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  #341  
Old 08.03.2017, 11:26
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Re: Investment fund

i'm not sure why the assumption is that you'd put all your money in at the top anyway.

if you invest a regular amount from your salary each month then the natural cost averaging would mean you buy the least when the price is at the peak and the most when it is lower.
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  #342  
Old 08.03.2017, 11:27
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Re: Investment fund

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That is indeed something to consider. Probbaly if my only investment would have been in nasdaq100, I would have sold. However, as a certain part of a diversified portfolio... maybe not...



do you know of a tool that could calculate total return with periodic investments based on the index?
What you have to remember with an index tracker & especially an index that holds 'HOT' stocks, is those HOT stocks will be bought regardless of value as they are weighted by the value of the company. When the market turns there will be no buyers this happened very clearly in 1973, 1999 & 2008. 1987 just being a blip, however it did not feel like a blip at the time.

Sorry I don't, amazed it's not easy, however the kids who write the software think EFT's have been around forever
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  #343  
Old 08.03.2017, 11:32
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Re: Investment fund

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i'm not sure why the assumption is that you'd put all your money in at the top anyway.

if you invest a regular amount from your salary each month then the natural cost averaging would mean you buy the least when the price is at the peak and the most when it is lower.
Generally markets spend most of the time rising, so on reflection market timing won't work. Having 20:20 hindsight & back testing is a wonderful feel good thing, just remember past performance is of no indication of future.
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  #344  
Old 08.03.2017, 21:05
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Re: Investment fund

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Nasdaq has been an index since 1971, here is a 45 year chart.
Here's a total return chart comparing NASDAQ vs S&P 500. Sadly, it does not include the dotcom bubble period. That's the longest period I've been able to find though. A comparison that does not include dividends is like measuring fuel consumption with a leaking tank :P.

Regarding Berkshire, I was not aware that their performance was SO spectacular. It's just unbelievable. Here is what an investing blogger that I like says about it (I think it also applies to Fundsmith):

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Nope, I’ve never owned any BRK and what a spectacular investment it would have been!!

Here’s the problem. Back in the day, there was no way to know Warren Buffett would turn out to be, well, Warren Buffett.

I mean this not just in his stock picking performance, but in his longevity.

Back in the 1980s I found Michael Price, who was running the Mutual Series of funds. He, too, turned in a spectacular performance and made me a lot of money.

But choosing him, from among all the others, was sheer luck on my part and not likely repeatable.

But then he sold out to Franklin Templeton for half a billion dollars. They, and he, tried hard to convince shareholders that the funds’ success wasn’t just him but a function of the efforts of his team. Fortunately, I didn’t listen. The funds were never the same after his departure.

Certainly those lucky enough to have bought and held BRK over the decades have out performed the index. About 5% of money managers pull this off over decades. A vanishingly small percent when you are picking them from the starting line as we all must do.

The real question, of course, is what about now? Well, Mr. Buffett is 80-something years old. The harsh reality is that investing in his acumen now is a short term proposition. All too soon you’ll need to make the same call as I did with Price.

For the past several years, BRK and Buffett have been floating the idea that the spectacular results were a team effort and that these results will continue even with out him. Just like Mutual Shares and M. Price. That’s a very long-shot in my view….
So, dear Fatman, if you believe in Terry Smith, then stick with him, and maybe he turns out to be the next Buffett
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  #345  
Old 08.03.2017, 21:25
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Re: Investment fund

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Here's a total return chart comparing NASDAQ vs S&P 500. Sadly, it does not include the dotcom bubble period. That's the longest period I've been able to find though. A comparison that does not include dividends is like measuring fuel consumption with a leaking tank :P.

Regarding Berkshire, I was not aware that their performance was SO spectacular. It's just unbelievable. Here is what an investing blogger that I like says about it (I think it also applies to Fundsmith):



So, dear Fatman, if you believe in Terry Smith, then stick with him, and maybe he turns out to be the next Buffett
I do, thats why I started investing over 4 years ago. It's a very simple strategy just like Waren Buffet in the late 60's. The Guardian had an article https://www.theguardian.com/money/20...-warren-buffet
You have to realise that the NASDAQ is becoming slightly top heavy 28% in three stocks & almost 40% in 5 stocks. Your in effect betting on the outcome of Apple, Microsoft, Alphabet, Amazon & Facebook. It's not providing the diversification people expect from an index just like the SMI.

EDIT Why does Amazon have a link.......... not from me.
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  #346  
Old 08.03.2017, 21:39
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Re: Investment fund

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You have to realise that the NASDAQ is becoming slightly top heavy 28% in three stocks & almost 40% in 5 stocks. Your in effect betting on the outcome of Apple, Microsoft, Alphabet, Amazon & Facebook. It's not providing the diversification people expect from an index just like the SMI.

EDIT Why does Amazon have a link.......... not from me.
The NASDAQ is never going to offer much diversification -- by definition, it's "just a little" skewed to tech stocks! Those top 5 companies are actually about as diverse as you can get on that index. A company that makes hardware and operating systems (mostly for mobile devices), one that specializes in software and operating systems for computers, a hugely diversified internet ventures company backed by one of the biggest brands of all time, a retailer of physical stuff, and a stupid waste of time social network.
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  #347  
Old 08.03.2017, 21:50
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Re: Investment fund

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Generally markets spend most of the time rising, so on reflection market timing won't work. Having 20:20 hindsight & back testing is a wonderful feel good thing, just remember past performance is of no indication of future.
that's my point: you would have never have put all your money in at a single point, let alone all of it at the peak.
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  #348  
Old 08.03.2017, 21:52
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Re: Investment fund

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Here's a total return chart comparing NASDAQ vs S&P 500. Sadly, it does not include the dotcom bubble period. That's the longest period I've been able to find though. A comparison that does not include dividends is like measuring fuel consumption with a leaking tank :P.
:
Here is a slightly longer graph, shows the advantage of owning quality boring stocks over either quantity or the latest fashion.
30 shares in the DOW 29 shares in Fundsmith, having 500 has made little difference apart from underperformance. Terry Smith did research & concluded after 25 stocks further diversification provided little benefit.


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that's my point: you would have never have put all your money in at a single point, let alone all of it at the peak.
If you buy good stocks & hold them for a long time, the valuation at purchase is less important. To paraphrase Buffet, better to buy a good company for a fair price than buy a fair company for a good price.
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  #349  
Old 08.03.2017, 22:01
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Re: Investment fund

Again you're obsessing with the peak price which is irrelevant except for the absurd scenario you gave of investing all your money at the peak.

You might as well take measurements from the trough:

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  #350  
Old 08.03.2017, 22:18
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Re: Investment fund

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Again you're obsessing with the peak price which is irrelevant except for the absurd scenario you gave of investing all your money at the peak.

You might as well take measurements from the trough:

I don't understand your chart, could you explain?
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  #351  
Old 08.03.2017, 22:21
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Re: Investment fund

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I don't understand your chart, could you explain?
Phil has just spent 5 minutes on Excel. But he makes an excellent point.
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  #352  
Old 08.03.2017, 22:36
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Re: Investment fund

Where is that peak? Where is that valley?

When you buy stock or invest in whole index, you'll never buy finished product. The market moves on all the time. It had the beginning back then on inception date but it has no end perpetually moving into the future.

As Warren Buffet said the other day, the stocks reached new level and they can either move on or correction hits and then they'll move onwards again. It's a nonstop business.

You wanna make some money ... buy a reasonable company worth investing and hold on to it for relatively long period of time, without pulling a trigger on sentimental vibrations, just let it live its life and one day sell when enough is reasonably timed to be "your enough".
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  #353  
Old 08.03.2017, 22:48
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Re: Investment fund

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I don't understand your chart, could you explain?
cumulative growth per year since the 2008 crash.
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  #354  
Old 09.03.2017, 16:56
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Re: Investment fund

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cumulative growth per year since the 2008 crash.
maybe "someone" was obsessed by going all in at the peak. But you are doing quite the opposite. Your chart ignores the peak and takes full advantage of the recovery.

A better comparison would be about 5 years before 2008 and 5 years after the 2008 crash:

Or even better 2003 - 2013 with dollar cost averaging
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  #355  
Old 09.03.2017, 17:06
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Re: Investment fund

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maybe "someone" was obsessed by going all in at the peak. But you are doing quite the opposite. Your chart ignores the peak and takes full advantage of the recovery.
that was kinda my point

if you take an extreme point you can put forward any arguments you like.

as noted in my posts above, the most reasonable would be to use monthly cost averaging approach - reflecting the situation where an investor invests a regular monthly amount.
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  #356  
Old 09.03.2017, 17:11
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Re: Investment fund

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maybe "someone" was obsessed by going all in at the peak. But you are doing quite the opposite. Your chart ignores the peak and takes full advantage of the recovery.

A better comparison would be about 5 years before 2008 and 5 years after the 2008 crash:

Or even better 2003 - 2013 with dollar cost averaging
If you look at 2000 - 2010, there is very little in it, which is a good reason to avoid the NASDAQ as you are not being compensated for the higher risk.

I would really like to see a much longer period ideally 47 years since the NASDAQ index was created.

You also have to understand when more investment is just buying the index, the market will perform differently from the past, back testing will mean very little unfortunately.
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Old 17.03.2017, 09:19
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Re: Investment fund

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Generally markets spend most of the time rising, so on reflection market timing won't work. Having 20:20 hindsight & back testing is a wonderful feel good thing, just remember past performance is of no indication of future.
natural cost averaging is not the same thing as trying to time the market. you shouldn't mix up the two things.
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  #358  
Old 24.04.2017, 13:17
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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...).
FYI: The question of how is one sure that FS in not a madoff was answered in the FUNDSMITH Annual Shareholders' Meeting 2017 (minute 29)

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  #359  
Old 23.05.2017, 17:31
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Re: Investment fund

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FYI: The question of how is one sure that FS in not a madoff was answered in the FUNDSMITH Annual Shareholders' Meeting 2017 (minute 29)

Having done some research I can list all current holdings of Fundsmith. I don't know the exact positions held, however the first 10 companies are all in the 4 - 5.5% of the portfolio, 4 other holdings are easy to work out.

Fundsmith Holdings

CR BAIRD
AMADEUS
IDEXX
STYKER
MICROSOFT
PAYPAL
INTER CONTINTAL
WATERS
PEPSICO
PHILIP MORRIS
SAGE *
NOVO NORDISK 2.8%
JOHNSON & JOHNSON *
BECTON DICKENSON *
JM SMUCKER *
Dr PEPPER SNAPPLE *
RECKITT BENCKISER *
ESTEE LAUDER
3M
UNILIVER
KONE 2.6% *
L'OREAL 2.1%
DIAGEO
INTERTEK
ADP
IMPERIAL BRANDS *
VISA
COLGATE PALMOLIVE
NESTLE 2.00%

Interestingly for the last few months it has outperformed both S&P 500 & NASDAQ 100 index's

companies with an * have been top 10 holdings in the last 2 years, the fund has grown substantially & it looks as if KONE has not been added to much so investments are made with thought each month.

Last edited by fatmanfilms; 23.05.2017 at 17:51. Reason: Adding * where appropriate
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  #360  
Old 23.05.2017, 17:49
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Re: Investment fund

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Having done some research I can list all current holdings of Fundsmith. I don't know the exact positions held, however the first 10 companies are all in the 4 - 5.5% of the portfolio, 4 other holdings are easy to work out.

Fundsmith Holdings

CR BAIRD
AMADEUS
IDEXX
STYKER
MICROSOFT
PAYPAL
INTER CONTINTAL
WATERS
PEPSICO
PHILIP MORRIS
SAGE
NOVO NORDISK 2.8%
JOHNSON & JOHNSON
BECTON DICKENSON
JM SMUCKER
Dr PEPPER SNAPPLE
RECKITT BENCKISER RBGLY
ESTEE LAUDER
3M
UNILIVER
KONE 2.6%
L'OREAL 2.1%
DIAGEO
INTERTEK
ADP
IMPERIAL BRANDS
VISA
COLGATE PALMOLIVE
NESTLE 2.00%

Interestingly for the last few months it has outperformed both S&P 500 & NASDAQ 100 index's
Thanks. Interesting that I have quite a few on my list:

o - own
x - used to own
f - on follow list

o MICROSOFT
f INTER CONTINTAL
x PEPSICO
o PHILIP MORRIS
x JOHNSON & JOHNSON
x BECTON DICKENSON
f ESTEE LAUDER
x UNILIVER
f L'OREAL
f DIAGEO
o ADP
o IMPERIAL BRANDS
f NESTLE
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