Busted Flushes

At the MP Evans AGM yesterday I couldn’t think of a good question to ask. What a difference a day makes.

This morning I got Personal Assets Trust’s quarterly report and their annual report. There were three unexpected reveals, any one of which would perhaps have perplexed, Peter, MPE chairman, had I posed them as questions yesterday.

Robin Angus writes the quarterly reports and has probably written all of them as he has been with Personal Assets from inception in the early 1980s. His theme in his latest article is about performance and benchmarking; maybe not madly exciting but buried in there are two gems.

“I don’t prefer watching Game of Thones to reruns of The Bill (to reveal two of my secret passions). …

My biggest equity holding by a very long way is Personal Assets. My second biggest is Scottish Mortgage. This is not because I see it as comparable to Personal Assets, but because it is a useful complement, in the same way that I like my roast beef with horseradish and my Bloody Marys with Worcestershire Sauce.”

I have never, ever, ever in all my puff heard a director of an investment trust implicitly recommend a competitor but he is spot on. Personal Assets is super-conservative, the only other similar fund I know is McInroy & Wood’s balanced fund. Personal Assets only has 36% in equities while SM is loaded up with super- sexy-hi-tech stuff like Amazon, Alibaba, Tesla and Netflix.

If you are curious, my biggest equity holding by far is in MP Evans and after that Monks investment trust leads Scottish Mortgage by a short head. I am sorry for investors who put their trust in Mr Woodford. He wasn’t on my radar when he was so successful as a fund manager at Invesco. Anthony Bolton escaped my attention too when he did well at Fidelity.

Why did they both crash and burn when they went independent? They were both geese that laid golden eggs in fees but were held in check by their employers. I cannot say why Bolton thought that he could analyse Chinese companies with the same diligence and efficiency that he applied to UK companies. He had no experience in that region and, if I may be blunt, what you read in a Chinese company’s financial statement, if you are able to read it, is at best opaque or an inaccurate representation of the true state of affairs.

Woodford went one further, doing a Jamie Oliver. Calling his company after himself was an act of hubris. Investing in start-ups that would have frightened the horses at Invesco was an act of folly. If you have the misfortune to be in his funds and you chose Woodford because of his past record, you have my sympathy. If you are in Woodford because your financial adviser put you there you should think about regime change. Perhaps you should also reflect on Personal Assets mission statement: “our aim is to preserve and grow, in that order, the Net Asset Value” (of the trust).

Today’s post is rather late because I inadvertently parked our green car on the elevated section of the M4 as I was driving it back from the showroom. I haven’t driven an automatic for ages.