‘I put more into overseasfocused stocks after Brexit’

includes factors such as earnings growth, bankruptcy risk and whether company bosses are buying shares.

To decide which of those to buy, we meet companies, and ask for any unusual numbers to be explained.

We particularly like recurring revenues from businesses with longterm contracts rather than firms that always need to find a new project. That puts us off construction firms with a few large developments, for instance.

We’re also put off very cyclical businesses, firms dependent on commodity prices, and those based on relationships between managers and clients, such as recruitment.

We like pricing power too, rather than a business being at the mercy of customers wanting a lower price.

I think it pays to be lower risk and concentrate on companies that can grow regardless of the economic cycle. That’s particularly important if you’re worried about the next few years.

Veteran investor Harry Nimmo tells James Connington

CV: Harry Nimmo

There has been a big swing since the Brexit vote. It’s not a global view that we have taken, but our screening process is now pointing us towards more international companies.

Since the referendum the share of the fund invested in companies that get the majority of their earnings from overseas has doubled. About 55pc of the revenues and profits now come from outside Britain. It has become better – the Nineties was a bad time. Manufacturing and industrial businesses were moving offshore, including textiles, engineering and chemical firms, which were big, smaller company sectors.

Since 2000 it has been a different story, largely thanks to the internet. Consumer tastes worldwide have been converging, and it has become easier to develop a business in one part of the world and take it global.

Look at clothing company Ted Baker. It was an entirely UK business worth £50m and now it’s a £1.2bn firm with nearly y 50pc p overseas earnings. The best was online retailer Asos, which we held from 2006 to 2014. The price to earnings ratio was between 50 and 70 the entire time, but the shares went up by 20 to 30 times over that period.

The worst was banking software company AIT, which was a top 10 holding. It had been issuing positive updates, but in 2002 it turned out that they had been falsified and the stock fell by 90pc in a day. Some of the executives subsequently went to jail.

We keep each holding below 5pc of the fund to avoid being hostage to individual stocks.

I get a basic salary and receive performance-linked pay. First Derivatives is based in Newry, Northern Ireland, and the founder, Brian Conlan, owns at least 30pc of the company.

Its speciality is in “big data”, in particular a piece of software called Kx, which it owns and is endeavouring to develop in many areas of the market.

Its focus was originally financial software, which was used for analysis of share price movements by exchanges, regulators and investment banks to catch insider traders. The software enabled exchanges to halt trading in real time.

First Derivatives has been able to sell this software around the world, but has more recently found applications for it in other areas, such as analysing market research data, utilities management and aerospace. Kx software is going to be used by the Red Bull Formula One team to analyse car sensor data too. It appears that the business really does have something special in terms of its ability to manipulate huge amounts of data in real time. The company has very strong momentum, but it’s not a cheap stock: it is on a projected price to earnings ratio in the 30s or 40s. Valuation is not one of the main factors in our screening process – it is secondary for us. Some of our most successful stocks have been expensive the whole way through. In some ways, you get what you pay for. We own about 11pc of First Derivatives, and have held it since 2010. The share price has risen from 285p to £35 over that time. Running our winners is one of our key features as investors.