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Old 02.12.2020, 19:06
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Re: Equity Portfolio Advice

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Very good move that you have opened IB accounts. I don't really see the point of buying all these index funds when you can buy individual stocks at very low cost in IB. There are so many opportunities with stocks but it is not only that. Stock selecting allows to sharpen your mind and understand the world you are living much better. Yes you may make mistakes but at such a young age you will have plenty of time to rectify them.
Nobody knows how much time they have.

Making mistakes can provide very valuable lessons. However, in the context of investing it's hard to tie results to actions. I interpret here mistake as losing money. I'm not sure what exactly I will learn from losing money. I already know now that that is an outcome I would very much like to avoid.
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Old 02.12.2020, 19:07
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Re: Equity Portfolio Advice

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Nobody knows how much time they have.

Making mistakes can provide very valuable lessons. However, in the context of investing it's hard to tie results to actions. I interpret here mistake as losing money. I'm not sure what exactly I will learn from losing money. I already know now that that is an outcome I would very much like to avoid.
Waren Buffet has a few important rules on investing:-

1) don't lose money
2) refer to rule 1
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  #23  
Old 02.12.2020, 19:08
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Re: Equity Portfolio Advice

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I'd consider fund picking before going for individual stocks ... much less of a jump
Exactly why I started with Fundsmith and Smithson. I completely agree with the philosophy and I figured the managers are much better placed than me to decide on when to enter and exit those positions than I currently am.
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Old 02.12.2020, 19:14
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Re: Equity Portfolio Advice

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Its worth noting that since Bogle's day, the cost of active investment funds has come down loads. For instance, Scottish mortgage's annual charge is only 0.36% - and that can be held with no platform charge in Degiro etc. 2-2.5% used to be the going rate inc. platform

With its long record of vastly outperforming the market, why would anyone consider that an excessively high price to pay.

Outside pillar 3a, I don't own a single ETF, and have beaten the market (MSCI world) every year since I started investing - and all I'm doing is picking funds with a history of outperforming the market. In the last 5 years, I'm probably not far off doubling that index. Sure history isn't a promise of future returns - but a long history of outperformance suggests a winning investment thesis.
It's not clear how long you've been investing but if it's 15+ years then that is very impressive.

SMT was on my radar but only after the insane climb since March (I didn't realise the cost was so low). What put me off was the TSLA holding (maybe they fully exited now?). I dislike TSLA and the cult-like following it has. Plus, I watched Elon Musk on the Joe Rogan show where he was purported to have smoked weed. It turns out he didn't inhale. That was it for me. Definitely this man cannot be trusted!
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  #25  
Old 02.12.2020, 19:19
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Re: Equity Portfolio Advice

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Exactly why I started with Fundsmith and Smithson. I completely agree with the philosophy and I figured the managers are much better placed than me to decide on when to enter and exit those positions than I currently am.
I have been stock picking since the 1980's so roughly 30 years before investing in Fundsmith, for the 10 years before I was making a higher return but with HUGE volatility. I knew I wanted to retire at 52 so reducing the volatility was key, I generally owned less than 10 stocks sometimes less than 5, you need time for concentrated bets to pay off. Personally it's much easier to sleep at night owning Fundsmith & Smithson.
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Old 02.12.2020, 19:28
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Re: Equity Portfolio Advice

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I have been stock picking since the 1980's so roughly 30 years before investing in Fundsmith, for the 10 years before I was making a higher return but with HUGE volatility. I knew I wanted to retire at 52 so reducing the volatility was key, I generally owned less than 10 stocks sometimes less than 5, you need time for concentrated bets to pay off. Personally it's much easier to sleep at night owning Fundsmith & Smithson.
Right now there's no way I could put all my net worth in 5-10 stocks as I would just be guessing.

I was reading some of the old posts from the stock investment poll thread, it makes for interesting reading. You were heavily criticised about AAPL. Now who's laughing!

The question is, what today is the next AAPL or NFLX?
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Old 02.12.2020, 19:39
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Re: Equity Portfolio Advice

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It's not clear how long you've been investing but if it's 15+ years then that is very impressive.

SMT was on my radar but only after the insane climb since March (I didn't realise the cost was so low). What put me off was the TSLA holding (maybe they fully exited now?). I dislike TSLA and the cult-like following it has. Plus, I watched Elon Musk on the Joe Rogan show where he was purported to have smoked weed. It turns out he didn't inhale. That was it for me. Definitely this man cannot be trusted!
I don't really like it either - but ultimately if SM's strategy is to find companies that have the chance of growing exceptionally then you can't fault them buying it at the low price they did. They already disposed of enough to make an enormous profit and I trust them to dispose of the rest if and when they see fit.

SM is about 12% tesla at present.

I've only been investing for about 6-7 years btw.
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Old 02.12.2020, 19:43
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Re: Equity Portfolio Advice

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Right now there's no way I could put all my net worth in 5-10 stocks as I would just be guessing.

I was reading some of the old posts from the stock investment poll thread, it makes for interesting reading. You were heavily criticised about AAPL. Now who's laughing!

The question is, what today is the next AAPL or NFLX?
MercadoLibre, Sea Limited, Meituan?
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  #29  
Old 02.12.2020, 19:57
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Re: Equity Portfolio Advice

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Right now there's no way I could put all my net worth in 5-10 stocks as I would just be guessing.

I was reading some of the old posts from the stock investment poll thread, it makes for interesting reading. You were heavily criticised about AAPL. Now who's laughing!

The question is, what today is the next AAPL or NFLX?
I bought Netflix on 30 May 2007 & BIDU 31 March 2006. Both lost at least 65% of their value 3 times & were ultimately responsible for my outperformance over the next 10 years. Apple was about 7 years later with much smaller percentage gains. Apple was the easiest & most obvious 100% gain in 18 months, I have ever had. Very occasionally something as obvious as Apple lands on your plate. It was the most valuable brand in the world, selling for a PE of 8 when cash on the balance sheet is subtracted. Unfortunately it rose to quickly & I never managed to buy my intended stake.
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Old 02.12.2020, 20:04
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Re: Equity Portfolio Advice

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excuse my ignorance, what is IB? i use an american platform e*trade, for the few investments (individual stocks, not funds) that I make, is IB a 'swiss' platform? thank you for the clarification
Interactive Brokers, one of the major American platforms. Has legal entities in Canada and the UK for Canadian and EU residents.
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  #31  
Old 02.12.2020, 20:08
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Re: Equity Portfolio Advice

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Nobody knows how much time they have.

Making mistakes can provide very valuable lessons. However, in the context of investing it's hard to tie results to actions. I interpret here mistake as losing money. I'm not sure what exactly I will learn from losing money. I already know now that that is an outcome I would very much like to avoid.
Losing a bit of money you need to be comfortable with it, otherwise why invest in risky assets?

You strive to learn for your mistakes and bounce back.

I disagree regarding results and actions. You should be able to know exactly every dollar of gain and loss and where it came from the same way you read your credit card statement and checking if your statements matches the receipts you got.
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  #32  
Old 02.12.2020, 20:10
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Re: Equity Portfolio Advice

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Waren Buffet has a few important rules on investing:-

1) don't lose money
2) refer to rule 1
He has lost money as well. He is running a portfolio of companies though, I think he started back in 1945 or something like that. Plenty of time to rectify his mistakes. Nobody has the magic touch and make money all the time by doing risky investments.
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  #33  
Old 02.12.2020, 20:16
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Re: Equity Portfolio Advice

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Losing a bit of money you need to be comfortable with it, otherwise why invest in risky assets?

You strive to learn for your mistakes and bounce back.
Respectfully, a diversified basket of equities has been shown to be less risky than bonds over the long term.

I wholeheartedly agree with learning from mistakes but my point was Iím not sure what lessons can be extrapolated.
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  #34  
Old 02.12.2020, 20:31
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Re: Equity Portfolio Advice

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He has lost money as well. He is running a portfolio of companies though, I think he started back in 1945 or something like that. Plenty of time to rectify his mistakes. Nobody has the magic touch and make money all the time by doing risky investments.
Buying Berkshire Hathaway was his biggest mistake, he took over the loss making business around 1965
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Old 02.12.2020, 20:43
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Re: Equity Portfolio Advice

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Buying Berkshire Hathaway was his biggest mistake, he took over the loss making business around 1965
I'm not familiar with the history. Should I exit my BRK.B position or does it still have a place in a portfolio today?
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Old 02.12.2020, 20:47
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Re: Equity Portfolio Advice

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I don't really like it either - but ultimately if SM's strategy is to find companies that have the chance of growing exceptionally then you can't fault them buying it at the low price they did. They already disposed of enough to make an enormous profit and I trust them to dispose of the rest if and when they see fit.

SM is about 12% tesla at present.

I've only been investing for about 6-7 years btw.
It's great you've had such success but I honestly believe 6-7 years is not a sufficient time period to truly gauge one's results, particularly when those 6-7 years relate to such a buoyant period.
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Old 02.12.2020, 21:14
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Re: Equity Portfolio Advice

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I'm not familiar with the history. Should I exit my BRK.B position or does it still have a place in a portfolio today?
No, Warren Buffet owned a block of shares & another major shareholder (& Manager) had agreed to buy them at a price. When the paperwork came through the price was marginally lower, this annoyed Warren & he proceeded to take control of the company & sack the manager. He says it was the worst deal he ever did as the existing business lost money for many years. Berkshire today is a very different & successful business. For a born again non taxpayer it's ideal as it does not pay a dividend, although the same is currently true for Smithson.

In the late1960's you could buy the A shares for $16 when Warren had been in control for a few years, they are now worth $343,400 each, a buy & hold strategy pays off.
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Old 02.12.2020, 21:51
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No, Warren Buffet owned a block of shares & another major shareholder (& Manager) had agreed to buy them at a price. When the paperwork came through the price was marginally lower, this annoyed Warren & he proceeded to take control of the company & sack the manager. He says it was the worst deal he ever did as the existing business lost money for many years. Berkshire today is a very different & successful business. For a born again non taxpayer it's ideal as it does not pay a dividend, although the same is currently true for Smithson.

In the late1960's you could buy the A shares for $16 when Warren had been in control for a few years, they are now worth $343,400 each, a buy & hold strategy pays off.
I don't quite get the born again part, but the fact they don't pay a dividend is also one of the reasons I chose to invest. All earnings retained and reinvested - super. Even better when in Switzerland dividends are taxed but capital gains are not.

May I be so bold to ask whether this forms a part of your own portfolio?

Also what percentage of a total portfolio might be a reasonable allocation for Berkshire?

As I stated earlier, I want to set the plan and stick to it. That means deciding on all positions to buy consistently and hold. At least until I am better able to appraise the merits of individual stocks at which point I could rotate out.
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Old 02.12.2020, 22:20
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Re: Equity Portfolio Advice

To add my 2 cents to the discussion, I fund the investing threads on EF are among the most interesting going- Often times there is some great advice to be had, tempered with words of caution.
From reading comments from the usual suspects on this thread (in other threads) I started reading up about investing and also jumped on the Fundsmith bandwagon...after other research too of course.

I was also thinking along the lines of using a bog standard ETF and Fundsmith going forward. Even though the Fundsmith record has been great and he did very good things before he started the fund, I do like to hedge my bets.
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Old 02.12.2020, 22:48
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Re: Equity Portfolio Advice

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I don't quite get the born again part, but the fact they don't pay a dividend is also one of the reasons I chose to invest. All earnings retained and reinvested - super. Even better when in Switzerland dividends are taxed but capital gains are not.

May I be so bold to ask whether this forms a part of your own portfolio?

Also what percentage of a total portfolio might be a reasonable allocation for Berkshire?

As I stated earlier, I want to set the plan and stick to it. That means deciding on all positions to buy consistently and hold. At least until I am better able to appraise the merits of individual stocks at which point I could rotate out.
I had to go back a few years to have a look at my US brokerage statement, when the majority of my investments were US based as I was unwinding my position in Apple

S&P500 was 32%
Fundsmith 25%
Apple 20%
BRKB 9%
BIDU 5%
Ocean Wilson Holdings 5%

Netflix / BIDU / OCH.l were all 25 baggers or better,
OCH.l was purchased between 1991-1996 so a very long holding period the dividend yield was 10.7% when I first purchased with liquid assets on the balance sheet of twice the share price plus a shipping business thrown in. I thought it would be a 10 bagger however it took 15 years for the price to explode.
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