The Lemon Fool

It seems Philip Morris has dropped out of TS's top ten. I wonder if they have taken a view that Tobacco or the new 'vaping' products have no long term future.....

Does anybody see any direct purchase opportunities? I have started to build a holding in MMM as they have come way down from their recent highs however most FS stocks are looking expensive. Or should I no matter what the price, enjoy the thought I am buying quality with every purchase.

now that philip morris has fallen in value, not one of the top 10 holdings is a consumer staple:

Microsoft
Paypal
Amadeus
Stryker
Facebook
Idexx
Waters
Becton Dickinson
Novo Nordisk
Intercontinental Hotels

FredBloggs wrote:Coincidentally, I posted at a recent low point for Fundsmith and good old Tel has played a blinder the last couple of months (from 341p to 381p).

Yes, not too shoddy a performance considering the main idea behind Fundsmith is to hold good companies and do nothing! I'm sure that works even better if you live in Mauritius like Terry I'm a happy holder too FWIW and it's the only OEIC/UT I own.

All the best, Si

I really should add Fundsmith or FEET to my SIPP sometime!

FredBloggs wrote:

ADrunkenMarcus wrote:I really should add Fundsmith or FEET to my SIPP sometime!

I understood FEET to be rather a dog? But have no real understanding TBH.

I don't think FEET has been running long enough to be a 'dog', but that current reputation is part of its attraction. I also like the fact that it's a closed-ended structure so there is the ability to invest on a long-term basis without worrying about investors selling their units at the bottom of the market. Its expense ratio needs to come down, though.

Best wishes

Mark.

Every dog has it's day....

Seriously though, expense ratio down would be a good start. I like the fact he is trying to avoid 'elephant traps' and is sticking to his knitting with the shares selected. Very heavy on consumer staples. I wonder how much currency issues have affected performance.

In the meantime, L'Oreal, Estee Lauder etc continue on in fine fetal! I am enjoying building a portfolio of 'his' shares for my retirement.

flyer61 wrote:In the meantime, L'Oreal, Estee Lauder etc continue on in fine fetal! I am enjoying building a portfolio of 'his' shares for my retirement.

Good work!

Best wishes

Mark.

I'm watching the FEET AGM video now.

I don't hold any FEET but 1/3 of my equity holding is in Fundsmith so I watch/listen to anything I can find with Terry in it as I always find I learn something (or think I do )

I am a fan of Fundsmith and it is quite a large holding for me. However, I do wonder about the investment in Facebook. This is rather different to most of Smith's other investments and not only was the timing of the purchase poor I am concerned about how fast a format such as facebook can move out of fashion. So far it seems like a pretty poor investment and I query whether it will ever be any good. I just hope this is not TS stepping back a bit too far and a portent of things to come.

based on the latest fact-sheet available from the 1st of Aug, it looks like Facebook is still within the top 10, so Terry must have topped it up after the price drop.
Otherwise a 20% drop would have moved it out of the top 10, as the top 10 are fairly similar in size,

cheers

flyer61 wrote:In the meantime, L'Oreal, Estee Lauder etc continue on in fine fetal!

I guess the word is fettle, but this not pedant's corner.

Dod

Dod101 wrote:I guess the word is fettle, but this not pedant's corner.

Dod

Nor is it Pedants' Place https://www.lemonfool.co.uk/viewforum.php?f=70

As this is the nearest thing to a Fundsmith thread, I thought I'd post this piece of news here:

https://www.fundsmith.co.uk/news/articl ... w-partners

"Conrad Rey, Greville Ward and Daniel Washburn" have been made Partners (subject to FCA approval) - anyone got any thoughts as to the implications?

I've just read the FEET owners manual https://www.feetplc.co.uk/docs/default-source/application-form/fs0514d_feet_owners_manual_v7_web_sprds.pdf

I'm considering investing, I was already part way there in that I recently bought a relatively small stake in the main fund, I like Terry Smith's style and the plain, no nonsense way the fund is described in the manual. Is anyone else invested/thinking of investing? The main fund has a highish management fee but this is even higher at 1.25% with an ongoing charge of 1.91% or so it says on HL's website. Given that there are getting on for double the number of companies held compared to the main fund the fee doesn't look too bad by comparison. There are cheaper alternatives I'm sure.

ap8889 wrote:I like FEET but cant bring myself to pay the premium or the fees. I went for the Vanguard EM ETF in the end at 0.38%. I like what FEET is trying to do, and the India slant given the progress India is making, but the one controllable I have is costs and FEET just a little more than I want to pay. There are a lot of ITs in the EM space that have good 10 year records too, and FEET is a relative newcomer.

All makes perfect sense ap8889 and maybe what I'm really looking is for a bit of confirmation bias, but even though the cost does concern me I like what the fund is trying to do, the India slant, the consumer staples slant and the wonderfully straightforward way the details, warts and all, are described in the manual and AGM video.

He's done a bit more explaining or at least thinking in this weeks FT .
For those who can't get it there is a copy on the Fundsmith website.
https://www.fundsmith.co.uk/news/articl ... investment
For those who don't want to read it it can be summarised as Risk and return aren't as corelated as thought but adding in small caps can help.
Nothing particularly new but quite well explained.

Backache wrote:For those who don't want to read it it can be summarised as Risk and return aren't as corelated as thought but adding in small caps can help.

There a discussion to be had about what is meant by "Risk".

If the context of fixed interest investment, I would have though it to be default risk. After all if you intend to hold the assets to maturity, price fluctuations should be of a far lesser concern than whether the issuer will default on their investment.

Risk in the context of equities is taken to mean price volatility. But for buy and hold investors, surely stability of the dividend and the absence of price collapses is just as much a concern? Risk then is as to whether the Company is or will be trading profitably, which is far more difficult to measure given the subjectivity allowed in most accounting rules, conventions and standards.

Alaric wrote:

Backache wrote:For those who don't want to read it it can be summarised as Risk and return aren't as corelated as thought but adding in small caps can help.

There a discussion to be had about what is meant by "Risk".

If the context of fixed interest investment, I would have though it to be default risk. After all if you intend to hold the assets to maturity, price fluctuations should be of a far lesser concern than whether the issuer will default on their investment.

Risk in the context of equities is taken to mean price volatility. But for buy and hold investors, surely stability of the dividend and the absence of price collapses is just as much a concern? Risk then is as to whether the Company is or will be trading profitably, which is far more difficult to measure given the subjectivity allowed in most accounting rules, conventions and standards.

I agree that volatility and risk are not by any means synonymous, just trying to summarise the article very briefly.

Equating dividend levels with risk has the problem that many impending disaster companies maintain their dividends almost to the last either to try and pretend the company doesn't have problems or out of misplaced pride.

The frequency and scale of share price changes seem to me a much better measure of risk, assuming share price changes reflect changing market views of the future prospects of the company. If the market keeps changing its mind, to me that suggests more uncertainty and more risk.

Backache wrote:He's done a bit more explaining or at least thinking in this weeks FT .
For those who can't get it there is a copy on the Fundsmith website.
https://www.fundsmith.co.uk/news/articl ... investment
For those who don't want to read it it can be summarised as Risk and return aren't as corelated as thought but adding in small caps can help.
Nothing particularly new but quite well explained.

Terry Smith's conclusion...

"I think Mr Feynman might conclude that we should all manage equity portfolios on a global basis and add an element of small-cap exposure."

...sound a nice segue into the forthcoming launch of his smaller cap global equity fund/trust.

Allegedly.