Alec Cutler, a successful investor, discusses inflation, markets, and stock selection. He also shares his investing principles learned from his grandmother. The podcast covers topics like losing capital, living away from financial centers, impact of greenflation, timing in investing, Mifford II's negative impact, diversity in investing, moving to Bermuda, and qualities of a successful contrarian portfolio manager.
Supporting Duchenne UK and raising funds for research is crucial in providing support for individuals with Duchenne muscular dystrophy.
Investing in advanced industrial companies involved in rebuilding and electrifying the grid may present promising investment opportunities.
Learning from mistakes, building diverse investment teams, and recognizing patterns are essential traits for successful long-term investors.
Deep dives
The Importance of Supporting Duchenne UK
The podcast episode highlights the importance of supporting Duchenne UK, a charity dedicated to raising funds for research and support for individuals with Duchenne muscular dystrophy. The personal connection of the podcast host to the disease emphasizes the need for support and highlights the impact it can have on affected individuals and their families.
Investing Approach and Insights from Alec Cutler
The podcast features an interview with Alec Cutler, a volume investor managing a balanced fund. He shares his investing approach, including the focus on inflation and markets and the importance of stock selection. Cutler also discusses the principles he learned from his grandmother and their influence on his investing framework. He highlights the benefits of diverse teams and explains why he values dividends and the importance of good management.
Concerns about Future Economic Trends
The podcast episode delves into concerns about future economic trends, particularly the potential challenges posed by a changing investment landscape. The conversation highlights the significant impact of 40 years of low interest rates and the potential consequences of misallocated capital. The role of central banks, addiction to stimulus, and the risk of inflation are also discussed, shedding light on the potential risks and uncertainties in the current market environment.
Investing in Greenflation and Rebuilding Grids
Investing in equities as a hedge against inflation is not a guaranteed strategy, as evidenced by the poor performance of equities during the 1970s. However, advanced industrial companies involved in rebuilding and electrifying the grid, such as those in the electricity transmission, windmill, solar, and gas turbine sectors, may present promising investment opportunities. The massive investments required in replacing outdated infrastructure, combined with the onshoring trend and increased focus on green energy, create potential for growth. However, it is crucial to consider longer investment horizons and recognize that success in investing often requires the ability to recognize patterns, be comfortable with contrarian thinking, and determine appropriate weightings for winning investments.
Importance of Learning from Mistakes and Developing a Diverse Investment Team
Learning from mistakes is an essential trait for successful long-term investors. It is crucial to acknowledge that being wrong is a normal part of investing and to take responsibility for one's own decisions. Additionally, building a diverse investment team enhances perspectives and strengthens decision-making processes. Diversity of thought, including different approaches to analyzing investments, can lead to more robust investment strategies and better outcomes. Recognizing patterns, having the courage to challenge consensus, and knowing when to overweight future winners are skills that top investors possess. However, it is important to note that becoming a skilled investor takes time, and experience helps in gaining a deeper understanding of complex market dynamics.
Alec Cutler runs one of the best performing low risk global funds and has a pragmatic investing approach. In this interview, we discuss inflation and markets and what this means for stock selection. Alec explains his views on what makes for a successful investment team. And he explains the principles of investing he learned as a child from his grandmother, which still guide his investing
framework today.
