The Lemon Fool

monabri wrote:Too many sales...he's looking like a HYP-P'er.

International Hotels Group - must be worth 50% more than when he baled. He saw a niche and rode on the back of it..well done to him. But, as above, buying an ETF such as "VUSA" or "VEVE" would have been as good.

SSON - ?
FEET - ? At least Simoan made some money from that one!

I don’t see the point of analysing buys and sells like this. Every investor gets things wrong and with hindsight we would all be investing geniuses. The important thing is to have an investment process and stick to it. You either buy into that process or you don’t. I agree there has been a worrying amount of trading of late and the “buy great companies and do nothing” shtick is looking a little misleading, to say the least.

simoan wrote:

BullDog wrote:Over the last (I think it's now) 12 years Smith has made a world of difference to my portfolio. But I'm not blind. Like I said above, I am thinking I might now be at least as well served in a global ETF.

I keep reading how wonderful global ETFs are on these forums and perhaps with the way Fundsmith is heading that makes sense. I’m not particularly happy with the vastly increased exposure to technology within the fund.

However, these ETFs are not really that diversified if you look carefully and the highest weighted stocks are being overbought as a consequence. Anyone that doesn’t own these stocks is bound to underperform from time to time. Personally I want a portfolio with greater breadth from a risk perspective, and so I’m quite happy to underperform because I don’t want to accept the concentration risk, particularly as I already have large holdings in Apple and Microsoft.

I see your point and it's difficult to avoid large holdings in Apple, Microsoft etc.... in global collective investment vehicles. I don't hold any of those single company equities so it's possible that is less of an issue for me. It's remarkable that one company like Apple or Microsoft is worth more than the entire FTSE100.

The global ETF I have considered from L&G, LGGG does have the usual suspects as top holdings. But unlike developed world ETFs it does have truly global exposure. I do think it's more diversified compared to developed world ETFs.

BullDog wrote:

simoan wrote:I keep reading how wonderful global ETFs are on these forums and perhaps with the way Fundsmith is heading that makes sense. I’m not particularly happy with the vastly increased exposure to technology within the fund.

However, these ETFs are not really that diversified if you look carefully and the highest weighted stocks are being overbought as a consequence. Anyone that doesn’t own these stocks is bound to underperform from time to time. Personally I want a portfolio with greater breadth from a risk perspective, and so I’m quite happy to underperform because I don’t want to accept the concentration risk, particularly as I already have large holdings in Apple and Microsoft.

I see your point and it's difficult to avoid large holdings in Apple, Microsoft etc.... in global collective investment vehicles. I don't hold any of those single company equities so it's possible that is less of an issue for me. It's remarkable that one company like Apple or Microsoft is worth more than the entire FTSE100.

The global ETF I have considered from L&G, LGGG does have the usual suspects as top holdings. But unlike developed world ETFs it does have truly global exposure. I do think it's more diversified compared to developed world ETFs.

Tbh I have never seen the point of investing in collective vehicles with thousands of holdings weighted so heavily to the US. You may as well just invest in the largest weighted US companies. A Global ETF is just a comfort blanket IMHO. But that’s just me. I don’t even like IT’s with more than 40 holdings.

simoan wrote:

BullDog wrote:I see your point and it's difficult to avoid large holdings in Apple, Microsoft etc.... in global collective investment vehicles. I don't hold any of those single company equities so it's possible that is less of an issue for me. It's remarkable that one company like Apple or Microsoft is worth more than the entire FTSE100.

The global ETF I have considered from L&G, LGGG does have the usual suspects as top holdings. But unlike developed world ETFs it does have truly global exposure. I do think it's more diversified compared to developed world ETFs.

Tbh I have never seen the point of investing in collective vehicles with thousands of holdings weighted so heavily to the US. You may as well just invest in the largest weighted US companies. A Global ETF is just a comfort blanket IMHO. But that’s just me. I don’t even like IT’s with more than 40 holdings.

And that's probably the main reason I have stuck with FS for about a dozen or so years. He has turned my £50000 into £300000 with no effort on my part. As a hopeless stock picker, for me, that's about as good as it's going to get.

I do still, however, think we've seen the best of FS. Many of these investment philosophies work until one day they don't. There's more of them than I can count.

BullDog wrote:I do still, however, think we've seen the best of FS. Many of these investment philosophies work until one day they don't. There's more of them than I can count.

I have no idea what the future holds but see nothing wrong with the process of investment selection that Fundsmith use I.e. holding highly profitable companies that generate large amounts of cash that can be reinvested at high rates of return. Who knows? Excluding poor quality and highly cyclical companies like banks and mining is no bad thing IMO. When the next financial crisis hits, it will at least be insulated from the worst of the fallout.

simoan wrote:

BullDog wrote:I do still, however, think we've seen the best of FS. Many of these investment philosophies work until one day they don't. There's more of them than I can count.

I have no idea what the future holds but see nothing wrong with the process of investment selection that Fundsmith use I.e. holding highly profitable companies that generate large amounts of cash that can be reinvested at high rates of return. Who knows? Excluding poor quality and highly cyclical companies like banks and mining is no bad thing IMO. When the next financial crisis hits, it will at least be insulated from the worst of the fallout.

I quite agree. Myself, I think many of the businesses that Terry Smith regards as uninvestable is perfectly justified.

However the volatility of Smithson has been a big disappointment. Covid drawdown was savage. Though that has a lot to do with trading at a discount which is not wholly under their control. One downside of SSON IT v open end FS which cannot trade at a discount. Off topic so I'll stop there.

Terry Smith takes aim at AI Hype (agree with him totally there!)

"In the letter, Smith discusses his reservations – for one, he does not want to hold all “Magnificent Seven” stocks due to concentration risk, even if they all fitted the fund’s investment criteria. He also observes that the stock market “has decided at the outset that it can identify winners in AI in the form of Nvidia designing the chips on which the generative AI models will run and Microsoft (MSFT) as a provider of an AI model. If it can do so at this stage it would seem to me to be a break with tradition.” He goes on to name some early leaders that have since more or less disappeared from their sectors: BlackBerry for smartphones, Yahoo! for search engines, and Myspace for social media." Morningstar, News 'Fundsmith Underperforms, Smith Takes Aim at AI Hype'

The process of liquidating the remains of the Fundsmith Emerging Equities Trust (FEET) seems to have dragged on so that ii are now telling me it no longer qualifies for inclusion in an ISA. They will therefore transfer it to the taxable account.

The residual value is quoted at around 15p per share.

https://www.feetplc.co.uk/

Is there a point where the fund gets so big, it becomes very difficult for it to out perform? I like Fundsmith, have done well out of it for a few years, but recently switched to the L&G Global 100 tracker, adding Smithson and a bit of Mobius. The tracker is 50% of my funds and whilst also skewed to the US, has out performed FS over the last 5 years for a lower fee. As it’s another large cap fund, I’m hoping Smithson will get back on form and start performing like Fundsmith of old.

Unlike emerging markets I think the strategy should be a good fit for developed market SMID stocks, as it will cut out some of the less profitable/highly leveraged companies. I’m prepared for more volatility than FS, which I’ll accept if the returns get back on track (at least I bought in at a discount).

Mobius is IMHO the fund that FEET should’ve been, and gives me a bit of SMID emerging markets exposure, particularly India, Taiwan and S. Korea.

Adyen as quoted as best company, not in the Fundsmith portfolio, by Julian Robbins. Now more than doubled from lows since. Simoan?

Humeau wrote:Adyen as quoted as best company, not in the Fundsmith portfolio, by Julian Robbins. Now more than doubled from lows since. Simoan?

Sorry but I’ve not been following it. There are some crazy price movements going on in the US though. ARM up 58% at one point today!

simoan wrote:

Humeau wrote:Adyen as quoted as best company, not in the Fundsmith portfolio, by Julian Robbins. Now more than doubled from lows since. Simoan?

Sorry but I’ve not been following it. There are some crazy price movements going on in the US though. ARM up 58% at one point today!

I know. I missed that one but am up several-fold on Nvidia, AMD and Broadcom so cannot complain.

Meta was up 20% in a day last week, although I only have a small holding.

I bought a call option in Disney yesterday for last night's earnings and closed it out today at a 60% profit.

These are great times for investors in the US. Hopefully Smith is mostly invested there. (I hold but never look).

Lootman wrote:

simoan wrote:Sorry but I’ve not been following it. There are some crazy price movements going on in the US though. ARM up 58% at one point today!

I know. I missed that one but am up several-fold on Nvidia, AMD and Broadcom so cannot complain.

Meta was up 20% in a day last week, although I only have a small holding.

I bought a call option in Disney yesterday for last night's earnings and closed it out today at a 60% profit.

These are great times for investors in the US. Hopefully Smith is mostly invested there. (I hold but never look).

For me, this craziness cannot continue. Everyone thinks they’re clever enough to get out before the music stops. Because stop it surely will. Who knows when? Not me, but I’m in top slicing mode. Even Fundsmith T class is nearing £7.

simoan wrote:

Lootman wrote:I know. I missed that one but am up several-fold on Nvidia, AMD and Broadcom so cannot complain.

Meta was up 20% in a day last week, although I only have a small holding.

I bought a call option in Disney yesterday for last night's earnings and closed it out today at a 60% profit.

These are great times for investors in the US. Hopefully Smith is mostly invested there. (I hold but never look).

For me, this craziness cannot continue. Everyone thinks they’re clever enough to get out before the music stops. Because stop it surely will. Who knows when? Not me, but I’m in top slicing mode.

Yes, I am wary at these levels and so am not committing new money. That is why I used options for my bet on Disney rather than buy the stock - to define my risk. I suspect that 5,000 will lead to a breather.

I got lucky with Fundsmith as I bought it at the 2020 Covid low, and it is up about 60% or so from there. Sadly it is in a taxable account but a profit is a profit.

I'm in Fundsmith, VUSA/S&P, VHVG, L&G Global Tech and other global trackers. All are hugely US weighted and yes, all have done remarkably well over the pat few months. The question for me is what will they do over the next decade or so. If they give me 4% per annum, I'll be happy.

And it finally breaks £7.

Lets hope it stays there, a bit of outperformance wouldn't go amiss after a few years of under.

doug2500 wrote:And it finally breaks £7.

Lets hope it stays there, a bit of outperformance wouldn't go amiss after a few years of under.

It has done well in more recent years too, depending on when you bought of course. I bought a little shy of 4 years ago at about £4 a share, so that is a 75% gain. About 15% a year compounded without dividends.

Lootman wrote:It has done well in more recent years too, depending on when you bought of course. I bought a little shy of 4 years ago at about £4 a share, so that is a 75% gain. About 15% a year compounded without dividends.

I've been in since the start so I'm not complaining.

The 2024 AGM video is now available on the website here; https://www.fundsmith.co.uk/tv/

Always worth a watch IMO especially with much more time given over to the Q&A these days. Interesting that their thoughts on Unilever are very much in line with my own.

simoan wrote:The 2024 AGM video is now available on the website here; https://www.fundsmith.co.uk/tv/

Always worth a watch IMO especially with much more time given over to the Q&A these days. Interesting that their thoughts on Unilever are very much in line with my own.

Will be fascinating to hear what the bank is that has finally interested Smith enough to make an investment. If he does so, of course. He was a bit of a tease about that prospect.