‘The lack of change is one of the more remarkable characteristics of the Finsbury Growth and Income investment trust,’ Nick Train said at a Frostrow Capital investment seminar today.
Indeed, the highly regarded fund manager is known for the very low turnover of his portfolios, which keeps his trading costs down.
Since 2011, Train has created just three new positions in this trust. ‘I’ve had three new actionable ideas in seven years,’ says Train, ‘I’m not sure that’s praiseworthy.’
And yet, he clearly is an advocate of sitting still. He spoke of his admiration for Jesse Livermore, an American investor famous for his fortune and his short selling on Wall Street before the 1929 crash.
Train quoted Livermore, who said: ‘It was never my thinking that made big money for me. It was always sitting. GOT THAT? My sitting tight. It is no trick at all to be right on the market. Men who can be both right and sit tight are uncommon. I found it one of the hardest things to learn.’
The most recent addition to Train’s portfolio – Manchester United Plc – was added in the summer of last year. He decided to invest in the football club to help investors benefit from technological change.
Train believes that the ‘stock will treble’, because there is currently a disparity between the scale of US and UK audiences who watch football. He thinks that ‘what will make the gap narrow is a battle between global internet giants’, who are going to fight over streaming rights for content such as football matches which attract millions of viewers.
This year marks the 18th year he has been running the trust, which returned 41.5 per cent over the last three years. ‘Nobody enjoys watching the years go by, and getting older’ said Train, but added that he finds consolation in having the opportunity ‘to build on this trust’s track record and invest people’s precious savings.’
This article was originally published in Money Observer, 16 May 2018: https://www.moneyobserver.com/our-analysis/nick-train-virtues-doing-nothing