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  #141  
Old 04.07.2019, 08:28
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Re: Question regarding Fundsmith

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FMF, how can you retire at 52, you've never worked !!
haha no need to work for long if you understood compound interest at school.

100 a month invested for 40 years with 12% growth gives you 1.2 Million. Once you realise you need high rates of compound growth then work out how to achieve it.

For me the OUTCOME is more important than PROCESS, the entire financial advise business, being highly regulated puts process & their fees before outcome.

I invested $4000 in BIDU in March 06 & a similar sum in NTFLX (May 07). Both of those investments paid for my Home in Malta, including building an extra floor last year. Interestingly they have been my 2 most volatile holdings ever dropping over 50% of value more than 3 times each over my holding period. Whilst my overall returns were far higher than F.S. During the following 10 years I never found another 30 / 40 / 50 bagger stock. My volatility was huge not ideal in retirement so switched to F.S. for the lower volatility with extroudanary growth potential.
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  #142  
Old 04.07.2019, 12:08
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Re: Question regarding Fundsmith

@FMF,
in a very early post on this thread you justified holding via LH as they transact quickly so allowing you to remain/return to the market rapidly. I get this part.

In the same post you wrote about selling FS in late March buying into the train fund for a while & then buying back into FS in April. You related this series of transactions to CGT mitigation/elimination.

So now to my question...I have a rebasing planned for sometime in the next ~12 months for CGT mitigation/elimination reasons also. I had planned to sell out of FS on lets say a Monday & buy back in on let's say Tuesday without an intermediate purchase of other assets in between. To your understanding there must be a purchase of a different Asset in the middle of the FS sell & FS rebuy transactions?

I hope the above makes sense & thanks for sharing your experience.
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  #143  
Old 04.07.2019, 14:16
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Re: Question regarding Fundsmith

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@FMF,
in a very early post on this thread you justified holding via LH as they transact quickly so allowing you to remain/return to the market rapidly. I get this part.

In the same post you wrote about selling FS in late March buying into the train fund for a while & then buying back into FS in April. You related this series of transactions to CGT mitigation/elimination.

So now to my question...I have a rebasing planned for sometime in the next ~12 months for CGT mitigation/elimination reasons also. I had planned to sell out of FS on lets say a Monday & buy back in on let's say Tuesday without an intermediate purchase of other assets in between. To your understanding there must be a purchase of a different Asset in the middle of the FS sell & FS rebuy transactions?

I hope the above makes sense & thanks for sharing your experience.
Who's potential CGT are you trying to avoid?
I was trying to rebase cost price for UK CGT, after getting married to an English resident girl. HMRC rules state you must not repurchase for 30 days (Section 102 holdings). However I have since discovered if you are not UK resident on the date of purchase then you can sell 1 day & buy the very next day. I did not want to hold cash for 30 days.
I used Lindsal Train Global as the closest proxy to Fundsmith (about 50% of the funds overlap) for what now turns out to have been an unnecessary transaction.
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  #144  
Old 04.07.2019, 14:36
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Re: Question regarding Fundsmith

Thanks FMF, a mine of valuable information as usual.

I'm not trying to avoid UK CGT but I can say the tax regime may be quite similar to that of the UK. I'll need to go back to the folks that are advising me & get this point clarified.

Thank you Sir.
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  #145  
Old 04.07.2019, 15:23
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Re: Question regarding Fundsmith

For the question of Swiss future pensioners investing in Fundsmith, I can make the following observation.

My Swiss second pillar vested benefits was cashed out on 3 June 15, however I did not receive the funds till slightly later for investment reinvestment. Using 3 June as a convenient valuation date.

Fundsmith 4 years total return in CHF 95.21%

Swiss life BVG mix 45 4 year total return in CHF 16.58%

I looked at several other Swiss funds, none of which earned their management fees!

It was a similar story for the previous 10 years in Swiss vested benefit foundations = waste of time
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  #146  
Old 04.07.2019, 15:26
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Re: Question regarding Fundsmith

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Thanks FMF, a mine of valuable information as usual.

I'm not trying to avoid UK CGT but I can say the tax regime may be quite similar to that of the UK. I'll need to go back to the folks that are advising me & get this point clarified.

Thank you Sir.
If there is any tax risk, moving to Lindsal Train Global Equity holding for say 7 months (So you can't be classified as a trader) will in all probability give a very similar return to you.
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  #147  
Old 04.07.2019, 16:05
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Re: Question regarding Fundsmith

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haha no need to work for long if you understood compound interest at school.

100 a month invested for 40 years with 12% growth gives you 1.2 Million. Once you realise you need high rates of compound growth then work out how to achieve it.

For me the OUTCOME is more important than PROCESS, the entire financial advise business, being highly regulated puts process & their fees before outcome.

I invested $4000 in BIDU in March 06 & a similar sum in NTFLX (May 07). Both of those investments paid for my Home in Malta, including building an extra floor last year. Interestingly they have been my 2 most volatile holdings ever dropping over 50% of value more than 3 times each over my holding period. Whilst my overall returns were far higher than F.S. During the following 10 years I never found another 30 / 40 / 50 bagger stock. My volatility was huge not ideal in retirement so switched to F.S. for the lower volatility with extroudanary growth potential.
talk of 50 baggers reminded me of this:

http://pages.stern.nyu.edu/~adamodar...owthstocks.htm

not surprising that bidu and nflx were big winners for you: the 'internet' companies with near global reach, (relatively) asset-light requirements and huge operating leverage are obvious candidates for research.
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  #148  
Old 28.07.2019, 14:30
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Re: Question regarding Fundsmith

Current FS holdings, in no particular order

AMADEUS
FACEBOOK
IDEXX
STYKER
MICROSOFT
PAYPAL
INTER CONTINTAL
WATERS
PEPSICO
PHILIP MORRIS
SAGE
INTUIT
McCORMICK
NOVO NORDISK
JOHNSON & JOHNSON
BECTON DICKENSON
INTERTEK
RECKITT BENCKISER
ESTEE LAUDER
3M
UNILIVER
KONE
L'OREAL
DIAGEO
ADP
COLOPLAST
VISA
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  #149  
Old 28.07.2019, 20:14
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Re: Question regarding Fundsmith

Apart from JNJ, UL, 3M, PM and FB, all other US stocks are probably pretty expensive now ... probably wise to wait till they come down a bit

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Current FS holdings, in no particular order

AMADEUS
FACEBOOK
IDEXX
STYKER
MICROSOFT
PAYPAL
INTER CONTINTAL
WATERS
PEPSICO
PHILIP MORRIS
SAGE
INTUIT
McCORMICK
NOVO NORDISK
JOHNSON & JOHNSON
BECTON DICKENSON
INTERTEK
RECKITT BENCKISER
ESTEE LAUDER
3M
UNILIVER
KONE
L'OREAL
DIAGEO
ADP
COLOPLAST
VISA
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  #150  
Old 28.07.2019, 20:29
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Re: Question regarding Fundsmith

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Apart from JNJ, UL, 3M, PM and FB, all other US stocks are probably pretty expensive now ... probably wise to wait till they come down a bit
Market timing is not something I attempt to do as I know I can't do it with any degree of success.
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  #151  
Old 29.07.2019, 07:46
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Re: Question regarding Fundsmith

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Market timing is not something I attempt to do as I know I can't do it with any degree of success.
I remember you mentioned trying to replicate FS's portfolio, but always lagged its performance. Could that be an explanation?

Fundmsith's investment strategy includes the "do not overpay" step, see https://www.gurufocus.com/news/80942...hing--facebook

If memory serves me right, Terry Smith built its position in McCormick (a company selling spices) about one year ago. Since then, the stock has appreciated approximately 40%. How likely do you think it appreciates another 40% within the next year?
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  #152  
Old 29.07.2019, 08:49
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Re: Question regarding Fundsmith

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I remember you mentioned trying to replicate FS's portfolio, but always lagged its performance. Could that be an explanation?

Fundmsith's investment strategy includes the "do not overpay" step, see https://www.gurufocus.com/news/80942...hing--facebook

If memory serves me right, Terry Smith built its position in McCormick (a company selling spices) about one year ago. Since then, the stock has appreciated approximately 40%. How likely do you think it appreciates another 40% within the next year?
He has the advantage of daily inflows & redemptions so adjusts weightings by adding to the shares he feels are best value that day.
The market was lower when he started the stake, it's quite possible the market will be considerably higher next year as US interest rates are not likely to rise but nobody actually knows.
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  #153  
Old 29.07.2019, 12:12
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Re: Question regarding Fundsmith

At the risk of upsetting FMF I've put some of my SIPP into the LF Blue Whale Growth fund. It is quite similar to fundsmith so I hope I don't get his full wrath

https://online.hl.co.uk/my-accounts/...?sedol=BD6PG56
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  #154  
Old 29.07.2019, 14:42
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Re: Question regarding Fundsmith

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At the risk of upsetting FMF I've put some of my SIPP into the LF Blue Whale Growth fund. It is quite similar to fundsmith so I hope I don't get his full wrath

https://online.hl.co.uk/my-accounts/...?sedol=BD6PG56
I don't think it's similar to FS in the way investment decisions are made, I would expect higher volatility v FS. I believe your other selections have underperformed FS to date. Morning star says below average for sustainability of return v Above average FS. The fund is less than 3 years old so difficult to say much.

You can take 'Hand-picked by Peter Hargreaves to run a substantial portion of his family’s wealth', he has invested £25 million in the fund but has a net worth in excess of £4.3 billion.
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  #155  
Old 29.07.2019, 15:10
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Re: Question regarding Fundsmith

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I believe your other selections have underperformed FS to date.
You dare suggest one would invest in anything other than FS?
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  #156  
Old 29.07.2019, 15:54
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Re: Question regarding Fundsmith

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You dare suggest one would invest in anything other than FS?
Vanguard Life Strategy IIRC
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I'm invested in Vanguard life strategy and in fundsmith.

FS seems to be outperforming LS by over 3 times since the start of this year despite much higher fees.
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  #157  
Old 29.07.2019, 16:01
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Re: Question regarding Fundsmith

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Vanguard Life Strategy IIRC
You're like my ex. Bringing up things from 2.5 years ago
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  #158  
Old 29.07.2019, 16:04
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Re: Question regarding Fundsmith

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You're like my ex. Bringing up things from 2.5 years ago
Here is the graph over 5 years Life strategy 100% equities v Fundsmith. Fundsmith is in blue
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  #159  
Old 29.07.2019, 16:14
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Re: Question regarding Fundsmith

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Here is the graph over 5 years Life strategy 100% equities v Fundsmith. Fundsmith is in blue
I sold a long time ago. I'm only on FS and this whale one now. Never know it might make a splash.

I was on MSD shares last year and that well outperformed FS!
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Old 30.07.2019, 10:24
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Re: Question regarding Fundsmith

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If memory serves me right, Terry Smith built its position in McCormick (a company selling spices) about one year ago. Since then, the stock has appreciated approximately 40%. How likely do you think it appreciates another 40% within the next year?
It looks as if Terry started picking up McCormick in January 19 which then fell a further 15% & was the share that had the most negative impact in January 19. It's price today is less than 5% above 13 December 18. It's been a good buy but has not obviously significantly increased fund performance, it will be interested to see what the January shareholder letter says.
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