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Stock Allocation - equal split?
Tom Bards
Posted: 18 May 2018 15:30:55(UTC)
#21

Joined: 28/06/2017(UTC)
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Why not just copy what the fund managers you respect are doing? Judging by people's stock holdings on here, that is exactly what they do. You can tell those who like Terry Smith/Train/Buffett because they will be holding Unilever, Diageo, Microsoft, Apple etc.

Given the amount of research available to these managers it is not a bad strategy at all. If you respect these managers then the work has already been done for you.
2 users thanked Tom Bards for this post.
John Miskelly on 18/05/2018(UTC), Aminatidi on 19/05/2018(UTC)
King Lodos
Posted: 18 May 2018 17:29:51(UTC)
#24

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If you go the quality large-cap route, the fact is you'll be fishing from a very small pond.

If I found a really great UK/European brand, large enough for LT/Fundsmith, I'd probably have to do even more research to work out why they hadn't .. Adidas was an example of that.

Trying to beat these firms on research is going to be a losing battle – so then the question is: why not just buy the funds?


Among your few advantages are size, time-scale and concentration .. You can act quicker; think longer; and you only have to hold the best 6 (or so) ideas.

The problem with just holding the obvious stocks is those aren't usually where the outperformance comes from .. In the case of LT Global recently, it's mostly come from Japan and Nintendo .. With Fundsmith, it's tended to come from opportunities like Domino's, when it was very cheap – the top positions tend to be the most index-like .. But what you can at least do is break down a very complex problem into a more manageable problem
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Aminatidi on 19/05/2018(UTC)
Aminatidi
Posted: 19 May 2018 07:18:26(UTC)
#22

Joined: 29/01/2018(UTC)
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Tom Bards;62502 wrote:
Why not just copy what the fund managers you respect are doing? Judging by people's stock holdings on here, that is exactly what they do. You can tell those who like Terry Smith/Train/Buffett because they will be holding Unilever, Diageo, Microsoft, Apple etc.

Given the amount of research available to these managers it is not a bad strategy at all. If you respect these managers then the work has already been done for you.


Quite, and I'd say that's exactly what I'm doing as I don't think there are any "surprises" or originality in my choices.

@KL I take the point on why not just buy the funds, and I am, it's where 90% of my invested money is, but without wishing to sound dramatic, those particular fund managers may not want to do what they do forever so at some point it feels prudent to try and get my head around the basics.

Plus the point on concentration too.

Anyway, once the errands are done it looks like I'm reading Buffettology.
1 user thanked Aminatidi for this post.
King Lodos on 19/05/2018(UTC)
Tom Bards
Posted: 19 May 2018 08:00:04(UTC)
#23

Joined: 28/06/2017(UTC)
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Was thanked: 117 time(s) in 67 post(s)
Aminatidi;62519 wrote:
Tom Bards;62502 wrote:
Why not just copy what the fund managers you respect are doing? Judging by people's stock holdings on here, that is exactly what they do. You can tell those who like Terry Smith/Train/Buffett because they will be holding Unilever, Diageo, Microsoft, Apple etc.

Given the amount of research available to these managers it is not a bad strategy at all. If you respect these managers then the work has already been done for you.


Quite, and I'd say that's exactly what I'm doing as I don't think there are any "surprises" or originality in my choices.




Well, there's nothing wrong with that but if you're were looking for slightly less standard holdings but still held by Smith/Train then why not consider Amadeus IT Group or Intuit. Intuit especially I would recommend, excellent company.
1 user thanked Tom Bards for this post.
Aminatidi on 19/05/2018(UTC)
Aminatidi
Posted: 19 May 2018 09:36:07(UTC)
#25

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Tom thank you, easy to be like a kid in a sweet shop :)

Errands are done, sat reading a few articles on how to interpret a balance sheet and trying it with the numbers on things like Morningstar to see if my numbers match their numbers.

I don't think I need to understand everything on the balance sheets, seems a basic understanding plus knowing some key ratios is probably enough to make a basic judgement (I hope!) on health.

Investopedia has proven very useful and I'm making my own document on how to calculate ratios because I can't remember it yet and find myself struggling to remember just because there's so many numbers/figures to consider.
King Lodos
Posted: 19 May 2018 14:14:03(UTC)
#26

Joined: 05/01/2016(UTC)
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Use Gurufocus and/or Ycharts too.

The amount of work sites like that do for you .. Not only employing teams of analysts who'll go through accounts and calculate metrics, but historical records of them too.

1 minute on Gurufocus (if you know how to use metrics – which is why I recommend Invest Like a Guru) could save you 20 hours of work easily
1 user thanked King Lodos for this post.
Aminatidi on 19/05/2018(UTC)
Aminatidi
Posted: 19 May 2018 14:26:08(UTC)
#27

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Yes thanks, I found that site quite useful for the US stuff, less so for LSE as it seems you need to pay?

As an aside, the first individual stock I purchased which is Games Workshop is up 8.8% in the fortnight since I purchased it.

The amount I have in it is "only" £2.5k so I don't intend to do anything other than hold it and hope it grows, but it's been, and continues to be, an interesting lesson.
King Lodos
Posted: 19 May 2018 15:53:53(UTC)
#28

Joined: 05/01/2016(UTC)
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You *can* access the UK and European stuff without paying anything quite easily .. That's one to figure out (as I don't want to lose them business).

If an investor holds a stock like Games Workshop, then the price it's on today is meaningless (unless you need to sell today) .. What you've got to be really clear on is that you hold the company so long as it's a great company, and let it create value over time .. So you have to be really clear on how you define it as a great company – because if you're the last to realise that something's going wrong, the price will already have been pulled out from your feet.

If you prefer the trading route, then the key is just to hold it for as long as it goes up, and get out with the best price gain possible – and that's when price is everything, and you get into charting and technicals .. I think Games Workshop is a difficult stock to hold or trade – it's a good challenge to work out why the stock starting going up so aggressively after spending so long in the doldrums .. What made that happen and what would it need to do to sustain, or go into reverse? Are you ahead of the curve on it? Small-caps test you a lot more, I think
1 user thanked King Lodos for this post.
Aminatidi on 20/05/2018(UTC)
Aminatidi
Posted: 20 May 2018 07:28:12(UTC)
#29

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With GAW I do wonder what the "catch" is myself and why it seemed to take off.

Every ratio/metric I read to look at seems to look good.

One other thing I have learned is that I may buy a cheap calculator as it's a complete pain trying to learn these things flicking to/from a computer calculator whilst reading :)
Aminatidi
Posted: 22 May 2018 15:52:37(UTC)
#30

Joined: 29/01/2018(UTC)
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@KL I noticed you referenced "Invest like a Guru" and as I registered for a free account at Gurufocus I'm now getting sent rather a lot of emails from them.

Ignoring the horribly cheesy title, is it a useful read?
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