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Smith goes short?

Closed-end funds and OEICs
todthedog
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Re: Smith goes short?

#321640

Postby todthedog » June 26th, 2020, 7:53 am

Is he heading down the road of believing his own publicity?
Holders of Fundsmith should be wary.

Alaric
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Re: Smith goes short?

#321665

Postby Alaric » June 26th, 2020, 9:05 am

todthedog wrote:Is he heading down the road of believing his own publicity?


He would have a reputation of being able to spot Companies with a dubious business model or practices to avoid investing in them. It's greater risk to actively seek them out in order to bet against them.

simoan
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Re: Smith goes short?

#321682

Postby simoan » June 26th, 2020, 9:48 am

ReallyVeryFoolish wrote:
todthedog wrote:Is he heading down the road of believing his own publicity?
Holders of Fundsmith should be wary.

Indeed, it would be foolish not to.

RVF.

I would go as far as to say I don't like Terry Smith as a person from what I see of him at the Fundsmith ASM. I also find it very difficult to like someone that was pro-Brexit but who resides in an offshore tax haven like Mauritius. However, that shouldn't stop you investing in Fundsmith Equity. The two should not be conflated if you're an investor. Everyone knew Steve Jobs was a pretty unpleasant person when all was said and done, but it didn't stop me investing in Apple.

All the best, Si

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Re: Smith goes short?

#321702

Postby simoan » June 26th, 2020, 10:13 am

ReallyVeryFoolish wrote:
simoan wrote:
ReallyVeryFoolish wrote:Indeed, it would be foolish not to.

RVF.

I would go as far as to say I don't like Terry Smith as a person from what I see of him at the Fundsmith ASM. I also find it very difficult to like someone that was pro-Brexit but who resides in an offshore tax haven like Mauritius. However, that shouldn't stop you investing in Fundsmith Equity. The two should not be conflated if you're an investor. Everyone knew Steve Jobs was a pretty unpleasant person when all was said and done, but it didn't stop me investing in Apple.

All the best, Si

Exactly. Couldn't have put it better myself. The first sign of Smith "doing a Woodford" and I'm out.

RVF

Absolutely. I'm invested in the investment method of the Fund, not Terry Smith. If that changes, I'll be selling the same day!

All the best, Si

scotia
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Re: Smith goes short?

#321709

Postby scotia » June 26th, 2020, 10:26 am

I suspect it will make a number of current Fundsmith investors feel a bit uncomfortable - and it may reduce their enthusiasm for adding more to their Fundsmith holdings. But since critics have been warning about the size of Fundsmith, this may be no bad thing.

bluedonkey
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Re: Smith goes short?

#321732

Postby bluedonkey » June 26th, 2020, 11:06 am

Not sure what the concern is. The link provided is to a new fund, not the existing Fundsmith funds which is what people here will hold.

flyer61
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Re: Smith goes short?

#321772

Postby flyer61 » June 26th, 2020, 12:14 pm

For me I am not concerned in the slightest he is starting a new fund. As has been mentioned above if FS stops doing what it says on the tin then I would sell. The fund industry in the UK is desperate to see the back of him so they can get back to taking a tithe off the people for doing nothing but hug an index.

You have to ask yourself WHY is he doing this at this time. My take is the world has a small universe of quality investable Companies and his team know what they are and the prices you should be paying for that quality. They have probably come to a point where they feel it could be sit and do nothing for sometime with FS. The opportunities they see are very much on the short side. The world is awash with basket cases. Many many Companies are being propped up by cheap money and Government assistance, financial, regulatory etc. Look at Wirecard, no short selling by order of the German authorities...talk about shafting the investing world whilst the fraudsters are at work. They are probably seeing dodgy accounting that your average fund manager wouldn't notice in a month of Sundays and realising there are opportunities to use their knowledge of how Companies work to bet against those that are blatently not what they seem.

Read his comments from 2017 where he has identified what he considers are uninvestable Companies......Centrica anyone. :roll:

https://www.fundsmith.co.uk/docs/defaul ... f?sfvrsn=3

It could also be a world view going forward of deflationary forces that are so great that money printing will not stop it.

Time will tell.

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Re: Smith goes short?

#321780

Postby xeny » June 26th, 2020, 12:25 pm

There's a short statement on the FS website, here:

https://www.fundsmith.co.uk/news/articl ... short-fund

Slightly surprised to discover that Terry held any bonds to be honest.

toofast2live
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Re: Smith goes short?

#322328

Postby toofast2live » June 28th, 2020, 5:09 pm

xeny wrote:There's a short statement on the FS website, here:

https://www.fundsmith.co.uk/news/articl ... short-fund

Slightly surprised to discover that Terry held any bonds to be honest.


Yes, that surprised me. So Smiffy prefers a goodly chunk of his fortune to be in bonds and a hedge fund.

Maybe we should follow his example and “do as he does, not what he says”.

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Re: Smith goes short?

#322330

Postby dealtn » June 28th, 2020, 5:19 pm

toofast2live wrote:
xeny wrote:There's a short statement on the FS website, here:

https://www.fundsmith.co.uk/news/articl ... short-fund

Slightly surprised to discover that Terry held any bonds to be honest.


Yes, that surprised me. So Smiffy prefers a goodly chunk of his fortune to be in bonds and a hedge fund.

Maybe we should follow his example and “do as he does, not what he says”.


Where does it say "goodly chunk", or indeed any indication of what % he holds in bonds?

scotia
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Re: Smith goes short?

#322410

Postby scotia » June 28th, 2020, 11:20 pm

xeny wrote:There's a short statement on the FS website, here:

https://www.fundsmith.co.uk/news/articl ... short-fund

Slightly surprised to discover that Terry held any bonds to be honest.

I'm also slightly surprised that he felt the need to put out such a statement. Is it a "Steady the Ship" response - does he feel the need to re-assure his traditional Fundsmith investors?

xeny
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Re: Smith goes short?

#322447

Postby xeny » June 29th, 2020, 8:35 am

dealtn wrote:
Where does it say "goodly chunk", or indeed any indication of what % he holds in bonds?


There's no direct evidence, but circumstantially, how much would you have to hold in bonds to make it in any way cost effective to set up a fund purely so you can use that money on a hedging strategy?

Something doesn't quite add up in the currently public information.


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