Salvor's Moats, Punts and Trusts strategy

[absolutezero]

Where do you get your ideas about general trends?

I subscribe to a lot of magazines and Motley Fool USA's Stock Adviser service (mostly for the message boards and their news service). I try to ensure that I see a huge amount of information on a regular basis from a wide variety of sources.

I probably spend close to £3,000 a year on subscriptions and books.

Magazine subscriptions: The Economist, The Atlantic, Wired (American edition), The Spectator, Investors Chronicle, The Oldie, History Today, Private Eye (soon to lapse, it's not what it used to be), The Cricketer.

Regularly read blog: Instapundit. Run by a University of Tennessee Law Professor whose politics is on the libertarian wing of the Republican party. Instapundit is a great source for American news, especially as to how the legal system, big business and academia is being corrupted by the Democrats.

Guido Fawkes for UK politics

Podcast: EconTalk. Run by Russ Roberts, an economics professor who is a mixture of the Chicago and Austrian schools. He interviews a wide variety of people and discusses a very wide variety of topics. I've learned more useful economics from EconTalk than in my economics degree! I buy some of the books that are discussed with some of the people he has on the podcast (average is a bit less than one book a month). The podcasts with Mike Munger (another evomonist) are always worthwhile.

I use Twitter as a news source (I have never posted there). I follow several journalists and academics accounts (Phillips P. O'Brien and Ilia Pomonarenko are my "go to" accounts regarding the Ukraine war)

Every time I go into WH Smith (about once a month, currently) I buy a magazine that looks as if it covers something that's a bit different

I read quite a bit of The Guardian online (I see this as opposition research). I subscribe to The Daily Telegraph and Sunday Times

Blimey
You're a one man research house. You should publish your ideas as a paid for service.

I hope you use The Economist as a contrarian indicator!

Twitter is very useful, I find. A cess pit but a good source of ideas.
I take MoneyWeek, The IC, Spectator and also subscribe (free) to a few email lists (Monevator, Banker on Fire etc). I also enjoy Dominic Frisby's non-Bitcoin stuff.

If you've not come across Marko Papic's book Geopolitical Alpha, I recommend.

[SalvorHardin]

Blimey
You're a one man research house. You should publish your ideas as a paid for service.

I hope you use The Economist as a contrarian indicator!

Twitter is very useful, I find. A cess pit but a good source of ideas.
I take MoneyWeek, The IC, Spectator and also subscribe (free) to a few email lists (Monevator, Banker on Fire etc). I also enjoy Dominic Frisby's non-Bitcoin stuff.

If you've not come across Marko Papic's book Geopolitical Alpha, I recommend.

Thanks. I'll have a look at your suggestions.

Funnily enough, I do do a bit of work from time to time where I'm acting as a research / ideas service for a client

[richfool]

Investment Trusts. My biggest holdings are Foreign & Colonial (4%), Finsbury Growth & Income (4%) and Henderson Smaller Companies (4%). The other names would be familiar, such as Caledonia Investments (2.1%), Law Debenture (2.2%) Templeton Emerging Markets (3.9%) and TR Property (2.6%).

SH, I've just been re-reading your OP and subsequent posts, which made interesting reading. Thanks.

I would be interested in any update on how the Investment Trust component of your portfolio is doing?

[SalvorHardin]

Investment Trusts. My biggest holdings are Foreign & Colonial (4%), Finsbury Growth & Income (4%) and Henderson Smaller Companies (4%). The other names would be familiar, such as Caledonia Investments (2.1%), Law Debenture (2.2%) Templeton Emerging Markets (3.9%) and TR Property (2.6%).

SH, I've just been re-reading your OP and subsequent posts, which made interesting reading. Thanks.

I would be interested in any update on how the Investment Trust component of your portfolio is doing?

My investment trusts as a group have fallen by about 12%. I'vr only made three changes. Doubled my holding in Caledonia, sold Templeton Emerging Markets and sold Seraphim Space.

Henderson Smaller Companies has been the worst performer of the lot (down 29%). But I'm relaxed about it.

[absolutezero]

Investment Trusts. My biggest holdings are Foreign & Colonial (4%), Finsbury Growth & Income (4%) and Henderson Smaller Companies (4%). The other names would be familiar, such as Caledonia Investments (2.1%), Law Debenture (2.2%) Templeton Emerging Markets (3.9%) and TR Property (2.6%).

SH, I've just been re-reading your OP and subsequent posts, which made interesting reading. Thanks.

I would be interested in any update on how the Investment Trust component of your portfolio is doing?

My investment trusts as a group have fallen by about 12%. I'vr only made three changes. Doubled my holding in Caledonia, sold Templeton Emerging Markets and sold Seraphim Space.

Henderson Smaller Companies has been the worst performer of the lot (down 29%). But I'm relaxed about it.

Always interested in your thinking.
Any changes in your thought processes?
Any changes in portfolio since?

Been doing some more diversifying myself - mostly going into Investment Trusts.
Topped up City of London (CTY) - I like the trust and like the big UK listed International companies.
Bought JP Morgan America IT (JAM) and Fidelity European Trust (FEV).

Got a slug of cash coming from some tidying up early next week.
Weighing up some top-ups or new purchases.
Top ups could be F&C (FCIT), RIT Capital (RCP), Caledonian (CLDN).
New ones could be Capital Gearing (CGT), Personal Assets (PNL), JP Morgan Emerging Markets (JMG), Bankers (BNKR), JP Morgan Japanese (JFJ), JP Morgan India (JII), Finsbury Growth and Income (FGT).
Leaning towards FGT (moats!), BNKR, JII (India I suspect is going to replace CHina as the world's manufacturing hub) and JMG (I have no EM exposure).

[SalvorHardin]

Always interested in your thinking.
Any changes in your thought processes?
Any changes in portfolio since?

Been doing some more diversifying myself - mostly going into Investment Trusts.
Topped up City of London (CTY) - I like the trust and like the big UK listed International companies.
Bought JP Morgan America IT (JAM) and Fidelity European Trust (FEV).

Got a slug of cash coming from some tidying up early next week.
Weighing up some top-ups or new purchases.
Top ups could be F&C (FCIT), RIT Capital (RCP), Caledonian (CLDN).
New ones could be Capital Gearing (CGT), Personal Assets (PNL), JP Morgan Emerging Markets (JMG), Bankers (BNKR), JP Morgan Japanese (JFJ), JP Morgan India (JII), Finsbury Growth and Income (FGT).
Leaning towards FGT (moats!), BNKR, JII (India I suspect is going to replace CHina as the world's manufacturing hub) and JMG (I have no EM exposure).

Since July the only change to my Investment Trusts are top-ups for Caledonia, Finsbury Growth & Income and Foreign & Colonial. No sales.

I've sold a lot of my British holdings; all that is left are two multinationals (Burberry and Diageo), three Central London property companies (Derwent London, Great Portland Estates and Shaftesbury) and a small holding in Mulberry (special situation, sooner or later it's going to be sold IMHO or one of the two controlling shareholders will buy out everyone else). From the reaction to Liz Truss' attempted supply side reforms, with fierce digging in by NIMBYs and other special interest groups who favour protectionism, I now consider that the UK is consigned to being a low growth highly regulated economy so I'd rather invest elsewhere (or in British companies which benefit from protectionism).

Most of the money went into America and Canada, plus the investment trust topups. Also a top up to Ocean Wilsons Holdings (whilst it's quoted in London, it's a Bermuda based investment company with a huge stake in a Brazilian port and shipping services company).

America - lots of REITs. Back in September there were some on fire sale with yields of more than 10%. Major holdings are Brandywine Realty Trust (offices and life science properties, mostly in Austin Texas and Philadelphia), Empire State Realty (70% off its peak, owns most of the Empire State Building), Medical Properties (hospitals, been hammed by concerted short selling and what seems to be misinformation about its biggest client) and SL Green (9.1% yield, biggest office landlord in Manhattan - I believe that work from home fears have been overdone).

Canada - topups to Brookfield Asset Management and Canadian Pacific (which is my largest shareholding). Canadian Pacific's takeover of Kansas City Southern looks like being a takeover which works out very well.

My goto website for American and Canadian shares is Seeking Alpha, now that TMF USA have sabotaged their message boards. Here's Medical Properties and SL Green:
https://seekingalpha.com/symbol/MPW

https://seekingalpha.com/symbol/SLG

Finally a big purchase of Manchester United two weeks ago (along with some topups). These have done very well since the Glazers announced a possible sale (thread linked below).

https://www.lemonfool.co.uk/viewtopic.php?f=33&t=36724

[absolutezero]

Always interested in your thinking.
Any changes in your thought processes?
Any changes in portfolio since?

Been doing some more diversifying myself - mostly going into Investment Trusts.
Topped up City of London (CTY) - I like the trust and like the big UK listed International companies.
Bought JP Morgan America IT (JAM) and Fidelity European Trust (FEV).

Got a slug of cash coming from some tidying up early next week.
Weighing up some top-ups or new purchases.
Top ups could be F&C (FCIT), RIT Capital (RCP), Caledonian (CLDN).
New ones could be Capital Gearing (CGT), Personal Assets (PNL), JP Morgan Emerging Markets (JMG), Bankers (BNKR), JP Morgan Japanese (JFJ), JP Morgan India (JII), Finsbury Growth and Income (FGT).
Leaning towards FGT (moats!), BNKR, JII (India I suspect is going to replace CHina as the world's manufacturing hub) and JMG (I have no EM exposure).

Since July the only change to my Investment Trusts are top-ups for Caledonia, Finsbury Growth & Income and Foreign & Colonial. No sales.

I've sold a lot of my British holdings; all that is left are two multinationals (Burberry and Diageo), three Central London property companies (Derwent London, Great Portland Estates and Shaftesbury) and a small holding in Mulberry (special situation, sooner or later it's going to be sold IMHO or one of the two controlling shareholders will buy out everyone else). From the reaction to Liz Truss' attempted supply side reforms, with fierce digging in by NIMBYs and other special interest groups who favour protectionism, I now consider that the UK is consigned to being a low growth highly regulated economy so I'd rather invest elsewhere (or in British companies which benefit from protectionism).

Most of the money went into America and Canada, plus the investment trust topups. Also a top up to Ocean Wilsons Holdings (whilst it's quoted in London, it's a Bermuda based investment company with a huge stake in a Brazilian port and shipping services company).

America - lots of REITs. Back in September there were some on fire sale with yields of more than 10%. Major holdings are Brandywine Realty Trust (offices and life science properties, mostly in Austin Texas and Philadelphia), Empire State Realty (70% off its peak, owns most of the Empire State Building), Medical Properties (hospitals, been hammed by concerted short selling and what seems to be misinformation about its biggest client) and SL Green (9.1% yield, biggest office landlord in Manhattan - I believe that work from home fears have been overdone).

Canada - topups to Brookfield Asset Management and Canadian Pacific (which is my largest shareholding). Canadian Pacific's takeover of Kansas City Southern looks like being a takeover which works out very well.

My goto website for American and Canadian shares is Seeking Alpha, now that TMF USA have sabotaged their message boards. Here's Medical Properties and SL Green:
https://seekingalpha.com/symbol/MPW

https://seekingalpha.com/symbol/SLG

Finally a big purchase of Manchester United two weeks ago (along with some topups). These have done very well since the Glazers announced a possible sale (thread linked below).

https://www.lemonfool.co.uk/viewtopic.php?f=33&t=36724

I noticed your Man Utd adventure. Well done!
So basically it's the UK is a dead duck that's modelling itself on EU style regulation (because conservatism is dead) and go long USA and multinationals?
That's pretty much my thinking given the Truss reforms were sabotaged.

[SalvorHardin]

So basically it's the UK is a dead duck that's modelling itself on EU style regulation (because conservatism is dead) and go long USA and multinationals?
That's pretty much my thinking given the Truss reforms were sabotaged.

That's it in the proverbial nutshell. As a general rule, any new money will probably invested overseas or in an international focused investment trust. Though I still keep my eye open for special situations (such as Mulberry) and bear in mind that some companies will benefit from Britain's low growth high regulation economy (mostly inefficient ones which rely on regulation to create barriers to entry and reinforce/entrench their market position).

I favour the Central London property specialists because IMHO there's still plenty of potential left in Central London, with recent data showing that prime locations are doing much better than secondary locations. Also there is a steady drift back of people to the office which should be reinforced by the forthcoming recession. In America most bosses have noticed that in a lot of cases work from home is an excuse to skive and reduces productivity. Britain is seeing a good example of that with the Civil Service (especially the Passport Office), though very few ministers seem bothered about it).

I've seen several articles where American managers have said that if they have to shed staff, the first place they will look is those working from home.

[monabri]

I guess you have to swallow the withholding tax on the US REITs.? ( question).

[absolutezero]

So basically it's the UK is a dead duck that's modelling itself on EU style regulation (because conservatism is dead) and go long USA and multinationals?
That's pretty much my thinking given the Truss reforms were sabotaged.

That's it in the proverbial nutshell. As a general rule, any new money will probably invested overseas or in an international focused investment trust. Though I still keep my eye open for special situations (such as Mulberry) and bear in mind that some companies will benefit from Britain's low growth high regulation economy (mostly inefficient ones which rely on regulation to create barriers to entry and reinforce/entrench their market position).

I favour the Central London property specialists because IMHO there's still plenty of potential left in Central London, with recent data showing that prime locations are doing much better than secondary locations. Also there is a steady drift back of people to the office which should be reinforced by the forthcoming recession. In America most bosses have noticed that in a lot of cases work from home is an excuse to skive and reduces productivity. Britain is seeing a good example of that with the Civil Service (especially the Passport Office), though very few ministers seem bothered about it).

I've seen several articles where American managers have said that if they have to shed staff, the first place they will look is those working from home.

I keep kicking myself that I stuck to the HYP approach for years. Took a while for the 'dividends are only giving you back your own money' argument to lodge in my head.
There's a world out there. If I'd have had an S&P tracker over the last 5 years....

[SalvorHardin]

I guess you have to swallow the withholding tax on the US REITs.? ( question).

Yes. But withholding taxes can be offset against the UK dividend tax. Since I have a reasonable amount of taxable UK dividends I don't worry about withholding tax.

Also 85% of a 10% dividend is still 8.5%

[monabri]

.... and Fidelity European Trust (FEV).

.... JII (India I suspect is going to replace CHina as the world's manufacturing hub)

I can see the logic of these. Hopefully someone will retire Putin soon and the "special operation" will cease. The sigh of relief across Europe will be palpable and the European mkts should see benefit ! I'm just wondering if FEV ahould be supplemented with a dash of VERX? (I like the majority of the top 10 VERX holdings).

https://www.hl.co.uk/shares/shares-sear ... rope-ex-uk


JII - For a start 10% of India have English as a language which is 'advantageous' to The West (US, UK, Europe) as opposed to China which is less than 1%.

They have an abundance of resources and they don't have a King Canute (President Xi holding back both the Covid and Investment Seas). They are less aligned to Mr P. than China which has to be a good thing. The reliance on China as 'our' workshop needs to change.

[absolutezero]

.... and Fidelity European Trust (FEV).

.... JII (India I suspect is going to replace CHina as the world's manufacturing hub)

I can see the logic of these. Hopefully someone will retire Putin soon and the "special operation" will cease. The sigh of relief across Europe will be palpable and the European mkts should see benefit ! I'm just wondering if FEV ahould be supplemented with a dash of VERX? (I like the majority of the top 10 VERX holdings).

https://www.hl.co.uk/shares/shares-sear ... rope-ex-uk


JII - For a start 10% of India have English as a language which is 'advantageous' to The West (US, UK, Europe) as opposed to China which is less than 1%.

They have an abundance of resources and they don't have a King Canute (President Xi holding back both the Covid and Investment Seas). They are less aligned to Mr P. than China which has to be a good thing. The reliance on China as 'our' workshop needs to change.

Nice post.
I do think India will boom.
I have VERX in my SIPP. Wouldn't hold ETFs outside of a tax shelter because of the tax return faff.

[baldchap]

Canada - topups to Brookfield Asset Management and Canadian Pacific (which is my largest shareholding).

I have been reading quite a lot about Brookfield, particularly of interest with the Asset management spin off coming up.
Do you know if there will be tax implications for foreign holders? Mine would be within a SIPP/ISA, but I know yours are not.

Thanks. Has been a great thread.

[SalvorHardin]

Canada - topups to Brookfield Asset Management and Canadian Pacific (which is my largest shareholding).

I have been reading quite a lot about Brookfield, particularly of interest with the Asset management spin off coming up.
Do you know if there will be tax implications for foreign holders? Mine would be within a SIPP/ISA, but I know yours are not.

Thanks. Has been a great thread.

Glad to help! As to the spinoff, everything I have read says that it is a straight forward split into two shareholdings with no tax due and the cost of the original holding is to be split appropriately (the figures should become available later this month).

I misread the split the first time I saw it (as have a few others). It is: for every 4 shares in Brookfield Asset Management your get 1 share in the new Brookfield Asset Management (the manager, which they hope will be priced like Blackstone) and 4 shares in Brookfield Corporation (the Brookfield assets).

Good luck

Edit: shares went ex-split today. Dealings start 12th December

[baldchap]

Thanks
Went ex div yesterday, but registration for the split is tomorrow, December 2nd...I hope

EDIT: Clear now thanks.

BROOKFIELD, NEWS, Nov. 22, 2022 (GLOBE NEWSWIRE) -- Brookfield Asset Management Inc. (NYSE: BAM, TSX: BAM.A) (“Brookfield”) and Brookfield Asset Management Ltd. (the “Manager”) today jointly announced a distribution record date of December 2, 2022 for the previously announced transaction for the public listing and distribution of a 25% interest in Brookfield’s asset management business, through the Manager, by way of a plan of arrangement (“Arrangement”). The transaction will result in the division of Brookfield into two publicly traded companies – the Corporation (Brookfield Asset Management Inc. will be renamed “Brookfield Corporation”) and the Manager (“Brookfield Asset Management Ltd.”).

[monabri]

Get your Brookfield heads around this...

https://www.investegate.co.uk/brookfiel ... 1346H9779/

[monabri]

Get your Brookfield heads around this...

https://www.investegate.co.uk/brookfiel ... 1346H9779/

iWeb are dragging their heels on this. My holding is still showing (quantity) BAM with no value.

[SalvorHardin]

Get your Brookfield heads around this...

https://www.investegate.co.uk/brookfiel ... 1346H9779/

iWeb are dragging their heels on this. My holding is still showing (quantity) BAM with no value.

Judging from what I've seen in the past, especially with spinoff from Brookfield, a few days delay is to be expected.

My Brookfield holdings are split between two brokers. The broker with the shares in an ISA is still waiting for confirmation from the custodian. The shares with the other broker (shares not in an ISA) appeared in the account last night.