Nick Train, Keith Ashworth-Lord and James Thomson are all FE fundinfo Alpha Managers who are highly-regarded for their stock picking abilities, but even they have holdings they wished they’d bought earlier on.
They, alongside Alpha Managers Mark Denham and Stephen Yiu, detail the wining stocks in their portfolios that they wished they’d bought more of sooner.
Not many fund managers would be willing to discuss their mistakes openly, but these five managers have a track record that proves their ability to deliver alpha in both rising and falling markets.
One lesson that readers might extract from this is that it is sometimes never too late to buy into a successful company.
Nick Train: Experian and Fever-Tree
Nick Train, manager of the £2bn Finsbury Growth & Income Trust, said there were two stocks he wished he bought earlier: consumer credit reporting company Experian and premium drink mixer producer Fever-Tree. 
“Many investors, including us, wish they had even more invested in the UK’s relatively rare digital winners and owners of luxury brands,” he said.
“Over the last 18 months we have been building up two new holdings – Experian and Fever-Tree – and this has helped us accelerate our own shift to capture these 21st century trends.”
Even though business performance from both companies “has been encouraging” since Train first initiated a position, Fever-Tree’s shares have underperformed so far in 2021.
He said: “Never mind, that gives us the opportunity to buy more on advantageous terms.”
“It is not an original insight, but true – we are living through a period of acceleration of already established industrial and societal trends, notably the impingement of digital into every aspect of life,” he added.
“For investors there are three implications. First, incredible new wealth is being created by digital winners. Next, sobering amounts of wealth are evaporating, as extinction events for digital losers mount. Finally, beloved and trusted brands, especially in luxury, continue to prosper.”
Keith Ashworth-Lord: Softcat
Keith Ashworth-Lord first bought Softcat for his £1.8bn CFP SDL UK Buffettology fund in August 2019 at 918p a share. However, the company first went public at 240p per share in November 2015. 
The IT infrastructure provider to the UK market is the number two player after Computer Centre and Ashword-Lord noted that it has been “eating its competitors’ lunches” over the last few years.
He said: “So why did we not act sooner? The simple reason is that IPOs usually don’t give us enough of a track record of financial history nor enough time to undertake a thorough analysis. So we rarely get involved in them.
“The lesson we have learned is to try to identify private businesses that we like and that might be future IPOs. But that takes a lot of effort.
“The classic example is Darktrace, a business that I have known of for about five years and where we had done preparatory work ahead of the IPO. We did take part in that IPO in April this year.”
James Thomson: Intuitive Surgical
“I bought it, and then I sold it, and then I bought it back again at a higher price - which is always embarrassing,” said James Thomson, manager of the £4bn Rathbone Global Opportunities fund. 
“But I think in many ways that illustrates the process - it's free from that kind of embarrassment because, actually, I think the facts have changed and I'm not too proud to admit I was wrong and swallow my words and buy back in.
Intuitive Surgical makes robotic devices for minimally invasive robotic surgery.
“I wish I'd seen it earlier to be honest,” Thomson said. “I did invest, but then I sold it last year during the pandemic with the view that hospital budgets would be very stretched maybe for years because of Covid and that they wouldn't have the capital budgets to be able to buy new machines.
“But the reality is: elective procedures started roaring back, and they were very clever with their financing options, which is a very important driver of the P&L [profit & loss] of a hospital.
“We were wrong about that view, and we recognise that sometimes we have to alter course and change our minds. So we bought back into that in recent months.”
Mark Denham: LVMH Moët Hennessy Louis Vuitton
“I should have bought LVMH when I first arrived at Carmignac at the end of 2016,” said Mark Denham, manager of the €746.6m Carmignac Portfolio - Grande Europe fund. “That's when its re-rating really began. 
“For one reason or another, we held off probably waiting for an ideal entry point - as is often the mistake. We only bought at about 12 months later, but the stock would have made a much bigger return if we bought when the gem of the idea was muted.”
He said that from the mid-1990s to the early 2000s there were a small number of high-quality growth stocks in Europe that every fund manager knew at the time. These were businesses such as ASML, Novo Nordisk, L'Oreal and LVMH.
“Very often people were waiting for the ideal entry points or finessing valuations or something - but those stocks have compounded pretty much 20% per annum over the last 25 years,” Denham said.
“I think sometimes when you identify a really strong business, you are just better off making sure you have it within your portfolio and let the compounding strength of the company do the work for you.
“So when I'm beating myself up, it's always when we've identified a really high quality business and we haven't bought it because we tried to finesse some stupid entry point. With these kinds of companies, that's always a mistake.”
Stephen Yiu: Nvidia
Stephen Yiu, manager of the £974m LF Blue Whale Growth fund, revealed that he wishes he bought Nvidia earlier. 
“We actually started researching on Nvidia in 2020. However, as the pandemic hit, we prioritised positioning the fund with the companies that we know well,” he said.
“We were pretty keen on Nvidia and some other names in that sector, but we didn't pull the trigger because we saw other opportunities available within in other parts of the market at the time.”
However, in his view, as time has passed since then, the valuations of these companies have become much less attractive today when compared to that of Nvidia.
He added: “We feel that the market is probably underestimating the potential of Nvidia’s end market. So it's just a matter of finding the best opportunity for the fund.
“We now believe that Nvidia’s opportunity lies at the confluence of three major secular trends over the next decade – artificial intelligence, augmented reality and 5G – all three of which drive increasingly higher demands on processing power.”
He added: “I think if you factor in the structural growth drivers, we don't think it's a cyclical as what the sector's experienced before.”