Fundsmith 2018 ASM

skitskut

Watching that reminds me of Mr Burns and Smithers

dividendhero

Had an email from Terence today funnily enough..the 2019 AGM is now online


https://www.youtube.com/watch?v=d3cRr318ve4

Alexland

dividendhero wrote: »

Had an email from Terence today funnily enough..the 2019 AGM is now online

Yes that's why I resuscitated this thread by posting the video link yesterday in post #8. It would be good if they did a condensed edit cutting out the bits they cover every time.

Alex

aroominyork

Alexland wrote: »

But aren't you even slightly concerned that many of the companies have very similar characteristics so your investment style isn't very diversified? Different styles have different prospects in different market conditions.

Agreed, and I'd go further and look at limiting my exposure not just to one fund manager but to similar styles, eg add up your Fundsmith, Lindsell Train, Jupiter European etc.

Prism

aroominyork wrote: »

Agreed, and I'd go further and look at limiting my exposure not just to one fund manager but to similar styles, eg add up your Fundsmith, Lindsell Train, Jupiter European etc.

Ok, but what other styles would you invest in to balance. If we assume those three funds invest in some combination of quality brands or defensive staples, medical devices and business software. Should we really invest in miners, oil and traditional banks just because they are not in those funds. Surely then we are just move closer to tracker performance which would be better served by using an actual tracker. Isn't the point of using active funds to try and chose one of the very few ones that have got a formula that gives them a chance to outperform, without diluting that with funds that don't?

Besides which, I'm not sure that those fund managers have a traditional style (value/blend/growth) as such. If we take some of Fundsmith's holdings, Pepsi and Philip Morris are value, Johnson and Johnson is blend, Microsft and Paypal are growth. I wouldn't know how to categorise them to then avoid that by picking another fund.

aroominyork

It’s an interesting question – whether to diversify for the sake it, away from approaches you think are going to be most lucrative. Partly it depends on whether you think the Smith/Train/Ashworth-Lord et al approach, rather than expecting days in and out of the sun, selects companies that not only have good growth prospects but also qualities which give them a good chance of outperforming in most market conditions. To be honest, I am not sure how to interpret Terry Smith’s ongoing surprise at how well he has done during the bull run when he thinks the fund is best positioned for choppier waters. This video about Fundsmith is quite interesting and fires a couple of warning shots.

DennisTenus

aroominyork wrote: »

It’s an interesting question – whether to diversify for the sake it, away from approaches you think are going to be most lucrative. Partly it depends on whether you think the Smith/Train/Ashworth-Lord et al approach, rather than expecting days in and out of the sun, selects companies that not only have good growth prospects but also qualities which give them a good chance of outperforming in most market conditions. To be honest, I am not sure how to interpret Terry Smith’s ongoing surprise at how well he has done during the bull run when he thinks the fund is best positioned for choppier waters. This video about Fundsmith is quite interesting and fires a couple of warning shots.

Interesting, pity we can't ask Terry for his take on that video

coastline

aroominyork wrote: »

It’s an interesting question – whether to diversify for the sake it, away from approaches you think are going to be most lucrative. Partly it depends on whether you think the Smith/Train/Ashworth-Lord et al approach, rather than expecting days in and out of the sun, selects companies that not only have good growth prospects but also qualities which give them a good chance of outperforming in most market conditions. To be honest, I am not sure how to interpret Terry Smith’s ongoing surprise at how well he has done during the bull run when he thinks the fund is best positioned for choppier waters. This video about Fundsmith is quite interesting and fires a couple of warning shots.

If you look at events recently major markets have experienced corrections of up to 20% and Fundsmith has still performed well. The USA has been the main driver as shown on the chart below and the fund has outperformed that. I would have thought in times of volatility this is when Fundsmith would show weakness but hasn't happened. I've no idea really just trying to highlight events.
Set the chart to January 1st 2018 to present to show all the latest market weakness which could be argued to be period of major consolidation . Who knows we might be entering a new bull market ?

https://www2.trustnet.com/Tools/Charting.aspx?typeCode=NM990100,NAWXUSAS,FLSX3

Aminatidi

DennisTenus wrote: »

Interesting, pity we can't ask Terry for his take on that video

I rather suspect Terry's take would be where would you rather have put your money and you're more than free to do so.

talexuser

aroominyork wrote: »

This video about Fundsmith is quite interesting and fires a couple of warning shots.

Some good points, unfortunately he then shoots himself in the foot by using Hargreaves to boost his point of view without mentioning the discounts they expect to be included in their marketing bumpf, while sticking with Woodford for the same reason, while Woodford has actually proven the underperformance he theorises about Fundsmith.