If loyalty bonuses are taxable then the value of our ongoing saving to you could be reduced, depending on the rate of tax you pay. The below table gives an indication of how this may affect you. Companies that have consumer monopolies have the economic power to pull themselves out of most bad news situations. Keith Ashworth-Lord, fund manager of the CFP SDL UK Buffettology fund: Thanks for inviting me, Kyle. Oh, about those qualifications… It helps to start off with about 15 years worth of the average persons gross pay in the bank to start investing. You also have to be quite obsessed with making money. You also have to be able to live off of a fraction of your earnings until you start to really roll in the dosh – that means patience and a willingness to forego instant gratification. But once you do these things, you can be well on your way to becoming quite wealthy – in 30 or so years. Actually, if you follow the guidelines laid out in this book, I’d wager you’d be quite well off in just 10 or 15 years. Without some predictability of future earnings any calculation of future value is mere speculation.

Don't believe it? Ask people you know why they chose to invest in a particular mutual fund and they will more than likely tell you it was because the fund was ranked as a top performer. The nature of the mutual fund beast influences a lot of very smart people into playing a short-term game with enormous amounts of capital. No matter what fund managers' personal convictions may be, producing the best short-term results possible is the way to keep their job. Timeless investing strategies for any economy—in this step-by-step guide, you will learn the formula Warren Buffet used to succeed. Notice that Buffett and Munger prefer companies which do not pay a dividend. This is because dividends lower retained earnings and therefore limit future growth. A company should only pay a dividend, according to the authors, if it has no better way of allocating the money, for example if a company has grown to the size of Apple (AAPL) and therefore has limited room for growth left. Excellent businesses are often industry leaders and tend to have low debt levels, large cash flows, a strong brand name, low maintenance & running costs, high quality products & services, an increasing book value, strong earnings, shareholder-friendly management, and a consumer monopoly. Keith Ashworth-Lord: Very rarely. I mean, our portfolio turnover currently, if you exclude where we've had to sell things, say, for meeting redemptions or whatever, it's currently 7.5%, and that's high by historic standards. So no, we don't chop and change the fund. Like Buffett, our ideal holding period is forever.Where Graham, but also the famous Graham-and-Doddsvilleinvestor Walter Schloss, bought cheap companies and lots of them to spread the risk, Buffett prefers a focused portfolio with only a handful of excellent businesses with a competitive advantage and growing value. Owning only great businesses means less diversificationis necessary.

In the world of investing, the name Warren Buffett is synonymous with success and prosperity—now you can learn how Warren Buffett did it and how you can, too. Tax rules can change and benefits depend on individual circumstances. Please remember loyalty bonuses received on funds held in the Vantage ISA or Vantage SIPP are exempt from tax.First determine what you want to own, then wait for a good price. The price you pay determines your rate of return. Kyle Caldwell, collectives editor at interactive investor: Hello and welcome to our latest Insider Interview . Today in the studio I have with me Keith Ashworth-Lord, fund manager of the CFP SDL UK Buffettology fund. Keith, thanks for coming in today. T or F Mutual fund managers are short-term motivated because they market their products to an investment public that is extremely short-sighted.

Keith Ashworth-Lord: Very much so. What you were seeing there was a contraction of price-to-earnings (P/E) multiples on the investee companies that we own. And just to prove that point, 23 of our 27 companies in 2022 reported earnings or trading statements that were in line with expectations or even better than expectations. But of those 27 companies, 22 of them finished the year with their share prices down and in some cases down quite a lot. So, I can't stress really too much that the operating performance of the companies is absolutely up to scratch. And it's been purely a market phenomenon. This rotation, so-called rotation into value, which has affected the multiples that the market accords our companies.So what is the main characteristic of a wonderful business? The book says they are like toll bridges: you have to cross them and it costs you a fee each time. Some examples are credit card companies, Google AdWords, and brand name consumer products shops have to carry, like Coca-Cola.