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  #301  
Old 24.02.2017, 09:30
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Re: Investment fund

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And in addition, reading now the 2017 letter to shareholders, Terrry himself makes several comparisons of his fund with s&p500, so Meadow's comparison is justified.

Another aspect besides performance (which is slighly in favour of FS), is safety. The S&P 500 index has been around for quite a while and we know that it recovers after a crash. With FS: nobody knows. And with an actively managed fund you always have some risk it is going bust (Maddof...).
Any comparisons with the FTSE & S&P are looking at the financial aspects of companies, I have posted the chart in this thread. Over 30 years those advantages will pay off. In the short term the Stockmarket is a voting machine, in the long term its a weighing machine.

Investing in an EFT that tracks the S&P500 is not without risk, EFT's use derivatives & lend stock. Fundsmith does neither of those. I don't see how Fundsmith could go bust, they have zero short positions & zero derivatives. Maddof was being "clever" & nobody understood what he was doing or how he got the results he did........
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  #302  
Old 24.02.2017, 09:41
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Re: Investment fund

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Any comparisons with the FTSE & S&P are looking at the financial aspects of companies, I have posted the chart in this thread. Over 30 years those advantages will pay off. In the short term the Stockmarket is a voting machine, in the long term its a weighing machine.

Investing in an EFT that tracks the S&P500 is not without risk, EFT's use derivatives & lend stock. Fundsmith does neither of those. I don't see how Fundsmith could go bust, they have zero short positions & zero derivatives. Maddof was being "clever" & nobody understood what he was doing or how he got the results he did........
I am not questioning Terry's strategy and I am actually committed to investing a significant portion (around 1/3 of my investments with FS). But investing exclusively with FS?... This is why I am looking for an alternative investment to reduce overall risk.
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Old 24.02.2017, 10:42
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Re: Investment fund

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I am not questioning Terry's strategy and I am actually committed to investing a significant portion (around 1/3 of my investments with FS). But investing exclusively with FS?... This is why I am looking for an alternative investment to reduce overall risk.
Alternatives I would happily hold 30% of my net worth, I can only think of 3.

Lindsal Train Global Equity
S&P 500
Berkshire Hathaway
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  #304  
Old 24.02.2017, 10:54
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Re: Investment fund

Although not a fund my best investment has by far been in Bitcoin which I bought some years back for 65 bucks. The SEC are due to make a decision in the next couple of weeks regarding the Winklevoss brothers being allowed to launch a Bitcoin ETF on the BATS exchange.
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Old 24.02.2017, 10:59
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Re: Investment fund

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Although not a fund my best investment has by far been in Bitcoin which I bought some years back for 65 bucks. The SEC are due to make a decision in the next couple of weeks regarding the Winklevoss brothers being allowed to launch a Bitcoin ETF on the BATS exchange.
I see bitcoin as a more convenient alternative to gold.
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  #306  
Old 24.02.2017, 12:40
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Re: Investment fund

some of you may be interested in this article on timing the market: https://www.ft.com/content/090e22ec-...e-68d53499ed71
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Old 24.02.2017, 14:03
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Re: Investment fund

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And with an actively managed fund you always have some risk it is going bust (Maddof...).
An active manager with high leverages that gets a margin call could go bust.
Madoff didn't go bust as he never invested. He was pouring all the money in a bank account, and generating random-ish numbers for the reports. He was running a Ponzi scheme, clear and simple.


With regulated on-shore active fund formats like UCITS that is impossible to do as the funds don't actually hold the shareholders' assets, and there are regular audits for their performance.

The risk in this case is the systemic risk of custodians that are holding the actual securities, but that's practically unavoidable...
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  #308  
Old 27.02.2017, 09:03
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Re: Investment fund

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Alternatives I would happily hold 30% of my net worth, I can only think of 3.

Lindsal Train Global Equity
S&P 500
Berkshire Hathaway
S&P 500? Why not NASDAQ 100? Isn't that even closer to Terry's strategy (I mean everything but financial)?

And it matches the FS performance almost exactly.
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  #309  
Old 27.02.2017, 09:06
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Re: Investment fund

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S&P 500? Why not NASDAQ 100? Isn't that even closer to Terry's strategy (I mean everything but financial)?

And it matches the FS performance almost exactly.
I don't believe a basket holding 50% + of tech companies can be compared with FS. The financials of those companies don't match in any way.
The strategy of FS is Large Global companies so MSCI World index, which it substantially beats.

EDIT, if you look at the NASDAQ longer performance, you may decide it's not the sort of stocks you want to hold, had you purchased in 2000 you would only have recently got your money back.
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Last edited by fatmanfilms; 27.02.2017 at 10:04.
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  #310  
Old 27.02.2017, 13:04
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Re: Investment fund

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I don't believe a basket holding 50% + of tech companies can be compared with FS. The financials of those companies don't match in any way.
The strategy of FS is Large Global companies so MSCI World index, which it substantially beats.

EDIT, if you look at the NASDAQ longer performance, you may decide it's not the sort of stocks you want to hold, had you purchased in 2000 you would only have recently got your money back.
Rather have the NASDAQ than S&P500:

https://finance.yahoo.com/chart/%5EI...5nZSI6Im1heCJ9
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  #311  
Old 27.02.2017, 13:26
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Re: Investment fund

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I don't believe a basket holding 50% + of tech companies can be compared with FS. The financials of those companies don't match in any way.
The strategy of FS is Large Global companies so MSCI World index, which it substantially beats.

EDIT, if you look at the NASDAQ longer performance, you may decide it's not the sort of stocks you want to hold, had you purchased in 2000 you would only have recently got your money back.
Indeed, the high returns are associated with HUGE volatility. OF course FS was not around in 2000 or 2008 to know how it would handle these events.

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Rather have the NASDAQ than S&P500:

https://finance.yahoo.com/chart/%5EI...5nZSI6Im1heCJ9
as said above: high returns but high risks that one would need to wait over a decade just to break even.

My conclusion is to do some dollar-averaging into Nasdaq 100, but keep an eye on its PE and CAPE.
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Old 27.02.2017, 15:39
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Indeed, the high returns are associated with HUGE volatility. OF course FS was not around in 2000 or 2008 to know how it would handle these events.



as said above: high returns but high risks that one would need to wait over a decade just to break even.

My conclusion is to do some dollar-averaging into Nasdaq 100, but keep an eye on its PE and CAPE.
Trustnet gives the risk score funds as Follows

Fundsmith 95
FTSE 100 100
S&P 500. 110
Nasdaq 100 130

https://www.trustnet.com/Factsheets/...eType=overview

Terry Smith has long stated that higher risk assets don't compensate you for the additional risk your taking, Trustnet would seem to confirm that.
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Old 28.02.2017, 14:11
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Re: Investment fund

https://www.ft.com/content/7d261c56-...8-3700c5664d30
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Old 28.02.2017, 17:33
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Re: Investment fund

Terry Smith wrote an article in the Financial Times recently about emerging market EFT's, it also has relevance to all trackers as over time the largest companies will become overpriced precisely because they are in the index an unintended consequence of index tracking. Over time the weighing machine v voting machine of financial markets will ring true.

https://www.fundsmith.co.uk/news/art...-jaws-of-death
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Old 28.02.2017, 17:49
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Re: Investment fund

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Terry Smith wrote an article in the Financial Times recently about emerging market EFT's, it also has relevance to all trackers as over time the largest companies will become overpriced precisely because they are in the index an unintended consequence of index tracking. Over time the weighing machine v voting machine of financial markets will ring true.

https://www.fundsmith.co.uk/news/art...-jaws-of-death
yet
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Old 28.02.2017, 18:25
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Re: Investment fund

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Wait 20 years, in which time there will be 2 major crashes, then you will see the benefit of only holding quality. Just look at the companies that make up the index...... do you really want to invest in Chinese banks, will they really be less of a disaster than UK, German or American Banks. If you read & understand Terry's article you will get the point. Terry was unemployable for 18 months after publishing 'accounting for growth', then Maxwell & Polly Peck collapsed both considered great investments by the city. He also called out Tesco when Warren Buffet was loading up as the cost of growth was too high. He is usually thought to be wrong, however with 20:20 hindsight he is spot on.
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  #317  
Old 28.02.2017, 18:28
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Re: Investment fund

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Wait 20 years, in which time there will be 2 major crashes, then you will see the benefit of only holding quality. Just look at the companies that make up the index...... do you really want to invest in Chinese banks, will they really be less of a disaster than UK, German or American Banks.
do you have any suggestions to invest in emerging markets?
It could be interesting to diversify a bit but it should be managed, not just an index.
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  #318  
Old 28.02.2017, 18:32
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Re: Investment fund

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Wait 20 years, in which time there will be 2 major crashes, then you will see the benefit of only holding quality. Just look at the companies that make up the index...... do you really want to invest in Chinese banks, will they really be less of a disaster than UK, German or American Banks.
His link was to an ETF that invests in consumer companies with large revenues from EM, much like Fundsmith's FEET. Ain't no banks in there.
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Old 28.02.2017, 18:43
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Re: Investment fund

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do you have any suggestions to invest in emerging markets?
It could be interesting to diversify a bit but it should be managed, not just an index.
S&P 500 alone actually is pretty diverse and not such a bad holding. It's not just about the US, half of revenue or so are from outside. Lots of giant multinationals which just happen to be HQed in the US.
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Old 28.02.2017, 19:31
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Re: Investment fund

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S&P 500 alone actually is pretty diverse and not such a bad holding. It's not just about the US, half of revenue or so are from outside. Lots of giant multinationals which just happen to be HQed in the US.
The reason why I consider Emerging markets consumer goods is its very quick recovery after the 2008 crisys.



Bassically the index recovered in a year, much quicker than the s&p.
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