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Tyrion Lannister
Posted: 14 February 2018 23:15:46(UTC)

Joined: 03/03/2017(UTC)
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Fell Walker;57173 wrote:
It'd be interesting to see if there are large outflows from some of the capital preservation funds are over the preceding months. Maybe there needs to be a bit of a cull!


Interesting question. I see the premium on the much coveted RCP has fallen 5% over the last couple of weeks.

I own 3 bond funds and they’ve held up reasonably well during the recent wobble as has gold. Ok, they haven’t increased in price either but under the current circumstances that’s fine by me.

My portfolio at present is around 70% equities, 10% bonds, 5% gold and 15% cash. I’ve just sold my last mixed asset fund and from now will manage my own asset mix.
4 users thanked Tyrion Lannister for this post.
Micawber on 15/02/2018(UTC), Mr Helpful on 15/02/2018(UTC), Mickey on 15/02/2018(UTC), dlp6666 on 15/02/2018(UTC)
MoMoney
Posted: 18 February 2018 09:39:12(UTC)

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Thinking about dropping a fairly big stake (3% of pa) into Imperial Brands for long term hold. Before I pull the trigger does anyone have a strong view? I get there are structural headwinds but there have been for decades! So not sure why it’s performed so poorly over last 2 years....

dyfed
Posted: 18 February 2018 09:50:23(UTC)

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MoMoney;57439 wrote:
Thinking about dropping a fairly big stake (3% of pa) into Imperial Brands for long term hold. Before I pull the trigger does anyone have a strong view? I get there are structural headwinds but there have been for decades! So not sure why it’s performed so poorly over last 2 years....



For me, these large brand tobacco stocks are all about vapour and ecigs. I don't know enough about the issues - investment costs, brand leadership, moats etc. So not investing at the moment, but could be the start of the tobacco stock renaissance! Would be great to have an informed comment about this. Anyone out there?
Alan Selwood
Posted: 18 February 2018 10:38:34(UTC)

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Terry Smith has dumped Imperial Brands from his Fundsmith Equity Fund.
Reason given is lack of investment merit, not an aversion on his part to owning tobacco stocks.

Despite the irrestistible urge that some people have to buy cancer sticks and new versions of them, I do wonder whether there will be a sea-change in the future.

Lots of global bodies are now ganging up on certain harmful items that people have always craved. Fossil fuels, sugar, tobacco, plastic, VW diesel engines........
2 users thanked Alan Selwood for this post.
lynne shaffer on 18/02/2018(UTC), Andrew Smith 259 on 18/02/2018(UTC)
Captain Slugwash
Posted: 18 February 2018 10:55:21(UTC)

Joined: 19/07/2017(UTC)
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dyfed;57440 wrote:
MoMoney;57439 wrote:
Thinking about dropping a fairly big stake (3% of pa) into Imperial Brands for long term hold. Before I pull the trigger does anyone have a strong view? I get there are structural headwinds but there have been for decades! So not sure why it’s performed so poorly over last 2 years....



For me, these large brand tobacco stocks are all about vapour and ecigs. I don't know enough about the issues - investment costs, brand leadership, moats etc. So not investing at the moment, but could be the start of the tobacco stock renaissance! Would be great to have an informed comment about this. Anyone out there?


We sometimes view the world through Western eyes.

Tobacco is still huge in the rest of the world, with more smokers than at any time previously.
Heat-not-burn tobacco is the next big thing, but either way it will take the rest of the world 20 years to reach Western attitudes to tobacco.

I am currently 3.7% IMB and 9.1% tobacco in general. Would happily go to 15%
These sort of unpopular industries are good value long term earners.

Having 24% of the portfolio in healthcare helps me sleep at night ;)
Alan Selwood
Posted: 18 February 2018 11:08:27(UTC)

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Which almost seems like shorting tobacco and going long healthcare, doesn't it?
Captain Slugwash
Posted: 18 February 2018 11:13:38(UTC)

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Alan Selwood;57453 wrote:
Which almost seems like shorting tobacco and going long healthcare, doesn't it?


If 20 years is short. Most of these companies, like big oil will adapt and transform.

Altria being limited to the US is already in wine and of course a good holding in BUD.
Others have dabbled with consumer goods, and will likely do so again.
King Lodos
Posted: 18 February 2018 11:45:48(UTC)

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MoMoney;57439 wrote:
Thinking about dropping a fairly big stake (3% of pa) into Imperial Brands for long term hold. Before I pull the trigger does anyone have a strong view? I get there are structural headwinds but there have been for decades! So not sure why it’s performed so poorly over last 2 years....


Worth looking at the Altman Z-score:

https://www.gurufocus.com/term/zscore/OTCPK:IMBBF/Altman%2BZ-Score/Imperial+Brands+PLC

I don't know the particular circumstances, but at least by this classic measure there's an 80% chance of bankruptcy within two years .. Forward PE's only 9, which means there's probably quite a bit of risk priced in.


My feeling on tobacco in developing markets is they'll follow us much quicker than we expect .. China may have been 50 years behind the industrial revolution, but they well beat us to clean air
1 user thanked King Lodos for this post.
chazza on 18/02/2018(UTC)
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