The Lemon Fool

Posted: **January 25th, 2022, 10:44 pm**

Humeau wrote:The video also includes some very negative comments on management, plus a little aside that he has Amazon on the brain, at the moment.

https://www.youtube.com/watch?v=ztiQlJjGQJ4&t=1436s

No doubt the arrival of Peltz, might ease his worries, even though he hates activists. However, it will take some time, to turn around the business; P&G took years. I can guarantee that the Dutch government will do everything to prevent a takeover. He must be looking for the exit unless he feels a change of management or takeover will happen fairly soon, and he is not that type of event driven investor.

I'd be surprised if he doesn't dump what's left to buy more AMZN or the French company that he has started to buy.

What have the Dutch government got to do with anything?

Posted: **January 26th, 2022, 8:13 am**

Less so now than when Kraft bid for Unilever in 2017 when the UK government was also strongly opposed.

I think that Smith will dump his Unilever position soon. He mostly dumps holdings because of management and I have never seen him so openly critical of management and continuing to hold. The switch out of growth is presenting much better opportunities. Adobe being one, having dropped some 27% over recent months. He likes dominant positions and secular growth stories.

We'll see.

Posted: **January 31st, 2022, 1:52 pm**

Interestingly it looks like Fundsmith has sold a bit of the holding in Fevertree.

http://newsfile.refinitiv.com/getnewsfi ... theme=true

I would have expected them to either buy more, hold or sell completely rather than trim? I would have thought it too small a position for trimming?

Posted: **January 31st, 2022, 2:43 pm**

doug2500 wrote:Interestingly it looks like Fundsmith has sold a bit of the holding in Fevertree.

http://newsfile.refinitiv.com/getnewsfi ... theme=true

I would have expected them to either buy more, hold or sell completely rather than trim? I would have thought it too small a position for trimming?

From Smithson IT, no doubt. I never liked Smithson buying Fevertree in the first place. I couldn't understand why it passed Smith's due diligence for investment.

Posted: **January 31st, 2022, 5:07 pm**

BullDog wrote:
doug2500 wrote:Interestingly it looks like Fundsmith has sold a bit of the holding in Fevertree.

http://newsfile.refinitiv.com/getnewsfi ... theme=true

I would have expected them to either buy more, hold or sell completely rather than trim? I would have thought it too small a position for trimming?

From Smithson IT, no doubt. I never liked Smithson buying Fevertree in the first place. I couldn't understand why it passed Smith's due diligence for investment.

I hadn't thought of that but I suppose it could be, it just says Fundsmith LLP?

As a holder of FEVR I couldn't possibly comment on your other point, except to say if it is Smithson who's ultimate call would it be?

Posted: **January 31st, 2022, 6:17 pm**

doug2500 wrote:
BullDog wrote:
doug2500 wrote:Interestingly it looks like Fundsmith has sold a bit of the holding in Fevertree.

http://newsfile.refinitiv.com/getnewsfi ... theme=true

I would have expected them to either buy more, hold or sell completely rather than trim? I would have thought it too small a position for trimming?

From Smithson IT, no doubt. I never liked Smithson buying Fevertree in the first place. I couldn't understand why it passed Smith's due diligence for investment.

I hadn't thought of that but I suppose it could be, it just says Fundsmith LLP?

As a holder of FEVR I couldn't possibly comment on your other point, except to say if it is Smithson who's ultimate call would it be?

They say SSON is run entirely by it's own management, no day to day input from Smith. But who really knows who has the final say?

Posted: **February 1st, 2022, 10:25 am**

Portfolio Comment for January 2022
We completed the purchase of a position in Alphabet and began buying two new positions for the fund, the names of which will be revealed when we have accumulated our desired weighting.

Posted: **February 1st, 2022, 11:31 am**

marathonman365 wrote:Portfolio Comment for January 2022
We completed the purchase of a position in Alphabet and began buying two new positions for the fund, the names of which will be revealed when we have accumulated our desired weighting.

So, now it is pretty much turning into a US technology fund

First Amazon and now Alphabet to go with Paypal, Meta Platforms and Microsoft. I know they are great companies but this is now a step too far. I will probably sell down some of my holding because of this before the end of the tax year.

All the best, Si

Posted: **February 1st, 2022, 1:00 pm**

simoan wrote:
marathonman365 wrote:Portfolio Comment for January 2022
We completed the purchase of a position in Alphabet and began buying two new positions for the fund, the names of which will be revealed when we have accumulated our desired weighting.

So, now it is pretty much turning into a US technology fund First Amazon and now Alphabet to go with Paypal, Meta Platforms and Microsoft. I know they are great companies but this is now a step too far. I will probably sell down some of my holding because of this before the end of the tax year.

All the best, Si

Amazon and Alphabet, Smith has been long term quite negative on both. Will be interesting to hear what he says at the annual meeting. Though I think I can guess, pretty much.

Posted: **February 1st, 2022, 1:41 pm**

BullDog wrote:
simoan wrote:
marathonman365 wrote:Portfolio Comment for January 2022
We completed the purchase of a position in Alphabet and began buying two new positions for the fund, the names of which will be revealed when we have accumulated our desired weighting.

So, now it is pretty much turning into a US technology fund First Amazon and now Alphabet to go with Paypal, Meta Platforms and Microsoft. I know they are great companies but this is now a step too far. I will probably sell down some of my holding because of this before the end of the tax year.

All the best, Si

Amazon and Alphabet, Smith has been long term quite negative on both. Will be interesting to hear what he says at the annual meeting. Though I think I can guess, pretty much.

The other 2 positions might not be "tech".

Posted: **February 1st, 2022, 2:04 pm**

monabri wrote:
BullDog wrote:
simoan wrote:
marathonman365 wrote:Portfolio Comment for January 2022
We completed the purchase of a position in Alphabet and began buying two new positions for the fund, the names of which will be revealed when we have accumulated our desired weighting.

So, now it is pretty much turning into a US technology fund First Amazon and now Alphabet to go with Paypal, Meta Platforms and Microsoft. I know they are great companies but this is now a step too far. I will probably sell down some of my holding because of this before the end of the tax year.

All the best, Si

Amazon and Alphabet, Smith has been long term quite negative on both. Will be interesting to hear what he says at the annual meeting. Though I think I can guess, pretty much.

The other 2 positions might not be "tech".

Amazon is included in the Discretionary Retail sector.

Meta (Facebook) and Alphabet (Google) are in Communications Services.

Paypal is in Financials.

So of those names only MicroSoft is officially a tech share.

Posted: **February 1st, 2022, 3:40 pm**

The fact that his top holding in what was his long/short fund suddenly appeared as Amazon was a pretty sure sign that it would go in his Equity Fund at some stage. The reasons for his change of mind are on the video here, released recently. There is absolutely no need to wait for the AGM. I'd judge 70+% of what he will say is here.

https://www.youtube.com/watch?v=ztiQlJjGQJ4&t=1185s

His comments at the AGM on GOOGL were positive on the main businesses, and negative on capital allocation apart from the main businesses. I suspect they came to the conclusion that the huge number of 'failed' investments were made to shut down competition. A mixture of a monopoly and triopoly in secular growth markets (see comments on AMZN's advertising business), will always appeal to him.

I'd guess that Adobe is one of his new purchases. It has been over 30% off it's peak recently. See comments on the video above, where he lists five new companies added to his watchlist. A dominant player with secular growth. What's not to like apart from the price?

I hold all three of AMZN, GOOGL and ADBE in my concentrated portfolio.

I'd be amazed if most of Unilever isn't sold by now to fund recent and new purchases. The post-mortem on their failed acquistion on the Fundsmith site is hugely critical. It's here and pulls no punches, as the ex boxer he is, would.

Posted: **February 1st, 2022, 3:42 pm**

Lootman wrote:
monabri wrote:
BullDog wrote:
simoan wrote:
marathonman365 wrote:Portfolio Comment for January 2022
We completed the purchase of a position in Alphabet and began buying two new positions for the fund, the names of which will be revealed when we have accumulated our desired weighting.

So, now it is pretty much turning into a US technology fund First Amazon and now Alphabet to go with Paypal, Meta Platforms and Microsoft. I know they are great companies but this is now a step too far. I will probably sell down some of my holding because of this before the end of the tax year.

All the best, Si

Amazon and Alphabet, Smith has been long term quite negative on both. Will be interesting to hear what he says at the annual meeting. Though I think I can guess, pretty much.

The other 2 positions might not be "tech".

Amazon is included in the Discretionary Retail sector.

Meta (Facebook) and Alphabet (Google) are in Communications Services.

Paypal is in Financials.

So of those names only MicroSoft is officially a tech share.

Tbh I don't care what industry sectors they are assigned to by the exchange. I know what they are (Amazon is basically a very profitable cloud services business with a loss making retail/logistics company). I was originally attracted to Fundsmith because it had few Megacap US technology holdings because I can invest in them easily myself. And IMO they haven't invested in the best of the lot in Apple, so I have to ask myself why I bother holding it anymore and paying them a 1% fee?

Posted: **February 1st, 2022, 3:43 pm**

https://www.fundsmith.co.uk/analysis/

Post-mortem ULVR failed acquisition.

Posted: **February 1st, 2022, 4:07 pm**

simoan wrote:
Lootman wrote:
monabri wrote:
BullDog wrote:
simoan wrote:So, now it is pretty much turning into a US technology fund First Amazon and now Alphabet to go with Paypal, Meta Platforms and Microsoft. I know they are great companies but this is now a step too far. I will probably sell down some of my holding because of this before the end of the tax year.

All the best, Si

Amazon and Alphabet, Smith has been long term quite negative on both. Will be interesting to hear what he says at the annual meeting. Though I think I can guess, pretty much.

The other 2 positions might not be "tech".

Amazon is included in the Discretionary Retail sector.

Meta (Facebook) and Alphabet (Google) are in Communications Services.

Paypal is in Financials.

So of those names only MicroSoft is officially a tech share.

Tbh I don't care what industry sectors they are assigned to by the exchange. I know what they are (Amazon is basically a very profitable cloud services business with a loss making retail/logistics company). I was originally attracted to Fundsmith because it had few Megacap US technology holdings because I can invest in them easily myself. And IMO they haven't invested in the best of the lot in Apple, so I have to ask myself why I bother holding it anymore and paying them a 1% fee?

Understood. Of course if they were also invested in Apple then you might as well buy a S&P 500 index fund, since Apple, MicroSoft, Amazon, Google and Facebook are usually the biggest 5 holdings in that index.

Posted: **February 1st, 2022, 4:29 pm**

Humeau wrote:https://www.fundsmith.co.uk/analysis/

Post-mortem ULVR failed acquisition.

Thank you. Excellent reading.

Posted: **February 1st, 2022, 4:39 pm**

simoan wrote: And IMO they haven't invested in the best of the lot in Apple

Why do you feel Apple is 'the best of the lot'? (I'm not disputing it - I use their products extensively and I'm a big fan - but from an investment POV?). Thanks.

Best wishes

Mark.

Posted: **February 1st, 2022, 4:52 pm**

Humeau wrote:https://www.fundsmith.co.uk/analysis/

Post-mortem ULVR failed acquisition.

https://www.fundsmith.co.uk/media/iljh2 ... nd_gsk.pdf

Posted: **February 1st, 2022, 4:58 pm**

ADrunkenMarcus wrote:
simoan wrote: And IMO they haven't invested in the best of the lot in Apple

Why do you feel Apple is 'the best of the lot'? (I'm not disputing it - I use their products extensively and I'm a big fan - but from an investment POV?). Thanks.

Best wishes

Mark.

It is really a luxury brand at a discount to other luxury brands. I also really like the services side of the business but wish they'd expand it more rapidly, maybe through acquisitions. EBIT margins of 30% and FCF yield of 3.5% are not to be sniffed at on a PER of 28 compared to the others. I am also worried about Meta and Alphabet being hit by regulation in the US. I don't think we've heard the last of that with maybe a push to break one or both of them up.

Posted: **February 1st, 2022, 5:00 pm**

Lootman wrote:Understood. Of course if they were also invested in Apple then you might as well buy a S&P 500 index fund, since Apple, MicroSoft, Amazon, Google and Facebook are usually the biggest 5 holdings in that index.

This is part of my thinking. It's rapidly heading towards being an expensive S&P500 tracker when combined with my own large Apple holding!

The Lemon Fool

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