Peter Thornhill 2020

Yes to Nope.

 

As you probably know it's difficult not to @geoffw. The urge to look for bargains, performance, price fluctuations, movements in % terms of the portfolio is hard to resist.

I did it for many years. It is what we are encouraged to do so to be part of the herd.

Deep down I still feel a want. So far I've been able to suppress that urge because I also have the gut feeling if I do I'll screw things up and undo what I have been attempting to achieve. Need to continually work at the IDGAS IAAM concept.

 

PT sure has a love for the Milner managed funds!

 

Taylor Larimore

I also liked the response to a question

Whats a 3 Fund Portfolio

From Vanguard's list of "core funds," the funds that are best for a three-fund portfolio are:

• Vanguard Total Stock Market Index Fund (VTSAX)
• Vanguard Total International Stock Index Fund (VTIAX)
• Vanguard Total Bond Market Fund (VBTLX)

 

That example is a beauty!

I do own some AFIC, but sometimes wonder if it will still exist in another 20+ years. The old school LICs are great but I wonder if once the older generations of investors, who didn't have access to the widespread ETF options we have now, pass on will any young people buy them. Vanguard, BlackRock et al. get/do a lot of promotion for their ETF products so LICs may get squeezed out. It's great people like Peter are continuing to spread the message.

 

Are these real figures? Was it common for Super funds to be paying >34% yield in 2007? Pre-GFC anomaly?

 

I can certainly understand the theoretical appeal of old LIC's - especially in this climate and being retired .... the dividend smoothing for income would be a huge relief, as would the appearance of less dramatic drop in stock price.
Mrs loves her old LIC's, I'll stick with my wholesale Vanguard fund. Each to their own I guess.
I am indebted to Mr Thornhill for being the first writer to have a serious impact on my habits - viz steady habitual accumulation and ignoring the noise - for this (if nothing else) I am grateful.

 

Doesn't pass my sniff test either. No way of validating his numbers but you can validate the conclusion he draws about AFI superiority.



Total cash returned $90,508 for an Annual Compound return of 16.24%

AFI


Total cash returned $66,569 for an Annual Compound return of 10.10%.

His conclusion of AFI superiority isn't supported by the data he provided.

As is typical. His conclusion fits with his story and opinions but it does not fit with the numbers he provided. Maybe the numbers are wrong, perhaps the conclusion is wrong..... I dunno, my instinct is to question what doesn't make sense and choose numbers over stories where the two differ.

Top marginal rate? even though the account is called superfund??? Super fund tax is 15% for income and short term capital gains and 10% for discounted capital gains. In any case the additional capital gains tax burden is "earlier" payment rather than "extra" payment unless gains can be deferred until a lower income year. No way of calculating tax outcome without knowing specific circumstances but a couple thousand max in timing difference would be my guess. (a couple K is worth chasing as tax efficiency only if everything else is equal)

Drilling down to that tax efficiency and his comments on ETF's. Obviously by his comments he doesn't understand ETF unit creation process. Its not only tax effective in theory, but is proving itself in practice with ETF's actually distributing less capital gains then their managed fund counterparts. Additionally Market capitalization ETF's create smaller amounts of turn-over than active funds in the first place.

 

Yeah, the only valid takeaways, which are in themselves very important from PT's latest dribble ;

1. Costs matter. (you get what you DONT pay for)
2. Tax matters, therefore so does portfolio turnover.

PT seems to have created his mental manifesto about 20 years ago and stopped there, and has now decided to just nail his ignorance to the mast with regards to Index funds and index ETFs.

 

My Say 65 was sent out today with an EOI for another Sydney event in early 2021

 

Just read it, My Say No. 64 was in July 2020, so not much to say for the last six months, other than updating his slides that cover the last 41 years and upcoming presentations

 

I guess there really isn't too much else to say really...

 

Exactly. The share market (and I mean the overall market or broad diversification across same) is the most wonderful wealth creation vehicle available for the great majority of people provided they can overcome the fear of volatility! From memory Thornhill’s words: Fear = Ignorance; Knowledge = Power.

Then again it takes more than knowledge to overcome fear. Hence he often says “toughen up princess” when anxiety takes hold. Whatever ... toughen up, grow / borrow a big set, learn / condition yourself to ignore market volatility and whenever fear takes hold and there’s an urge to sell take a couple of aspirin, go lie down until the urge goes away. Do this over the long term and wealth beyond what most would expect will surely follow.

 

Keep feeding the beast, DCA for accumulators over the long term and get on with life.

 

A few Jack Daniel's caused me to lie down. Sometimes though JD didn't work which is when I did my "best" work.

Dichloroacetate (DCA)? Does wonders for your skin I'm told.

 

My Peter Thornhill candle has dimmed somewhat in 2020 due to my four LICs performing fairly poorly, with total returns of:

AUI -3.47%
ARG +1.02%
MLT +1.82%
AFI +7.49%​

I say poor performance as my share portfolio (including these 4 x LICs) achieved total returns of 12.68% over the same period.

My LICs certainly held me back .

 

If you picked some up during the March sales they would have done okay price-wise

AUI is up around 39% from its lowest point and ARG around 51%

 

True but one needs to compare apples with apples.

Since the bottom of the COVID crash, my share portfolio as a whole has produced total returns of 55%.

So, my LICs are still holding me back .

 

I had some Cap Gains due last FY so did some harvesting