With December’s Client Seminars behind us, Leo and Gary sit down to talk about the new year, AI, and the importance of the UK market for stocks, businesses and investment.

Courtiers’ position at the end of 2023

“These next ten years are going to be very, very, very good.”

After what appeared to be a challenging year for value investors, the funds picked up in December, with improvements in the Global (ex-UK) and Ethical funds in particular, giving investors – and the Investment Team – positive news to end the year.

We currently hold a lot of stocks that are great value; their prices have gone up and are delivering good net profits. Gary thinks the next ten years are going to look “very, very, very good.”

The importance of AI

There’s a lot of turmoil in life that could be making people depressed about the future, about politics – both here and in the US – and that can also spill into cynicism around AI. But while there is the notion that AI is a risk to humans, Gary thinks that AI is hailing a positive movement, and this will feed into good returns over the next 10-15 years, as well as increased productivity and incomes. Any companies able to lean into AI should do well.

AI is changing the way we live and think. Some educational companies are using AI to replicate and offer tutorage to all. This is elevating learning, meaning that if an average student is able to access individual tutorage – from an AI – they learn and become better performers, becoming good students. This is shown in practice through the Khan Academy – there’s a TED talk about it: How AI Could Save (Not Destroy) Education | Sal Khan | TED – YouTube.

Gary goes on to say that “if you can educate people better…you get an explosion in productivity.” In doing so, generally people will get more from their lives, earn more and accelerate human knowledge.

However, Gary warns against investing in companies that create AI, instead suggesting it may be better to look at the companies that use AI to better their propositions. Car companies, for example, could use AI to benefit – and not just Tesla! Stellantis, who we hold, for example, is doing well with a remarkable diversification including electric vehicles.

What markets are appealing right now?

“We really like our own economy; we really like prospects for the UK.”

Jake talked in our December Client seminars about how Apple is worth more than the FTSE 350, and that doesn’t seem right. UK companies are doing great things; look at how we managed to create the Oxford–AstraZeneca COVID‑19 vaccine by having our educational institutions work alongside our excellent businesses. That’s the core of what we have working in our country – and it’s very exciting.

We’re looking at investment strategies all the time. With long-term, risk-averse investors, we know people and institutions entrust us with the money they need to get them through the rest of their lives. This is not speculative capital, so we take a very long-term view.

The Investment Team is always busy – constantly reviewing what we’ve got and what we might buy. At the moment, there’s loads and loads of great stock on the shelves and everything is looking reasonably priced. So, we can be discerning and that’s exciting, but it brings its own pressures.

Before considering the prospect of lifelike avatars, Gary concludes by saying, “I think what’s exciting for us now is the number of decent companies that you can pick up at a reasonable price with decent balance sheets, good profits, and they’re generating cash. And I haven’t seen anything as good as this for a long, long time.”

It’s fair to say that with great change abound in the world, its business as usual at Courtiers.