I'm not a huge fan of active fund managers, mainly because of their high costs and because most of them don't actually deliver much value for money. In general I think most investors are much better off just relying on an index fund rather than trying to find a manger (mainly because retail investors have a terrible tendency to invest in last-year's best performing fund, which will often be a poor performer in future).
That said I do have soft spot for a few contrarian value-focused investors. True value investors are willing to suffer long periods of poor performance in return for outperformance over the very long run.
Two of the British value investors I like most are Terry Smith and Neil Woodford.
Terry Smith just got a great writeup in The Guardian newspaper on the first anniversary of his new fund, Fundsmith. It is a relatively low cost fund (cheaper than most other active funds, but still more expensive than the cheapest index trackers) has a decided value focus.
Some of his favourite picks are consumer goods and other branded companies such as Unilever, Procter & Gamble and Imperial Tobacco.
None of this firms is especially exciting, but they deliver good cash flows, good dividends and trade at attractive yields. Think Warren Buffet when you think of Terry Smith as the fundamentals of his share selection his very much like the Buffet's.
Some of his method is revealed in the Guardian article:
Smith's other mantra is that investors should read, read and read rather than trade, trade and trade.
"Between the three of us who run Fundsmith Equity, we read around 1,000 publications regularly.
"I read PotatoPro magazine, Elevator World, even Tissue World. PotatoPro, for example, helps you keep on top of what's happening in the snack food industry."
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