Stick: How we are balancing price and business risk

EQUITIES

In 2011, we wrote about risks to the global economy, and concluded investors were being too enthusiastic about riding the liquidity train.

We advocated a ‘capital preservation mode’, which prompted our holdings in GlaxoSmithKline, British American Tobacco, and Diageo. We continued to fret through the autumn, when high class names within the FTSE 100 outperformed. Price risk was the subject at hand then, and it remains so now. We bought William Hill back in 2009, when the market showed no interest in the business. Now it is a darling of the City, nestling comfortably in the FTSE 100. BAE Systems, also hitherto unloved, has flourished this year. GlaxoSmithKline, Restaurant Group and Tarsus are high quality businesses th...