Following on from our last post on IQ vs mindset for investing, today we take a look at a specific example of an individual who successfully brought the important attributes we highlighted to bear during his years of investing: John Lee.

Alongside his long-time Financial Times column and political career, perhaps Lee’s most well known credit is becoming the UK’s first ISA millionaire in 2013. Indeed, he has published a book on the subject.

Starting in the early 1980s and with only £126,000, over the course of around 20 years he employed a largely ‘buy and hold’ strategy, investing using PEPs (an ISA precursor) and later on ISAs when they became available in 1999.

This return of around 10-11% CAGR substantially outperforms the FTSE 100 index over the same period. Lee’s performance is actually more inline with those of LandlordInvest lenders, who average returns of 10.56% per annum. See more on our statistics page.

As with many of the authors referenced in our reading list for investors, Lee places great emphasis on the underlying value of the company, meticulously studying financial statements, industry trends, and competitive landscapes in an attempt to identify undervalued assets. Lee is also well known for preferring those running the company to have ‘skin in the game’ and would monitor insider deals closely.

But equally as important is his mindset and focus on building wealth through disciplined and patient investing: avoiding overreaction to short-term market fluctuations, focussing on fundamentals, and maintaining a long-term perspective.

Some examples of successful investments made by Lee include: Fenner, bought for 60p in 2008 and sold for 350p in 2014; Lok‘n Store, bought for 135p in 2013 and sold for over £11 this year; Cerllion bought for between 84p and 173p starting in 2016 and held at almost £18 at the time of writing.

Of course, these returns sound great, but note the long holding periods - much longer than the average holding period of around 12 months. During those periods, in all cases, the prices both increased and decreased and Lee needed to rely on the strength of his convictions and not react irrationally to short-term movements.

See the chart below in which there are multiple periods where the Cerillion price drops 10-30%, we’ve highlighted a handful of the larger short-term drops.

Source: Google Finance

1. 27/12/2019 - 27/03/2020 -30.0%
2. 07/01/2022 - 11/03/2022 -28.4%
3. 23/06/2023 - 13/10/2023 -29.3%

These days, investors can also choose to diversify their portfolio across peer-to-peer loans as well as equitites. LandlordInvest offers both peer-to-peer property loans and an ISA wrapper, read more here to see how your portfolio may benefit from the inclusion of P2P property loans.

Our blogs are for information purposes only. This content is not financial, legal or tax advice. Should you require any advice in relation to the earnings you make from LandlordInvest we recommend seeking independent professional advice. Links to other sites are provided for your convenience but LandlordInvest accepts no responsibility or liability for the content of those sites or of any external site. The information in this blog is correct at the time of posting.