It is an insider?s perspective on what to do and what not with your funds. Anthony Bolton, after serving for three decades at Fidelity and managing the portfolio of some of its ever-shining funds such as FIF Special Situations Fund, FE European Growth Fund and FIF European Fund, has passed on his lessons in the book. He admits how he had made mistakes, and seen the waning and waxing of fortunes while managing funds. The book has an added relevance in the present scenario of economic uncertainty in which fund managers grapple.
The ?Foreword? is written by Peter Lynch, and the book is divided in three parts.
Being a fundamentalist, Bolton relied on the information collected from his one-to-one meetings with companies and used them for learning their business model, important factors affecting their business prospects, strategies of management, divisional profits and even to develop impression about management. They corroborated other information collected through secondary reports.
For Bolton, common sense and temperament are a must to succeed in fund management. Successful investors ?think logically, objectively and independently? and hold their head high when others lose theirs. While he stresses on the need to learn lessons from past mistakes, he warns that they do not automatically guarantee anything for the future. He advocates that fund managers should actively interact with analysts, both in-house and outside, for none knows the source of good ideas. He adds, skill of a good investment manager is in knowing not only whom to ask but also what questions to ask.
The second part of the book is interesting as Bolton discusses some of his memorable meetings with companies that influenced his decision to buy, hold and sell. Bolton provides an insight into how investment management profession has evolved over the years. He admits that shareholder activism forces companies to take short-term decisions, but is of the opinion that ?one share, one vote principle? needs to be reinforced, as it will not curtail the influence of bonafide institutions over management. In the given context, Bolton could have discussed whether increased shareholder activism has driven risk taking ability of management under the carpet.The book contains insights as well as dos and don?ts. It is of great value to any investor and fund manager, as well as a must for those aspiring for a career in fund management. Though Bolton aims at both professional and sophisticated amateur investors, and assumes readers to have knowledge of investment management, his lucid writing style makes it an easy read even for ordinary investors.
The reviewer teaches at IBS,Bangalore