Lindsell Train Global: what the hell is going on here?

[Deleted User]

On the thread kinger101 wishes to examine - I mentioned AApl, and Microsoft only after goading.

If you want to compare performance I'm happy to do that.

If you think you can do better than me by funds, I'm happy to take your bet.

[Deleted User]

By you, I mean kinger101, obviously.

bowlhead99

Audaxer wrote: »

I agree that if DIYing you should do your research. I didn't think that in-depth level of research was necessary when buying funds, but maybe some DIY investors do have the knowledge and experience

It's difficult sometimes for experienced investors to get their heads around how little some people understand about investment 'due diligence'. For example, everyone will nod along that you should 'do your research' before investing... and then when you give a cursory explanation of the most basic things you should do as part of the research to understand whether it is the type of fund that could be useful within your portfolio, and what other investment you have that it might complement by not being highly correlated, the same people will say "oh, I didn't think *that* was what you meant by research".

Well with respect, what did you think you were doing.

Checking if you like the name, and that at least someone else on the MSE forums has bought some? This is not picking a name for the Grand National, for money you are writing off as probably lost. This is part of your life savings, that you hope to grow or generate income from, to support your current or future lifestyle.

maybe some DIY investors do have the knowledge and experience to look in detail at the holdings and how the fund could develop over time, and assess the risks facing major holdings.

Really you are paying the fund manager to assess and monitor the risks of the things they are going to acquire, hold and dispose of for the portfolio (or not assess them, if the target is to track a known and trusted index instead of exercising discretion).

So you don't have to research the prospective fund investment 'in-depth', if you trust the fund will do what it says on the tin. Which in most cases for an equity fund could be summarised as 'achieve capital and income growth over the long term, by buying shares of good companies'; surrounded by some flowery marketing prose, but such an objective doesn't really help sort the wheat from the chaff.

A lot of people don't do more than look at the 3-5 year chart or league table. Some will do things they have read on forums that other more experienced investors do, such as look at charts longer than 5 years, or see how long the individual manager or team has been in place, or investigate what the charges are.

Some will take the 'manager review' further and try to find out how much profit the management company makes, whether the individual manager is likely to be motivated or coasting to retirement, what the succession planning is like, but to others that would be 'rocket science' and TMI. They only want to know if the fund was top quartile or not, and don't know why anyone would care about volatility measures or income levels as much as overall % growth against some other fund to which they compared it.

Some will read articles in newspapers or on financial sites, blogs or forums; fewer will stop to speculate whether the article's author works for the fund house or benefits indirectly from positive or negative things they write about funds. A massive proportion of retail investors don't read the annual reports; the FCA doesn't even mandate that investors confirm they read a report or long-form prospectus before buying, because they know many retail investors don't expect to understand accounting or to look at the underlying holdings in detail, nor fully comprehend and measure the types of risk that may lurk behind the scenes. The basic disclosures are fine, and if the investor didn't buy advice, he doesn't get protection against his own bad choices or inadequate research.

So if you don't go into a lot of detail, a cursory glance at the other stuff like charts, volatility, fees, holdings, strategy, manager history etc takes tens of minutes rather than hours. But some people don't even do that, and when questioned after the fact, it's because they don't think they would understand what they are reading and 'really, some of it is down to luck anyway'.

I am more of the opinion that you can make your own luck, but even if you can't, you can at least be prepared for whatever outcome you get. The only way to be prepared is to look into what might happen.... what haven't I checked, what haven't I asked about?

Coming from a position of low knowledge or experience there are lots of unknown unknowns - things we don't know that we don't know. Fortunately there are blogs and forums like this to help shine some lights. I would agree that the internet and regulation has hugely improved things for retail investors in recent decades, but not just in costs, transparency of pricing etc. The access to information is excellent these days. If you don't know something, you can ask anonymous strangers on a Sunday evening and they may respond. And respond publicly so that if they are incompetent or trolling you, others will shout them down. The 'wisdom of the crowd' can be quite useful in that respect, even though some parts of the internet are an echo chamber where you may only hear what the mood of the site wants you to hear. MSE is one of the better places in that respect, if unsophisticated.

[Deleted User]

bowlhead99 wrote: »

And respond publicly so that if they are incompetent or trolling you, others will shout them down. The 'wisdom of the crowd' can be quite useful in that respect, even though some parts of the internet are an echo chamber where you may only hear what the mood of the site wants you to hear. MSE is one of the better places in that respect, if unsophisticated.

I'll take that in the spirit in which it was intended.
Unlike bowlhead, I do not have a vested interest in the financial services industry.
Unlike, 95% of threads on here, there is at least one that will not be subjected to the aftermining by the forum's usual suspects:

https://forums.moneysavingexpert.com/discussion/6037441

coastline

ZingPowZing wrote: »

To the above two posts - completely agree but every advantage the individual now has has been forced on the financial services in the UK by the internet.
Otherwise, you would be buying at huge spreads, eye watering brokerage fees etc.
But the financial services industry - as evidenced on this forum - still feel entitled.
I believe the UK financial services industry would survive about a day in America.

Brokers costs were falling at the same time the internet was taking hold. I have a few contract notes from 2000 and 2002 where the first fee was 1.5% and in 2002 the fee was fixed at £17.50.Years before that it was staggered depending on the size of the deal and way above 1.5%.
I started young and bought into the government privatisations thinking it was easy but I soon found out the hard way when my first fund purchase fell 30% in a few weeks. As posted earlier there wasn't much help out there years ago just the weekend press and a few magazines in the newsagents.
I can remember selling my British Gas shares and simply walked into the stockbrokers and the guy just took the certificate and told me the cheque would be in the post in a few days time. As I left the office I saw two young lads with drawing boards plotting charts of FTSE shares.
Funds had a typical spread of 5% or more and an annual fee of 1.5% and today you can get the whole package for less than 0.75% a year.
At the end of the day when you buy and hold you've got to give a couple of decades otherwise you'll be wondering what its all about when the market has crashed a couple of times.

[Deleted User]

coastline wrote: »

Brokers costs were falling at the same time the internet was taking hold. I have a few contract notes from 2000 and 2002 where the first fee was 1.5% and in 2002 the fee was fixed at £17.50.Years before that it was staggered depending on the size of the deal and way above 1.5%.
I started young and bought into the government privatisations thinking it was easy but I soon found out the hard way when my first fund purchase fell 30% in a few weeks. As posted earlier there wasn't much help out there years ago just the weekend press and a few magazines in the newsagents.
I can remember selling my British Gas shares and simply walked into the stockbrokers and the guy just took the certificate and told me the cheque would be in the post in a few days time. As I left the office I saw two young lads with drawing boards plotting charts of FTSE shares.
Funds had a typical spread of 5% or more and an annual fee of 1.5% and today you can get the whole package for less than 0.75% a year.
At the end of the day when you buy and hold you've got to give a couple of decades otherwise you'll be wondering what its all about when the market has crashed a couple of times.

The UK financial services industry has been dragged to this position by international (online) competition yet, as this forum testifies, its proponents still speak the language of entitlement and authority.

Audaxer

bowlhead99 wrote: »

It's difficult sometimes for experienced investors to get their heads around how little some people understand about investment 'due diligence'. For example, everyone will nod along that you should 'do your research' before investing... and then when you give a cursory explanation of the most basic things you should do as part of the research to understand whether it is the type of fund that could be useful within your portfolio, and what other investment you have that it might complement by not being highly correlated, the same people will say "oh, I didn't think *that* was what you meant by research".

Well with respect, what did you think you were doing.

Checking if you like the name, and that at least someone else on the MSE forums has bought some? This is not picking a name for the Grand National, for money you are writing off as probably lost. This is part of your life savings, that you hope to grow or generate income from, to support your current or future lifestyle.


Really you are paying the fund manager to assess and monitor the risks of the things they are going to acquire, hold and dispose of for the portfolio (or not assess them, if the target is to track a known and trusted index instead of exercising discretion).

So you don't have to research the prospective fund investment 'in-depth', if you trust the fund will do what it says on the tin. Which in most cases for an equity fund could be summarised as 'achieve capital and income growth over the long term, by buying shares of good companies'; surrounded by some flowery marketing prose, but such an objective doesn't really help sort the wheat from the chaff.

A lot of people don't do more than look at the 3-5 year chart or league table. Some will do things they have read on forums that other more experienced investors do, such as look at charts longer than 5 years, or see how long the individual manager or team has been in place, or investigate what the charges are.

Some will take the 'manager review' further and try to find out how much profit the management company makes, whether the individual manager is likely to be motivated or coasting to retirement, what the succession planning is like, but to others that would be 'rocket science' and TMI. They only want to know if the fund was top quartile or not, and don't know why anyone would care about volatility measures or income levels as much as overall % growth against some other fund to which they compared it.

Some will read articles in newspapers or on financial sites, blogs or forums; fewer will stop to speculate whether the article's author works for the fund house or benefits indirectly from positive or negative things they write about funds. A massive proportion of retail investors don't read the annual reports; the FCA doesn't even mandate that investors confirm they read a report or long-form prospectus before buying, because they know many retail investors don't expect to understand accounting or to look at the underlying holdings in detail, nor fully comprehend and measure the types of risk that may lurk behind the scenes. The basic disclosures are fine, and if the investor didn't buy advice, he doesn't get protection against his own bad choices or inadequate research.

So if you don't go into a lot of detail, a cursory glance at the other stuff like charts, volatility, fees, holdings, strategy, manager history etc takes tens of minutes rather than hours. But some people don't even do that, and when questioned after the fact, it's because they don't think they would understand what they are reading and 'really, some of it is down to luck anyway'.

I am more of the opinion that you can make your own luck, but even if you can't, you can at least be prepared for whatever outcome you get. The only way to be prepared is to look into what might happen.... what haven't I checked, what haven't I asked about?

Coming from a position of low knowledge or experience there are lots of unknown unknowns - things we don't know that we don't know. Fortunately there are blogs and forums like this to help shine some lights. I would agree that the internet and regulation has hugely improved things for retail investors in recent decades, but not just in costs, transparency of pricing etc. The access to information is excellent these days. If you don't know something, you can ask anonymous strangers on a Sunday evening and they may respond. And respond publicly so that if they are incompetent or trolling you, others will shout them down. The 'wisdom of the crowd' can be quite useful in that respect, even though some parts of the internet are an echo chamber where you may only hear what the mood of the site wants you to hear. MSE is one of the better places in that respect, if unsophisticated.

Maybe some investors can do too much research in trying to beat the market. I think for DIY investors, probably the most important things are investing at the right risk profile, asset allocation, rebalancing at least annually, and sticking to a plan and not panicking and selling when there are equity crashes.

bowlhead99

ZingPowZing wrote: »

bowlhead99 wrote: »

The access to information is excellent these days. If you don't know something, you can ask anonymous strangers on a Sunday evening and they may respond. And respond publicly so that if they are incompetent or trolling you, others will shout them down. The 'wisdom of the crowd' can be quite useful in that respect, even though some parts of the internet are an echo chamber where you may only hear what the mood of the site wants you to hear. MSE is one of the better places in that respect, if unsophisticated.

I'll take that in the spirit in which it was intended.

The point being made (i.e. the spirit in which it was intended) is that these days anyone can find out 'how stuff works', with ease.

Pre internet, and in the early days of the internet, there were private discussion groups and bulletin boards with light participation. If you asked a question, someone might send you a direct message or email. They could be a troll or fraudster misleading you for fun or profit. Now we have places like MSE where 10 million people get the newsletter and are free to comment on the related forums.

When people post, everyone can scrutinise it and comment, so that obvious trolls and fraudsters are shouted down - they cannot get away with their deception if you ask and are answered in full gaze of the public - thus the better information 'should' rise to the top and blatantly false stuff is not at risk of being taken seriously. However, the less popular opinions are not hidden or suppressed - everything that someone takes the effort to post (and not marked as spam) is still out there to be considered by the whole audience. This is great for someone learning, as they can consider all viewpoints and may find things with which they agree or disagree from posters with a range of backgrounds.

In saying MSE was one of the better places in that respect - though it is unsophisticated from a tech perspective and imperfect as a forum - it is better for sharing ideas than, for example, the r/personalfinance area on Reddit.

There, where there are thousands of bot accounts working to push threads or advertising content to the frontpage, the hivemind may downvote you to oblivion if you don't give in to populism, and the answer is always get a vanguard tracker. And to more sophisticated questions the force of ten thousand teenagers bored on their Christmas break may drown out the better quality answers which actually have a rational basis in law, UK tax rules or adult reasoning.

Whereas here, there is no downvoting - if you say something people don't like, it will be scrutinised, challenged, but it will still sit in the thread to be viewed by all before the next POV is heard.

Unlike bowlhead, I do not have a vested interest in the financial services industry.

I do have an interest in getting my salary paid, but it is not paid by Lindsell Train or any other retail fund manager, so views expressed on this thread are not unduly biased by my career choice, though they are informed by the education and experience I picked up along the way.

Audaxer wrote: »

Maybe some investors can do too much research in trying to beat the market. I think for DIY investors, probably the most important things are investing at the right risk profile, asset allocation, rebalancing at least annually, and sticking to a plan and not panicking and selling when there are equity crashes.

I would generally agree with all of those as some of the most important points for new investors.

Firstly, aiming to invest money rather than simply depositing cash for later collection is a good start.

Once that consideration is made, the rest follows.

Goals and objectives, limited by capacity for and tolerance for risk, come before the coarse details and certainly before the fine details.

Once those things are considered, look at asset allocation, and only later for specific assets or packaged products to fill the allocation.

Later, look for service providers or vendors who offer those products or assets that you've decided you want.

Once you have them, monitor what you have to ensure the 'plan' is on track. If it starts to fall off track because of something over- or under-performing against other holdings, changing the allocation beyond acceptable limits - do rebalance among your holdings to refocus on the initial goals, objectives and risks and avoid having too much or too little in one area. Consider whether the holdings are all still doing what you expected them to do, and if they still have a place.

Failing to plan is planning to fail, as they say. So is hoping for or expecting great performance all the time. You shouldn't expect to always beat an index or a stranger who picked a different set of tools for the job. Most commonly, the stranger's job is not the same job as yours - he has different needs, goals and objectives, because everyone has different financial circumstances and personalities.

kinger101

ZingPowZing wrote: »

On the thread kinger101 wishes to examine - I mentioned AApl, and Microsoft only after goading.

If you want to compare performance I'm happy to do that.

If you think you can do better than me by funds, I'm happy to take your bet.

I'm > 20 years away from my state retirement age. There's not much point in comparing performance over one or five years even. I'm bored with you now. I'm hardly going to come back to compare scores with you.

And why would I take a bet with you? My investment choices aren't a bet. They're about what I think will put me in the best position for a comfortable and hopefully early retirement. Not about seeing whether unnecessary risks pay off in the short term.

I frequent this forum because I want to get a consensus from people whom seem knowledgeable and see how that compares with my own thoughts. It seems I'm not alone in seeing the foolhardiness of picking a handful of stocks from just the FTSE 100.

tin586

....................
“MSE was one of the better places in that respect - though it is unsophisticated from a tech perspective and imperfect as a forum - it is better for sharing ideas than, for example, the r/personalfinance area on Reddit.

There, where there are thousands of bot accounts working to push threads or advertising content to the frontpage, the hivemind may downvote you to oblivion if you don't give in to populism, and the answer is always get a vanguard tracker. And to more sophisticated questions the force of ten thousand teenagers bored on their Christmas break may drown out the better quality answers which actually have a rational basis in law, UK tax rules or adult reasoning.

Whereas here, there is no downvoting - if you say something people don't like, it will be scrutinised, challenged, but it will still sit in the thread to be viewed by all before the next POV is heard.” bowlhead99
....................



Now it is not my intention to take this thread off topic, but you might also have mentioned some of the issues with MSE. There might not be downvoting, but there is plenty of irrational upvoting. One of the criticisms of MSE as mentioned on Trustpilot is that it is a forum for giving and receiving thanks among a particular clique, who spend a lot of time on the forum and are hostile to outsiders. I consider this very fair comment. Sometimes I see a totally bland and innocuous post from a regular that gets a lot of up votes and I see no rational reason for it. So I wonder if it’s votes from their chums and/or a supplementary sock puppet account they have created to upvote their own comments.

I persist with MSE because there are some very helpful, informative and insightful posts that I can learn from, despite some of my misgivings.

And robust challenge from posters to the ‘orthodoxy’ is always welcome to see!

I also find Lemonfool very useful, by the way, and in some respects more ‘sophisticated’ and collaborative than MSE.