Books
Capital Returns:
Investing through The Capital Cycle
Published 2015
Available to buy: UK Edition | US Edition
We live in an age of serial asset bubbles and spectacular busts. Economists, policymakers, central bankers and most people in the financial world have been blindsided by these busts, while investors have lost trillions. Economists argue that bubbles can only be spotted after they burst and that market moves are unpredictable. Yet Marathon Asset Management, a London-based investment firm managing over $50 billion of assets has developed a relatively simple method for identifying and potentially avoiding them: follow the money, or rather the trail of investment.
This capital cycle strategy encourages investors to eschew the simple 'growth' and 'value' dichotomy and identify firms that can deliver superior returns either because capital has been taken out of an industry, or because the business has strong barriers to entry (what Warren Buffett refers to as a 'moat'). Some of Marathon's most successful investments have come from obscure, sometimes niche operations whose businesses are protected from the destructive forces of the capital cycle. Capital Returns is a comprehensive introduction to the theory and practical implementation of the capital cycle approach to investment. Edited and with an introduction by Edward Chancellor, the book brings together 60 of the most insightful reports written between 2002 and 2014 by Marathon portfolio managers.
Reviews - Capital Returns
“I read Capital Returns in one sitting. I wish this book had been available when I started in the business. One of the best books on investment I’ve ever read.”
“Capital Returns brings together industrial economics, Michael Porter’s competitive analysis and behavioral finance, into a powerful long-term investment approach that Marathon Asset Management calls ‘capital cycle’ analysis. … This is one of the best investing books I’ve read. Highly recommended!”
“First, it covers an important and underappreciated subject, the capital cycle. Second, it contains a superb introduction by one of the great financial writers of our era, Edward Chancellor. … Capital Returns explores an oft-neglected mechanism in the capital markets. It will prove profitable reading for any finance professional, and for the securities analyst, it is essential reading.”