Seems like a good price, Henry. Last NAV was £1,072 as of 31 Jan 2020, but I doubt it’s moved that much since the Global fund has been pretty flat in February.

Both the main UK and Global funds saw outflows in January it would seem. The former went from £6,727m to £6,562m (but most of this was due to unit price falls) and the latter from £8,444m to £8,235m (despite flat performance). I guess some folks think this trend may persist and the value of Lindsell Train Limited could fall as a result.

(it’s bouncing around at lunchtime, got down to 1050, but seems to be back up to 1080/90 now. Who’s selling? What do they know? etc. etc.).

The last time that Nick Train & Michael Lindsell bought shares in LTIT was in 2012 when they were at a premium of 8%. Train recently said that he would love to buy more shares on the same terms so your limit of 10% looks spot on.

And as far as I can tell they kept the Kraft Foods’ shares that were part of the Cadbury offer back in 2010, so that one seems a fair shout as well.

How to handle the share price is a proper conundrum. My instinct is that one either A) slowly starts to sell when the premium gets really silly e.g. 75%? in the hope that one can buy them back at a lower price in the future or B) buys more when the premium gets to the teens or lower. If your holding gets too big later on you can reduce at a profit.

Of course this year was a great example of the problems of timing – if you sold at a 75% premium, it then kept on going up for a while, making you feel very frustrated.

The issue of the funds closing is also very interesting, if probably some way off. I suppose the optimstic view is that in the meantime global companies get bigger and bigger, resulting in them revising the figure up (you’re probably aware of how EM smaller co funds have tended to react to this i.e. increasing the maximum market cap of companies they can own).

There is also the succession issue – my instinct again is that this will be tricky, no matter how talented Bulloch etc are (and I do believe in them) as it is very tricky to replace the halo effect created by larger-than-life founders such as Train and Lindsell.

On a separate note, it would be fascinating at this point to see Lindsell Train ‘doing a Smithson’. Their only small/mid-caps I can think of now are A.G. Barr and the champagne.

To sum up, I very much hope that the Trust keeps performing and the premium stays steady and not too crazy.

I admire Lindsell and Train so much for their integrity and fiduciary duty to clients, and I think its good for the industry to have examples like this. If only there were more fund managers like them.

p.s. Forgive the pedantry – you said that A.G. Barr was the only listed equity surviving from the first Annual Report – I think you’ll see Nintendo is still there as well (and arguably Cadburys has survived in the form of Mondelez, but that’s getting really silly!).

Mike and I are significant personal shareholders in LTIT and have not sold a share since flotation, 2001 – and have no intention of doing so. However, we have not added to our holdings for many years. This is because we have always believed that the independent directors’ valuation of LTL within your company is fair. Our longstanding view has been that if we purchased shares above the price of the published NAV we would thereby be signalling that we thought the directors’ valuation was too cautious. We don’t.

Nonetheless, I think it’s important to say – though without making any irrevocable commitment today – that if we ever again have the opportunity to buy LTIT shares on such terms, we’d absolutely love to do so. Mike and I remain committed to the company we established, enjoy our work, are continuing to build up a strong investment team around us and believe our investment approach, consistently applied, should deliver satisfactory returns to investors over time.

Thanks, Lindsey. I can hardly complain about lengthy comments when I post lengthy articles myself! It’s great to hear other investing stories, though, especially those who have stayed the course like you have and been duly rewarded.

I remember first becoming a client of HL in the 90s through its association with Analyst magazine — it’s incredible how far the firm has come since then.

The LTI share price seemed to drop to 1,200p soon after I published this piece, but it’s already rebounded to over 1,400p less than a day later. So neither of us may get the chance to buy at a discount for a little while I suspect.