Peter Thornhill 2017

Discussion in 'Share Investing Strategies, Theories & Education' started by Redwing, 1st Jan, 2017.

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  1. Nodrog

    Nodrog Well-Known Member

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    I have been an investor in MLT for quite some time and recall some years ago there was a period where MLT experienced extraordinary returns but like most Mgrs they haven't been able to sustain them. Again the significant increase in size (including merger with sister company CHO) has been responsible in part for this. Of course the rest could be due to great management vs luck or a combination of both.

    Back in 2005 10 yr TSR for MLT was 20.4% and the All Ords 11.8%. From memory MLT's 20 year TSR was also extraordinary but I'm having trouble finding the data. Of course that's TSR not TPR but again from memory TPR was excellent but others need to check as my memory is far from perfect.

    As for MLT's future it's unknown but as the largest holding in our portfolio I'm optimistic they might outperform the Index. And I reinforce the word "might", there's no guarantee. If they don't well I'm not going to be dissappointed. I feel at ease investing in a company run for the very long term by the likes of Millner and Gooch. There's very few companies around nowadays run like a faimily business with a very long term inter-generational focus. One of their other companies is SOL with the best dividend history out of all companies on the ASX.
     
    Last edited: 21st May, 2017
  2. Redwing

    Redwing Well-Known Member

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    Because I was interested, looking at the ASX 300 and then dropping in a few of the LIC's, by market cap

    AFI would be around #60 (Just under Orica and Coke)
    ARG would be around #71 (Just under Alumina & Domino's)
    SOL is in the Index at #77 (Energy)
    WHT is around #81 (Just under Tabcorp)
    MLT is around #97 (Just under Henderson Group)
     
  3. Nodrog

    Nodrog Well-Known Member

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    Less well known +
    Less liquidity +
    Much smaller = less perceived safety.
    No resource holdings in the middle of a massive resource boom.

    Which meant I was ecstatic being able to buy WHF more heavily discounted than the others as a result. From memory most of my GFC purchases of WHF averaged around $2.40.
     
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  4. Kat

    Kat Well-Known Member

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    Very valid point.
     
  5. Nodrog

    Nodrog Well-Known Member

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    Given the topic of conversation in this "Thornhill" thread all I can say is:
    IMG_0242.JPG
     
  6. Zenith Chaos

    Zenith Chaos Well-Known Member

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    Aspirin required. You've got them now, paid the brokerage, have to pay brokerage on exit, and you can participate in SPPs etc. Unless you believe their performance will be considerably worse then don't sell.

    You'll need a time machine to pick exactly which of these LICs is going to perform best.

    Not licensed to give advice.
     
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  7. Realist35

    Realist35 Well-Known Member

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    That sounds sensible. From now I'll just try to increase the allocations of the other four lic's, especially WHF.

    Thanks:).
     
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  8. Zenith Chaos

    Zenith Chaos Well-Known Member

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    Has anyone done the research on how long before a market crash it is worthwhile to lump sum buy into the market. That is, when was it worthwhile buying based on different time horizons, say 3, 5, 10 years? 2006? 2005? 2004? 2003?

    If you've held on since then obviously with dividends and market growth it has come back. I think it would be interesting.
     
  9. pippen

    pippen Well-Known Member

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    Ahh the ol time machine! Will jump on ebay I might be surprised! :p
     
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  10. Realist35

    Realist35 Well-Known Member

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    So the smaller size of WHF is just the perception issue? For never-sell holders, I can only see it as a benefit as it sells at a greater discount.

    From my understanding safety doesn't have to do anything with the size of the LIC.
     
  11. Realist35

    Realist35 Well-Known Member

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    I suppose you meant I should have chosen the same start and end periods when I compared the data:)?
     
  12. willair

    willair Well-Known Member Premium Member

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    Behaviourists who read a thread like this understand why they have menu's in restaurants ,we are all different with different experiences and every forecaster even the ones who own no stocks are always thinking short or bearish..
     
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  13. Nodrog

    Nodrog Well-Known Member

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    Further to the LICs vs Index debate.

    An old mentor of mine now deceased used to say "beware the well meaning American". Don't get me wrong I'm a great fan of indexing and the major authors on the subject. But ASX with it's concentration and heap of speculative mining stocks is not like the US market.

    Because of this in part there is greater opportunity to outperform the ASX Index as shown in the below SPIVA report. Still not great but note this is after fees:

    IMG_0083.JPG

    Now take the older LICs with their low fees similar to or less than cap weighted Index ETFs then their odds of outperformance improve. Fees are a big killer for many funds. Quite a few outperform before fees but it's a totally different story after fees.

    Of course there's the argument put forward by the Index approach authors in more recent times that the outperformance of active Mgrs in times of old is unlikely going forward because of the huge amount of trading talent out there nowadays. I tend to largely agree with that.

    But let's remember that LICs periodically offer that wonderful unique advantage that the Index product doesn't - LICs can trade at a discount! For a dividend investor in particular that can offer great opportunity.

    But the future is unknown. I like to think that the older LICs may have an edge over the Index particularly if you take advantage of their unique attributes. However it doesn't have to be one or the other. I still think that cap weighted index ETFs / Funds are a magnificent product. So given an unknown future a wise investor might be one who uses each product to it's full advantage.

    If it all gets too hard even I will admit that the Index approach is the easiest and outcome more reliable.

    However for me it's a preference for mostly low cost LICs in Australia but a preference toward the Index product for international developed markets.

    Not advice:)
     
    Last edited: 21st May, 2017
  14. Nodrog

    Nodrog Well-Known Member

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    Don't get me wrong, I was a fanatical technical trader / chartist many years ago and fully understand what you were getting at. I just didn't think it was the right thread to be making that comment. It's the wrong audience so likely to go way over the heads of most readers of the Thornhill thread.

    Peace:).
     
  15. Nodrog

    Nodrog Well-Known Member

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    In the case of WHF I believe it is. But not all smaller LICs are the same when it comes to risk, there are many factors. Size definately counts though. DYOR.
     
  16. unwillingwillis

    unwillingwillis Well-Known Member

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    Seriously? I think I need a aspirin after reading some of your posts!!

    The contributors on these threads (LIC and Thornhill) are very supportive and generous with their time and knowledge. It’s a pleasure (and privilege) to be involved in this investor community. I personally respect other members time and try to add value to these investment threads when I can (which is why I seldom post).

    Realist35 after reading your previous posts (and they are prolific) I’m not sure ETFs or LICs are the right investment vehicle for you. Have you considered Vanguards lifestyle funds? I personally invest in the wholesale index funds and they are great products. The balanced fund is a set and forget product where all the decisions are made for you! I think this is a product that may be more in line with your investment style and temperament!



    Not licenced to give advice!
     
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  17. Nodrog

    Nodrog Well-Known Member

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    A aspirin, maybe the whole box:D.
    He he. Yes that has already been discussed:
    Why Property is Better Than Shares

    Vanguard Wholesale Diversified Funds are an excellent product if you can find $100k to get started. Fantastic for emotional or indecisive investors prone to chopping / changing / fiddling or those more interested in getting on with their life. Setup periodic BPay contribution then forget about it. Latest update on these funds here:

    https://api.vanguard.com/rs/gre/gls/stable/documents/10508/au

    And they are getting cheaper on 1 July.

    My preference would be the High Growth option though especially if I was younger.

    Not advice.
     
    Last edited: 21st May, 2017
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  18. willair

    willair Well-Known Member Premium Member

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    Maybe it just comes back too the bookcase i have in front of me ,, and all the second hand published works that i have bought over the years and the sober study within the applications about market analyses within those books ..

    I was just wanted to show that with the wave of enthusiasm with all the posts within this thread that some charts are showing a broadening of top formations and as long as selling does not occur in big volumes then full steam ahead,..
    If you like a good read buy a copy of this book by Paul V Azzopardi..Behavioural Technical Analysis..

    It's a simple easy to read even for a grade ten x blue collar worker like myself and study on the way sentiment and emotions can affect financial stand alone decision making..And why they have menu's in restaurants ..
     
  19. The Falcon

    The Falcon Well-Known Member

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    It's worse than SPIVA suggests, given that funds that perform poorly have a habit of closing! Then reopening with a new mandate for another tilt !

    The old LICs have a lot to recommend them, low fees and turnover right at the top. I'll write a longer post on all of this when I get a chance.
     
  20. unwillingwillis

    unwillingwillis Well-Known Member

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    I have been using them for some time. My wife has a lower investment risk profile than myself. Half of our funds each quarter go into the Wholesale diversified funds. I try to limit investing to every 3 months. In fact my wife likes to gloat as her index funds have easily outperformed my LICs and direct share holdings (most of them anyway).

    Yup BPay then forget about them! It couldnt be easier!!

    I wish I were younger......
     
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