This week, we speak with James Anderson, partner at Baillie Gifford, the Edinburgh, Scotland investing giant that manages $470 billion in client assets. He runs FTSE-100-listed Scottish Mortgage Investment Trust, a $23.5 billion fund, where since 2001, he has generated returns of 1,700%.
He declares the fund management business to be ‘irretrievably broken’, observing “fund managers are addicted to the near-pornographic allure of earnings reports and macroeconomic headlines.” They are overly focused on short-term returns while failing to recognize that great companies take years to develop.
He also critiques the recent market tendency of spending more money on stock buybacks and dividends than it has raised in new capital. He is not a fan of financial engineering and believes the focus should be on research and development and focusing on new products and services than share buybacks.
A list of his favorite books is here; A transcript of our conversation is available here Monday.
You can stream and download our full conversation, including the podcast extras on iTunes, Spotify, Stitcher, Google, Bloomberg, and Acast. All of our earlier podcasts on your favorite pod hosts can be found here.
Be sure to check out our Masters in Business next week with Samantha McLemore, Miller Value Partners. She is the co-portfolio manager of the Miller Opportunity Trust and related strategies, and founder/CIO of Patient Capital Management. For the 10 years ending 1/31/22, LMNOX returned 16.42% and was in the top 1% of its Mid-Cap category.
James Anderson Favorite Books
Scale: The Universal Laws of Life, Growth, and Death in Organisms, Cities, and Companies by Geoffrey West
Factfulness: Ten Reasons We’re Wrong About the World–and Why Things Are Better Than You Think by Hans Rosling
The Ladies’ Paradise by Emile Zola
The Kill by Emile Zola
Germinal by Emile Zola
