Peter Thornhill 2019

And yet LIC's PT promotes certainly do hold some Property trusts eg WHF.

 

Hi all

Would appreciate the collective wisdom here plese:-

Dear wife has agreed to minimise her portfolio (but not interested in going to Vanguard wholesale fund like me) and we are down to culling this last handful of her holdings as follows:
VAS, AFI, MLT, ARG, DUI, AUI, BKW, SOL and WHF.

She wants to get it down to maximum 4 holdings out of the above.

What would you keep and why?

 

VAS - self explanatory
DUI - div history and international holdings, low fee
ARG and or AFI - low fee consistent div growth over long term

Id seriously attempt to convince them to hold at least 20% in VGS or VGAD and replace DUI with AUI considering all the holdings are highly correlated/same risk profile etc.

Total MER approx .14%

 

Unless she really really wants 4 holdings VAS alone would do the job and over the long term returns would be neck and neck between all those LICs.

If she wants some international diversification add IVV or popular among PC members VGS.

For me personally I have got 3 holdings VAS , AUI and IVV. Would have sold AUI but it’s not a small holding and am not prepared to pay CGT on it yet.

Cheers
Oracle.

 

I’d go VAS and 1-2 others.

Can choose MLT and instantly scrap BKW and SOL. Then I’d go with any of those others (ex WHF due to cost).

 

2 holdings is better than 3 from simplification point of view. Don't want the wife to ever think I left her a complicated share portfolio to manage and so she decides to sell the lot and put money in term deposit

Seriously, no plans to sell AUI but out of the 3 if there was ever need to reduce to 2 it would be AUI that would go since it's the smallest holding among the 3.

Cheers,
Oracle.

 

Now available through the 'Motivated Money' newsletter.

My Say - No. 60
30th August 2019

Oh no, not again.

It was disappointing to see, yet again, the use of a failed metric to distort the investment dialogue. Let me start this by reminding everyone of my preferred definition of investing; ‘the use of money productively to produce a regular income'. Contrast this with the definition of speculation; ‘buying and selling in an attempt to benefit from a fluctuation in the price’.

In general, the profit of a company is split broadly in two, 1. retained earnings for R&D, new technology etc and 2. the balance, or payout ratio, as a dividend. In mature, quality companies, earnings drive dividends and it is dividend growth, reflecting growing earnings that ultimately drives share price performance.

 

Link pls? Only issue no 59 appears to be available.

 

I received this by PT's emailed newsletter, would seem that he hasn't posted it on Motivated Money as yet.

Perhaps sign up for the newsletter if you want earlier access.

 

Thornhill mentions he owns CSL, Credit Corp and Cochlear, Event Hospitality also gets a mention

This makes a bit more sense now with reference to his oft touted CBA and Wesfarmers examples, I had thought he was invested in LIC's only (Aus & UK) but he looks to have a number of individual shares also (core/satellite approach?)

 

I gather from the sub-heading PT is a tad annoyed about some aspect. I'm not a subscriber but then I'm not a subscriber to any newsletter or investment sites apart from this forum. Too much of the white noise.

I don't think he has ever hidden the fact he holds dirdct shares. It was mentioned in the LIC thread he holds about 40 but I'm not certain of the actual number.

 

Some years back he had over 70 shares including his four LICs. Overtime he has been reducing his direct shares with the aim of his LICs becoming the greater part of the portfolio. That number has since reduced to around 40. But his huge performers such as CSL have an enormous amount of capital gain albeit less of an issue in his SMSF but still an issue given the Super pension cap which resulted in excess over pension being forced back into accumulation.

From the latest My Say here’s his holding in Credit Corp and CSL.

I think some would be surprised if they knew all of Peter’s holdings.

 

The My Say is usually posted on his site a few days after being sent by email. If you can’t wait that long in future then simply subscribe to it at:

My Say | Motivated Money

 

Good on him for having some of those individual shares in his portfolio long term

They've done well

 

However note that these are part of a widely diversified portfolio. Investors like to highlight the big winners. The reality is that a well diversified buy and hold portfolio is more likely to be similar to the old LICs or index ETF for that matter. The overall result is really nothing more than the compounding of a diversified, low turnover portfolio of growth assets.

Holding direct shares seems appealing but I think even Peter would agree nowadays that simply buying well diversified LICs over a long period would likely do the same thing. If not the result was likely due more to luck than skill. I can tell you now having followed Thornhill for over two decades that there were also a number of dogs in his portfolio including a couple that went bust.

Really the concept of “positive skew” is a major factor in all this. Peter favours Industrials. Diversify widely (as opposed to skill) in the hope that a few come good, very good. That then gives you something to brag about.

There’s no magic in this.

 

@DoggaPP i agree with your comment and try to apply alot of what PTsays but i imagine a couple of 100 baggers would have helped the compounding over the last 30 years.

 

LOL. If looking at one certain company multiply its current share price by three to account for the 3 for 1 share split.

 

That part of PT’s strategy I have executed very well ...