medirectalk 24 January 2024: Terry Smith - Fundsmith Equity Fund
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- เผยแพร่เมื่อ 1 ก.พ. 2024
- During this edition of medirectalk, Terry Smith from Fundsmith Equity Fund gave an update on the performance of the fund, together with his views on the financial world and the current trends.
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The information given during this seminar was being provided by Fundsmith Equity Fund and is for general information purposes only and is neither intended to provide legal or other professional advice nor does it commit MeDirect Bank (Malta) plc to any obligation whatsoever. The information available during the seminar is not intended to be a suggestion, recommendation or solicitation to buy, hold or sell, any securities and is not guaranteed as to accuracy or completeness.
The financial instruments discussed may not be suitable for all investors and investors must make their own informed decisions and seek their own advice regarding the appropriateness of investing in financial instruments or implementing strategies discussed herein.
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Perfect. Knows the businesses inside out, integrity, straight talker. I've been invested in F/s and Smithson since inception. I think SSON will out-perform f/s over the next decade (share price). Both fund managers (Julian Robins and Simon Barnard are world class)- & TS is too!
Plus, snappy Q&A with great questions (way better than the AGM equivalent using hackneyed Sky presenters: 'the ego has landed', followed by the 'wooden top'), so well done to Medirect Malta too! All IMO.
What makes you think smithson will outperform fundsmith in the next decade ? And is Simon Barnard “that”world class ? For what it is worth I am also invested in both, but am noticing that smithson is still, and has been for a long while, well below NAV even after lots and lots of share buy backs. I do hope you are right.
All else equal between fs and sson (viz. they both own great co’s, with high roce and profitable growth etc), then SMEs should grow faster than Mega-caps: 12-14% p.a. vs 10-12% p.a, say (and assuming the share price follows over time). Over a decade that 2% compounded is meaningful. In addition, as you rightly say, sson is at a >10% discount. Here, I regard buy-backs in sson as the same as per a single co: if it’s a great co at a low price(>10% discount), then buy-backs will add value. So, buying back at >10% discount will contribute an a guesstimated 0.5% p.a to the 2% above, total 2.5%.Otoh, the discount will likely close, so 0.5% pa could also come from this. Plus, I don't blame SB for the discount: that's market sentiment and is a great opportunity for investors.
Fs has had some wonderful contributors (msft, novo, idxx), but sson may well have its equivalents. We don’t know which ones yet, but there are several potential contenders.
Sson has been on a roller-coaster in 5 years: from overpriced (£20 in late 2021) to under-priced (Octobers 22 and 23). Listening to SB, I hear someone who is constantly analysing/reflecting/learning on improvements, the next decade will show the benefit of that. You can bet that if the fcfy gets to 2% again (Late 21) and the discount is still present SB will act (I trust the board will accommodate). SB says ‘time’ will close the discount, but actually the discount is, in extremis, wholly voluntary.
The portfolio now is in a super-good shape and at attractive prices too. The annual letter estimated a 3% fcfy. Adding 10% for the discount=3.3% (and higher if you bought in the October’s). Then, 3.3+(12-14%) growth above+0.5% (buy-backs/discount closing)=>15%pa (16.8%).
Plus, I personally feel the board could be smarter (some gearing in Octobers 22 and especially 23) would have been good, rather than trotting out the usual (volatility, debt etc). I think a quantified policy would be good to set out now for the next market wobble.
I hope that helps/feel free to disagree!
@@johndoh539
Hope you are correct. Thanks for your thorough and full reply.
I suppose that another plus for sson is that everything still has to go through Terry,
So perhaps I should have more confidence. Perhaps as you say it was overpriced at £20
Thank you John - and I hope so too!
FS - brilliant.
Ss - dogshit.
I wish I had discovered Mr Smith years ago.
Same here, I wish I did. I'm finishing all the ASMs in their yt channel
questions asked were absolutely brilliant. it covered most of the ones i had in mind
Great content as usual
WHY???? Kenvue and Haleon have both very small ROCE's... why are they in the radar???
Haleon ROCE reduced because of debt from spin-off.
Both are excellent businesses with low 20s operating margins and high ROCs. HLN is growing a bit faster right now with higher international and EM exposure.
So UL is a screaming buy !?