Books that help cast aside prejudices and subconscious biases, a short history of the past 13,000 years and a guide to spotting ‘ten baggers’ early are some of the books that managers at Artemis credit with making them better investors.
In this part of Trustnet’s ongoing look into the books – financial or otherwise – which have influenced the industry’s top managers, we spoke to the Artemis Global Select fund team.
Made up of FE fundinfo Alpha Manager Rosanna Burcheri, Simon Edelsten and Alex Illingworth, the team each recommended two thought provoking books whose lessons they have carried with them into their managerial careers.
Rosanna Burcheri
‘The Age Curve: How to profit from the coming demographic storm’ by Kenneth W. Gronbach
“The best book on demographics I have ever read. It really opened my eyes to the importance and power of demographic data. My job is to invest in companies that (most of the time) produce goods or services for which there is demand,” Burcheri said. 
“That demand will often depend on demographics. As each generation ages what it buys and how much will change. Demographic data are very powerful in understanding which goods and services the biggest cohort of the population will need.
“The beauty of demographics is that trends change quite slowly – shaped by mortality and fertility rates – so it is possible to analyse how demand will shape over decades. I’m interested in which industries will benefit from demographics and how companies respond to demographic shifts – how they cultivate interest in and allegiance to their products for years to come.”
‘Factfulness – Ten reasons we’re wrong about the world and why things are better than you think’ by Hans Rosling
“Probably the best reminder of what my professor of statistics told me at university: ‘Statistics without common sense is of no use’,” she continued.
“It’s an easy book to read, full of anecdotes that demonstrate how the world looks a better place when you cast aside your prejudices and subconscious biases. It’s a cheery read, which is a good thing at the moment.
“More importantly it encourages you to think more carefully about factual and statistical claims. Percentages shape a lot of my investment decisions – this book reminds me to put them into context and understand what they really mean. Doing that is probably the best risk management tool I have.”
Simon Edelsten
‘The Cash Nexus: Money and Politics in Modern History 1700-2000’ by Niall Fergusson
“The book explores the history of the relationship between money and politics. It starts in the early 1700s – an era when governments began learning how to borrow and service debt through bond issues that could finance war and the building of empires,” Edelsten said. 
“As he gets closer to modern times Fergusson explores the inter-dependence of politics and economics. Does the electorate choose politicians on the basis of economic benefit – do they even understand where their best financial interests lie?
“The lesson for me was how much of the history of the West since 1700 is the consequence of economic and demographic forces rather than the decisions of high-profile politicians or matters of chance. Let’s not underestimate the power of politicians to screw things up, but as investors we’re better focusing on the secular growth themes driving the economy – like digitalisation and automation.”
‘Guns, Germs and Steel: A short history of everybody for the last 13,000 years’ by Jared Diamond
“This winner of the Pulitzer Prize is similar to the Fergusson book in challenging inherent preconceptions,” the manager said.
“Diamond explores the driving forces behind societal development around the world, from the earliest stages of civilisation. Drawing on scientific fact, he explains how societies have developed and how influential geography and the environment have been in determining regional differences in economic growth.
“The book gives a very different perspective on regional economic disparities today and encourages you to think about which differences are likely to persist and which to converge, which emerging markets will actually emerge and which will struggle. Despite its epic ambitions it really is quite short – only 500 pages.”
Alex Illingworth
‘One up on Wall Street: How to use what you already know to make money in the market’ by Peter Lynch and John Rothchild
“Peter Lynch was one of the best investment managers of his generation, consistently outperforming the S&P 500. He is also one of those people who could come up with great and memorable turns of phrase, like: ‘Go for a business that any idiot can run – because sooner or later an idiot probably is going to be running it’,” Illingworth said. 
“This book has several such bon mots. It really got me excited about investing. The main message is that with smart research and observing the world around you, you can pick winners. His focus is on how to spot the ‘ten-baggers’ early, and the importance of ignoring the short-term ups and downs of the market to run your winners: ‘The trick is not to learn to trust your gut feelings, but rather to discipline yourself to ignore them. Stand by your stocks as long as the fundamental story of the company hasn’t changed’.”
‘The rise of the robots’ by Martin Ford
“This is a more recent book that’s been very influential. It brought to my attention the stark reality of how robotics is changing our world,” he finished.
“Increasingly, robots can do things more quickly, more cheaply and better than humans. It’s a frightening book in many ways – any job, or any part of a job that is routine can be automated. That has terrifying implications for unemployment, but automation can also be good for society. And it’s been good for our portfolios. Japan, which has an ageing population and therefore a vested interest in automation, is at the forefront of the manufacturing industry for robotics.
“Automation is a major theme within our [Artemis Global Select] unit trust and its sister, the Mid Wynd International Investment Trust, and the Japanese stocks we hold within this theme have been some of our best performers in recent years.”