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Top Stocks are Tough to Find

Stocks and Shares ISA , Choosing funds for ISA's, risk factors for funds etc
Investment strategy discussions not dealt with elsewhere.
GeoffF100
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Top Stocks are Tough to Find

#412151

Postby GeoffF100 » May 15th, 2021, 1:44 pm

Here is the latest Pensioncraft video:

https://www.youtube.com/watch?v=xQvTJG7DSR8

Dod101
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Re: Top Stocks are Tough to Find

#412229

Postby Dod101 » May 15th, 2021, 5:43 pm

GeoffF100 wrote:Here is the latest Pensioncraft video:

https://www.youtube.com/watch?v=xQvTJG7DSR8


The message is basically the same as James Anderson of Scottish Mortgage has been making for a long while now. It does no harm to keep emphasising it.

Dod

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Re: Top Stocks are Tough to Find

#412257

Postby NotSure » May 15th, 2021, 7:40 pm

Dod101 wrote:
GeoffF100 wrote:Here is the latest Pensioncraft video:

https://www.youtube.com/watch?v=xQvTJG7DSR8


The message is basically the same as James Anderson of Scottish Mortgage has been making for a long while now. It does no harm to keep emphasising it.

Dod


At first I struggled to understand what you meant there - the video seemed to be saying that active funds (e.g. SMT) were, literally 98 times out of a hundred, a waste of time, but I assume you are referring to James Anderson's views on the investment industry?

e.g. https://www.theguardian.com/business/2021/may/13/fund-management-irretrievably-broken-james-anderson-outgoing-baillie-gifford-star-investor

I should add tha the video did not dismiss the utility of active funds - you can pick one with a style that suits you - just that they will usually underperform index trackers for various reasons.

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Re: Top Stocks are Tough to Find

#412309

Postby Dod101 » May 15th, 2021, 10:10 pm

NotSure wrote:
Dod101 wrote:
GeoffF100 wrote:Here is the latest Pensioncraft video:

https://www.youtube.com/watch?v=xQvTJG7DSR8


The message is basically the same as James Anderson of Scottish Mortgage has been making for a long while now. It does no harm to keep emphasising it.

Dod


At first I struggled to understand what you meant there - the video seemed to be saying that active funds (e.g. SMT) were, literally 98 times out of a hundred, a waste of time, but I assume you are referring to James Anderson's views on the investment industry?

e.g. https://www.theguardian.com/business/2021/may/13/fund-management-irretrievably-broken-james-anderson-outgoing-baillie-gifford-star-investor

I should add tha the video did not dismiss the utility of active funds - you can pick one with a style that suits you - just that they will usually underperform index trackers for various reasons.


Not really. What I am saying (or trying to imply anyway) is that James Anderson often tells us that most of the stockmarket's gains come from a very small proportion of the stocks and shares available. I think this video said only about 20% actually outperform; Anderson has said rather less than that I think. Demonstrably SMT, as an active fund, is not a waste of time (or maybe more accurately money) but falls within that very small proportion that actually regularly outperform.

Dod

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Re: Top Stocks are Tough to Find

#412347

Postby GeoffF100 » May 16th, 2021, 7:13 am

Dod101 wrote:Demonstrably SMT, as an active fund, is not a waste of time (or maybe more accurately money) but falls within that very small proportion that actually regularly outperform.

A point of the video is that SMT is a waste of time and money. It falls within the small proportion that have outperformed for a significant period, but the chances of that being repeated are very small.

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Re: Top Stocks are Tough to Find

#412351

Postby Dod101 » May 16th, 2021, 7:58 am

GeoffF100 wrote:
Dod101 wrote:Demonstrably SMT, as an active fund, is not a waste of time (or maybe more accurately money) but falls within that very small proportion that actually regularly outperform.

A point of the video is that SMT is a waste of time and money. It falls within the small proportion that have outperformed for a significant period, but the chances of that being repeated are very small.


Well that just confirms what I think of the video and its presenter. I wish I could find a few more investments that are a waste of time and money by that definition. I have held SMT for about 25 years. It has made lots of money for me.

Dod

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Re: Top Stocks are Tough to Find

#412414

Postby tjh290633 » May 16th, 2021, 11:45 am

I suspect that the successful active fund managers follow the precept that last year's losers are this year's winners.

I found that out the hard way:

.       2018             2019             2020
Epic Change Epic Change Epic Change
PSON 27.50% SGRO 52.43% WMH* 43.29%
AZN 14.68% TW. 41.94% ADM 25.86%
GSK 12.76% MARS 35.25% KGF 24.61%
BHP 8.48% TSCO 34.25% RIO 21.47%
CPG 3.13% SSE 33.01% BHP 8.34%
DGE 2.57% LGEN 31.17% PSON 6.81%
ADM 2.25% AZN 29.52% RB. 6.74%
SGRO 0.27% BATS 29.26% SGRO 5.62%
ULVR -0.41% SMDS 28.37% SSE 4.28%
BP. -5.12% UU. 28.14% ULVR 0.95%
RIO -5.38% IMI 24.89% PHP@ 0.67%
TATE -6.12% NG. 23.57% S32 -1.15%
RDSB -6.72% BA. 23.00% IMI -1.19%
INDV* -8.87% WMH 21.58% SMDS -2.50%
TSCO -9.15% RIO 20.72% AZN -3.72%
S32 -9.25% LLOY 20.61% UU. -5.13%
UU. -11.25% BLND 19.80% NG. -8.40%
BT.A -12.37% GSK 19.30% TSCO -9.33%
NG. -12.67% TATE 15.18% DGE -10.08%
RB. -13.09% CPG 14.55% TATE -11.29%
LGEN -15.48% DGE 14.51% LGEN -12.15%
MARS -16.40% ADM 12.80% BA. -13.46%
SSE -18.07% AV. 11.50% TW. -14.27%
BA. -19.86% BHP 7.58% BATS -16.20%
MKS -21.47% ULVR 5.89% VOD -17.59%
BLND -22.89% KGF 4.58% IMB -17.84%
LLOY -23.86% RB. 1.93% AV. -22.33%
IMB -24.92% VOD -4.02% BLND -23.45%
AV. -25.86% RDSB -4.29% GSK -24.56%
IMI -29.18% BP. -4.91% CPG -27.88%
TW. -33.99% MKS -13.63% BT.A -31.28%
VOD -34.94% BT.A -19.18% MKS -36.16%
KGF -38.55% IMB -21.37% MARS -40.57%
SMDS -42.16% S32 -23.37% LLOY -41.70%
BATS -50.18% PSON -32.12% RDSB -43.76%
WMH -51.86% BP. -45.97%
CLLN* -100.00%

@ Addition
* Disposal

That shows the effect to a great extent.

It's not infallible, but it does work.

TJH

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Re: Top Stocks are Tough to Find

#412535

Postby Dod101 » May 16th, 2021, 7:20 pm

The lack of any response for the last several hours tends to confirm my immediate response. 'Bloody h*ll will look at this later. ' I still intend to.

Dod

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Re: Top Stocks are Tough to Find

#412606

Postby GeoffF100 » May 17th, 2021, 7:14 am

Dod101 wrote:
GeoffF100 wrote:
Dod101 wrote:Demonstrably SMT, as an active fund, is not a waste of time (or maybe more accurately money) but falls within that very small proportion that actually regularly outperform.

A point of the video is that SMT is a waste of time and money. It falls within the small proportion that have outperformed for a significant period, but the chances of that being repeated are very small.

Well that just confirms what I think of the video and its presenter. I wish I could find a few more investments that are a waste of time and money by that definition. I have held SMT for about 25 years. It has made lots of money for me.

The point is that the last 25 years is in the past. What matters now is the future. SMT is unlikely to beat a global tracker over the next 25 years, after allowing for risk. Some funds will, but there is no way of telling which ones in advance, except by chance. Our own experience is, of course, no more relevant than the experiences of others.

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Re: Top Stocks are Tough to Find

#412625

Postby Dod101 » May 17th, 2021, 8:45 am

GeoffF100 wrote:
Dod101 wrote:
GeoffF100 wrote:A point of the video is that SMT is a waste of time and money. It falls within the small proportion that have outperformed for a significant period, but the chances of that being repeated are very small.

Well that just confirms what I think of the video and its presenter. I wish I could find a few more investments that are a waste of time and money by that definition. I have held SMT for about 25 years. It has made lots of money for me.

The point is that the last 25 years is in the past. What matters now is the future. SMT is unlikely to beat a global tracker over the next 25 years, after allowing for risk. Some funds will, but there is no way of telling which ones in advance, except by chance. Our own experience is, of course, no more relevant than the experiences of others.


Ain't you right as far as the last 25 years are concerned and the last 100 years and so on. What makes you think that SMT is unlikely to beat global trackers over the next 25 years, after allowing for risk or otherwise? I think you are missing the very point that James Anderson makes. Shares of any sort need not 'revert to the mean'.

Dod

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Re: Top Stocks are Tough to Find

#412635

Postby GeoffF100 » May 17th, 2021, 9:11 am

Dod101 wrote:What makes you think that SMT is unlikely to beat global trackers over the next 25 years, after allowing for risk or otherwise? I think you are missing the very point that James Anderson makes. Shares of any sort need not 'revert to the mean'.

Watch the video. Funds that performed well in one time period are no more likely to perform well in the next time period than those that did badly. The evidence for that is overwhelming. Active fund managers naturally want deny it, and hope that people will be blinded by wishful thinking.

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Re: Top Stocks are Tough to Find

#412637

Postby Dod101 » May 17th, 2021, 9:37 am

GeoffF100 wrote:
Dod101 wrote:What makes you think that SMT is unlikely to beat global trackers over the next 25 years, after allowing for risk or otherwise? I think you are missing the very point that James Anderson makes. Shares of any sort need not 'revert to the mean'.

Watch the video. Funds that performed well in one time period are no more likely to perform well in the next time period than those that did badly. The evidence for that is overwhelming. Active fund managers naturally want deny it, and hope that people will be blinded by wishful thinking.


I have watched the video thank you. There is not a lot in it that I have not seen in one for or another before. Of course what you say is in itself correct. Just because for instance Unilever has done well over the last 50 years does not mean it will do well in the next 50. We all know that but it has a better chance of doing better than some by its built in culture and position in the marketplace.

I think SMT will probably do better than some for the same reason, culture.

Dod

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Re: Top Stocks are Tough to Find

#412662

Postby GeoffF100 » May 17th, 2021, 10:51 am

Dod101 wrote:I think SMT will probably do better than some for the same reason, culture.

SMT is most unlikely to be the worst performing fund in the world, so it almost certainly will do better than some.

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Re: Top Stocks are Tough to Find

#412677

Postby MaraMan » May 17th, 2021, 11:24 am

I am just glad no one tried to make this argument to me when I first invested in SMT ten years ago. I have no intention of selling in the forseeable future.

MM

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Re: Top Stocks are Tough to Find

#418491

Postby Moosehoosenew » June 9th, 2021, 10:47 pm

I lost 1k on SMT in early 2000s, 3k investment and sold out, I guess the initial 3k would be worth around 100k now, more fool me.
I now have around 100k in SMT that started as 40k, so things worked out in the end.

The above of course means nothing, Baillie Gifford culture over last 25 years is impressive, I assume the largest argument against them is that from being a small firm to now a large firm in assets held, they have to take larger positions in any investment than ever before. Of course they will have rocky patches, but as far as I am concerned the firm and SMT a good place to put part of your portfolio.

If I was a 25 year old investor, it would be SMT all the way.

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Re: Top Stocks are Tough to Find

#426527

Postby AWOL » July 10th, 2021, 7:11 pm

I like the Pensioncraft videos and the presenter's style as well as content. I think the problem is that we are arguing future performance based on past. There is a ton of evidence that out performance doesn't persist. SMT has clearly been well run, performed well and has low charges. However that doesn't guarantee that things won't change. Value could make a persistent return (or may not). There was a time when growth funds looked like a mugs game and value looked unstoppable.

The problem with choosing active funds is you are betting on momentum, the persistence of out-performance. Momentum in general works however style's change and market leadership changes. I have lost count of the go-to funds that deliver unbeatable performance that suddenly find themselves backing the wrong horse when the market's music changes.

The point made in the video is good and backed by data.

This is a big part of the active versus passive debate. Sure active managers outperform but backing the right horse and knowing when to get off is easy until it goes disastrously wrong.

Take another factor like large cap quality... Terry Smith saw that it was undervalued launched a fund playing in that area and performed well enough that people pay higher than average charges. However at some point the value is priced in and the opportunity will lie elsewhere. I cannot figure out if this is the time to sell out and I've been in since launch.

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Re: Top Stocks are Tough to Find

#426540

Postby mark88man » July 10th, 2021, 8:31 pm

I think the challenge with generalisations is that they are general. The primary challenge with them is that not everything is equal, whilst generalisations tend to assume that everything is equal or ends up that way in that all funds prospects are ultimately homogenous.

Now, although I am a leftie by the standards of this board, I have never assumed that all things are equal or fair in the world especially that of big money, and the more I realise this the better I do. Class (as in capability) counts and that SMT seem to have it in spades, and I am very happy with my decision to invest, and happy to leave a fair chunk of the equity part of my growth portfolio in their hands for as far forward as I can see, although I am not so sanguine I won't check it periodically.

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Re: Top Stocks are Tough to Find

#426574

Postby AWOL » July 11th, 2021, 1:07 am

I will pick the first example that comes to mind of what happens with funds... Aberdeen Asian Smaller Companies was the top performing trust with a stellar 10 year record and Aberdeen were the investment house who were winning awards everywhere for making everyone rich from Asia. It traded on a premium and then Hugh Young gave an update saying that the easiest gains had been made. It's performance went off the boil and it slipped to a modest discount. I increased my holding because AASC had untouchable growth. I spoke to a neighbour who was on the board, he said Asia's time is past and USA is the place to be. I ignored him and bought more :shock: Things just got worse from there although US investments skyrocketed. In the end I sold out having made a large loss.

AASC is now called Asia Pacific Smaller Companies and it's actually had a good year with 39.4% return, and it stands on a discount of around 14%, this may even be a good entry point. It has made 131% in the last 10 years no longer the 1000%+ 10 year returns it boasted back in 2013.

https://www.trustnet.com/news/424004/th ... the-decade
https://www.whatinvestment.co.uk/winner ... 2-2111136/

We could name others including Jupiter European, BlackRock World Mining, but the reality is that trends change. The gifted and wonderful turn out to have been in the right place at the right time and that place no longer looks so attractive, not even memorable, we forget the stars. Some of them may even have another day eventually... New Star Technology trust.

Does this mean SMT is a bad bet no.. it just means don't be certain that it's not.

PS- I hold Monks, I sold out of SMT early and missed some gains so if it comforts you, decide this is sour grapes, it's not it's a cautionary reminder that past growth is certain the future is fickle.


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