May 2020: Roaring Tigers + Recency Bias

Download PDF

Roaring Tigers and Recency bias

May 2020

 

If this note reads that we are universally bullish or on in anyway certain of the future that is not its intention. Our aim is to think as contrarians and challenge any biases we see that might be leading to a lack of objectivity. That there is risk and an unusual amount of uncertainty we accept. We also accept at a sub-industry level much may change, but a lasting economic slump we see as far less likely.

We find ourselves wondering if the ‘wounded animal’ that is the consumer in a normal recession, who takes a long time for his spirits to revive, is not replaced in Covid-19 by the ‘Caged Tiger’. Maybe she will not rampage as soon as the cage is open, but if she is healthier than realised (as we believe she is) she could roar a little sooner than many might imagine. This does not imply an imminent ‘V’ shaped recovery, instead just that the gradient of recovery might surprise when it comes. Portfolios we think should be constructed with one eye on this eventuality and the other on downside risk that looks at balance sheet strength, market positions and resilience to a proacted slowdown.

“Danger and heartbreak dead ahead”

Seemingly many investing and economic commentators are agreeing with the lyrics of The Marvelettes 1960s song, i.e. that there is “danger and heartbreak dead ahead.” It is hard to open a newspaper, Twitter or turn on the radio without someone telling you (with a reasonably high degree of conviction on their part) one of the following:

  • That a second Covid-19 infection wave is a certainty
  • That Covid-19 is creating a significant economic downturn that will take years to recover from
  • That many who are currently furloughed will lose their jobs soon after the scheme ends
  • With China/US relations now so bad globalisation will soon go into reverse replaced by protectionism
  • Inflationary problems are just around the corner post all the intervention we have had (monetary and fiscal)
  • The stock market is riding for a fall post its foolish rally.

We highlight below a quote from Friday 1st May FT Lex column. Not because we think it wrong but because we think it well reflects the current mood:

Bullish investors should focus less on when the US economy will re-open. The real question is when US demand will recover – and how it is exposed to a second wave of infections. On nearly every measure the prognosis is grim. The current rally in stocks, like some of the presidents’ medial prognostications is only tenuously linked to reality”.  Source: FT

A week later the FT used it front page to tell us that “Britain on brink of worst recession since the great frost of 1709, BoE warns.’ If the FT acts as the expressor of the balanced view of investor concern, then CNBC is the voice-piece for our friend Mr Market “there is no return to normal, no return, until we get a vaccine and that is not coming until next yearJim Cramer, May 4th 

The danger in data

All of this caution could of course be justified. This piece is designed just to reflect and offer some perspective. The first refection we offer is on our modern standard of living and the danger of data. While we will not question the BoE data in its comparison to 1709, we would ask readers to reflect on what a 30% GDP contraction would have felt like in 1709 vs. what it feels like today. Surely, they are same you suggest? No, we will firmly assert. Today a US consumer only uses only c.25-35% of their spending for food and shelter. Whilst we seem to have mislaid our 1709 diary, we know the standard of living then was much much worse. This is we think an important clue as to what the future might look like and warns against the hysteria such headlines can create. Today our confinement means we have been forced to cut back on the huge discretionary expenditure that 100 years of economic prosperity has given us (car repairs, haircuts, eating out, drinking out, holidays ++) . That this would result in a such sharp drop in a catch-all data point like personal consumption, or GDP is thus unsurprising.

As such does the historical comparison of this fall vs. the past really tell us much? During the 2020 collapse a very high percentage of global society has still been able to live a safe and healthy life. In addition, we also have good enough central finance (government + banks) that are providing a significant safety net to those that need it. Anyone reading just a little economic history will tell you it was not always like this. When Buffett puts up his slide of “Don’t bet against America” too many people just think of the stock market, but that has never been his point. It is about the economic miracle that has been occurring for the last 100+ years that has created a constantly improving standard of living in America and now the world. Thus, more discretionary as opposed to necessary consumption has been made possible. Books like Factfulness and Enlightenment Now lay out the data (hard proof) behind such progress.

Interestingly such books also make it clear that it is the bad news that has always sold newspapers, never stories of 50-years of progress in medical advances or lower child mortality. In all the doom and fear we are reading about currently we find not a single article reflecting on how lucky we are to be able to withstand such an attack on our society. While we will not make light of current events, or the challenges ahead we think the scale of recent economic reversal needs to be seen against this context. The crisis/panic of Covid-19 2020 will likely be a blip in the ongoing advance of society and the wealth and wider prosperity it continues to bring.

Hunting high and low

When situations like this occur in our investing careers, we have often found it best to look for insight in two places. Among the wisest and among those who live all around us.

In seeking the views of the wise we have read and listening intently in recent weeks to those such as Buffett, Gates, Sam Zell and Howard Marks to mention just a few. From such wisened voices we hear caution and an honest and open reflection that the outlook is extremely uncertain. Their caution is mainly with reference to the danger of the virus returning or the uncertainty for the economic recovery that follows. Each however is normally upbeat on a longer-term basis.

Their views continue to give us much to reflect upon and lead us to realise how trying to forecast the future is almost futile in such an environment. Howard Marks most recent memo, Uncertainty is truly excellent in that regard. We think it one of his best.

https://www.oaktreecapital.com/docs/default-source/memos/uncertainty.pdf

The second source of insight as to the way of the world comes to us from those all around us. This is where we think investors could look to to better understand what might happen next and whether it is what is expected by markets and individual company share prices.

Recency Bias + Fear gauges

As we mulled the risk that was Covid-19 in February we found ourselves increasingly uncomfortable packing bags and squeezing onto flights for half term holidays. In hindsight these holidays were perhaps the Chuck Prince/Citigroup moment for western consumers who were still dancing as the music still played. Cleary the medial situation then deteriorated quickly, and policymakers’ warnings were heeded and obeyed by the wider population.

As we seek to analyse markets and economies during such times it is important that we can hold differing thoughts or sentiments at the same time. We can be empathetic; we can be understanding as to why people make feel the way they do. But importantly at the same time we need to be objective. The average person in global society is always busy. Busy with their day job, marriage, children, mortgage ++. This makes them far too busy to question all the information they are given daily. As such they rely heavily on their animal instincts (‘system one’ as Kahneman put it). This tells them to behave like all those around them but to watch out for occasional danger.

In February half-term western populations’ peers and leaders were giving them no reason to worry. A dramatic change in command from those they respect in a crisis enforced a huge change not only to individual’s activity levels (as desired), but also importantly to personal fear gauges (which went from ‘zero’ to ‘red alert’). Once all our peers followed suit the reason for this caution was re-enforced in us all. The ‘recency bias’ and ‘social proof’ that told all in January and February they were safe now tell us in April and May they we are not. The neighbours that would have hated you if you cancelled their skiing holiday in February now don’t even want to go to the garden centre. This is recency bias. (We state again these are not criticisms just psychological observations).

It is the now required reversal of consumer psychology away from fear and safety towards more normal behaviour that is causing some experienced investors to express uncertainty over what will happen next – We totally agree. Getting a mother to send a child back to school just by telling her that the child is a 1000x less likely to die from Covid than an old person is no easy task. The only words she hears are ‘school’ and ‘die’. In time however lower perceived risks and peer behaviour will ensure a return to normality

Wounded animal or caged tiger?

Whilst a wide variety of data all point to a massive economic impact, individual discussions throw up alternate views:

  • There are many self-employed or small businesses who have been able to carry on without too great an impact who will also receive grants and self-employed compensation
  • There have been steeper falls in consumption in parts of the UK that would normally be considered better off, i.e. more recession resilient (a recent survey showed Brighton and Oxford as examples)
  • A recent Danish survey showed the biggest proportionate fall in spending occurring amongst the wealthy and elderly (i.e. the opposite of a normal recession)

These latter points we think interesting and possibly illustrative of a wider economic phenomenon which we will call the ‘caged tiger’. In a normal recession the average worker/consumer could be thought of as a wounded animal. Poor job security, higher credit costs and lower housing wealth create an environment that is hard to break out from. Animal spirits take some time to recover as job prospects improve and a little more disposable income enables greater spending. Whilst this scenario might well describe a proportion of workers during the current environment it does not describe all (far from it). There are a great number whose job prospects are still secure, whose main source of wealth (their house) has not fallen in value and whose credit costs have not risen.

Enforced recession – Easier or harder to recover from?

But these normally affluent spenders are being stopped from spending at all. The result has been an unusually high spike in the savings ratio reported at end of March (we expect it to be very high in June qtr.). These are what we will call the caged tigers, those who would love to be far more economically active and frankly spend. The scale of the savings even ordinary families have made during this lock down period are significant. A quick look at the breakdown of US Personal Consumption Expenditure (PCE) by household shows that 51% of it in 2019 was spent on housing/healthcare/food/energy and finance. But arguably almost everything else has not been able to be spent in the last 8 weeks. The citing of Oxford and Brighton in the UK as two areas seeing the biggest falls in consumption is notable. The wealthier in society have the greatest disposable income so spend more on discretionary items and services. That the normal recipients of these services (say a hairdresser) is feeling the economic pain is clear. But that the spender is better off is also an under reported fact. A wider benefit for all is the cost of travel. Many people have sizable transport (to work/ school++) costs. That these are running at almost zero is a boost to many household budgets.

Our best guess is that in the coming days and weeks the door of the tigers’ cage is opened and she is encouraged to come out. That her first steps will be cautious ones we think is both likely and understandable. However, where our view differs from others maybe is that we think once the tiger (consumer) has found her feet she could well roar once again one day. The debate for us is not the ‘if’ but the ‘when’. A lengthy delay we accept can have knock-on consequences.

Don’t bet against Capitalism

Buffett’s favourite slide “Don’t bet against America”. said differently could be restated as “don’t bet against the global worker/consumer”. Capitalism’s attraction is that it enables via personal effort an accumulation of income that is greater than need, meaning that luxuries in life can be aspired to and ultimately afforded. This desire to work hard to improve one’s position in society is deeply ingrained in human psyche –and increasingly popular across the globe. This economic desire we still feel is 100% intact. For many the recent stop in their spending has not been out of a need to spend less but being forced to spend less. Thus, the recovery in such spending could be steep.

NB: The effect has not just been on service items like gyms and hairdressers but on large parts of spending on durable goods also; Autos, furniture and clothing are 10% of PCE. That we will for a period spend less in sectors like transportation/hotels and dining (10% of PCE combined) is clearly a new fact of life for a while, but importantly that might free us up to spend more elsewhere. Might we instead improve the home we have been stuck in for 2 months, or have a little more to cover rent/mortgage costs/bills? That the Covid-19 crisis creates economic change we agree, that it creates an inevitable economic catastrophe we are far more sceptical of.

Western arbitragers and the wealth effect

If the global aspiring worker is the one of the important cogs driving the capitalist machine another is the interest-rate arbitrageur. There will be those that do not even know what that word means, but who are engaged in the activity. What we mean by this is the activity to look at the cost of debt and compare it to the cost of a property asset you can finance with that debt. For many decades this was just an activity for the uber wealthy, but recent years have made it a mainstream activity (in UK + US). The result is constant refinancing of existing mortgage debt or use of new debt for buy to let/speculate purposes. Clearly this process is also mirrored in the commercial property sector. All the while central bankers are prepared to step in as the FED did in March and all the while the forces we are fighting are deflationary ones with our ever-lower interest rate weapons then the role of arbitragers (both professional or amateur) will continue. What do they bring to society? Well some will say a speculative bubble in asset values. That may one day be true (and we all still await that reckoning) but in the meantime they are one of the conduits that passes on the wealth effect in just the way central bank actions desire.

Exactly when these two cogs – cog 1 (consumer animal spirits) and cog 2 (interest rate arbitragers) are again working strongly in unison to drive the economy we do not know. But underestimating their combined power has been an error of many a bearish investor in the past. This is not a predication of an imminent recovery. Far from it. Just an observation of powerful drivers that investors are unwise to bet against for too long.

Virus views and second comings

We found a recent virus data point interesting from an unusual source. For light relief from the daily news we picked up an old book from the bedside (Tipping Point by Malcolm Gladwell). In reading we found no light relief at all as Chapter 4 was on “epidemics”! In looking at tipping points Gladwell had looked at pandemics. He noted an important point in the 1918 Spanish flu, i.e. that the reason it came back with such vengeance in the fall of that year was that the virus itself had mutated quite significantly over the summer to become a much more dangerous disease.

We thought this was interesting because everything we have heard about Covid-19 is that so far it has mutated very little. Indeed, that is why, whilst vaccine producers cannot move fast enough when asked they express to be fairly sure on being able to tackle the disease in time for exactly that reason. I.e. it does not mutate too much. Whilst we realise the danger of the amateur virology role, we think such insights can help balance the debate away from despair to occasional hope. Admitting that we don’t and cannot know is important however as the quote below illustrates:

“I’ve studied this stuff at university, done analysis for decades, written several NHS guidelines (including one for infectious diseases) and taught it to health professionals. That is why you don’t see me making any coronavirus forecasts…” Medical Statistician Robert Grant/Oaktree letter

Nothing to fear except…

If ever there was a time for psychology to have a strong place in policy making or investing it is now. For us it is not the GDP falls or the lack of rents paid to landlords in April or May that worry us greatly. It is the fear that now sits inside a billion people’s heads. This fear has been successfully created by policymakers, unwinding it is the ‘opening-up‘ challenge. We stated in March that investors needed to be careful not to bring the personal emotion that would influence their home life into their investing decision making. That is still true.

To learn about the likely behaviour of others we can reflect on our own feelings. When have we felt the most fearful in the last 8 weeks? We would suggest it was at the initial point of lockdown when the true scale of events dawned on us all. After that life at home has been calmer and importantly, we felt safer. Other more fearful times for some might be when they needed to take public transport or found themselves in busy supermarket.

Our point is that our greatest fear comes at the point of change. Thus, it is logical that now societies are beginning to be opened many are fearful (Ref: the criticism of leaders announcing even gradual openings – these views are driven by fear). This we think is our caged tiger in action – the longer she has been locked up, the more careful her exit of the cage will be. One day soon (hopefully) social proof and recency bias will turn the full 360 degrees and tell us it is safe to return (almost) to normal. That things will be different we accept, but we humans are a resourceful bunch. We repeat that we see changes by industry as very likely, but not lasting economic catastrophe.

Whatever it takes

The economic fear many are expressing often only includes what we know today. An example being the worry of mass redundancies once furlough schemes expire. However, with policymakers having acted swiftly up to know it is highly unlikely they will stand by and watch such a mass unemployment event unfold. We expect this economic recovery to be the fiscal equivalent of Mario Draghi’s ‘whatever it takes’. Whilst we have already had huge stimulus measures, we fully expect more if they are necessary. Policy makers are very fortunate that such a crisis occurs against a backdrop of super low interest rates. Additionally, and many will find this heard to accept, maybe we are lucky to find ourselves globally governed by policymakers who are market facing and whom seem set to at least try to make the right stimulus decisions.

In addition to existing policies there is much more that can be done to nurse an economy/society back to life – to tempt our tiger out of her cage if you will, when the time is right. A few UK examples would be to reduce housing stamp duty or extend ‘help to buy’. But there are many at a micro level too. Were the virus risk to be seen to have passed by say September a government that wanted to encourage travel/reward the population could allow all children to be taken out of school for two weeks in the 2020/2021 academic year for a holiday without penalty. Covid-19 has been an unprecedented event, the policy responses to it are likely to continue to be equally unprecedented until they have ‘worked’.

Maybe we are safer than we believe

While there may be political spats at a global level, doctors and researchers are co-operating like never before. Additionally, much data is being shared with wider populations. Thus, were a second infection wave to come we will be given good warning of it and we/our leaders can adapt accordingly. In short, we now know what to look for. An analogy could be the tsunami in Thailand in 2004.

Few globally knew what the warning for a tsunami (the retreating tide) meant, but many millions in coastal areas worldwide now do. 100 years ago, that information/knowledge to help avoid future catastrophe was not able to be shared. Today it is. This is happening at impressive speed with the global tackling of Covid-19.

But less useful information is shared also. Information that re-enforces the feeling that you currently have. Thus, those worried about a terrible second peak of infection or the fear of venturing outside can find data re-enforcing their current view. On Monday 24th February we were taking Covid-19 very seriously indeed, but CNBC on in the background of our office was not. They were finding and sharing the information that backed their view they then had. Now they are doing the same with todays current starting point. The view we see often reflects the direction we chose to look in.

In short

Whilst we realise the folly in fighting biological uncertainty, we are still contrarian investors at heart. We know that to find the value we seek we will need to have a different view from that which prevails, but that also our view has to be right (eventually). This is hard to do in the face of current uncertainty.

Much is made of the strength of the recent stock market rally, but for depressed value sectors still in heavy bear market territory the wider market rally means little. Mr Market is maybe just doing his job differentiating between the probability adjusted winners and losers. It just so happened that the ‘winners’ were already big companies and the ‘losers’ smaller, hence ‘the market’ performance in aggregate tells us little.

We concede that a wider long-lasting pandemic could tip more economic dominos over, spreading the damage further. That is why we are looking for businesses with recovery potential yes, but ones with an asset backing and/or a very strong market position that should ensure their survival. This is not in case the tiger roars sooner that all expect, but in case she is forced to stay in her cage for longer. Margin of safety comes in different forms, often it is in the price we pay. Today it is in the resilience and survival time a company will have.

Put us down as cautious optimists, but ones that like to point out and try to profit from biases when we see them.

Postscript: Please see our further reflections on the following page.

With best wishes

Andrew Hollingworth & Mark Power

The Directors and employees of Holland Advisors may have a beneficial interest in some of the companies mentioned in this report via holdings in a fund that they also act as advisors to.

Roaring Tiger – Reflections

Post sending the below piece yesterday I wanted to provide just a few reflections

  • As I turned the pages of my FT/WSJ this morning to see almost every single story be another account of yet more uncertainty, yet more reason to worry globally I found it uncomfortable to have written almost anything upbeat just the day before. How was I so foolish? But maybe that ‘uncomfortable’, even ‘foolish’ feeling is instructive in itself:
    • In the most recent Howard Marks piece that we recommended (link below) Marks talks openly of “Investing when scared” suggesting it: ”sharpens your focus”
    • He went on: “I can tell you that during the global financial crisis, following the bankruptcy of Lehman we felt enormous uncertainty. If you didn’t there was something wrong with you”… “when we started buying Bruce came to me often saying ‘I think we are going too slow’ and then the next day ‘I think we are going too fast’ ”  
    • Howard Marks and his team are some of the most accomplished distressed debt investors on the planet. To hear them express the daily doubts they have should provide us all with some comfort. Not the sort of comfort that says today’s risk are not real, but comfort that we are right to be perhaps in a state of angst while we are assessing new(or indeed many existing) investments currently.
  • Having recommended Factfulness again yesterday I picked it up last night. As a simple to read book in these busy times I just cannot recommend it enough. I suggest it will help a reader on many levels. In addition to its wider message there are so just many short examples of how hard we collectively find it not to extrapolate anything other than in a straight line (up or down). Alternatively, how even really smart people just look for the biases they already believe in.
    • Its core message I also think is really important against our current Covid backdrop, as I asserted yesterday. Global Society is set for secular growth due to variety of factors that are already pretty much set in stone. The scale of the challenges that have already been overcome and the speed of progress to get to this point(disease eradication, child mortality, increase in wealth per capita) is frankly staggering
    • Controlling Covid-19 is clearly a huge importance to the world today, but as a race we have overcome far worse

With best wishes

Andrew Hollingworth

 

Disclaimer

This document does not consist of investment research as it has not been prepared in accordance with UK legal requirements designed to promote the independence of investment research. Therefore even if it contains a research recommendation it should be treated as a marketing communication and as such will be fair, clear and not misleading in line with Financial Conduct Authority rules. Holland Advisors is authorised and regulated by the Financial Conduct Authority. This presentation is intended for institutional investors and high net worth experienced investors who understand the risks involved with the investment being promoted within this document. This communication should not be distributed to anyone other than the intended recipients and should not be relied upon by retail clients (as defined by Financial Conduct Authority). This communication is being supplied to you solely for your information and may not be reproduced, re-distributed or passed to any other person or published in whole or in part for any purpose. This communication is provided for information purposes only and should not be regarded as an offer or solicitation to buy or sell any security or other financial instrument. Any opinions cited in this communication are subject to change without notice. This communication is not a personal recommendation to you. Holland Advisors takes all reasonable care to ensure that the information is accurate and complete; however no warranty, representation, or undertaking is given that it is free from inaccuracies or omissions. This communication is based on and contains current public information, data, opinions, estimates and projections obtained from sources we believe to be reliable. Past performance is not necessarily a guide to future performance. The content of this communication may have been disclosed to the issuer(s) prior to dissemination in order to verify its factual accuracy. Investments in general involve some degree of risk therefore Prospective Investors should be aware that the value of any investment may rise and fall and you may get back less than you invested. Value and income may be adversely affected by exchange rates, interest rates and other factors. The investment discussed in this communication may not be eligible for sale in some states or countries and may not be suitable for all investors. If you are unsure about the suitability of this investment given your financial objectives, resources and risk appetite, please contact your financial advisor before taking any further action. This document is for informational purposes only and should not be regarded as an offer or solicitation to buy the securities or other instruments mentioned in it. Holland Advisors and/or its officers, directors and employees may have or take positions in securities or derivatives mentioned in this document (or in any related investment) and may from time to time dispose of any such securities (or instrument). Holland Advisors manage conflicts of interest in regard to this communication internally via their compliance procedures.

Related Posts

Holland_logo_RGB Agree

Welcome to Holland Advisors

By continuing to use this website you:
Terms and Conditions
Disclaimer
Privacy Notice

Agreement

Please confirm the following Please confirm that you have read and understood the following terms of use of this website. THIS PORTION OF THE WEBSITE IS ONLY MADE AVAILABLE TO NON-US INVESTORS AND PROFESSIONAL CLIENTS OR ELIGIBLE COUNTERPARTIES. The content of this website has been prepared by Holland Advisors (London) Ltd on the basis of information and sources believed to be reliable. Under no circumstances should any part of this website be construed as an offering or solicitation of an offer for any investment in the products on this site Holland Advisors (London) Limited is authorised and regulated by the Financial Conduct Authority (FRN 538932). 1. Not for U.S. Persons The provision of the information in this website does not constitute an offer of securities to any person in the United States or to any U.S. Person as such term is defined under the Securities Act of 1933, as amended. The information contained in this site about Holland Advisors (London) Ltd is not directed to any person in the United States. Funds referred to herein are neither registered under the Securities Act 1933 of the USA, nor are they registered under the Investment Company Act of 1940. Consequently, they cannot be offered for sale or be sold in the USA, its territories, possessions or protectorates under its jurisdiction, nor to nationals, citizens or residents in any of those areas. No investments or services mentioned on this website are directed at US Persons who are not Eligible Counterparties as defined by the UK Financial Conduct Authority (FCA) Handbook or Qualified Purchasers as defined under the Investment Company Act of 1940. The information contained herein does not constitute a distribution, an offer to sell or the solicitation of an offer to buy any securities in any jurisdiction in which such distribution or offer is not authorised. 2. Terms and Conditions of Use IMPORTANT LEGAL NOTICE THE FOLLOWING TERMS AND CONDITIONS OF USE (“TERMS OF USE”) APPLY TO YOUR ACCESS TO AND USE OF THE HOLLAND ADVISORS (LONDON) LTD WEBSITE (THE “WEBSITE”). EACH TIME YOU ACCESS OR USE THIS WEBSITE, YOU AGREE TO COMPLY WITH, AND BE BOUND BY, THE TERMS OF USE AND ACKNOWLEDGE THAT WE MAY RELY UPON YOUR AGREEMENT. PLEASE READ THE FOLLOWING TERMS OF USE CAREFULLY AND IF YOU DO NOT ACCEPT ANY TERMS OR CONDITIONS, PLEASE DO NOT ACCESS OR USE THIS WEBSITE. 3. Information on the Website Except where stated otherwise, the information, content and services on this Website (the “Information”) are provided by Holland Advisors (London) Ltd (referred to as “we” and “us”) as at the date indicated on the relevant material. The Information is provided for personal use and information purposes only. The Information does not take account of the investment objectives, financial situation and particular needs of any particular person and is not general advice to any class of persons. Therefore, you should not rely on the Information and should obtain relevant and specific professional advice in making any investment decision. Furthermore, nothing on this Website constitutes or should be construed to constitute: (i) an offer, advice, invitation or solicitation from us or our affiliates to buy or sell any investments or securities, futures, options or other financial instruments; (ii) an invitation or inducement to engage in investment activity or a financial promotion of any kind; or (iii) investment advice or recommendation. 4. Stock exchange prices and exchange rates The prices/values shown on this Website in relation to different underlying securities are based on the prices notified to Holland Advisors (London) Ltd as the last sale price of the relevant securities on the stock exchange on which they are traded as at the time and date shown. Those figures may vary throughout the course of, and between, stock exchange trading days, market trading times and business days in general. Holland Advisors (London) Ltd has not verified the figures with the relevant stock exchange and you should verify the accuracy of those figures separately before relying on them. 5. Permitted users of the Website The laws and regulations of the country from which you access this Website may include restrictions on the distribution of the Information. This Website is not directed at or intended for distribution to or use by any person or entity in any jurisdiction where (by reason of that jurisdiction’s applicable securities laws, person’s nationality, residence or otherwise) such distribution, publication, availability or use of this Website or any part of its contents would be contrary to applicable law or regulation or would subject Holland Advisors (London) Ltd to any registration or licensing requirement within such jurisdiction. If you are such a person or entity, you are not authorised to enter the Website. It is your responsibility to ensure that your use of this Website complies with any restrictions or any applicable local laws regarding use of the Information on this Website. Persons or entities in respect of whom such restrictions apply must not access the relevant pages on this Website. The Information displayed on this Website contains material that may be interpreted by the relevant authorities in the country where you are viewing this Website as a financial promotion or an offer to purchase securities. Accordingly, if you reside in any such country or fall within the scope of any law that seeks to regulate financial promotions in the country of your residence or in the country in which you are viewing this Website, please cease accessing or using this Website immediately. If you are uncertain about your position under the laws of the country in which you are viewing this Website, then you should seek clarification by obtaining legal advice from a lawyer practicing in the country of your residence or in the country in which you are viewing this Website before accessing this Website. You may not use any part of the material or Information on this Website to establish, maintain or provide or assist in establishing, maintaining or providing a stock market for trading in securities. 6. Investment Performance and Accuracy of Information The Site contains material about the past performance of our Funds. The value of an investment in a Fund may go up as well down so that an investor’s investment in a Fund, when redeemed, may be more or less than the original investment amount. By its nature, investment in a Fund managed by Holland Advisors (London) Ltd is only suitable for sophisticated investors who do not require immediate liquidity for their investment, for whom an investment in a Fund does not constitute a complete investment programme and who fully understand and are willing to assume the high risk involved in the investment programme of a Fund. THE PAST PERFORMANCE OF ANY INVESTMENT, INVESTMENT STRATEGY OR INVESTMENT STYLE IS NOT INDICATIVE OF FUTURE PERFORMANCE. Whilst the information contained on the Website has been given in good faith and every effort has been made to ensure its accuracy, the Information may not be complete or accurate for your purposes. This Website and the Information is provided on an “as is” basis and Holland Advisors (London) Ltd may not, and has no obligation to, update the Information or correct any inaccuracy which subsequently becomes apparent. The Information and/or opinions and estimates comprised in the Information may be changed or withdrawn without notice and may become outdated. You, therefore, should verify any information or other material obtained from this Website before you use it. HOLLAND ADVISORS (LONDON) LTD, ITS DIRECTORS OR OFFICERS DISCLAIM ALL REPRESENTATIONS AND WARRANTIES, WHETHER EXPRESS OR IMPLIED, INCLUDING BY WAY OF EXAMPLE BUT NOT LIMITATION AS TO RELIABILITY, COMPLETENESS, FITNESS FOR PURPOSE OR ACCURACY OF THE INFORMATION ON THIS WEBSITE OR ON ANY THIRD PARTY WEBSITE LINKED TO THIS WEBSITE. IN ADDITION, WE DO NOT REPRESENT OR WARRANT THAT THIS WEBSITE OR THE SERVERS THAT MAKE THE WEBSITE AVAILABLE WILL BE UNINTERRUPTED, ERROR FREE, OR FREE FROM INFECTION, VIRUSES, WORMS OR ANY OTHER HARMFUL CODE WHICH MAY HAVE CONTAMINATING OR DESTRUCTIVE PROPERTIES. YOU ARE FULLY RESPONSIBLE FOR ENSURING PROTECTIVE STEPS TO BE TAKEN SUCH AS VIRUS CHECKING. The Information is assembled from material prepared by Holland Advisors (London Ltd) or its agents but may not include Information made known to Holland Advisors (London) Ltd officers (or agents) subsequent to the date of publication of the Information indicated on the Website. If you use the Information, you do so at your own risk. Please recognise that the previous performance of securities or other instruments does not guarantee or predict future performance. 7. Exclusion of liability TO THE FULLEST EXTENT PERMITTED BY LAW, HOLLAND ADVISORS (LONDON) LTD ACCEPT NO LIABILITY TO YOU OR ANY THIRD PARTY FOR ANY LOSSES OR DAMAGES, INCLUDING, WITHOUT LIMITATION, DIRECT OR INDIRECT DAMAGES, CONSEQUENTIAL OR SPECIAL DAMAGES, LOSS OF USE, DATA OR PROFITS, COSTS OR EXPENSES INCURRED OR SUFFERED BY YOU OR THIRD PARTY, WHETHER IN CONTRACT OR DUE TO NEGLIGENCE OR OTHER TORTIOUS ACTION, ARISING OUT OF OR IN CONNECTION WITH THE ACCESS TO, USE OF, RELIANCE ON, OR PERFORMANCE OF THIS WEBSITE OR ANY INFORMATION CONTAINED ON THIS WEBSITE, WHETHER DUE TO INACCURACY, ERROR, OMISSION OR ANY OTHER CAUSE AND WHETHER ON THE PART OF US, OUR SERVANTS, AGENTS OR ANY OTHER PERSON. NOTHING IN THE TERMS OF USE EXCLUDES, RESTRICTS OR MODIFIES ANY CONDITION, WARRANTY OR LIABILITY WHICH MAY AT ANY TIME BE IMPLIED BY STATUTE OR ANY OTHER APPLICABLE LAW WHERE TO DO SO IS ILLEGAL OR WOULD RENDER ANY PROVISION OF AN AGREEMENT VOID. 8. Third Party Websites We may provide, on our Website, links to websites operated by third parties as a convenience to you. If you use these other sites, you will leave this Website. If you decide to visit any linked site, you do so at your own risk and it is your responsibility to take all protective measures to guard against viruses or other destructive elements. Holland Advisors (London) Ltd makes no representations, warranties or guarantees of any kind about any of the content of any other website which you may access by hypertext link through this Website. When you access any other website by means of a link from this Website, you should understand that your access to that other website is independent of Holland Advisors (London) Ltd and Holland Advisors (London) Ltd has no control over the content of the website, nor does Holland Advisors (London) Ltd in any way endorse or approve the content of that website. In no event will Holland Advisors (London) Ltd in any way be liable to you or any other person(s) or organisation(s) for loss or damage (whether direct, indirect, consequential, special or other) for any use of any site linked to it by means of hypertext or otherwise. 9. Indemnity You agree to indemnify Holland Advisors (London) Ltd and its officers from and against any claim brought by third parties against Holland Advisors (London) Ltd and its officers as a consequence of your breach of the Terms of Use. Furthermore, if your use of this Website results in the need for servicing, repair or correction of equipment, software or data, you assume all costs thereof. 10. Intellectual Property Rights and Licence The copyright, trade mark or any other intellectual property rights in the Website and the Information are owned by or licensed to Holland Advisors (London) Ltd. You may download or print out a hard copy of individual pages and/or sections of this Website provided you do not remove any copyright or other proprietary notices. Any downloading or other copying from this Website will not transfer title to any software or material to you. You may not reproduce (in whole or in part), transmit (by electronic means or otherwise), modify, link to or use for any public or commercial purpose this Website without the prior written permission of Holland Advisors (London) Ltd. Any rights not expressly granted in the Terms of Use are reserved. 11. Operation of the Website You should be aware that the internet, being an open network, is not secure. If you choose to send any electronic communications by means of this Website, you do so at your own risk. Holland Advisors (London) Ltd cannot guarantee that such communications will not be intercepted or changed or that they will reach the intended recipient safely. 12. Privacy Any personal data relating to you will be collected, used and recorded by us in accordance with current data protection legislation, the Terms of Use and our Privacy Policy. You must read our Privacy Policy as it forms part of the Terms of Use. 13. Governing law The Terms of Use are governed by the laws of England and Wales and the courts of England and Wales will have exclusive jurisdiction over any disputes arising under them. 14. Waiver If you breach the Terms of Use and we take no action, we will still be entitled to use our rights and remedies in any other situation where you breach the Terms of Use. 15. Our details This website is owned and operated by Holland Advisors London Ltd. You can contact us at: Holland Advisors London Ltd, The Granary, 1 Waverley Lane, Farnham, Surrey, GU9 8BB. Updated and effective as of  31st March 2024
Disclaimer
Please read the following conditions of use of this website. This website is directed at high net worth experienced investors and institutional investors who understand the risks involved with the investments being promoted and it should not be relied upon by retail clients (as defined by Financial Conduct Authority). The information on this website is issued by Holland Advisors (London) Limited (hereafter referred to as “Holland Advisors”), a limited liability company (7431314) incorporated in England and Wales, which is authorised and regulated by the Financial Conduct Authority (FRN: 538932). This website is for information purposes only and does not constitute an offer or solicitation to buy or sell securities, funds or any other financial instrument. The information is directed inside the United Kingdom and is not directed at any persons in jurisdictions where it would be against local law or regulation.  In particular, information on this site is not directed at any person, partnership or corporation being resident in the United States of America. Holland Advisors disclaims all responsibility if you access or download any information in breach of any law or regulation of the country in which you reside. Information on this site The information provided does not constitute advice. Holland Advisors believes that the sources of the information in this website are reliable. However it cannot and does not guarantee, either expressly or implicitly, and accepts no liability for, the accuracy, validity, timeliness or completeness of any information or data (whether prepared by it or by any third party) for any particular purpose or use or that the information or data will be free from error. Holland Advisors does not undertake any responsibility for any reliance which is placed by any person on any statements or opinions which are expressed herein. Neither Holland Advisors nor any of its directors, officers or employees will be liable or have any responsibility of any kind for any loss or damage that any person may incur resulting from the use of this information. This does not exclude or restrict any duty of liability that Holland Advisors has to its customers under the regulatory system in the United Kingdom. All Information may be changed or amended without prior notice although Holland Advisors does not undertake to update this site regularly. Marketing Communications Documents on this site do not constitute investment research as they have not been prepared in accordance with UK legal requirements designed to promote the independence of investment research. Therefore, even if they contain research recommendations they should be treated as marketing communications and as such will be fair, clear and not misleading in line with Financial Conduct Authority rules. These communications are not personal recommendations to you and any opinions cited are subject to change without notice. Holland Advisors takes all reasonable care to ensure that the information on this site is accurate and complete; however no warranty, representation, or undertaking is given that it is free from inaccuracies or omissions. Documents on this site are based on, and contain, current public information, data, opinions, estimates and projections obtained from sources we believe to be reliable. Past performance is not necessarily a guide to future performance. The content of these documents may have been disclosed to the issuer(s) prior to dissemination in order to verify their factual accuracy. Investments in general involve some degree of risk, therefore Prospective Investors should be aware that the value of any investment may rise and fall and you may get back less than you invested. Value and income may be adversely affected by exchange rates, interest rates and other factors. The investments discussed on this website may not be eligible for sale in some states or countries and may not be suitable for all investors. If you are unsure about the suitability of an investment given your financial objectives, resources and risk appetite, please contact your financial advisor before taking any further action. Holland Advisors and/or its officers, directors and employees may have or take positions in securities, funds or derivatives mentioned on this site (or in any related investment) and may from time to time dispose of any such securities (or instrument). Holland Advisors manages these potential conflicts of interest internally via its compliance procedures. Fund Information Parts of this site may refer to Funds managed or advised by Holland Advisors. These are not solicitations to invest and any potential investors should refer to the “Our Funds” section of the website in order to learn more about these Funds and find out how and where to obtain the relevant full legal documentation. Linked Websites This site may be linked to third party websites or contain information provided by third parties. Holland Advisors does not make any representation as to the accuracy or completeness of such websites or information, has not and will not review or update such websites or information, and cautions browsers that any use made of such websites or information is at their own risk. Holland Advisors does not accept any liability arising out of the information contained on any linked website or Information provided by a third party and the use of such sites and information is at your own risk. This does not exclude or restrict any duty or liability that Holland Advisors has to its customers under the regulatory system in the United Kingdom. Indemnity You agree to indemnify and defend Holland Advisors, its affiliates and licensors, and the officers, directors, employees, and agents of Holland Advisors and its affiliates and licensors, from and against any and all claims, liabilities, damages, losses, or expenses, including legal fees and costs, arising out of or in any way connected with your access to or use of this website and the Information. Use of Cookies If you agree to these terms and conditions a “cookie” might be placed on your computer. A cookie is a packet of information that does not identify individual users of a website, but allows the collection of website activity (such as the number of users who visit our website, the date and time of visits, the number of pages viewed, navigation patterns, what country and what systems users have used to access the site). We can use this information for statistical purposes, which allows us to analyse and improve our website. The cookie will expire automatically after 6 months or you can manually remove cookies in your browser settings. Copyright, Trademarks and Other Rights Copyright, trademarks, database rights, patents and all similar rights in this site and the information contained in it are owned by Holland Advisors or relevant third party providers. You may use the Information and reproduce it in hard copy for your personal reference only. The information contained herein and any supplemental documentation provided is confidential and should not be copied, reproduced or redistributed without the prior consent of Holland Advisors. Governing Law You agree that your use of this site and any dispute arising from this use is subject to English law and you submit to the jurisdiction of the Courts of England & Wales.
Privacy Notice
This is the privacy notice of Holland Advisors London Ltd our company number is 07431314. Our registered office is at The Halt, Smugglers Way, The Sands, Farnham, Surrey, GU10 1NB.
Introduction
This notice describes how we collect, store, transfer and use personal data. It tells you about your privacy rights and how the law protects you. In the context of the law and this notice, ‘personal data’ is information that clearly identifies you as an individual or which could be used to identify you if combined with other information. Acting in any way on personal data is referred to as ‘processing’. This notice applies to personal data collected through our website www.hollandadvisors.co.uk. Except as set out below, we do not share, or sell, or disclose to a third party, any information collected through our website.
Data Protection Officer
We have appointed a data protection officer (‘DPO’) who is responsible for ensuring that our privacy policy is followed. If you have any questions about how we process your personal data, including any requests to exercise your legal rights, please contact our DPO, Claire Brunt at  claire@hollandadvisors.co.uk.
Personal data we process
1. How we obtain personal data The information we process about you includes information:
  • you have directly provided to us
  • that we gather from third party databases and service providers
  • as a result of monitoring how you use our website or our services
2. Types of personal data we collect directly When you use our website, you may provide personal data by submission of data by our Sign Up or Contact Us forms. This can be categorised into the following groups:
  • personal identifiers, such as your first and last names
  • contact information, such as your email address and your telephone number for communication
  • records of communication between us including messages sent through our website, email messages and telephone conversations
  • marketing preferences that tell us what types of marketing you would like to receive
3. Types of personal data we collect from your use of our services By using our website and our services, we process:
  • technical information about the hardware and the software you use to access our website and use our services, including your Internet Protocol (IP) address, your browser type and version and your device’s operating system
  • usage information, including the frequency you use our services, the pages of our website that you visit, whether you receive messages from us and whether you reply to those messages
  • your preferences to receive marketing from us; how you wish to communicate with us; and responses and actions in relation to your use of our services.
4. Our use of aggregated information We may aggregate anonymous information such as statistical or demographic data for any purpose. Anonymous information is that which does not identify you as an individual. Aggregated information may be derived from your personal data but is not considered as such in law because it does not reveal your identity. For example, we may aggregate usage information to assess whether a feature of our website is useful. However, if we combine or connect aggregated information with your personal data so that it can identify you in any way, we treat the combined information as personal data, and it will be used in accordance with this privacy notice. 5. The bases on which we process information about you The law requires us to determine under which of six defined bases we process different categories of your personal data, and to notify you of the basis for each category. If a basis on which we process your personal data is no longer relevant then we shall immediately stop processing your data. If the basis changes then if required by law we shall notify you of the change and of any new basis under which we have determined that we can continue to process your information. 6. Information we process with your consent Through certain actions when there is no contractual relationship between us, such as when you browse our website or ask us to provide you more information about our business, you provide your consent to us to process information that may be personal data. Wherever possible, we aim to obtain your explicit consent to process this information, for example, we ask you to agree to our use of non-essential cookies when you access our website. We continue to process your information on this basis until you withdraw your consent or it can be reasonably assumed that your consent no longer exists. You may withdraw your consent at any time by instructing us  claire@hollandadvisors.co.uk. 7. Information we process for the purposes of legitimate interests We may process information on the basis there is a legitimate interest, either to you or to us, of doing so. Where we process your information on this basis, we do after having given careful consideration to:
  • whether the same objective could be achieved through other means
  • whether processing (or not processing) might cause you harm
  • whether you would expect us to process your data, and whether you would, in the round, consider it reasonable to do so
For example, we may process your data on this basis for the purposes of:
  • improving our services
  • record-keeping for the proper and necessary administration of our business
  • responding to unsolicited communication from you to which we believe you would expect a response
  • preventing fraudulent use of our services
  • exercising our legal rights, including to detect and prevent fraud and to protect our intellectual property
  • insuring against or obtaining professional advice that is required to manage business risk
  • protecting your interests where we believe we have a duty to do so
How and when we process your personal data
8. Your personal data is not shared We do not share or disclose to a third party, any information collected through our website.
Use of information we collect through automated systems
9. Cookies Cookies are small text files that are placed on your computer’s hard drive by your web browser when you visit a website that uses them. They allow information gathered on one web page to be stored until it is needed for use at a later date. They are commonly used to provide you with a personalised experience while you browse a website, for example, allowing your preferences to be remembered. They can also provide core functionality such as security, network management, and accessibility; record how you interact with the website so that the owner can understand how to improve the experience of other visitors. Some cookies may last for a defined period of time, such as one visit (known as a session), one day or until you close your browser. Others last indefinitely until you delete them. Your web browser should allow you to delete any cookie you choose. It should also allow you to prevent or limit their use. Your web browser may support a plug-in or add-on that helps you manage which cookies you wish to allow to operate. The law requires you to give explicit consent for use of any cookies that are not strictly necessary for the operation of a website. 10. Personal identifiers from your browsing activity Requests by your web browser to our servers for web pages and other content on our website are recorded. We record information such as your geographical location, your Internet service provider and your IP address. We also record information about the software you are using to browse our website, such as the type of computer or device and the screen resolution. We use this information in aggregate to assess the popularity of the webpages on our website and how we perform in providing content to you.
Other matters
11. Your rights The law requires us to tell you about your rights and our obligations to you in regard to the processing and control of your personal data. We do this now, by requesting that you read the information provided at  http://www.knowyourprivacyrights.org 12. Communicating with us When you contact us, whether by telephone, through our website or by email, we collect the data you have given to us in order to reply with the information you need. We record your request and our reply in order to increase the efficiency of our business. We may keep personally identifiable information associated with your message, such as your name and email address so as to be able to track our communications with you to provide a high quality service. 13. Complaining If you are not happy with our privacy policy, or if you have any complaint, then you should tell us. When we receive a complaint, we record the information you have given to us on the basis of consent. We use that information to resolve your complaint. 14. Retention period Except as otherwise mentioned in this privacy notice, we keep your personal data only for as long as required by us to provide you with the services you have requested. 15. Compliance with the law Our privacy policy complies with the law in the United Kingdom, specifically with the Data Protection Act 2018 (the ‘Act’) accordingly incorporating the EU General Data Protection Regulation (‘GDPR’) and the Privacy and Electronic Communications Regulations (‘PECR’). 16. Review of this privacy policy We shall update this privacy notice from time to time as necessary.