"In 1979 Anthony Bolton Launched a Special Situations Trust Valued at
£1 Million, By 1991 That Trust was
Valued at £280 Million "

Introduction

Anthony Bolton

Anthony Bolton graduated from Cambridge in 1971 and began working for investment bank Keyser Ullman.

He became a permanent analyst at Keysers which was prominent at the time in managing investment trusts.  It also managed the Throgmorton Trust which specialised, amongst other things, in smaller companies.

In 1975 Bolton moved on to Schlesingers as a fund manager.  After 4 years he left and joined Fidelity.

Fidelity, at that time, managed more than $120 Billion of assets and had a client base of over 2 million.

"Anthony Bolton Sets Up Two
Fidelity Unit Trusts in the UK"

Anthony Bolton arrived at Fidelity and immediately set about building the Fidelity Special Situations Trust, a UK based unit trust that specialised in smaller companies.

The Special Situations Trust at launch was valued at £1 million (1979).  By the early 1990s (i.e. 1991) it was worth  a whopping £280 million.

In 1985 Bolton launched the Fidelity European Trust which, by 1991, had a market value of £555 million.

His Special Situations Unit Trust had, between launch and 1991 an average annual growth rate of 25.2%.  The European Trust performed even better with an annual growth rate of 30%.

"The Technique of Anthony Bolton"

Anthony Bolton's forte was in achieving capital growth from a portfolio of undervalued UK companies.  He defined a Special Situation as a stock that was unfashionable and valued at a discount to their net assets or earnings potential.

He 'filled his boots' with stock that were in recovery, possible bid targets, in a new technology, companies that were re-structuring and company Inital Public Offerings (IPOs).

He loved investing against 'the crowd'.  His methods were very similar to those of Warren Buffett in that he scoured the market for stock that was mis-valued by the markets, bought them, and waited for the markets to recognise their true value.

Where he differed greatly from Buffett was that his entire portfolio would be turned over every 18 months. He reckoned that once the market cottoned on to a company's true valuation and the stock rose, the major move in the stock price will have taken place .

He had a knack of not only spotting undervalued companies, but also of identifying poorly run businesses with sub-standard management.

As the value of his funds grew he had to look more and more at medium to larger companies. His funds subsequently contained around 15% in larger companies and about 20% was invested overseas.

"Anthony Bolton's Characteristics"

When pushed to explain what characteristics were needed to succeed in Special Situations he listed the following as his main methods:

• You have to take a contrary view
• You must have flexibility
• Have the courage of your convictions - do not be shaken if your belief is strong
• You must do your due diligence and hold the stock through that period until the market realises your pricing anomaly
• You need to accumulate evidence and be qualitative as well as quantitative
  
• Take a long-term view
• Try to do your own research where possible
• Use Technical Analysis
  

"Books By Anthony Bolton"

Anthony Bolton always liked to be contrarian.  He would never follow the crowd.  His two books describe his methods clearly and you should follow the man.

Investing Against The Tide by Anthony Bolton

You can get Investing Against The Tide by clicking the link below:

Investing With Anthony Bolton by Anthony Bolton

 GetAnthony's book Investing With Anthony Bolton by clicking the link below:

Conclusion

Anthony Bolton said that he learned three things in investing:

1. Understand why you own a stock
2. Know what's discounted in the price
3. Know yourself

He finally stepped down after 28 years in the business with a record to be proud of.  He achieved an average annual growth rate on his investments of 19.5%.  Not too shabby.

He effectively turned a £1,000 investment into a £147,000 fortune.  Now that's a great example of investing for a DIY Pension.

One of his major trading techniques was investing against the crowd.  How right he was.

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