Cross: short-term thinking is affecting analyst community

Liontrust's Anthony Cross believes fund managers are becoming too short term in their thinking.

He points out the average holding period for a stock in a fund has dropped from around seven years in the 1960s to currently one year. Cross, who jointly manages Liontrust’s First Opportunities Growth, First Growth and Intellectual Capital Trust funds with Julian Gosh, says this short-term thinking is affecting the analyst community. “If you look at consensus earnings there is five times the amount grouped around year one than there are three years onwards,” he says. But, he points out, when an equity house values a company, around 75% of the value of the company based on discounte...