However, investing in digital doesn’t mean sticking solely to traditional tech firms. Among Train’s largest and most successful holdings are fashion chain Burberry and stockbroking platform Hargreaves Lansdown. The success of these companies – which arguably look expensive on certain measures – lies with their technology-centred strategies. This has “mattered much more to stockmarket investors than the valuations”. Meanwhile, the share price of accountancy software firm Sage is down almost 20% this year, making it Train’s worst-performing stock. But the fall is “nothing to do with valuation or rising interest rates”, notes Train – instead it is all about the challenges Sage currently faces in digitising its business.
Train isn’t saying that money doesn’t matter. “In the end, everything hangs on what is the true value of a corporation’s future cash flows, discounted back to today’s intrinsic worth,” he notes in Portfolio Adviser. “It’s just that during the 21st century to date, what looked expensive yesterday has turned out to be in fact far cheaper than most of us could imagine.”