This is not the latest missive from Lloyd Blankfein, you may be surprised to hear, but the closing sentence from the Chairman of Personal Assets Trust plc, in their latest Quarterly Report. PAT is an enigmatic Investment Trust whose board reports are always worth a read.
The aforementioned Chairman, Robin Angus, addresses the concerns of a shareholder who was not overly impressed with the trust’s performance as follows:
I was, however, a little concerned that [the shareholder] would even contemplate the idea that our performance might ever be ‘spectacular’. So I plead with you now ― if Personal Assets’ performance is ever ‘spectacular’ in a rising market because we seem to be taking the kind of risks that could result in the loss of irreplaceable capital, write to me, complain to me, come and camp outside 10 St Colme Street and make my life a misery, until the Board returns to its senses. We are not in the business of trying to be ‘spectacular’.
Uniquely amongst Investment Trusts, PAT successfully eliminated the “discount” by continually redeeming and issuing new shares as necessary to ensure the share price stays very close to the underlying Net Asset Value. Under the management of late Ian Rushbrook the trust avoided the worst of the equity market losses during the credit crisis, having correctly predicted the severity of the subprime mortgage problem and its wider impact due to credit “securitisation”.
(Source: Personal Assets Trust plc. Disclosure: no position in PAT plc)
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Yes, PAT are a contrarian bunch. If I remember correctly some investors are more prone to complaining that they shouldn’t be paying them to manage cash when they go ultra-bearish, rather than about spectacular performance.
If you believe in market timing and that someone can do it consistently, I think it’s probably worth paying for. (If…)