Fund themes: To buy and to hold

4. “If a company’s products taste good buy the shares,” is a recommendation by Vivian Bazalegette, my former and much-admired boss at M&G, whose comments about stock selection continue to inspire.

He was drawn to companies whose products were regarded as irreplaceable by their customers. So, for instance, scientists and lawyers around the world have little option but to subscribe to Reed Elsevier’s services – they can’t do their work without them. But, as Mr Bazalegette recognised, consumer loyalty to a tasty product is just as reliable and highly profitable. Investors in Unilever, Diageo, AG Barr and similar companies can take comfort knowing that their investment is being supported by people’s insatiable love of, for instance – Guinness, Johnnie Walker, IRN-BRU, Rubicon, Fuller’s London Pride, Old Speckled Hen, Dr Pepper, Cadbury Dairy Milk, Oreo cookies, Toblerone bars, Magnum ice cream, Hellmann’s products, Knorr goods and my own choice brand, which I cannot do without: Marmite.

These products will be enjoyed 30 years from now and, in an uncertain world, that is enough to mean the companies that own these brands are likely to be terrific investments over time.

Another distinguishing factor of investment styles is portfolio concentration – does the manager have courage in his or her convictions? Richard Thornton, a pioneer of international fund management and the T behind GT Management, who hired me back in 1981was a great proponent of conviction portfolios. Sadly he died in 2013, mourned by colleagues as a formidable stock market operator. I have never forgotten his account – to a group of then feckless graduate trainees – of his secret to investment success:

5. “First, identify your great idea. Next, invest into it as much as you can possibly afford. Third, double the size of your holding, so you can no longer sleep at night. Finally – tell everyone else about it.”