Fund Manager Comments on Inflation/Valuation, Visa, Beauty & Consumer Stocks

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A version of this was also published on my Twitter account.

Introduction: Below are some fund manager comments that we find of interest, on inflation and valuation multiples (Troy), Visa/Mastercard (Artisan Partners), Beauty (Fundsmith) and Consumer stocks (Lindsell Train).

Inflation: No Easy Answer, Certainly Not “Cheap” Stocks

At Troy, CIO Sebastian Lyon and fund manager Charlotte Yonge wrote about the recent rise in inflation expectations and market volatility. They are expecting a tougher period for investors ahead:

"Our objective is not to beat stock markets over short time periods. We seek instead to protect the real value of capital over the long term. That has just become more challenging”

With higher inflation, higher interest rates cut company valuations by reducing the present value of future earnings. This could be a problem for companies with high multiples:

“Companies whose value rests upon cash flows discounted far out into the future are vulnerable to those earnings becoming…