Investing Against the Tide, details the former special situations manager’s contrarian approach to running money and is designed to appeal those with a basic level of investment knowledge.
Bolton took on the management of the Fidelity special situations fund in 1979 and delivered an annualised return of 19.5 per cent until his decision to stand down from day-to-day fund management at the end of 2007.
The book is the second from Bolton after Investing with Anthony Bolton: The Anatomy of a Stock Market Phenomenon, which was co-written with Jonathan Davis in 2004.
Bolton says he wrote a chapter on how he came to Fidelity and some of the key lessons but it did not expand on what he had learned in his time as fund manager.
He says: “People said this is the book I should write and I thought that before I forget it all I should pen what are the key things I have learnt in all those years.”
The first part of the book covers Bolton’s principles and practices, such as analysing companies, what to look for in management and risk and then features his reflections and lessons from running money.
He says: “The book is not aimed at beginners but I do think a sophisticated private investor who knows the basics of investment can get something from this. I have also peppered in quotes from people I admire and have made many useful insights.”
Areas of interest that Bolton points to include what makes a good fund manager and what to do when you are doing badly and get put under “intense pressure”, which he says he has not seen documented before.
He also talks of how companies have become more accessible and masses of information have become available in the market, particularly through the introduction of computers.
“When I started, the best computer available was little more than a calculator. We all had to learn and I remember on one occasion one of my colleagues asking for a PC and his boss rounded on him and said why do you need one as an investment manager? Today, no one could do it without one. That said, I feel the basics of the business of buying stocks cheap and selling expensive have not changed.”
Bolton says this is an industry where you make mistakes at least 40 per cent of the time and the best thing you can do is to move on.
“I think I learned so much more from the mistakes than the successes. If you can avoid mistakes, you can make yourself an above-average fund manager. Any fund manager can have successes, what differentiates a good one from an average one is those who can avoid mistakes. This is the part of fund management that I think is not focused on enough, the risks, what goes wrong and the key is that if you do make a mistake that you do not lose a ton of money on the back of it.”
“I always tried to buy things that had enough value to protect against the downside to ensure I had both scenarios covered for a stock.”
Investing Against the Tide, Lessons From A Life Running Money by Anthony Bolton is published by Financial Times Prentice Hall at £14.99