Donate to Remove ads

Got a credit card? use our Credit Card & Finance Calculators

Thanks to johnstevens77,Bhoddhisatva,scotia,Anonymous,Cornytiv34, for Donating to support the site

Fundsmith

Closed-end funds and OEICs
ADrunkenMarcus
Lemon Quarter
Posts: 1584
Joined: November 5th, 2016, 11:16 am
Has thanked: 672 times
Been thanked: 479 times

Re: Fundsmith

#435299

Postby ADrunkenMarcus » August 17th, 2021, 9:37 am

simoan wrote: still they feel the need to release semi-annual reports and hold an AGM, which as far as I'm aware have no other purpose than to allow Mr. Smith to put the world to rights!! I am not aware that holding an AGM is a requirement for OEICs.


I'm not going to complain! More OEIS should hold AGMs.

Best wishes


Mark.

Backache
2 Lemon pips
Posts: 220
Joined: November 8th, 2016, 7:26 pm
Has thanked: 17 times
Been thanked: 85 times

Re: Fundsmith

#435302

Postby Backache » August 17th, 2021, 9:49 am

simoan wrote:That was my point. The Fundsmith motto is "buy good companies and do nothing", or something like that, so there should be nothing worthwhile to say. But still they feel the need to release semi-annual reports and hold an AGM, which as far as I'm aware have no other purpose than to allow Mr. Smith to put the world to rights!! I am not aware that holding an AGM is a requirement for OEICs.

All the best, Si

I don't think it's a bad thing to have regular communication with your fund holders in the form of an AGM and letters.
Personally I usually find he does have things to say which are useful and informative.I didn't actually find this years semi annual letter particularly useful but highlighted it because it was the exception.

simoan
Lemon Quarter
Posts: 2092
Joined: November 5th, 2016, 9:37 am
Has thanked: 463 times
Been thanked: 1457 times

Re: Fundsmith

#435304

Postby simoan » August 17th, 2021, 10:04 am

Backache wrote:
simoan wrote:That was my point. The Fundsmith motto is "buy good companies and do nothing", or something like that, so there should be nothing worthwhile to say. But still they feel the need to release semi-annual reports and hold an AGM, which as far as I'm aware have no other purpose than to allow Mr. Smith to put the world to rights!! I am not aware that holding an AGM is a requirement for OEICs.

All the best, Si

I don't think it's a bad thing to have regular communication with your fund holders in the form of an AGM and letters.
Personally I usually find he does have things to say which are useful and informative.I didn't actually find this years semi annual letter particularly useful but highlighted it because it was the exception.

Well, it's horses for courses. I can see the marketing angle and that unsophisticated investors may find the AGM re-assuring and helpful, but it worries me as it all verges on the cult of personality. I can just imagine Woodford is kicking himself he didnt think of holding forth at an AGM on a regular basis such was the size of his ego. I'd much prefer to see a more detailed datasheet every month as most other funds do.

One of the most important aspects to investing is controlling the effects of outside influence on what you do - whether that's some self-important poster on a BB or a star fund manager. The most important book I ever read about investing, and life in general, was the Robert Cialdini book on Influence. I would go as far as to say it changed my whole approach to life for the better. So, personally I only see downside to the AGM as I know after I watch it, it makes me want to invest more, which so far has been a good decision, but one day it may not be.

All the best, Si

simoan
Lemon Quarter
Posts: 2092
Joined: November 5th, 2016, 9:37 am
Has thanked: 463 times
Been thanked: 1457 times

Re: Fundsmith

#435313

Postby simoan » August 17th, 2021, 10:38 am

ReallyVeryFoolish wrote:Actually...... Woody would by law have had to hold an AGM for his investment trust. We know what happened there.

I agree about the near planet size of Smith's ego. However, what is equally refreshing, is he can be surprisingly humble when he gets things wrong.

RVF

Obviously, I was referring to the fact Woodford never thought of holding an AGM for his faithful following for his main OEICs. It's very unusual because normally an AGM is held only for shareholders who have a legal right to vote on matters arising, including appointment of directors etc. Even the Berkshsire Hathaway meetup is for shareholders. I remember when Terry Smith used to do the AGM for the Fundsmith Emerging Equities Trust but that didn't go so well, did it? And now he no longer attends. Some excuse about spreading himself too thinly, and nothing to do with distancing himself from something that didn't work :)

All the best, Si

monabri
Lemon Half
Posts: 8396
Joined: January 7th, 2017, 9:56 am
Has thanked: 1539 times
Been thanked: 3428 times

Re: Fundsmith

#435370

Postby monabri » August 17th, 2021, 1:29 pm

Does Fundsmith still hold IHG? What's the attraction...margins have been dropping off in recent years.

simoan
Lemon Quarter
Posts: 2092
Joined: November 5th, 2016, 9:37 am
Has thanked: 463 times
Been thanked: 1457 times

Re: Fundsmith

#435406

Postby simoan » August 17th, 2021, 3:24 pm

monabri wrote:Does Fundsmith still hold IHG? What's the attraction...margins have been dropping off in recent years.

I've not seen them state they have sold out. I assume the attraction is the usual i.e. strong free cash generation, high gross margins and ROCE, assuming it gets back to pre-pandemic levels of cash generation it doesn't look a bad bet. If you look at cash generation averaged over 5 years (2015-19) it was ~250p which would put IHG on a current FCF yield of ~5.5% - pretty attractive in a zero interest rate world.

All the best, Si

monabri
Lemon Half
Posts: 8396
Joined: January 7th, 2017, 9:56 am
Has thanked: 1539 times
Been thanked: 3428 times

Re: Fundsmith

#435414

Postby monabri » August 17th, 2021, 3:41 pm

My take on the "FCF yield" ( fwiw) indicates the generation of a good chunk of cash that could / might be used to pay a dividend and/or used to reinvest elsewhere...certainly at 5%, the divi would be covered. What the "chasing yield" ( HYP-like) is another story. Indeed, the dividend yield on IHG would be sniffed at by a HYP investor.

I was looking at the margin deterioration over the last years, referring to Morningstar.

http://financials.morningstar.com/ratio ... region=GBR

simoan
Lemon Quarter
Posts: 2092
Joined: November 5th, 2016, 9:37 am
Has thanked: 463 times
Been thanked: 1457 times

Re: Fundsmith

#435420

Postby simoan » August 17th, 2021, 3:55 pm

ReallyVeryFoolish wrote:
simoan wrote:
monabri wrote:Does Fundsmith still hold IHG? What's the attraction...margins have been dropping off in recent years.

I've not seen them state they have sold out. I assume the attraction is the usual i.e. strong free cash generation, high gross margins and ROCE, assuming it gets back to pre-pandemic levels of cash generation it doesn't look a bad bet. If you look at cash generation averaged over 5 years (2015-19) it was ~250p which would put IHG on a current FCF yield of ~5.5% - pretty attractive in a zero interest rate world.

All the best, Si

Except Smith would give you the usual lecture on why investing for yield is a mugs game! LOL!

RVF

I don't understand? Free cashflow yield is not the same as dividend yield - it is not paid out as income to shareholders. It is the cash that is leftover when everything else is paid. It could be used to pay out a dividend but the companies Fundsmith invest in use it mostly to re-invest at the high returns on capital they enjoy. Sorry if I've misunderstood the joke :)

All the best, Si

Hariseldon58
Lemon Slice
Posts: 835
Joined: November 4th, 2016, 9:42 pm
Has thanked: 124 times
Been thanked: 513 times

Re: Fundsmith

#435516

Postby Hariseldon58 » August 17th, 2021, 10:01 pm

simoan wrote:

One of the most important aspects to investing is controlling the effects of outside influence on what you do - whether that's some self-important poster on a BB or a star fund manager. The most important book I ever read about investing, and life in general, was the Robert Cialdini book on Influence. I would go as far as to say it changed my whole approach to life for the better. So, personally I only see downside to the AGM as I know after I watch it, it makes me want to invest more, which so far has been a good decision, but one day it may not be.

All the best, Si
[/quote]

I came across Robert Cialdini for the first time a few days ago on this podcast

https://podcasts.apple.com/gb/podcast/masters-in-business/id730188152?i=1000526009805


I wished I had come across this 30 years ago, it took me years to learn this the hard way !!

If you have poor communication it won’t help you but if you can communicate, it could transform your ability to influence people and get along smoothly in life.

Pendrainllwyn
Lemon Slice
Posts: 304
Joined: November 4th, 2016, 9:53 pm
Has thanked: 162 times
Been thanked: 200 times

Re: Fundsmith

#435556

Postby Pendrainllwyn » August 18th, 2021, 1:22 am

Just listened to the podcast. Thoroughly enjoyed it. Thanks for sharing. It’s amazing how some simple things aren’t always self evident until someone points it out.

Pendrainllwyn

Humeau
Posts: 36
Joined: July 24th, 2019, 7:47 am
Has thanked: 18 times
Been thanked: 19 times

Re: Fundsmith

#437737

Postby Humeau » August 27th, 2021, 8:12 am

A friend of mine ruled out investing in Fundsmith because he didn't like Smith's cocky attitude. My view is that to come from being a lorry driver's son, to running the largest fund in the UK and a net worth of +/- 500million, in a world surrounded by posh, and not so bright individuals, it must be difficult not to have an edge to your character.

I like Smith's straight taking and consistent approach, his clear explanations and the fact that what he says all too often turns out to be true. The fact that he achieved 14+% returns over 6-7 years with Tullet Prebon's pension fund through the financial crash and 18% in over a decade since starting his own fund is all that really matters.

He is open about his mistakes and his reliance on Julian Robbins's analysis. I also suspect he has the nous to leave the fund in good hands, when he eventually stops running it, and has made some good moves in that direction.

I trust to profit from investing in his fund and cloning what he, and the likes of Pat Dorsey, Stephen Yiu and the guys at Polen Capital, do.

MaraMan
Lemon Slice
Posts: 497
Joined: November 22nd, 2016, 3:30 pm
Has thanked: 219 times
Been thanked: 228 times

Re: Fundsmith

#437753

Postby MaraMan » August 27th, 2021, 9:29 am

I prefer my investment decisions to be based on more than my perceptions of the fund managers personality. I want him/her to grow my investments or provide an income, not be my new best friend (although a filthy rich new best friend wouldn't be a bad thing :lol: ).

MM

ADrunkenMarcus
Lemon Quarter
Posts: 1584
Joined: November 5th, 2016, 11:16 am
Has thanked: 672 times
Been thanked: 479 times

Re: Fundsmith

#437759

Postby ADrunkenMarcus » August 27th, 2021, 9:54 am

Humeau wrote:I like Smith's straight taking and consistent approach, his clear explanations and the fact that what he says all too often turns out to be true. The fact that he achieved 14+% returns over 6-7 years with Tullet Prebon's pension fund through the financial crash and 18% in over a decade since starting his own fund is all that really matters.

He is open about his mistakes and his reliance on Julian Robbins's analysis. I also suspect he has the nous to leave the fund in good hands, when he eventually stops running it, and has made some good moves in that direction..


Agree entirely!

I don't think Smith is cocky, either - just confident (and usually correct).

Humeau wrote:I trust to profit from investing in his fund and cloning what he, and the likes of Pat Dorsey, Stephen Yiu and the guys at Polen Capital, do.


I'd like to be able to acess Pat Dorsey or Polen Capital as a UK investor. I think there are problems with USA UTICs. :(

Best wishes


Mark.

Humeau
Posts: 36
Joined: July 24th, 2019, 7:47 am
Has thanked: 18 times
Been thanked: 19 times

Re: Fundsmith

#437803

Postby Humeau » August 27th, 2021, 1:48 pm

Hi Mark,

In answer to your question, by cloning, I mean buying what some of these investors have bought recently, not accessing their funds directly.

The latest example being Amadeus, which I know that Dorsey bought mostly in Q4 last year, and I doubt given the size of his holding that he paid less than it has been recently. In fact, I'd judge he bought at an average higher price than it is today. The fact that Terry Smith was mightily pissed off by Amadeus, when not informed of their discounted share sale last Spring, and still holds, (2.3% of portfolio), despite its underperformance over recent years. My conclusion after further research is that this moaty business is most likely to get more profitable and reward shareholders accordingly over the longer term.

I hope this helps.

H.

ADrunkenMarcus
Lemon Quarter
Posts: 1584
Joined: November 5th, 2016, 11:16 am
Has thanked: 672 times
Been thanked: 479 times

Re: Fundsmith

#437928

Postby ADrunkenMarcus » August 27th, 2021, 10:34 pm

Thank you.

I have to admit I sometimes scan a few fund managers' portfolios as a basis for researching shares to hold directly!

Best wishes

Mark.

simoan
Lemon Quarter
Posts: 2092
Joined: November 5th, 2016, 9:37 am
Has thanked: 463 times
Been thanked: 1457 times

Re: Fundsmith

#441888

Postby simoan » September 13th, 2021, 2:30 pm

Hurrah! Finally, a modern, fast website with improved security and a wider range of on-line investment options. About time for a £28bn fund!!

All the best, Si

xeny
Lemon Slice
Posts: 450
Joined: April 13th, 2017, 11:37 am
Has thanked: 233 times
Been thanked: 154 times

Re: Fundsmith

#442137

Postby xeny » September 14th, 2021, 12:55 pm

simoan wrote:Hurrah! Finally, a modern, fast website with improved security and a wider range of on-line investment options. About time for a £28bn fund!!


If only they hadn't lost the day from the fund factsheet page's top table. Makes it hard at a glance to know if the values have updated that day.

Backache
2 Lemon pips
Posts: 220
Joined: November 8th, 2016, 7:26 pm
Has thanked: 17 times
Been thanked: 85 times

Re: Fundsmith

#442409

Postby Backache » September 15th, 2021, 9:49 am

xeny wrote:
simoan wrote:Hurrah! Finally, a modern, fast website with improved security and a wider range of on-line investment options. About time for a £28bn fund!!


If only they hadn't lost the day from the fund factsheet page's top table. Makes it hard at a glance to know if the values have updated that day.

Seems to be there for me :?

xeny
Lemon Slice
Posts: 450
Joined: April 13th, 2017, 11:37 am
Has thanked: 233 times
Been thanked: 154 times

Re: Fundsmith

#442413

Postby xeny » September 15th, 2021, 10:03 am

Backache wrote:Seems to be there for me :?


Day or date? For me it now says "Price Data 14th September 2021" . It used to say something like "Price Data Wednesday 14th September 2021"

Backache
2 Lemon pips
Posts: 220
Joined: November 8th, 2016, 7:26 pm
Has thanked: 17 times
Been thanked: 85 times

Re: Fundsmith

#442415

Postby Backache » September 15th, 2021, 10:11 am

xeny wrote:
Backache wrote:Seems to be there for me :?


Day or date? For me it now says "Price Data 14th September 2021" . It used to say something like "Price Data Wednesday 14th September 2021"

Ah got you, must admit I lose track of both and always check on the top of my screen if looking at a date or day.


Return to “Investment Trusts and Unit Trusts”

Who is online

Users browsing this forum: No registered users and 6 guests