One of my favorite value investors is Nick Kirrage.
Kirrage joined Schroders in 2001, initially working as part of the Pan European research team providing insight and analysis on a broad range of sectors from Transport and Aerospace to Mining and Chemicals. In 2006, he and Kevin Murphy took over management of the Schroder Recovery Fund, a UK product identifying and exploiting deeply out of favor investment opportunities. In 2010, he and Murphy also took over management of the Schroder Income Fund, the UK equity team’s flagship value product.
Recently Kirrage did a presentation (below) at the London Value Investor Conference 2016 where he discussed the difficulty of life as a value investor, and the importance of sticking to your strategy.
One of my favorite quotes from his presentation was, Fish in Markets That Can Make You Look Immensely Stupid! These are the markets that will provide you with some serious outperformance.
Before we look at the presentation I’d like to share Kirrage’s 16 investment lessons from a decade of picking value shares:
Rule 1: Don’t continue to hold stocks that you wouldn’t buy today if you didn’t own them
Rule 2: Don’t sell just because the price falls
Rule 3: Don’t be ashamed to hold cash
Rule 4: Don’t buy the dream
Rule 5: Don’t buy single product companies
Rule 6: Don’t buy stocks you don’t want to own in 12 months
Rule 7: Don’t buy stocks you wouldn’t want to buy more of if they fell 20% for no reason
Rule 8: Only back companies with high debts if they are already priced for financial distress
Rule 9: Don’t chase stocks
Rule 10: Think long-term and forget about the index
Rule 11: Don’t let past performance affect future investment decisions
Rule 12: You can’t predict volatility
Rule 13: Don’t buy and sell too much
Rule 14: Risk vs reward
Rule 15: Focus on your weaknesses
Rule 16: Keep it simple
Here’s his presentation:
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