My mum Helen Aitken was a great Australian wife, mother and investor. Unfortunately, mum was struck down prematurely six years ago by breast cancer. She was just 66.

To be clear, mum was a strong woman and a great advocate for women’s causes. She made a difference.

Today, to mark International Women’s Day, I thought it would be appropriate to honour my mother’s memory by writing to you about what made mum the best investor in our family.

I am a fund manager, my father was a fund manager, and my two brothers work in financial markets. However, when all is said and done it is clear that the performance record will show that the best investor in the family was mum.

When she passed away, she left her boys a tremendous portfolio of genuinely blue-chip Australian stocks that she had accumulated in her lifetime. Her three largest holdings were CSL, Westpac and BHP, all of which she had held and reinvested dividends in for multiple decades.

Mum was a schoolteacher in the early years then became a full-time mother of three active boys. I hate to think how many school lunches she made for us, how many pairs of crickets pants she washed or how many times she had to ring dad saying “the boys have broken another window”. Looking back today it’s amazing she had any spare time to consider investments, let alone volunteer for worthy causes.

However, I suspect mum’s “investment edge” as such was she operated in the real world every day. In a time before facebook, twitter and the 24-hour news cycle, there was a clear advantage to being physically involved in the consumer economy in real time.

Mum could make her own judgements about products and services. And mark my word, she did!

The Peter Lynch Theory

The great investor Peter Lynch believed “the best investment ideas are those you see with your own eyes in everyday life”. I believe mum was a classic example of “Peter Lynch Theory”, that being she only owned companies whose products and/or services she thought were “really good”. Similarly, you couldn’t get mum to even think about buying a company where she thought the managing director was a “spiv” or the product they sold “useless”.

I can remember many times, back when I was a stockbroker, trying to get mum to buy Telstra shares. Mum would reply that they are a “terrible company”, “completely useless”, “I can’t even get them to put our Foxtel, Mobile and Home Phone bills on one bill”. She was ahead of her time…

But when it came to a company she liked she was a loyal advocate, and she simply couldn’t be parted with her shares at “any price”. Fair enough because her entry prices were so low that there really was no point in selling and paying any CGT. She was very Warren Buffet like in believing the right holding period for a great stock was “forever”. And she did go to her grave with the same conviction, holding great Australian companies.

Mum wasn’t into “fads” or “trading”. She was a genuine buy and hold, high conviction concentrated investor. She didn’t care about portfolio weightings, she only cared that her biggest holding was her best stock.

In the “passive” investing bubble we are now in, where many investors and their advisors have simply given up on being able to beat an index, Mum was the classic example of how not to just beat an index but how to trounce it over the medium-term.

Mum smashed the index return via buying a small number of great companies, holding them through market ups and downs, and mostly reinvesting the dividends. There is a very clear lesson in that which remains right today, no matter what the current investment fads are such as index or ETF investing.

To remind you of the power of successful high conviction long-term quality investing, below is a chart of CSL and the S&P/S&P/ASX 200Index on a common capital growth performance base since 2000. CSL gained 2287% versus 92% from the S&P/ASX 200.

CSL was mum’s largest holding. She held the stock from the IPO and as far as I know never sold a share. She loved the company and everything it stood for. She loved the fact it became an Australian based global leader of its industry.

I have often wondered how mum came to understand CSL and be such a high conviction investor in CSL.

I never had the direct discussion with mum about what it was about CSL that attracted her so much, but in thinking about it since her death, I believe there was an angle she had on CSL from her earlier childhood.

My mum’s father was a highly decorated surgeon, who was a Colonel in the Australian Army, and later operated at Royal Prince Alfred Hospital. My mum’s mother was a nurse. I can remember conversations with mum about the importance of blood transfusions in life-saving surgery. I believe this is where she obtained an understanding of plasma and how valuable the global market for plasma could be. I don’t think her investment in CSL was a coincidence. She was from a medical family, and her most successful investment was a medical product.

Again, this is a classic example of investing in something you broadly understand. There’s a lesson in that for all of us.

Helen Aitken’s legacy

Even though it’s been six years now since mum left us I often think of her and her investment legacy.

The lessons for me are:

• She followed her instincts and made her own judgements.
• She invested for the long-term in the best companies she could.
• She bought and held the highest quality and let the custodians of those great companies reinvest her capital for further growth.
• She was never really agitated by short-term market movements, she simply saw them as an opportunity to buy her favourite companies “cheaper”.

In a world where most people advocate investment “diversity” mum was highly “concentrated”. In a world where most people over-trade their portfolios, mum rarely traded. A bit like the Australian cricket team used to be; once you made it into mum’s portfolio it was almost impossible to be “dropped”. That’s because to get in you had to be the best of the best in her eyes.

There are other CSLs out there right now. Perhaps more of them are listed globally than in Australia, but there are other CSL’s to be found. I tend to believe they are China facing with a technology platform angle and over the next few weeks, I will try and put to you a couple of stocks that could we prove to be CSL-like over the next few decades.

All in all, mum was the best investor in our family, and I hope you all consider some of the attributes that drove her success.

Important: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. Consider the appropriateness of the information in regard to your circumstances.