Growth has been so plentiful for many years. Small and fiddly has been an area where you haven’t needed to stray.
It’s easier in big companies because of their scale and liquidity and the fact they’re well analysed. It’s been unnecessary for people to get their mind around the challenges of smallness.
Mid-caps have been some of the best performing stocks over the past 15 years. If managers can make an attractive return in mid-caps why should anyone stray further as far as the crowd is concerned?
Some businesses feel institutionalised with 50 staff. Others feel nimble and flexible with 25,000 staff.
Generally, the smaller the company, the better the performance. It’s easier to double when you have 10 staff than 100.
The opportunity for growth is so much better at the smaller end of the market. Now that world growth has stalled, that differential is going to become overwhelming.
In simple terms we’re looking for companies that can generate more cashflow next year and the year after. That means they can pay dividends.
If you look back at the 1970s, when small-caps routinely outperformed, it wasn’t because the economy was growing; it wasn’t because interest rates were low because they shot up; it wasn’t because they weren’t challenging markets because 1973/74 was very challenging. It was down to small companies generating more dividend growth than big companies and that dragged share prices up.
Many active professional fund managers aren’t interested in small-caps below £200m. You do find abnormally good valuations at entry for a business that is well positioned to sustain growth and deliver income.
We engage with companies we’re not even invested in. We’re interested in how we can give them the benefit of our experience with some of the other companies we’ve known.
What we don’t expect is that they automatically do what we tell them. They know the business so much better than we can and have a responsibility to act in the interests of all shareholders.
There may be fewer companies growing when there’s a recession on but there’s always going to be some which manage it. That in itself means there are still opportunities in Europe.
There’s nothing like the Aim market. We’ve got a wonderful opportunity to attract inward capital and potential companies to come to our exchange and that’s exciting.
I’m not very politically aligned but the UK economy has done well in the past five years. I don’t know if that’s a glowing testament but it’s certainly a positive one.
Ultimately the RDR has de-layered and made it clearer for investors what the total costs are of their advice. That can only be a good thing.
Public understanding of personal finance is not good enough. It is perceived as very complicated or boring.
What we’re interested in is making sure our collective savings are well allocated to individual companies which can deliver commercial advantage not just to their shareholders, investors and wider stakeholders but also the non-investing public. If we do invest well we get job creation and wider domestic growth.
I love simplification. As we fill in our tax form, even the most simple thing seems to be complicated. All these special cases ultimately mean there are more loopholes available.
I just wanted to be gainfully employed when I grew up. I felt I had to be so focused on delivering commercial benefit to my employer that I made sure I was an easy retainer.
