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  • FIRST POST
    • CreditCardChris
    • By CreditCardChris 2nd Dec 19, 4:21 PM
    • 90Posts
    • 13Thanks
    CreditCardChris
    S&P index tracker vs FTSE dividend fund.
    • #1
    • 2nd Dec 19, 4:21 PM
    S&P index tracker vs FTSE dividend fund. 2nd Dec 19 at 4:21 PM
    The S&P 500 has had tremendous growth over the last 10 years but doesn't pay dividends, whereas the FTSE 100 has had slow growth over the last 10 years but most companies pay dividends.

    So if you put £10,000 into an S&P index tracker and £10,000 into a FTSE 100 dividend fund, excluding the GBP/USD slump, which £10,000 investment would have returned more?

    Thanks.
Page 2
    • Thrugelmir
    • By Thrugelmir 2nd Dec 19, 7:09 PM
    • 65,939 Posts
    • 58,048 Thanks
    Thrugelmir

    I mean look at Elon Musk for example, creates an electric car and a space exploration company which become $70billion companies in a decade. Where the !!!! is our space industry?
    Originally posted by CreditCardChris
    How many start up companies do you think fail in order to create one Tesla?

    Suggest you do some research. The UK Space Industry is very much alive and growing.
    ““there really is no such thing as ‘the future’, singular. There are only multiple, unforeseeable futures, which will never lose their capacity to take us by surprise.””
    ― Niall Ferguson
    • Linton
    • By Linton 2nd Dec 19, 7:27 PM
    • 11,533 Posts
    • 11,946 Thanks
    Linton
    Couldn't agree more, and to be honest I think technology (green energies, space exploration, fuel systems, transport systems) etc will still be where the real growth is for the next 100 years as technology is by definition and constantly evolving industry, unlike oil or banking which kinda just serves the same purpose until the end of time.

    I mean look at Elon Musk for example, creates an electric car and a space exploration company which become $70billion companies in a decade. Where the !!!! is our space industry?


    The UK population simply has absolutely no interest in creating tech companies essentially is what it boils down to.
    Originally posted by CreditCardChris

    The UK is extremely effective at creating Tech companies. Unfortunately the best ones mostly get taken over before they reach the FTSE100 or not long after as in the case of ARM.



    Elon Musk has so far proven to be very good at spending other people's money in creating impressive tech. He has yet to prove he has a viable long term business. Tesla's current market value at $59Bn compares with Ford's at $35Bn. Tesla's turn over was $21Bn last year, Ford's was $160Bn. In the past 3 months Tesla made its first ever quarterly profit of $143M recently after losing £1Bn in the first half of the year. Last year Ford did poorly making a profit of $3.7Bn.


    Is Tesla really currently worth 1.7 X Ford? Or is it possible that it is a little overvalued?
    • CreditCardChris
    • By CreditCardChris 2nd Dec 19, 7:36 PM
    • 90 Posts
    • 13 Thanks
    CreditCardChris
    The UK is extremely effective at creating Tech companies. Unfortunately the best ones mostly get taken over before they reach the FTSE100 or not long after as in the case of ARM.



    Elon Musk has so far proven to be very good at spending other people's money in creating impressive tech. He has yet to prove he has a viable long term business. Tesla's current market value at $59Bn compares with Ford's at $35Bn. Tesla's turn over was $21Bn last year, Ford's was $160Bn. In the past 3 months Tesla made its first ever quarterly profit of $143M recently after losing £1Bn in the first half of the year. Last year Ford did poorly making a profit of $3.7Bn.


    Is Tesla really currently worth 1.7 X Ford? Or is it possible that it is a little overvalued?
    Originally posted by Linton
    I know a classic example is ARM, a fantastic British company which quickly got gobbled up by a foreign company. The UK government should have prohibited the sale to be honest.

    As far as Tesla's stock price goes, seeing as electric vehicles are absolutely going to be the future of motor vehicles and maybe even aeroplanes, (oil is a finite resource) it seems like a no brainer.

    Tesla and Spacex could very well both be trillion dollar companies in the next 20 years... Meanwhile the UK hasn't created a £5billion company for 15 years let alone ever creating a trillion dollar company.
    • Linton
    • By Linton 2nd Dec 19, 7:45 PM
    • 11,533 Posts
    • 11,946 Thanks
    Linton
    .....

    As far as Tesla's stock price goes, seeing as electric vehicles are absolutely going to be the future of motor vehicles and maybe even aeroplanes, (oil is a finite resource) it seems like a no brainer.
    ......
    Originally posted by CreditCardChris

    Electric vehicles may well be the future, but how certain is it that Tesla will be making them for the mass market? It may well end up as the luxury brand name of some major global manufacturer. How about Toyota or some currently unknown Chinese company? History shows that its the business brains focussing on sales and profits who win out, not the tech innovators.
    • ColdIron
    • By ColdIron 2nd Dec 19, 7:52 PM
    • 5,511 Posts
    • 7,552 Thanks
    ColdIron
    So basically the FTSE 100 is full of dinosaur companies which are happy to coast along until they eventually die
    unlike oil or banking which kinda just serves the same purpose until the end of time.
    I'm struggling too
    • dividendhero
    • By dividendhero 2nd Dec 19, 8:00 PM
    • 2,367 Posts
    • 4,273 Thanks
    dividendhero
    The UK is extremely effective at creating Tech companies.
    Originally posted by Linton
    Last UK Tech company to head into the FTSE100 is a portal to fast food takeways (Just Eat). Meanwhile it looks like Inmarsat is heading into foreign ownership..says it all
    • Thrugelmir
    • By Thrugelmir 2nd Dec 19, 9:56 PM
    • 65,939 Posts
    • 58,048 Thanks
    Thrugelmir

    Meanwhile the UK hasn't created a £5billion company for 15 years let alone ever creating a trillion dollar company.
    Originally posted by CreditCardChris
    Who cares? Investors prefer actual returns to vanity. Uber and wework are examples of overpriced overhyped upstarts.
    ““there really is no such thing as ‘the future’, singular. There are only multiple, unforeseeable futures, which will never lose their capacity to take us by surprise.””
    ― Niall Ferguson
    • Prism
    • By Prism 2nd Dec 19, 10:38 PM
    • 1,227 Posts
    • 914 Thanks
    Prism
    Why so binary? Hold some of both, along with the rest of the world. Which stock m.arket a company trades on at the scale of these companies is not massively important. Nobody knows which will do better over the coming years.
    • Thrugelmir
    • By Thrugelmir 2nd Dec 19, 11:55 PM
    • 65,939 Posts
    • 58,048 Thanks
    Thrugelmir
    Why so binary? Hold some of both, along with the rest of the world. Which stock m.arket a company trades on at the scale of these companies is not massively important. Nobody knows which will do better over the coming years.
    Originally posted by Prism
    Tesla's future value is more likely to be in it's GRID battery business. Than vehicle manufacturing.
    ““there really is no such thing as ‘the future’, singular. There are only multiple, unforeseeable futures, which will never lose their capacity to take us by surprise.””
    ― Niall Ferguson
    • bostonerimus
    • By bostonerimus 3rd Dec 19, 1:47 AM
    • 3,494 Posts
    • 2,791 Thanks
    bostonerimus
    This thread just reinforces the principal that you should diversify your holdings and not be fettered too much by home bias. The UK needs to understand that it's on a generally downwards trajectory relative to many other economies because all the advantages it had in the 19th and 20th centuries have been lost. The US is also on a downwards relative trajectory, but it's size and natural resources will make the decline more gradual.
    Misanthrope in search of similar for mutual loathing
    • bostonerimus
    • By bostonerimus 3rd Dec 19, 2:22 AM
    • 3,494 Posts
    • 2,791 Thanks
    bostonerimus
    The S&P 500 has had tremendous growth over the last 10 years but doesn't pay dividends, whereas the FTSE 100 has had slow growth over the last 10 years but most companies pay dividends.
    Originally posted by CreditCardChris
    What makes you think S&P500 companies or indexes don't pay dividends? The Vanguard 500 fund pays 2%.
    Misanthrope in search of similar for mutual loathing
    • AlanP
    • By AlanP 3rd Dec 19, 9:06 AM
    • 1,769 Posts
    • 1,419 Thanks
    AlanP
    I know a classic example is ARM, a fantastic British company which quickly got gobbled up by a foreign company. The UK government should have prohibited the sale to be honest.
    Originally posted by CreditCardChris

    I wouldn't say it was "quickly" gobbled up.

    ARM was founded in 1990 and the sale to SoftBank was in 2016. Also worth noting that at least some of the founders of ARM had a track record in the industry, knew how to work with VC investors and how to build a business from the ground up.

    They didn't achieve multi-billion pound values without looking at the profit line at the same time.

    US Tech Stocks in general are "popular and sexy" as all sorts of exciting things going on but many dozens / hundreds fail before they get to Tesla / Apple size.

    Diversify across markets and across sectors.

    I think I read a recent prediction that over half of today's children starting school will work in jobs that don't exist yet (or something very similar) so making long term bets on which sector, company or country is going to do well is a bit tricky.

    Final comment, most people want to have a reasonable amount of their investments in their local market in developed countries with relatively stable economies to reduce currency risk so there will always be a demand for UK based investments.
    • MaxiRobriguez
    • By MaxiRobriguez 3rd Dec 19, 10:01 AM
    • 644 Posts
    • 466 Thanks
    MaxiRobriguez
    Undeniable the US has outperformed over the past decade due to investor preference for growth in a low interest rate world.

    It's unlikely to be the same for the next ten years though, with the US market expensive compared to recent and long term history in many metrics, global growth slowing and corporate buybacks petering out.

    Some FTSE100 companies are offering what appear to be relatively secure yields of 6%+. They may not be "exciting" but I'm quite happy to have added them to my portfolio over the last year as I'll be delighted to get 6%+ from my index trackers next year given where we are.

    There was also the bonus that GBP was on its knees in the first couple of weeks of Boris so buying domestic UK stocks made more sense than foreign investments. That scenario has eased somewhat but it's still in play as GBP likely to strengthen further after the election if polls are to be believed.

    So I'm overweight UK at the moment not because I believe we're as good as the US, but because fundamentals of UK equities are cheap compared foreign investments and yields are great compared to UK gilts. If you're not going to buy FTSE100 companies now, when will you?
    • Thrugelmir
    • By Thrugelmir 3rd Dec 19, 1:55 PM
    • 65,939 Posts
    • 58,048 Thanks
    Thrugelmir
    Undeniable the US has outperformed over the past decade due to investor preference for growth in a low interest rate world.
    Originally posted by MaxiRobriguez
    Market value of companies can increase without a corresponding increase in profitability. Demand and supply, i.e. money flow, drives share prices. Smaller investors tend work with a herd instinct.
    ““there really is no such thing as ‘the future’, singular. There are only multiple, unforeseeable futures, which will never lose their capacity to take us by surprise.””
    ― Niall Ferguson
    • dividendhero
    • By dividendhero 3rd Dec 19, 2:35 PM
    • 2,367 Posts
    • 4,273 Thanks
    dividendhero
    A big issue with both US and wider markets is Trump and his dumb tweets - he can move markets with his random tweets....no suggestion of insider dealing though
    • Thrugelmir
    • By Thrugelmir 3rd Dec 19, 2:39 PM
    • 65,939 Posts
    • 58,048 Thanks
    Thrugelmir
    A big issue with both US and wider markets is Trump and his dumb tweets - he can move markets with his random tweets....no suggestion of insider dealing though
    Originally posted by dividendhero
    I'd be more concerned with the ongoing trade war. Though it's not just about trade.
    Last edited by Thrugelmir; 03-12-2019 at 2:44 PM.
    ““there really is no such thing as ‘the future’, singular. There are only multiple, unforeseeable futures, which will never lose their capacity to take us by surprise.””
    ― Niall Ferguson
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