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25 March 2013


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Philip Hutchinson


Thanks - an interesting analysis.

I am a Fundsmith shareholder and attended the annual meeting at the start of the month. I didn't ask any questions, as most of the issues I had thought about were anticipated in the general discussion.

However, if I'd read this beforehand, I'd have asked what you think the impact of your comment below will be on Fundsmith's investee companies:

"Moreover, investment can only earn satisfactory returns if we assume adequate consumer purchasing power in the future. If the proportion of consumer incomes required for essentials continues to increase, the scope for discretionary purchases will be squeezed.
Remember that the majority of the consumer spending of the pre-crash years was debt-funded."

I am thinking particularly of the likes of Unilever, Reckitt Benckiser, Mondelez (not sure whether a Fundsmith holding but strikes me as a "Fundsmith-type" company), etc. All those companies sell "premium" products, albeit small ticket, and it's not hard to envisage a world (given the implications of your comment above) in which spending on such premium products is by necessity heavily reined in, as essentials such as energy and basic food (as well as confiscatory measures by desperate governments) take up more and more of consumers' squeezed incomes.

I would be interested in your views.

Alan Dykes

"What one thing would make a positive difference to the US and UK economies?

Well, there are several specifics, but the big one would be facing up to reality. "

But do you see any sign of reality moving up the agenda In the absence of a sudden wave of economic maturity, we're left waiting for a crisis big enough to rewrite the rules of what's possible.

I appreciate Tim Morgan's and your efforts to educate and some seed must fall on stoney ground but do you feel you're making progress.


I certainly agree with with you about the bias towards non industry and non technology degrees, perhaps they should make the legal profession operate in a free market and stop the restrictive practices that abound. A side effect of all the Lawyers and Marketeers operating in Government is they are incapable of understanding how far technologically behind the West is going to end up, the least they could do is offer some good tax breaks for R&D spending, like now and not "some time in the future"

I disagree with you about technology always using up energy, energy efficiency does not, a joule save is a joule earned!, neither does solar power in the long run, wind and wave power, again these industries could be encouraged with tax breaks. Solar has already reached grid parity with coal in Spain and the areas where it does will move further north as time goes on.

Whilst I agree it is a good idea to have people have served in the armed forces, played full contact team sports and worked in for profit companies in the government, I am less enthusiastic about the idea they all should have, we have had ideas like this in the past when Mao sent everyone to work in the fields, it ended in tears. I think we need a representative mix of people who have faced the day to day problems that go on in the country. After all I am sure Stephen Hawking could have done a better job than some of the lot we have had but under your plan Gordon Brown would be allowed in and Professor Hawking not, be careful what you wish for!.

Ciro Spinone

IMHO, the best Q&A of this interview was the one about "sense of policy vacuum". Until this is addressed, little will change, methinks. Anyway, slow but sure, this is dawning on people. Take a look at




Interesting and enlightening but tell the people the truth?

What particular collection of truths do you have in mind? Who would have the authority and credibility to tell these truths and propose politically workable solutions?

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