently listened to a podcast in which a retail industry consultant, Doug Stephens, argued that "retail is no longer a distribution mechanism for product but a customer acquisition strategy".01 Jun 2019
Valuation Challenge
James Bullock
Valuations are challenging. Achieving precision is of course impossible, but even the roughest of estimates can be extremely hard to derive without resorting to conjecture.01 May 2019
Reflections on Liquidity and Capacity
Michael Lindsell
Since the beginning of the year the LF Lindsell Train UK Equity Fund and the Lindsell Train Global Equity Fund have continued to grow in size, thanks largely to continued net subscriptions... As the funds grow it is important that we ensure that the size itself does not provide any impediment to the integrity of our approach...01 Apr 2019
Bags of Potential
Madeline Wright
Here at Lindsell Train we don’t think of ourselves as having a great deal in common with 50 Cent, but we do share an unashamed enthusiasm for luxury brands and a liking for Burberry too!01 Mar 2019
Miami Vice
Madeline Wright
I’ve just returned from the annual Consumer Analyst of New York (CAGNY) conference in Boca Raton, near Miami, where I’ve heard a wide range of consumer goods companies from the USA and beyond present over the course of the week.02 Jan 2019
Great Expectations
James Bullock
At Lindsell Train we spend a lot of time reading. Company reports, broker notes, media commentary, academic papers, business and investment texts; anything that we think might supplement our own analysis with external insight. To this end, I have, on occasion found myself reaching for a book on management strategy - a much maligned but rather prolific branch of nonfiction.01 Jan 2019
What Makes Us Think and What We're Thinking About
Nick Train
I received an interesting letter from an investor last year. In it he shared with us a quotation from a speech given by Fidelity's Peter Lynch.01 Aug 2018
Dragon Quest
James Bullock
Whilst on his death bed, the 13th century Italian explorer Marco Polo was given the opportunity to retract some of the more fantastical observations from his book detailing his visit to China. Instead he responded with the famous last words "I have not told half of what I saw".01 May 2018
Digesting Digital Disruption
Madeline Wright
Perhaps the single most important thing we think about is the potential for technology to disrupt industries and erode moats, not just within the technology industry itself but across all the sectors we invest in.01 Sep 2017
Just What The Doctor Ordered
Madeline Wright
Early on in Lindsell Train's history Nick and Michael looked seriously at investing in leading pharmaceutical companies, but came to the conclusion at that time they were materially overvalued.02 Feb 2017
Confounding Compounding
James Bullock
All long-term investors need optimism, even to achieve their most basic aim, to preserve and grow the real value of their assets.01 Feb 2017
The Growing Appetite for Brands
Madeline Wright
Lindsell Train has never invested directly in emerging market listed companies, but nevertheless accessing emerging markets is an important part of our strategy.01 Jan 2017
Success Breeds Complacency
Nick Train
"Success breeds complacency. Complacency breeds failure. Only the paranoid survive." Andy Grove01 Aug 2016
Who Wants to be a Billionaire?
Nick Train
What are we to make of the Forbes Billionaires List? This is the magazine’s guide to the, currently, 1810 billionaires of the world – average personal net worth of $3.6bn. The list, which updates in real time, puts us face-to-face with these worthies.01 Apr 2016
Re-evaluating Valuations: Exceptional Companies Deserve Exceptional Multiples
James Bullock
Those familiar with Lindsell Train's approach will recognise a key tenet of our philosophy; that other investors undervalue the best companies.02 Jan 2016
Impending Global Profit Boom
Nick Train
According to the Bloomberg M&A tracker 2015 was the biggest year ever for global deal-making.01 Aug 2015
Lynch Law
Nick Train
I was filing some old papers over the weekend and came across a forgotten treasure: a set of bullet-points jotted down by an anonymous attendee of a speech called “Common Sense Investing”, given by Fidelity’s great Peter Lynch almost exactly 25 years ago, in May 1990 – to the Greater Boston Chamber of Commerce.01 May 2015
Evaluating Valuations
James Bullock
Other investors persistently underestimate quality, resulting in unduly low market valuations for the very best companies.08 Jan 2015
Why GDP Doesn't Adequately Measure Prosperity
Michael Lindsell
Last December, following the announcement early in the month of the Japanese GDP statistics for quarter ending September, the market promptly fell in response by 3% in a day.01 Dec 2014
Retail Therapy
Madeline Wright
The way we shop is changing. The advent of the internet has had an undeniable impact on global retail, with digital and community spaces increasingly interacting with traditional and new shopping channels.01 Jul 2014
Size Doesn't Matter (Very Much)
Nick Train
The biggest company by London-listed market value in our UK equity portfolios is Diageo, with a current capitalisation of £46bn.30 Apr 2014
Save The Data!
Michael Lindsell
A question that we have been asking ourselves recently is: how valuable is the data that our portfolio companies amass and have available at their disposal in the general course of what they do?28 Feb 2014
A Little Of What You Fancy
Madeline Wright
As holders of Diageo and Brown-Forman, we believe that premium spirits (broadly defined by the drinks industry as litre bottles retailing at over $15) hold a uniquely valuable place in the global spirits market.31 Jan 2014
Men More Frequently Require to be Reminded Than Taught
Nick Train
Dr Samuel Johnson is a great hero of mine and this report is inspired by one of his many memorable flashes of wisdom.31 Jul 2013
Kings of Content
James Bullock
Several of the companies in our portfolios own and create unique intellectual property, be it in TV and movies (Disney and WWE), video games (Nintendo) or sports (Juventus, Celtic and International Speedway).31 Jan 2013
Aristocratic Dividends
James Bullock
Dividends are a crucial component of any long term equity strategy and, simply put, might be the only tangible return earned by the permanent owner of an equity asset.31 Dec 2012
A New Nifty Fifty? Bring It On!
Nick Train
I hope Crispin Odey won’t object if I begin this discussion with a typically stimulating idea I heard attributed to him recently.30 Jun 2012
What Goes Up Must Come Down: Must It Not?
Nick Train
I’ve just read Howard Marks’ book – “The Most Important Thing: Uncommon Sense for the Thoughtful Investor”. Marks is chairman and co-founder of Oaktree Capital, a recently-listed $6bn market cap US investment management company.31 May 2012
Indian Takeaway
Michael Lindsell
I have recently been on holiday to India - in Rajistan visiting forts, temples, villages and crowded cities but in the process learned a lot more about the country. My interest was more than idle curiosity for it posed two important investment questions, both pertinent to our global portfolio.30 Apr 2012
Something for Nothing?
James Bullock
I recently returned from a revealing trip to San Francisco, home to Morgan Stanley’s annual TMT conference and presentations from 200 of America’s top technology companies.02 Jan 2012
Surprises In 2011
Nick Train
‘Tis that season of year – a flood of New Year predictions from strategists and talking heads, as traditional as Christmas cracker mottoes and about as memorable.30 Sep 2011
Seven Pillars of Wisdom
Nick Train
A friend asked my advice about his financial affairs, having recently come into a pot of capital. My first thought – which indeed I acted on - was to direct him toward the capable hands of any of Lindsell Train’s valued counterparties in the Private Wealth Management industry.31 Jul 2011
More Observations on Japan
Michael Lindsell
Following a recent visit we introduce, reiterate and reinforce some views on Japan three months on from the earthquake.30 Jun 2011
Nintendo
Michael Lindsell
“Nintendo dealt a blow to rivals last week by unveiling its groundbreaking new console. Gamers will be spellbound by the possibilities.” Sunday Times, 12th June 2011.30 Jun 2011
Are We Heading For a New Tech Bubble?
Nick Train
LinkedIn’s May 2011 public offer displayed the unmistakable symptoms of financial exuberance and has prompted a flurry of concerned articles debating the above question. Our considered response is: yes, we are most likely headed toward another such bubble.31 Mar 2011
Events, Dear Boy, Events
Nick Train
The brutality of recent events makes it hard to know what is “really” going on in markets– i.e. what level securities would be without Japan and the Arab Uprising. But we have to assume conditions in the investment markets will eventually return to normal.31 Dec 2010
Observations From Japan
Michael Lindsell
Following a recent visit to Japan, I provide below some observations that may hold lessons, or indeed implications, for the economies and markets in the West, particularly in respect of the banking sector.31 Aug 2010
Just Another Merger Monday
Nick Train
I am coming to the conclusion that the FT’s Lex Column is written for, or perhaps even by, hedge fund managers and investment bankers alone. Possibly this is the FT’s chosen or actual constituency – in which case, fair enough. But for this reader the result is sometimes the column misses the point and by a country mile.31 Jul 2010
An Oblique Approach
Michael Lindsell
On my recent trip to Japan I finished reading John Kay’s newly published book ‘Obliquity’, which has some useful insights into how we achieve our objectives in all aspects of life but with particular relevance to business. In it he contends that most of what we do, whether personal, professional or corporate, is often best pursued indirectly or obliquely.31 Dec 2009
I Wished a Client…
Nick Train
I wished a client in the wealth management industry happy holidays and a happy New Year last week. “Yes”, he replied sardonically, “I can’t tell you how much I’m looking forward to January 1st…2011”.30 Sep 2009
Do Dividends Really Matter?
Nick Train
“As we have gone through the very, very good times a few people have said – ‘5%, that feels a bit stingy’. In the times we’re in now, people say ‘Wow, that’s great, we really appreciate you being very consistent about this’ ”. So said Nick Rose, Diageo FD, a day or so after the company’s recent final results and remarking on another year of 5% dividend increases.31 May 2009
Reflections on Markets in 2009
Nick Train
2009 has seen investor sentiment swing from the depths of despair to the euphoria of the recent rally. Nothing much has changed in our portfolios but we reflect below on a number of aspects of what has occurred.31 May 2009
You Will Come
Nick Train
“Eventually You Will Agree With Me Because You Are Smart And I Am Right….” This, according to Warren Buffett, is how longstanding business partner Charlie Munger concludes any debate the pair has about Berkshire Hathaway’s strategy.31 Dec 2008
The History Man
Nick Train
An old friend of mine is a historian (well, he has had articles published and lectures at a proper university). He is also an active participant in the equity markets and in no doubt about the gravity of current events.30 Nov 2008
Is Britain going the same way as Japan?
Michael Lindsell
Japan’s asset price bubble in the late 1980s was founded on an unprecedented stockmarket and property boom. Asset prices inflated to such an extent that they lost any anchor with incomes. At the peak of the boom, mortgages were granted worth 8-10 times incomes and shares traded on an average dividend yield of just 0.5%.30 Apr 2008
How to Value £1 of Sales
Nick Train
After a market dislocation of such magnitude all one knows for sure is that something is wrongly priced. The moves have been wrenching – up as well as down - and hindsight will confirm some “once-in-a-generation” opportunities.29 Feb 2008
Cash Hoarders and Debt Dependents
Michael Lindsell
Although most of our readers will know by now that we do not construct portfolios with reference to a market index, we do think it is useful to compare the salient characteristics of our portfolios to that of the market indices to have a sense of where our biases lie and to illustrate to our investors where we differ from the average portfolio.31 Jan 2008
"I Forgot More Than You'll Ever Know (Abouth Them/Her)"
Nick Train
There is no need for us to enumerate the worries and uncertainties out there. We feel them as keenly as everyone else and can articulate as apocalyptic a bear case as the next man.30 Nov 2007
On The Failure...
Nick Train
There have been plenty of “panick terrours” since 1771 of course, up to and including our very own of Summer/Autumn 2007.29 Nov 2007
Is Japan a 'Buy'?
Michael Lindsell
The dividend yield of the Japanese stock market is rising, partly because dividends are growing but also more recently because share prices are falling. Having sunk to a low of 0.8% in January 2006 the yield on the TOPIX index is today standing at 1.5%.31 Aug 2007
Bids - Who Isn't Next?
Nick Train
Earlier this year we enjoyed one of those short-lived but welcome “hot” streaks, when all our strategies benefited from a succession of takeover approaches.30 Jun 2007
Idea Updates
Nick Train
The bull market in UK equities hots up, with takeover speculation, both real and imagined, puffing up valuations. Here, as very long term investors – at least by most people’s standards - we undertake an infrequent evaluation of our key sector assumptions and stock ideas – to ensure they still have the legs to make it to our time horizon.31 May 2007
Various thoughts on Japan
Michael Lindsell
It is widely believed that global hedge funds play the leading role in the 'Japanese Yen carry trade' as they borrow low yielding Yen and diversify into other higher yielding or capital appreciating assets. What is little realised is the role played by Japanese individuals.28 Feb 2007