Not true. In a lot of cases Terry buys companies even with free cash flow yield of 2%.
@Pizza-gb1ch4 ай бұрын
CL has a long runway, potentially, but the progress is slow.
@derwaldbaer57074 ай бұрын
This is complete bogus, because company A can pay out the gains as a dividend, and the investor can do the compounding by investing the dividend into other opportunities.
@Fazzamania7 ай бұрын
Shutting your fund down isn’t how to invest in emerging markets.
@silverheart5734 ай бұрын
He who knows he can't invest and return whatever left of investors` money or he who doesn't know he can't invest and keep destroying investors` money. He is Honest and Competence enough to do the right thing as a fund manager.
@joeindo9174 Жыл бұрын
do you know the date of this talk?
@12496k Жыл бұрын
👏
@ottoliaandrea2690 Жыл бұрын
I think Terry Smith is excellent
@rowanwood5397 Жыл бұрын
He won't invest in technological innovation? Well, that rules out, Amazon, Microsoft, Apple, Facebook, Tesla, and many more of the very best performing stocks of the last 30 years. I appreciate that he cannot understand it but no one ever fully understands a company. Investors only understand parts of it. You only need to understand enough to make good decisions. see Mosaic Theory. To rule out investing in technological innovation, completely, is overkill and silly in my opinion. Honestly, his speech on not investing technological innovation is incredibly stupid. The analogies he uses are stupid. He compares it to investing in the Wright brothers. Then he says technological innovative destroys sectors and he uses this as a reason to not invest in "technological innovation" (wtf). That's some ass backward logic. ~ Later he says hates durables because they are durable. He says people have to continuously buy tooth paste. A couple sentences later he says he thinks investing in elevators is excellent because there is a monopoly and service elevators last forever and need servicing forever. Survice elevators are extremely long lasting (like a durable good). This is guy sounds like a schmuck. Cool haircut though. I guess this video is from the 80s before he figured how to think properly in order to not contradict himself and not give horrendously formed logical conclusions for his decision making. I thought he was brilliant before i watched this video.
@jakelamotta79049 ай бұрын
looks like your mind changes from video to video
@bluegtturbo Жыл бұрын
What he says about debt is very true. With Facebook and MS he has moved away from his stance?
@zetaconvex1987 Жыл бұрын
In other words: incremental return on capital. Coca Cola has it, but WD-40 doesn't. I think there were actually a few companies that tried to take market share from WD-40, but they exited the market. WD-40 operates in a small niche, and that is actually good because it means that it's not worth competition getting involved.
@davidgray3321 Жыл бұрын
I think Terry is a very good fund manager but there is a slight gap in the logic, his fund buys significantly less companies that a top 100 fund, as he just pointed out (he has 70 I think he said) the fund I invest in is an index fund of 100 of the biggest companies, mostly in the USA and some worldwide, so the risk of a company going “ wrong” will have a smaller impact on my investment. Unfortunately for Terry the fund I invest in has done significantly better over 5 years, and it is SIGNIFICANTLY cheaper, so why invest in Fundsmith? This is the problem managed funds face, a growing realisation that they generally are not good enough at clairvoyance to make their fees worthwhile paying.
@dancrooksycamore Жыл бұрын
He has made a sort of similar point at past annual meetings about not being a very active fund manager. I guess he'd say he'd be doing this work for his own money investment anyways, so if people trust his decisions to invest with their money too, that's their problem, not his!
@RedGoobler Жыл бұрын
He needs an FCF yield of 5%? Good thing his thinking has evolved
@Allen-L-Canada6 ай бұрын
What is his FCF yield requirement now?
@RedGoobler6 ай бұрын
How the fuck would I know?
@GoncaloMoiteiro-uw4bb4 ай бұрын
@@Allen-L-Canada 10%
@martynfenton3814 Жыл бұрын
Taylors rule - bring it back. Govts in West can't, they went bust in 2008 and nobody really talks about it
@moreno34612 жыл бұрын
Nice! He practically doing the opposite! He's investing billions in technology innovation!
@boratsmagadijev940 Жыл бұрын
Good point. I guess he changed. This must be very old video
@Dr.Dumpnpump Жыл бұрын
I’m not so sure that is true. Can you name a consumer durable or tech company that he is invested in that doesn’t fit this model?
@Discovery_and_Change2 жыл бұрын
I bought CL at $78 two months ago...currently down -9%
@xXRedEyedStrangerXx Жыл бұрын
See where it is in 2 decades…
@deansworld2047 Жыл бұрын
😂😂😂😂😂😂😂😂
@deansworld2047 Жыл бұрын
You should've checked if it was the right time to buy it relative to its underlying value😂
@deansworld2047 Жыл бұрын
It's probably currently expensive
@Discovery_and_Change Жыл бұрын
@@deansworld2047 I sold and decided to buy XLP (Consumer Staples index) instead. They cost almost the same ($70s).
@freizeit81172 жыл бұрын
Don't overpay for good companies. I think CL is one of these companies. Too expensive. Growth is to weak. Too much competition. I buy my toothpaste from a drugstore. A private label that was tested with very good. Cheaper than Colgate: I think CL is worth around 40 USD only.
@Piggy991 Жыл бұрын
Until they buy your private label
@lihapekka2625 Жыл бұрын
40$ is quite cheap for a company
@deansworld2047 Жыл бұрын
Well said, Colgate is just waay too expensive
@beastmode36003 ай бұрын
@@freizeit8117 lol $102 right now
@CarlosMcWhorterCPA2 жыл бұрын
Love Terry Smith! Learned so much from listening to him and reading his articles.
@arnabbhattacharya65792 жыл бұрын
This guy is good
@slapjuice10 ай бұрын
aged badly, he closed his emerging market fund as he couldn't figure it out
@kiesasmith25442 жыл бұрын
Tx
@mazterz2 жыл бұрын
I have to disagree with Terry on this. Yes, Coca-Cola can reinvest its capital at an attractive rate and grow over time and benefit from price appreciation. BUT WD-40 pays out most of its free-cash flow to its shareholders, earning them a very attractive return on invested capital each year. As Buffett has said, there is no rule saying you have to spend your money where you earned. WD-40 shareholders can take their cash return and invest it elsewhere at a rate that may be significantly higher than what Coca-Cola can reinvest their capital, making WD-40 the more attractive investment.
@Aubatron2 жыл бұрын
Yeah but that's not really the point. There's no growth. If you're someone like Warren Buffet focusing on smaller market cap stocks, you can get 50% returns. Even if you're half as efficient as him, you can make 25% returns, much more than you'd get from WD40. When you have well established companies that are doing lots of share buy backs and paying out dividends, it usually means that company is more stable and safe than other businesses, but your returns are going to be much lower. It doesn't really matter if you take both capital gains and dividends into account, WD40 is still the loser by a long shot.
@mazterz2 жыл бұрын
@@Aubatron Buffett has not achieved anywhere near 50% returns; In the 50's and 60's, his partnerships had an annualised return of just over 30%. Whether your return comes in the form of dividends and price appreciation through buybacks, as opposed to growth-induced price appreciation, makes no difference. And this is not difficult to understand. Over the long term, you will earn a return that coincides with the ROIC of the underlying business. Growth, in and of itself, does not create value. The return has to exceed the cost of capital (which is a function of opportunity cost).
@Aubatron2 жыл бұрын
@@mazterz do some research, I’m talking about when he first started. He is able to make 50% returns with capital under 10 million. You’re comparing compounding interest on dividends to compounding interest on exponential growth of a business. 68% of all businesses that increase in market cap 100x or more, do the majority of that growth under 300m market cap. You can make any argument you want, your opinion doesn’t stand up to the numbers. You don’t get that type of return reinvesting dividends. All of this stuff you’re suggesting is only accurate if we’re talking about the biggest businesses in the market. The ones Warren Buffet and Charlie Munger are forced to invest into because they’re working with a little bit more than 10 million…
@mazterz2 жыл бұрын
@@Aubatron Read my first comment again because clearly you don't understand. Dividends can be reinvested to compound. If a company pays me a 15% dividend and I can reinvest that somewhere else at 15%, ill make the same return as someone holding a stock with a CAGR of 15%. Really straightforward.
@Aubatron2 жыл бұрын
Yes you would make the same for 15% dividends as capital gains, but link me a diverse array of healthy businesses with 15% dividends. You can't, because there are not many. Let alone comparing 15% to a potential average growth much higher, like many value investors get. Businesses are valued based on future projected earnings, so a trend of growth gives you way more potential for future capital gains than a business with high dividends does. And I already mentioned reinvesting dividends and it compounding in my last comment, so not sure what you're even talking about? I'm not even going to get into capital gains usually getting taxed lower than dividends either, that doesn't need to be part of my argument.
@hl36412 жыл бұрын
inception till now his fund produce ab -7% after fees total return less than benchmark…. Remember 1% -1.5% fee for twelve years is 15% with compound effect!!!!!! Thief and looooser compare to vanguard passive index …lol..
@hl36412 жыл бұрын
Another scammer .Lol… for inception till now his fund produce ab -7% after fees total return less than benchmark…. Remember 1% -1.5% fee for twelve years is 15% with compound effect!!!!!! Thief and looooser compare to vanguard passive index …lol..
@mumbaiindia3034 Жыл бұрын
@@DanLyndon nice comment
@NoRegertsHere11 ай бұрын
After fees, he’s outperformed by a fair amount
@hl36412 жыл бұрын
Lol… for inception tell now his fund produce ab -7% after fees total return less than benchmark…. Lol
@MrSabinR2 жыл бұрын
He speaks all things Warren Buffett but assumes the credit. This is wrong
@BSSE2 жыл бұрын
Can you upload full video if not
@williamnee23312 жыл бұрын
So does it do as well as Berkshire Hathaway cause they invest in all those sectors that this guy doesn't't?
@thegrumpydeveloper2 жыл бұрын
We own good companies. Mic drop. (Peaces out)
@afrin25282 жыл бұрын
NICE VIDEO..... I HAVE BEEN TRADING FOR MONTHS NOW. I KEEP MAKING MORE LOSS TRADE WRONG COINS PLEASE I NEED SOME KIND OF ASSIST OR ADVICE ON WHAT TO DO
@geraldmark75232 жыл бұрын
Nice video:Cryptocurrency also changed my life, with an experience broker crypto trading would just be easy and highly profitable.
@charlotteolie9372 жыл бұрын
Sometimes I wonder if she's used magic power trade
@charlotteolie9372 жыл бұрын
I've never heard or seen any of her clients complain of Lost....I think she's just too perfect
@lazarusmaigida18962 жыл бұрын
A friend that I referred to her just received $7,050 profit after 10 days of investing....I became jealous.. lol
@sandracletus22652 жыл бұрын
She's really the best, I've made a lot
@sz17712 жыл бұрын
And now there is Smithson , Emerging market
@drdrjr132 жыл бұрын
1 % is kind of a lot
@paultweedley20262 жыл бұрын
Some people have gotten very rich from ciclicals and thing's like mining companies because they only buy when there depressed and sell when exuberant, I'm surprised he's not interested in that because he is a rather clever chap 😏
@Doncarlosmcwhorter2 жыл бұрын
Love hearing perspective from Terry Smith
@nq11042 жыл бұрын
In some ways I love how simple this is, but I am surprised there’s no mention of a required FCF growth rate over as well as the current FCF yield. I.e wants FCF to grow at a rate of >x%, or to see a runway for revenue growth. I suppose he alludes to ROCE, and therefore if the FCF yield is greater than long term bonds, and his view of the company is that they will grow FCF through their high ROCE, that by definition is going to lead to FCF growth that would maintain a good FCF yield. Very interesting.
@nancysometimes70212 жыл бұрын
Interesting observation, but ROCE does not of itself translate to growth because normally the ROCE of a business doesn't move very much.
@nancysometimes70212 жыл бұрын
So still puzzled which benchmark he bases growth on ...
@frankle2462 жыл бұрын
growth rate of fcf >= 5% is good.
@TheBuckonator Жыл бұрын
I would expect its because his crystal ball for predicting fcf growth rates is broken
@JonBaldie Жыл бұрын
@@nancysometimes7021 you’ve not quite got it right. ROCE is a ratio, so even if ROCE stays the same, if the total amount of capital employed (the bottom part of the ratio) increases, that shows the business is growing while retaining the same level of profitability, which is a great sign.
@akshayshetty55482 жыл бұрын
Thanks
@agnivdey2 жыл бұрын
Great thinking
@hugomeza29102 жыл бұрын
I wish Warren Buffett was this specific about how he values a business
@guharup2 жыл бұрын
Calculating fcf and projecting it into the future isn’t easy
@Yotaciv2 жыл бұрын
@@guharup or accurate
@roym1444 Жыл бұрын
This isn't really valuing it's pricing stocks relative to others big difference
@paulraschella22232 жыл бұрын
What a great SIMPLE “ BACK TO BASICS” vid. Listen and learn kiddies !!!!!!
@Felicidade1012 жыл бұрын
interesting but a couple of great stocks do not have the FCF Yield he looks for.
@valerio7272 жыл бұрын
yeah, amazon for example. but he still bought it
@jonathanrhodes85252 жыл бұрын
@@valerio727 If you watch the recent Fundsmith shareholders meeting video, he talks about Amazon and the reasons for buying it
@valerio7272 жыл бұрын
@@jonathanrhodes8525 thanks, I'll check it out!
@ambalavanant2 жыл бұрын
I like the insights that Terry gives. Also I like Saurabh Mukherjea of Marcellus who's penchant for FCF growth is widely known and how he picks the winners in the same way
@maninarucksack89832 жыл бұрын
CONTENT THEFT! Great idea, take someone else’s popular videos and republish them as a way of earning money from those who watch them!
@ajithdileep2 жыл бұрын
They don't invest in airlines, banking, minerals, oil and insurance.
@kidze732 жыл бұрын
which year is this?
@holtencosales2 жыл бұрын
it looks like 2013 from the slides in the background
@Concojone52 жыл бұрын
Good question
@sil3ntmode2 жыл бұрын
Exxon no brand value?
@Spencer-vm9kt2 жыл бұрын
yeah they don't, do you care which gas station you get fuel from?
@HepCatJack2 жыл бұрын
As in Exxon Valdez oil spill ?
@AbcDino843 Жыл бұрын
None whatsoever. People chose gas stations on convenience and maybe price. Nobody cares which logo is on it.
@thebeardeddoctor2272 жыл бұрын
My wife and I recently watched that video of the people passing the ball and completely missed the gorilla. Perfect example of missing the Forrest for the trees. It’s one of the reasons I stopped watching my portfolio performance everyday and I definitely had to stop watching the stock market news. Market makers make money on capturing the bid/ask spread so they need activity in the market to keep their pockets fat. Less activity is certainly more!