Anthony Bolton

Anthony Bolton (born 7 March 1950) is one of the UK's best known investment fund managers and most successful investors, having managed the Fidelity Special Situations fund from December 1979 to December 2007. Over this 28-year period the fund achieved annualised growth of 19.5%, far in excess of the 13.5% growth of the wider stock exchange, turning a £1,000 investment into £147,000.

Bolton emphasizes some key fundamentals. “Cash-on-cash return is the ultimate measure of attractiveness in terms of valuation,” he writes. This metric shows how much cash a company generates on cash invested. Cash is not the same as profit. “Cash is a fact, profit is an opinion,” goes the old Wall Street adage. That’s why most great investors follow the cash, not earnings. (Too often, reported earnings are merely an accounting fiction).

Bolton also looks for strong balance sheets. That means lots of cash and little debt. “When something goes wrong at a company with a weak balance sheet, this is when equity investors lose the most,” writes Bolton.

There are other tidbits and details worth mentioning. He likes simple companies, not complex ones. He also prefers small companies to big ones. Owning smaller companies increases his chances of getting a buyout offer. He likes unpopular shares and turnarounds. Here he feels he can get outsized returns. Bolton is also a big fan of boots-on-the-ground research, rather than faraway theorizing.

When he ceased managing funds in 2007, he took a full-time role overseeing Fidelity's investment process. In 2009 he announced his return to fund management with a proposed Chinese fund. Even though he considered Chinese market to be a speculative bubble, he reasoned that there were still several years of good profits to be made.