Against a backdrop of volatile markets and geopolitical tensions, James Anderson, managing partner and CIO Lingotto Innovation, discussed the challenges facing investors at the third annual London Quality-Growth Investor Conference last week.

At the London Quality-Growth Investor Conference, James Anderson from London-listed investment house Lingotto Investment Management highlighted how remaining loyal to the firms he has invested in is his most difficult task.

Anderson said that trusting your firms is hard: “It would make my life a lot easier to not own Tesla but that wouldn’t be the right thing to do.” Anderson said he made a terrible mistake selling Apple in 2016. “It was a bad decision,” he added. Considering what to do with the stock of US multinational tech firm Nvidia was another extremely hard decision.

He believes that “thinking for the long-term is almost impossible” because investors find it emotionally difficult.

Faced with China’s slowing economy and geopolitical tensions, Anderson invests much less in China now. “It makes me terribly sad,” he said. However, Anderson believes that Chinese firms are not oversubsidised by the government, compared with their western counterparts, and they can survive in a highly competitive environment – BYD, for example, is a force in the electric vehicle (EV) industry.

Jian Shi Cortesi, investment director for Asian and Chinese equities at Zurich-headquartered asset manager GAM Investments, also believes that the newly-proposed EU tariffs on Chinese EVs are not enough to take away the cost advantage of BYD cars in Europe. The EU recently decided to impose provisional tariffs of between 17.4 per cent and 38.1 per cent on electric vehicle imports from China, which has just been officially approved by EU Member States.

As the world's largest EV seller by volume, BYD offers a range of vehicles, from basic models starting at $9,000 to premium options priced at $300,000. Its product lineup includes both pure electric and hybrid cars, which allow drivers to switch between petrol and electric. “BYD's 43 per cent increase in sales volume in China last year, at the expense of competitors like Volkswagen, Toyota, Honda and Changan, underscores the shifting dynamics in the automotive industry,” Cortesi said. See more commentary here about China and BYD. 

"Meanwhile, the US continues to innovate whilst Europe over regulates, inhibiting innovation," Anderson added. He believes that robotics is one of the biggest opportunities for investors in the future. Robotics is the science of designing and building robots to improve automation and innovation, which is having an enormous impact on the computing and electronics industry. It is also being increasingly used in the food and agriculture sector.

London-headquartered Cibus Capital, a specialist investment advisory firm focused on sustainable food and agriculture, has recently invested, for instance, in Withcott Seedlings, a large player in the highly fragmented nursery space, accounting for 11 per cent of Australia’s nursery market, by plants produced with automation and robots reducing labour costs.

Another investment by Cibus Capital is in Burro robot, which means donkey in Spanish, and is an autonomous workhorse collobarative robot, to combat labour scarcity. The firm estimates that a single Burro enables an eight-person harvest crew to harvest 15 to 30 per cent more fruit daily. The firm has also acquired a majority stake in a Dutch farming robotics provider ISO Group. Based in the Netherlands, ISO designs and develops robotics solutions for indoor vegetable and flower growers. See more commentary here.

Anderson, who has more than 40 years of investment experience, joined Lingotto Investment Management in 2023 as managing partner and CIO of the Lingotto Innovation Strategy. Prior to joining Lingotto, he was a partner at Baillie Gifford from 1987 until 2022, leading the Scottish Mortgage Investment Trust.