How to find ‘cockroach’ shares that can survive disasters

TL;DR

Simon Edelston discusses the investment themes and stock selection process for the midwind international investment trust, focusing on quality stocks and growth themes.

Transcript

hello and welcome to the first fund insider interview in our new recording studio i'm kyle caldwell the collective's editor at interactive investor and today i'm joined by simon edelston who is the full manager of the midwind international investment trust simon thanks for coming in today you're welcome so simon the trust invests in high quality st... Read More

Key Insights

• 🌍 The midwind international investment trust focuses on quality stocks centered around growth themes like automation.
• 🍉 The trust avoids sectors in long-term decline, such as the oil sector, and invests in themes with a good long-term outlook.
• 🤑 Valuation is crucial, and the trust ensures there is good value for money by comparing cash flow with share price.
• ✊ Investing in defensive companies with pricing power, known as "cockroaches," helps balance the portfolio.
• ✳️ The trust has no exposure to Russia or China due to political risks and considers environmental impact in its investment decisions.
• 👍 Inflation-proofing is important, and certain companies like phone and cable TV operators, as well as American railroads, have proven pricing power.
• 💪 The trust focuses on companies with strong barriers to entry and the ability to pass on cost increases.

Questions & Answers

Q: What are some investment themes in the midwind international investment trust portfolio?

The trust focuses on quality stocks centered around growth themes, such as automation, and avoids sectors in long-term decline, like the oil sector.

Q: How does the trust ensure it is not overpaying for a company?

One way the trust ensures good value for money is by comparing a company's cash flow with its share price to determine its underlying value.

Q: Can you give examples of companies the trust bought towards the end of last year?

The trust sold high-growth stocks like PayPal and invested in companies like Nippon Telecom, which have high quality and profitability but don't grow quickly.

Q: What are some examples of "cockroach" companies in the portfolio?

Nippon Telecom is an example of a defensive company that can pass on inflation and cope with economic pressures. American railroads are also included due to their strong pricing power.

Summary & Key Takeaways

• Simon Edelston discusses the investment themes of the midwind international investment trust and highlights the importance of quality and growth.

• The trust avoids sectors in long-term decline, such as the oil sector, and focuses on themes like automation.

• Valuation is crucial, and the trust ensures that there is good value for money by comparing cash flow with share price.