Peter Thornhill 2020

Agree wholeheartedly

Its like you always say, it's all about me



With around $20M throwing off $400k per annum in dividends you'd be hard pressed to tell him he's gone wrong

 

Storytelling is a good description. And I don't think semi-fiction makes for good investment strategy.

This thread always cycles back to "yeah he has faults but he's done something right".

 

You'd think it'd have to be cashflow related.

Oz property has horrendous yields after costs. Hard for a corporation to justify buying an asset with a 2-3% net yield (PE of 33 to 50), which earnings (rents) can be expected to grow at 2-4% pa.

But everyday investors are more than happy to own these assets due to tax breaks and expectation of future capital growth, which has paid off in the past. So it's not surprising who owns the resi property in this country.

In the US, from what I can tell they have many cities and resi property types where yields are 6%+ after costs. Much easier to make a 'business case' for investment companies buying these assets, even if rents grow with inflation.

 

So this Thornhill character is he against owning resi property or all property including commercial / reits?

 

Agreed, there are plenty of ways to skin a cat, but some universal truths are relevant regardless of the details - spend less than you earn, borrow less than you can afford, invest wisely etc. I'm not anti-ETFs and I'm not anti-overseas diversification like Peter seems to be, however I can certainly appreciate the general message that he attempts to convey, regardless of my individual choice of investment vehicles to achieve it.

 

In short yes, his principal message is that he wants to invest in human endeavour (ie businesses) and stays away from property and mining (in his words, digging stuff out of the ground). He is a larger than life character in person, who has strong opinions in the "best" way (something that we would all be guilty of) and doesn't shy away from his beliefs. However, he isn't the sort of person to deride others for going down a different path, and the fact that you are doing something and investing he would already see you as on a better path than most.

 

PT does own MFF and MFG as international holdings

 

Zugzwang anyone?

Or possibly Zwischenzug is the preferred investing method.

Your choice 'cause nobody bar you cares.

 

I know that he has commented that he still holds a number of individual companies from his stock picking days, and I know that he holds an investment in the City of London Investment Trust, however I doubt that he would own shares in MFF. Peter only invests in LIC's and comparables that are low cost and been around for preferably 50 years and this doesn't seem to meet his requirements, although I could be wrong.

 

I still have a great deal of respect for Peter. Although I don’t agree with a some of his views my investing at its core is very much Thornhillish ie shares for income.

Course attendee’s many whom typically are fearful of the sharemarket because of its volatility (see it as a casino) often become enthusiastic converts when Peter teaches them that shares are two dimensional ie capital (highly volatile) and INCOME (less volatile). Then when they find out there are products ie LICs that can reduce that income volatility even more that adds even further to their enthusiasm.

I’ve seen feedback from many course attendees over the years who embraced Peter’s approach which was literally life changing for them.

He’s doing a good thing in my view.

 

Have had private chats with him over a couple years now and spoke about him and the kids and his justification for holding MFF and MFG.

 

Redwing thanks for your time to post the above Peter Thornhill's supporters might conclude what he does and the way he has acted is a good thing and good luck too them all as there seems many who follow him within this site,and this will BE the last time i will ever say anything about him..
Redwing not being one to sidetrack POSTS but next time your in London and ''W'ho owns London'' try and spend the time and go too this house of British architect Sir John Soane it's free and what's inside that terrace and the artwork by..
William Hogarth (1697 - 1764)
A Rake's Progress III: The Orgy


1734

William Hogarth (1697 - 1764)
A Rake's Progress III: The Orgy

1734

There is a set of the above paintings all in one room from start to finish every investors should look at those set of drawings and the story it tells..

The money this gentleman had and his collection still on display will blow you away..
Collections

 

Thanks Satay ,as i said to you before we are all different and i will be sitting in the back row sometime in the future ..

 

Here’s the answer from the man himself.

I hope you will watch it more than once.

I used to have a monthly reminder to watch it - I’m in a similar boat to you with my high yield weakness, and it’s been very slow to cure.

 

Good video. And that chart makes a compelling case. Couple of things and I say all this purely playing devils advocate and not saying the guy is wrong.

Could that chart period be playing into his argument? Just saying it ends right at the GFC crash in which reits did get hit harder than the general asx200. Would a chart till today show a different result?

Next thing that I have to question, is the value and dividends in the chart for the reits. I am surprised that the value and dividends from reits only moves so slightly up and returns pretty much back to the starting point after 20 years. I have no reason to doubt the chart but I guess this is why I do not invest in reit indexs. I don't believe they work as well as general equities index.

So are we saying that good quality commercial assets have minimal value growth and dividend growth over a 20 year period? Based on my experience being only the last 4 years and mainly in unlisted property I am seeing plenty of growth in value and also dividends. I understand 4 years is not a long time. But keeping in mind that most commercial assets have fixed rental increases in place. So generally speaking dividends should also continue to also rise in property to some degree.

Don't get me wrong I am not arguing that the guy is wrong. I am sure his level of experience and knowledge is miles ahead of mine. I am trying to see if my way of looking at the property play is that far off. At the end of the day I need to re balance towards equities and away from property trusts. So any argument that can convince me equities are a superior investment I am willing to listen.

 

Even for Peter there’s ideal then there’s pragmatic. His often presented Mothership Industrials share chart contains property trusts as does one of his favoured LICs WHF. As for his other three favoured LICs they contain reasonable exposure to resource stocks.

A “growing” income stream is at the heart of his philosophy with productive enterprise the preferred choice. In theory property with it’s high payout ratio should exhibit less growth than equities. Data suggest this is not necessarily the case. One thing for sure @Big A you’re very much the “income” investor.

 

Yes @Nodrog i think we share the income investor DNA. As much as our situation does not require us to continue focusing on necessarily accumulating more income we can’t seem to help but be attracted to income producing investments.

 

Yes, but there is a big percentage of the population that use stories as a basis of action and justification.

 

There's a newer chart in one of his recent articles and the message is fairly consistent My Say No. 60 – Oh no, not again | Motivated Money



You're probably correct on the reit index as a comparison measure, as the ASX REIT index has only 19 companies with Top 10 making up 88.5%. It's drawbacks were discussed here heavily some time ago, including its performance during the turmoil years. Select quality opportunities in unlisted space could obviously perform differently (better).

But the question is, are you looking at a bigger picture here? Are you not sucking yourself into a "yield trap"?

 

I hope not. I don’t think I am as I expect that the value of these commercial assets generally should go up as the rent being paid by the tenants continues to increase. There’s never any guarantees of course but that’s the premise of investing in such assets.
But I mean the graph that you provided is showing capital value and dividends over almost 30 years has only slightly moved up.

So are we saying that commercial assets based on the general index have no income or value growth prospects? I’m not trying to be sarcastic either. I am genuinely asking the question as that’s what this graph is telling me. I would think based on my understanding of such assets that they will be worth more and the dividend will also be more in the future than it is today. In 20 years time I would guess much more based on the just the few years I have been watching anyway.