Peter Thornhill 2020

What i think the graph is saying, is that the income growth of the equity index will outpace that of the REITs over a long enough timeframe. And by a decent margin.

PS i'm just a messenger on these, the data and graphs are obviously from PT. I'm hoping other more knowledgeable members would chime in with regards to your questions.

 

Thank you @nofriends . And I appreciate you responding and educating me. My responses are out of genuine interest and counter arguing / understanding of the behaviour of the different asset classes. I hope my responses didn’t come across as being argumentative.

I am still a newbie when it comes to investing in equities. And property was something that I was comfortable with which is why I gravitated towards property trusts.

While I don’t know if the individual property trusts I have invested in will perform as poorly against the general equities index as PT’s graphs indicate, I know it’s not wise to continue plowing so much capital into 1 asset class. I was attracted to the high yield offered as a way of building a portfolio that would replace my working income if and when needed. I have now done that and more with the amount of unlisted property I have accumulated.

I was actually about to take up another offering in a new property trust that is opening up shortly. I am now considering scrapping that idea and re directing that money into the equities portfolio.

 

The PT chart is crafted to confirm an opinion of industrials as superior to property rather than portray an accurate comparison.

The chart conveys no useful information as it does not make a realistic comparison. You withdraw more early (ie you ‘spend all’ your higher initial distributions from property than dividends from industrial companies and you will end up with less. But if you invest the difference between the two you will paint a whole different picture especially if you can re-invest at a better rate into property than into industrials)

Two different income streams with differing re-investment opportunities need to be compared based on re-invested income to make a meaningful comparison.

This is Vangaurds Property Managed Fund since inception vs the All Industrial (non-resources) Benchmark

Red is property fund
Blue line is the industrials benchmark




The since inception shows industrials as superior but take out the GFC and the story is different.

2008 was a default event for property trust created by too much leverage where the index fell some 90 odd %. (ask @Nodrog the exact figure, its scared into his memory) Was the leverage leading to the default events caused by the inferiority of property or by management complacency in relation to the prior norms of the asset? That question needs to be answered before you can draw a conclusion on inferiority or otherwise of property.

Figures since GFC indicate property is once again chasing down the industrials benchmark.

Don't be too easily led by reference to authority.

 

Thank you @dunno . I knew there had to be more to it than what the story the PT graph was telling. I just wasn’t smart enough to be able to put it together.

Not going to deny that I can be led astray by the spruking of an expert like PT, but my re considering another property trust investment in favour for more equities is something I should be doing regardless of the PT graph. I’m sitting at 50% unlisted property and 26% equities. And some of that 26% equities would has exposure to listed property. So I am very heavy in property trusts. Graphs that move me away from property trusts might be what I need to see to give up my property trust addiction.

 

Old now as I’ve uninstalled the charting package but start dates (or biased data) seem to be at play with Peter’s charts. I posted this quite some time ago. I think AREITS have gone gangbusters since then:

Listed Investment Companies (LICs) Q3 2018 [LIC & LIT]

 

I think we're starting to get bogged down in nitpicking. Sure it's not a perfect strategy, and it has flaws, but at the end of the day, those who pay themselves first and invest for the long term, will do better than those who just put cash in savings accounts and term deposits.

He's a book author, and so he has to tailor his book to fit the niche. Sure, he could've written an all-encompassing book about investing in JVs, property, businesses, etc, but it waters down the main content.

Same with the haters against the Barefoot Investor, Scott Pape.
In his books he's opposed to credit cards (allegedly) - most savvy investors see the benefit of keeping cash in offset accounts and maximising interest free periods.
Pape is also (allegedly) against borrowing to invest.
He's also (allegedly) against buying single stocks.
But I say allegedly, because I'd be willing to bet that he does in fact diversify his investments. But the majority of his success is writing a book that is very simple, and it appeals to his audience.

Just pick an investment style and stick with it. I like the PT approach because it's simple, and it fits my SANF, and my risk tolerance. Sure it won't make me a multimillionaire, but it'll make me better off than my peers.

In saying that, I really appreciate the scholarly and gentlemanly discussion with evidence backed arguments.
Jollly good show, old chaps.

 

@dunno I for one love your posts, the detail and facts you include are fantastic and I like how you run your own race and not hand of the coat tails of others. Very valuable contributor!

 

Thanks @dunno but you’re a very naughty boy picking on geriatrics.

Agree with what you say of course, the chart of Industrials vs Property that Peter uses is very deceiving. This issue has been discussed a number of times here. Here’s an old post from 2018. I have deleted the charting software from my computer otherwise I’d provide an updated chart. However the chart which starts is 1992 (Max data available) just like the one @dunno provided paints a very different picture to the one Peter uses:

Listed Investment Companies (LICs) Q3 2018 [LIC & LIT]



I no longer have anything against Areits but I have no desire to own more than market weight as in VAS being near 8% which is more than enough for a sector allocation especially given the concentration in the Areit index:

 

Geez, I need to get my memory checked. I just noticed that I had already posted the above linked thread last night but had forgotten.

 

Not a problem until you start answering your own questions in threads

 

Actually there has been times I ended up answering my own questions but thankfully realised what I was doing before hitting the “post reply” button. I wonder what I’ll be like at @SatayKing ’s age! It’s a worrying thought.

 

It sounds like this guy makes money from his seminars charging over $200 a pop? Steve Navra only used to charge about $60 to help cover the venue cost.

 

I thought it was from the goodness of his heart that he held these seminars.

And that's why I put more weight on the knowledge gathered from a forum like PC than a Peter Thornhill type. I am not saying what PT is selling is no good. If the general public followed what he preaches they would be much better off than most.

But when members on here share there knowledge and experiences that is from the goodness of their hearts and there desire to learn and help others learn. Except @Nodrog who you need to send a monthly cheque to. Mine is in the mail mate.

 

If he's got a high net worth with a high income then he should be doing it for free, for the love of helping others to retire early (unless he's greedy!). Maybe he should just charge a token amount just to cover the venue hire.

 

I agree it would be nice of him to do it for love but I wont hold it against him. I am sure he is somewhat greedy. Most of us are to some extent and if there is an opportunity to make an extra dollar we will.

 

There is nothing wrong with charging for a service. We all do it directly or indirectly

 

I’ve known Peter for years. Nothing could be further from the truth in terms of the reasons he runs these courses. As for any money received from such activities it will benefit their selected charities after their passing far more than Peter. He has a strong belief in philantrophy so yes still likes to see growth in wealth from such activities no doubt albeit minimal relative to his dividend income accumulated from personal exertion over his lifetime.

I like others have never attended any of Peter’s courses but he is willing to devote hours of his time talking to those interested in investing in shares on the phone, provide detailed responses to emails etc.

He’s a true gentleman who genuinely wants to help others in my view.

 

Totally Agree. Never said there is anything wrong with it at all. I would charge as well. I might even start charging for every post I put on here.

Mods please advise where I submit my invoice.

Nah in all seriousness I am not saying there is anything wrong with charging for his service. But was just agreeing with @Momentum that it would be nice if he did it at cost. There are many members on here who could probably charge for there knowledge but come here and share it just for the satisfaction of knowing they are helping others. But that is an individual choice and there is no right or wrong approach.

I have nothing against PT except that he doesn't like property as part of his portfolio. I take it personally because I have an obsession with property trusts. I wont hold it against him though.

 

A couple of years ago Peter contacted me about joining PC forum to offer information here freely like the rest of us. Around this time he also agreed to participate on a Facebook page related to the Thornhill Shares for Income approach setup by a member here. However Facebook participants started discussing trading and all sorts of other speculative discussion. He didn’t want others searching on him finding such speculative discussion associated with his name.

After this he decided to avoid public forums and continue to offer his time freely to those, often complete strangers, who contacted him directly. He’s very generous with his time.

 

Thanks @Nodrog . PT sounds like an absolute gentleman. I hope it didn't come across that I was criticising him, was just trying to be funny not nasty. Hey he is a better person than me. If I was in his position I would probably me monetising every opportunity I had. Personally I would add in a merchandise line. T-shirts , Caps and coffee mugs for all you coffee lovers.