8th April 2016
This experience, and others, have led me to question what it means to be a buy and hold investor. Author and fund manager George Cooper describes buy and hold as a dereliction of duty in the inaugural letter to holders of his new fund, Equitile Resilience.
He says corporate longevity has been in decline for decades because of increased competition from globalisation and accelerating innovation.
Cooper's book Money, Blood and Revolution advocates a Darwinian model to describe the economy and his fund practices a Darwinian approach to investment.
Equitile Resilience is a diversified portfolio of the most resilient companies, the strongest, most adaptable businesses with the strongest balance sheets, similar to Share Sleuth (though the companies are huge and headquartered all over the world).
Cooper says the founder of packaging company Sonoco, one of the fund's holdings, had a dictum that has guided the company for over 100 years: 'Change is an immutable law, eternal adaptation is the price of survival.'
It sounds like a company to buy and hold, but Equitile has another element to its strategy, which it calls Darwin. Should a holding's share price fall sufficiently according to predetermined criteria, the fund sells the shares, a trade known as a stop-loss.