Monthly Update September 2002

Lindsell Train Investment Trust PLC
11 October 2002

The Lindsell Train Investment Trust PLC
As at 30th September 2002



Fund Objective

To maximise long-term total returns subject to the avoidance of loss of absolute
value and with a minimum objective to maintain the real purchasing power of
Sterling capital, as measured by the annual average yield on the 2.5%
Consolidated Loan Stock.


Share Price                                                   GBP 89.00
Net Asset Value                                               GBP 95.68
Discount (Premium)                                                 7.0%
Market Capitalisation                                        GBP 17.8mn



Source: Bloomberg
             NAV - LTL


Performance
(based in GBP)                        Sep          Aug          Jul          YTD     Since Launch
NAV                                  -1.1         +3.6         -5.3         -5.3             -4.3
Share Price                          -2.7                      -6.8        -18.0            -11.0
2.5% Consol Loan Stock                5.1         -5.2
Annual Average Yield
Source: Bloomberg.
Based in GBP.


Top 10 Holdings
                                                                  % NAV
US Gov Treasury 6.25%                                              15.0
Lindsell Train Japan (Dist)                                        12.8
Lindsell Train Global Media (Dist)                                 12.1
US Gov Treasury IL 3.875%                                           8.5
HBOS 6.125% Non Cum                                                 7.4
21/2% Consolidated Loan Stock                                       6.5
UK Treasury 2.5%                                                    5.7
Cadbury Schweppes                                                   5.6
HBOS 9.25% Non Cum                                                  5.3
Barr (AG)                                                           5.1



Industry Breakdown
                                                                  % NAV
Bonds                                                              38.8
Preference Shares                                                  12.7
Media                                                               7.9
Banks & Investment Co.                                              6.7
Leisure & Tourism                                                   7.7
Food & Beverage                                                    15.2
Investment Fund                                                    24.9
Cash & Equivalent                                                (13.9)
Total                                                             100.0


Geographical Breakdown
                                                                                % NAV
Bonds                                                                            38.8
                                      UK*                         15.3
                                      US                          23.5
Preference Shares                                                                12.7
Equities                                                                         37.5
                                      UK                          27.3
                                      US                           4.1
                                      Japan                        3.8
                                      Europe                       2.3
Funds                                                                            24.9
                                      LT Japan                    12.8
                                      LT Global Media             12.1

Cash & Equivalent                                                              (13.9)
Total                                                                           100.0

  * Including the Daily Mail 2.5% 2004 Convertible Bonds (3% of NAV)


Currency Exposure
                                                                  % NAV
USD                                                                53.1
JPY                                                                 0.1
EUR                                                                 2.3
GBP                                                                44.6
Total                                                             100.0





Fund Manager's Comments

We're bored of extolling the virtues of long duration bonds and simply record
this month how grateful we are to still own so many.  But what is the case for
stocks?  We certainly want to construct one, if only to comfort ourselves while
we survey the somewhat ragged state of our equity book.  More to the point, we
know we need to transition out of debt at some stage, but when and into what and
at what price?

We have two observations to make.  First, we note the good news is that
capitalism is working, at least in those economies where it is allowed to work.
There is an age-old cycle in the capital markets that goes something like this -
bust is followed by bankruptcies, is followed by rescue rights issues, is
followed by takeovers, is followed by revival of the new issue market, is
concluded by investment bankers ruling the universe.  Simplistic, of course and
almost impossible to determine where one is with any accuracy, but we think, an
adequate schema.  And it is notable the extent to which the pattern is
repeating, although obscured by the fogs of war.  The pattern, commencing with
an almighty bust, is visible in NASDAQ, the most egregiously overblown market of
all.  Here, in Kipling's memorable words, 'the Gods of the Markets' have tumbled
and 'the smooth-tongued wizards' have withdrawn.  NASDAQ has now fallen 78.0%.
Importantly, though, it has sustained this damage in just over two years.  By
contrast, the Japanese, more reluctant to allow the markets to do their thing,
have teased a similar decline over 13, in hindsight, wasted years.  When the
Americans organize a bear market, they get on with it.  For instance, the then
biggest company on the planet, General Electric, was capitalized at $597bn at
its 2000 peak, when what may be the most poisonous chalice in corporate history
was passed to poor Mr Immelt.  GE now commands a market value of $219bn, meaning
that $377bn has evaporated, dwarfing what is by comparison, you might argue,
only the minor annoyance of WorldCom's $164bn mishap and the mere lost change of
Enron, which mislaid only  $65bn from peak capitalization.  In amusing context,
GE's 'lost' $377bn of market value is greater than the current value of the
entire DAX 30, the German index, which to be fair has halved during 2002.  The
bankruptcies have followed and the begging bowl is being passed around with
increasing frequency, particularly in Europe.  So far the pattern is holding.

But what makes us really sit up is when corporations begin to offer cash sums to
take control of other businesses.  Then the cycle may be bottoming.  In the
current desperate environment, when a company with sensible management makes a
cash bid you can be sure that the price offered is below the true intrinsic
value of the target asset and thus sends important signals about the valuation
of comparable assets.  For instance, Wrigley is self-evidently a terrific
company.  And when it offers 15.0x EV/EBITDA for Hershey, as it did last month,
you can be sure that Hershey is a great business and represents a great
opportunity for Wrigley at this price and that this 15x is an important
benchmark for other consumer franchises.  So, while we have not dealt in Cadbury
Schweppes since the July lows, we are tempted to add here.  On that Hershey
valuation, Cadbury would trade 60% higher.  Meanwhile, Cadbury itself has made
an acquisition for cash, a not very distinguished, but strategically helpful,
German soft drinks business.  It paid 1.6x historic revenues, which is higher
than Cadbury's current ratio, which we think is an anomaly.  Elsewhere, EMAP has
sold its interest in Red magazine for over 3.0x sales and Tribune has bought
Chicago magazine for 2.5x revenues.  These real world deals suggest that some
publicly quoted values of media assets are too low.  Last month Intuit bought a
complementary business, Blue Ocean Software for 4.0x sales, suggesting, for
instance, that Sage's 2.5x revenue valuation is interesting.  And so on.  What
is important is not so much the valuation at which deals are being done, but
that they are being done at all.  The combination of Logica and CMG will not
interest us as a potential investment, but it interests us as an example of
markets forcing a clearance of underperforming assets.  Such clearance has not
yet happened in Japan.

Second, we have some sympathy with what might be called the 'Barton Biggs'
school of constructive thinking about equity markets.  The Morgan Stanley
strategist, a notable bear at the peak of the boom, is still a proponent of long
bonds.  Today investors appear to believe that as soon as you declare an
allegiance to long bonds you de facto reveal your aversion to equities.  Biggs
though is also a bull on stocks, noting that bonds and stocks do occasionally
rise nicely in tandem.  He believes that once the equity anguish begins to
subside, investors will look at growing companies and be surprised by how cheap
they appear, relative to the new discount rate, a significantly lower long bond
yield.  He even believes that technology will rally.  The 15% one day gain in
PepsiCo's stock on the 8th October seems to us a good example of the scope for
reliable and reliably growing earnings streams to be rerated.

This month we bought some more AG Barr, after its results demonstrated
continuing cash generative growth.  Franchises such as this, Cadbury and our
other favourites could have serious upside from here, we think.  The answer to
the question of the first paragraph is to buy more equities of this type, buy
them tentatively but buy them now.









Fund Manager         Launch Date                 Denominated Currency
Nick Train            22 January 2001              GBP

Year End             Dividend                    Benchmark
31st March              Ex-date:   June            The annual average yield on
                        Payment:   August          the 21/2% Consolidated Loan
                                                   Stock.

Sedol No            Bloomberg
3001710                 LTI LN

The Board           Management Fees              Registered Address
Rhoddy Swire          Standard Fee: 0.65% p.a.   Lindsell Train Investment Trust
Michael Mackenzie     Performance Fee:           77A High Street
Donald Adamson        10% of annual increase in  Brentwood
Michael Lindsell      the share price, plus      ESSEX  DM14 4RR
                      dividend, above
                      the gross annual yield 
                      of the 21/2% Consolidated
                      Loan Stock.

Disclaimer

The contents in this document is solely for information purposes only. The
information contained herein does not constitute an offer or invitation to buy
or subscribe any securities or funds in any jurisdiction in which such
distribution is not authorised. Nothing in this document constitutes investment,
legal, tax or other advice and cannot be relied upon in making any investment
decision. Applications to invest in some of the funds must only be made on the
basis of offer documents which may only be available for private circulation.
The information contained in this document is published in good faith and
neither Lindsell Train Limited nor any other person so connected assumes any
responsibility for the accuracy or completeness of such information as provided.
No representation is made or assurance given that any statements made, views,
projections or forecasts are correct or that objectives will be achieved.
Lindsell Train and/or persons connected with it may have an interest in the
Fund.  The value of investments and the income from them may go down as well as
up and are not guaranteed. Past performance is no guarantee of future
performance. You may not get back the amount you invested. Foreign exchange
rates may cause the value of investments to go up or down. Investments may be
subject to higher volatility in certain funds and the investment value may fall
suddenly and substantially.



                     Lindsell Train Limited
              35 Thurloe Street, London  SW7 2LQ
         Tel. [phone]  Fax. [phone]
         [e-mail]  www.lindselltrain.com

         Lindsell Train Limited is regulated by the FSA.



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