Are you feeling bullish for the rest of 2016
"I’ve never pushed Europe, what I’m trying to find are good companies which have been borne there which tend to have good global reaches and today's no exception. I think if you look at Europe per se its facing in all sorts of challenges as other parts of the world too. Where is growth coming from? Some of the issues like migration are really quite severe at the moment and there are all sorts of geo-political pressures, not just in Europe but everywhere else too."
"So it’s a sort of nasty headlines, nervous investors and the market has obviously come back quite sharply. I think at times like these, it’s important to be choosy. If you’re choosy I think you can find very good businesses which can deliver maybe slightly less growth in a very difficult time but I think they can still grow. I also think with interest rates where they are, which is very low, the economy where it is, which is very tough, they are going to stay very low and think there is going be mna at some stage. I think it’s not a bad time, timing is always very difficult, I think one has to accept that it will be bumpy but I think the direction of travel will be fine next year?"
What will it take for a snap back in Euroepan Markets?
"I’ve never been very good at crystal ball gazing and trying to work out what the macro is going to do in the next few months and I’m not going to try and predict with any great confidence what’s going happen in the next few months from a macro point of view and what will happen from a sentiment point of view. I think what would be very helpful is if we got some significant mna coming through which I think is quite possible but it’s very hard to know when that might happen.
"That’s certainly one thing with a rpple effect which is quite positive. I can’t see some of the sort of headline issues disappearing very quickly, it’s not a quick fix type feel and I'm so I’m afraid it won’t sound hugely exciting, it’s probably dogged does it in the sense it’s just a question of being patient but I think being patience an important part of the investment process, you have to be patient."
"As long as you have the right sort of business ran by the right sort of guy, patience should be we rewarded I think actually so it’s more that sort of thing but i think before one gets too desperate and despairs totally, I think you need to look at what else you can do with money at the moment. I think if could compare what we're doing which is buying good quality global businesses which are based in Europe to say respectable sovereign debt or respectable corporate debt or something on those lines, the returns that we can get I think are far more interesting than, corporate debt you can get negative yields in certain sovereign debt."
"I think from that point of view, we are talking free cash flow yields of around 7 per cent plus on very under geared balance sheets and companies of modest PEs which have handled adversity for the last 7 or 8 years quite well, I don’t think it’s desperate, it’s just I’m afraid steady she goes rather than getting too excited."
Is Brexit a threat to a recovery
"I wouldn’t imagine Brexit is a major negative, it does add to uncertainty obviously so as far as that is concerned, it’s a short term issue, certainly talking to the company management that I talk to, they prefer nothing to change its just makes their life that little bit easier. I think the other thing it does do is it reminds, certainly UK investors about the importance of diversification, sterling has been quite strong up to the last few days certainly days or month or so against the euro certainly.
"I think that people thought that was wonderful but I think there has been a slight wakeup call in terms of the sterling taking a bit off a hit in the last few days certainly. I think it just shows people they should be diversified, I think a good diversified global portfolio is essentially what we are doing is no bad thing."
What is the oulook for dividends?
"I think when you look at dividends and yield that European stocks are offering, I think it’s quite encouraging but I think one has to quite careful about what your talking about because there are a chunk of companies who I think are very much over distributing and in some cases if you look at some of the utilities, they are borrowing money to pay you dividend which is a finite game clearly."
"The oil majors are doing that too and so yes they have very high dividends but I would doubt they are sustainable, we are very much focused on stocks which are as far as we are concerned growth stocks which have pay-out ratios of typically 40 or 50 per cent but sometimes they are higher than that because they do need so little capital and that’s kind of fine too. I think the obvious point is if you are a sensible finance director your dividends are going to follow your earnings and cash flow growth so its very much about are you going able to see some underlying growth if so the dividends will follow."
"I think again if your picky there’s no reason why businesses can’t make growth even if they haven’t got a nice GDP tailwind to help them. So I'd be reasonably up beat and certainly historically the sort of companies we are talking about have shown quite consistent growth and I think the interesting test is always to ask a company how it handles their 08/09, most of the companies we are talking about handled it fine, I think that gives you quite a good feeling of how they can handle adversity."
How is your new fund shaping up?
"The new fund started in the beginning of November last year and the market has been very difficult, I’m afraid, since then. We are quite naturally conservative, we tend to be in the higher end in terms of the quality of stocks that we have, hopefully without paying too high valuations. In a relative sense our investmesnts have been ok and we are very slightly up against the market which is 4 per cent down so that’s obviously been satisfactory."
"As far as we are concerned, I think going forward what I’ve always tried to do is focus on 3-5 year views and invest accordingly rather than trying be aggressive and clever in the short term and so we are much placed for those sorts of stories. We feel quite comfortable about the way the world is shaping up if you take that kind of time frame and particularly because certainly some of the valuations now look particularly interesting having had this sell off so I would feel this is not a bad time to actually invest into this sort of area because it is now cheaper and a lot of the issues have been discounted."