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Fundsmith....New Holding

Closed-end funds and OEICs
flyer61
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Fundsmith....New Holding

#356483

Postby flyer61 » November 14th, 2020, 1:24 pm

Anybody want to guess what it might be? My track record of working out what it might be is poor!

https://www.fundsmith.co.uk/fund-factsheet

Adamski
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Re: Fundsmith....New Holding

#356489

Postby Adamski » November 14th, 2020, 2:18 pm

My guess is Starbucks, global brand and will come out of pandemic with fewer competitors.

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Re: Fundsmith....New Holding

#356495

Postby nmdhqbc » November 14th, 2020, 2:39 pm

Adamski wrote:My guess is Starbucks, global brand and will come out of pandemic with fewer competitors.


Already confirmed Starbucks in the May factsheet...
https://www.fundsmith.co.uk/docs/defaul ... f?sfvrsn=4

I think I remember him saying Alphabet might be appealing to them. Would not expect him to discuss it if they were seriously considering it I would have thought though.

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Re: Fundsmith....New Holding

#356525

Postby langley59 » November 14th, 2020, 3:25 pm

Surely the new position they began buying in October can't be Starbucks if that was disclosed in the May factsheet.

The October factsheet states that there are 30 holdings. I have tracked them since inception and have 29, including Starbucks.

tikunetih
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Re: Fundsmith....New Holding

#356537

Postby tikunetih » November 14th, 2020, 3:46 pm

flyer61 wrote:Anybody want to guess what it might be? My track record of working out what it might be is poor!

https://www.fundsmith.co.uk/fund-factsheet


Average Age of Company Theory ( viewtopic.php?p=296556#p296556 ) suggests the new addition was founded ~1870-1897, having moved the dial from 1928 to 1926

For whom does a shoe of that vintage fit?

:D

ReallyVeryFoolish
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Re: Fundsmith....New Holding

#356541

Postby ReallyVeryFoolish » November 14th, 2020, 3:49 pm

tikunetih wrote:
flyer61 wrote:Anybody want to guess what it might be? My track record of working out what it might be is poor!

https://www.fundsmith.co.uk/fund-factsheet


Average Age of Company Theory ( viewtopic.php?p=296556#p296556 ) suggests the new addition was founded ~1870-1897, having moved the dial from 1928 to 1926

For whom does a shoe of that vintage fit?

:D

Nestle, 1867?

RVF

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Re: Fundsmith....New Holding

#356554

Postby stevensfo » November 14th, 2020, 4:18 pm

nmdhqbc wrote:
Adamski wrote:My guess is Starbucks, global brand and will come out of pandemic with fewer competitors.


Already confirmed Starbucks in the May factsheet...
https://www.fundsmith.co.uk/docs/defaul ... f?sfvrsn=4

I think I remember him saying Alphabet might be appealing to them. Would not expect him to discuss it if they were seriously considering it I would have thought though.


Isn't that the Coffee shop the Brits were all up in arms about a year ago and everybody was boycotting due to them evading tax in the UK?

Just asking, not complaining. I prefer Cafe Nero. Better coffee and staff who don't try and force 90% sugar cookies down your throat. 8-)

Steve

tikunetih
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Re: Fundsmith....New Holding

#356557

Postby tikunetih » November 14th, 2020, 4:26 pm

ReallyVeryFoolish wrote:Nestle, 1867?


Since they don't disclose a decimal to the fund's average company founded year, my range above was too prescriptive at the lower end, so Nestle would fit a treat.

He sold out of Nestle in 2018, writing:
"We did undertake some activity in 2018. In particular we sold our
holdings in Dr Pepper Snapple and Nestlé during the year.

Last year we wrote about the attention which Nestlé, amongst other
portfolio companies, had attracted from activist investors. In Nestlé’s
case this was followed by the announcement of new margin and
share buyback targets and then a deal to purchase Starbucks
supermarket coffee products, excluding the ‘Ready to Drink’ ones,
for $7.15bn. In other words, bags of coffee. Presumably we can also
look forward to being able to purchase Starbucks Nespresso pods.
Virtually no mention was made of the royalty which Nestlé will
continue to pay to Starbucks on sales of these products. We rely on
the management of our companies to allocate capital in ways which
create value for us as investors, and this deal did not seem to meet
those criteria, although it certainly seemed to fit the activist
imperative to do something and looked like a good deal for
Starbucks."

...later going on to buy Starbucks (that he mentions above) during this year's market panic.


Strong candidate based on an 1866 founded date, anyway.

flyer61
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Re: Fundsmith....New Holding

#356757

Postby flyer61 » November 15th, 2020, 1:13 pm

Interestingly I did not sell my Nestle holding when TS did. I felt he was being petulant given the size of the deal versus the huge size and reach of Nestle. Also having something denominated in Swiss Francs helps me sleep at night.

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Re: Fundsmith....New Holding

#356762

Postby Dod101 » November 15th, 2020, 1:33 pm

flyer61 wrote:Interestingly I did not sell my Nestle holding when TS did. I felt he was being petulant given the size of the deal versus the huge size and reach of Nestle. Also having something denominated in Swiss Francs helps me sleep at night.


I expect you were right not to sell Nestle. It often amuses me when someone, even as august as Terry Smith tries second guessing an outfit like Nestle. They probably know more about their business than a fund manager. However I think you may be a little misplaced in having too much confidence in the fact that Nestle reports in Swiss Francs. They trade throughout the world and it would not really matter whether they accounted in US Dollars, Euros or Sterling. I think the more important point is that Nestle is domiciled in Switzerland and, although they will have an international Board of Directors, their values and culture are probably very Swiss oriented. That is usually a good thing in my somewhat limited experience.

Dod

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Re: Fundsmith....New Holding

#356806

Postby crazypanda » November 15th, 2020, 4:10 pm

I was thinking could be ‘KO’ Coca-Cola? Recent weakness, business model moved back to one that is less capital intensive. Also TS has recently used them as an example in one of his videos, so may have been on his mind. The founding year isn’t too far away.

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Re: Fundsmith....New Holding

#356862

Postby ADrunkenMarcus » November 15th, 2020, 7:37 pm

I guess it's relative valuation. Coke is on a forward projected free cash flow yield of 3.6 percent - not cheap but not bad. Could be!

Best wishes

Mark.

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Re: Fundsmith....New Holding

#356947

Postby simoan » November 16th, 2020, 10:26 am

Dod101 wrote:I expect you were right not to sell Nestle. It often amuses me when someone, even as august as Terry Smith tries second guessing an outfit like Nestle. They probably know more about their business than a fund manager.

Dod

That's not really the point though as far as Terry Smith is concerned, or me for that matter. As an investor in a company one of the most important things to consider is the actions of the management. If you lose faith in how the company is being run, you should sell pretty much regardless of anything else. With regard to Nestle, he obviously felt the presence of an activist investor was forcing the hand of management to be seen to be doing something (an acquisition that made little business sense) as opposed to sitting on their hands and doing nothing, which is more often than not the best thing to do.

If the Nestle share price has risen in the meantime, that doesn't mean the decision was wrong because you can only act on what you know and how you feel at a given time. Terry Smith freely admits he gets stuff wrong from time to time, as all good investors should do, in the full knowledge that you don't have to get every decision right; if you can get 60% right you'll make very good money in the long run.

All the best, Si

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Re: Fundsmith....New Holding

#356987

Postby Dod101 » November 16th, 2020, 11:59 am

simoan wrote:
Dod101 wrote:I expect you were right not to sell Nestle. It often amuses me when someone, even as august as Terry Smith tries second guessing an outfit like Nestle. They probably know more about their business than a fund manager.

Dod

That's not really the point though as far as Terry Smith is concerned, or me for that matter. As an investor in a company one of the most important things to consider is the actions of the management. If you lose faith in how the company is being run, you should sell pretty much regardless of anything else. With regard to Nestle, he obviously felt the presence of an activist investor was forcing the hand of management to be seen to be doing something (an acquisition that made little business sense) as opposed to sitting on their hands and doing nothing, which is more often than not the best thing to do.

If the Nestle share price has risen in the meantime, that doesn't mean the decision was wrong because you can only act on what you know and how you feel at a given time. Terry Smith freely admits he gets stuff wrong from time to time, as all good investors should do, in the full knowledge that you don't have to get every decision right; if you can get 60% right you'll make very good money in the long run.

All the best, Si


I agree entirely. Culture is all as I keep saying. Just as Terry Smith gets things wrong from time to time, so will any management no matter how good they are but that is not usually a good reason to ditch the baby and Nestle is one of those companies which if I held it I would not be selling.

Anyway, I hold neither Nestle nor Fundsmith so it does not affect me one way or the other.

Dod

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Re: Fundsmith....New Holding

#356996

Postby simoan » November 16th, 2020, 12:12 pm

Dod101 wrote:
simoan wrote:
Dod101 wrote:I expect you were right not to sell Nestle. It often amuses me when someone, even as august as Terry Smith tries second guessing an outfit like Nestle. They probably know more about their business than a fund manager.

Dod

That's not really the point though as far as Terry Smith is concerned, or me for that matter. As an investor in a company one of the most important things to consider is the actions of the management. If you lose faith in how the company is being run, you should sell pretty much regardless of anything else. With regard to Nestle, he obviously felt the presence of an activist investor was forcing the hand of management to be seen to be doing something (an acquisition that made little business sense) as opposed to sitting on their hands and doing nothing, which is more often than not the best thing to do.

If the Nestle share price has risen in the meantime, that doesn't mean the decision was wrong because you can only act on what you know and how you feel at a given time. Terry Smith freely admits he gets stuff wrong from time to time, as all good investors should do, in the full knowledge that you don't have to get every decision right; if you can get 60% right you'll make very good money in the long run.

All the best, Si


I agree entirely. Culture is all as I keep saying.

Dod

It's not just about culture though. Terry Smith like Nick Train, Buffett, Keith Ashworth-Lord et al. invests from a business perspective. They don't just rely on the numbers, although they are very important, but they act like part owners of the business. If they are not happy with how the company is being managed, they sell their investment. More often than not it will save you money by doing so.

All the best, Si

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Re: Fundsmith....New Holding

#357284

Postby flyer61 » November 17th, 2020, 10:03 am

Lots of good points fellow fools. It is why I cannot understand high yield investing when you can have 30 great Companies in your portfolio.

I followed TS out the door when he sold JM Smucker.....he was right. Happy to still hold Nestle as I still believe it is a fabulous Company.

Maybe he has bought Disney....time will tell

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Re: Fundsmith....New Holding

#357315

Postby tikunetih » November 17th, 2020, 11:22 am

flyer61 wrote:Maybe he has bought Disney....time will tell


Disney's a great company, but its founding date of 1923 doesn't appear to fit the implied age profile for this latest portfolio addition (unlike, say, the Nestle and Coca Cola suggestions above) :D

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Re: Fundsmith....New Holding

#357325

Postby flyer61 » November 17th, 2020, 11:40 am

tikunetih...that made me laugh...just the 97 years..

You are getting like those High yield fools...all dogmatic!

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Re: Fundsmith....New Holding

#357339

Postby tikunetih » November 17th, 2020, 12:00 pm

Here's an odd thing...

Fundsmith LLP's quarterly 13F SEC filings disclose the US-listed equities held across the Fundsmith Equity fund and the Smithson and Fundsmith Emerging Equity ITs. It's a bit of a rear-view mirror into what was held at the filing date across the three funds...

The latest filing is from 30-Sep for Q3 2020, and it includes a *new* small (~$8M) position in Colgate-Palmolive (CL):
https://fintel.io/i13f/fundsmith-llp/2020-09-30-0

If Fundsmith LLP was buying it then it must have been doing so for the main Fundsmith Equity fund, not for either of the ITs, since it wouldn't fit the profile for those two funds. Fundsmith Equity had previously sold out of CL in Q1 2019, citing their patience had run out over the lack of a growth strategy emerging.

Now, no new position was disclosed in the Fundsmith Equity end-of-Sept factsheet (and the no. of holdings didn't change at that point either), but perhaps a new $8M position wasn't sufficiently material (w.r.t. to total fund size) to require disclosure...

Furthermore, an 1806 founded year for CL doesn't fit the average age stuff I've posted above. So not sure what's going on here. Maybe they had a nibble at CL then changed their minds? Or maybe the average age calc is nonsense and this is the new holding being built. Or maybe something else?

Tea leaves only get us so far! Per flyer61, "time will tell".

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Re: Fundsmith....New Holding

#357351

Postby flyer61 » November 17th, 2020, 1:04 pm

Seeking Alpha 30 Oct 20......40 per cent of the world toothpaste market is some moat..

Colgate-Palmolive (NYSE:CL) reports organic growth increased 7.5% vs. +3.9% consensus.
Organic sales were positive across North America (+5.0%), Latin America (+11.5%), Europe (+3.0%), Asia Pacific (+4.5%), Africa/Eurasia (+12.0%) and Pet Nutrition (+11.0%).
The company's gross margin rate improved 220 bps to 61.2% of sales vs. 60.1% consensus. Operating margin came in at 24.1% of sales vs. 22.6% consensus.
Colgate-Palmolive says its global market share in toothpaste is 39.9% to date and share in manual toothbrushes is 31.1%.
Looking ahead, Colgate-Palmolive expects 2020 net sales and organic sales to both be up mid-single digits, with organic sales up at the high end of that range Colgate-Palmolive expects gross margin expansion, increased advertising investment and 6% to 7% earnings-per-share growth vs. +4.8% consensus.
Shares of Colgate-Palmolive are down 0.06% premarket to $208.60.
Previously: Colgate-Palmolive EPS beats by $0.09, beats on revenue (Oct. 30)


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