Peter Thornhill

First up thanks very much @Wukong, much appreciated.

Maybe old age is catching up with Peter.

He is adverse to QVE BUT to the best of my knowledge he has held IML's Small Companies unlisted managed fund for a very long period at around the same MER as QVE! Then again as a friend and former work colleague of Anton T perhaps he gets a discount.

Note also that QVE has NO performance fees!

And he holds BKI As mentioned below which goes against his 50 years in operation rule. Unless of course he is including the time it was held as BKW's private portfolio before being spun out as BKI?

Interesting I though he also held AFI but it has the heaviest resource exposure so would make sense. Perhaps old age is also catching up with me.

And as stated above BKI is inconsistent with his 50 year rule.

As for putting everything into WHF he's a braver man than me. Great LIC but doing this would not pass the SANF for me. Too small for a start.

As you know I'm a fan of Peter's ideas but with boring regularity he constantly brings up the same old examples eg CSL, COH and CBA. This is great for historical illustration but investors should bear in mind that the important message here is that we want to own the CSL type growth stocks OF THE FUTURE directly or indirectly.

And you have to look at the likes of CSL as part of ones overall portfolio. Alone the performance is impressive but not when measured across the whole portfolio. And what is he suggesting, ARG doesn't own CSL? Rest assured you are getting this same performance by holding CSL in ARG. It's silly to compare a single stock against an entire portfolio of shares.

He probably means this in terms of dividend production. The returns might be similar but I would think his direct shares pump a higher proportion of dividends than the LICs. For a start there are resource stocks (crap dividends) in most of his LICs.

And he has said in the past:

But Peter even at his age loves owning direct shares regardless of whether they outperform his LICs, it's in his blood. Plus with direct shares he can eliminate resource stocks and AReits unlike with his LICs. For example even WHF which he suggested as a single holding portfolio has its fair share of AReits which he hates! And of course he loves a bargain which is much easier to get with direct shares.

Has always been my approach as stated in another thread this morning.

Sounds good to me but fortunately as an existing shareholder I have already BPayed my SPP application for max price of $4.08. Won't be selling mine for a "potential" profit but I'm sure others will be. Keep an eye out there "may" be some unloading shares closer to the SPP final allocation price.

The above doesn't take away from the fact that Thornhill offers excellent education. But as always keep an open mind, evaluate the information and adapt to what fits well with YOUR goals and risk appetite etc.

Not advice, general info only.

 

In a SPP what happens to the difference between the amount you transfer and what ultimately gets bought? Does it get direct credited back to you?

 

The financial advisor is Luke Rathborne And AFAIK he is fee based, not % FUM.

And Peter needs to look at QVE more closely, no performance fees. Ah @austing beat me to it. Lots of contradictions in Peter's stuff, he does foam at the mouth a bit at times so he might have been positively frothing.

 

No, they donate it to charity. Only joking, it gets credited back to you.

 

He he, agree. Was surprised at the amount of contradictions myself a number of which I mentioned above.

Be wary of his financial advisor suggestion. Given that he is not liscenced to give advice I'm assuming in part he does this to cover his ar*e.

He has made it clear he mostly uses his financial planner for technical aspects such as Super and general planning NOT share / LIC selection. And importantly he has stated the planner is there as part of estate planning. That is, if he goes the planner will manage the share portfolio on behalf of his wife!

As for most investors it is highly unlikely you need a financial planner if older LICs are your primary focus. You are simply destroying the entire low fee advantage!

Not advice.

 

@austing - yes entirely correct.

 

@The Falcon Peter was saying that his financial advisor is fee based for himself given the size of his portfolio but will be %FUM / subject to negotiation. Not a one size fits all?

@austing I'd say that given my level of investing knowledge, there would be loss of information/ misinterpretation during the course of the day. I do think Peter does a lot of 'seek professional advice' and is fairly conservative with his messaging throughout the day.

I'd think that some of his stock purchases weren't 'blue chip' from the start but are small cap/ mid cap stocks which have transformed to blue chip over the years.

He does say he's not licensed to give advice and outsources everything including stock picking.

More importantly is the mindset and keeping a simple approach over decades was my main takeaway.

 

@austing knowing the SPP for WHF will close 10th of June, will it be prudent to have a wait and see approach until then

 

With SPPs I do most of the time depending on the terms of the offer. But this time I'm being lazy and have already submitted the application incase senility or excessive home brew consumption causes me to forget. And because it is the lower of the set price $4.08 OR the price based on the 5 trading days leading up to the closing date it's not worth the effort of trying to outsmart the market.

One can try to finesse these things but at the end of the day they're long term investments with steady accumulation so a lot of the time it isn't worth the fuss.

 

I forgot to mention however that if the market tanks 50% on the day of (or day before) the offer closing you might be swearing at me.

So if you have concerns you can always leave it as close as possible to the closing date. However make sure you allow enough time for BPay processing so you don't miss the deadline.

 

Hi again @Wukong,

Looking back at my posts I hope they didn't come across as being a bit too aggressive in my critique of your summation of Peter's course. I asked you awhile back if you could give us a summary of the course which you have kindly done. Again a big thank you for that. And I understand that there may have been some misinterpretation given the volume of material covered on the day.

I had a quick look back at some of my stuff which confirmed Peter has held AFI for a very long time. Mostly to prove to myself that senility hadn't set in. So I'm wondering if perhaps there was some misunderstanding between AFI vs BKI? Of course he might have sold AFI in somewhat more recent times but for Peter this would be extremely unlikely. So in the past his core LICs have been AFI, ARG, MLT and WHF.

Yes, why some of us hold mid / small cap LICs such as MIR and QVE.

However, importantly it should be noted that the Large Cap focused LICs are also always on the lookout for mid / small stocks that could potentially become the CSLs of the future. For example, from AFI:

So it is not mandatory to own dedicated mid / small cap LICs for this exposure, the biggies are doing some of this for you.

Further to Peter's rejection of QVE I draw attention to this following quote from a couple of months ago:

So that rejection fits with his criteria.

Point 2 in particular is one that is very important. Many LIC investors detest "external" management agreements preferring "internally" managed LICs. More often than not the terms and conditions of these External Management Agreements may be far more beneficial to the manager rather than the shareholders.

That said, during the course Peter stated his advice to his children is that they invest solely in WHF which by the way is "externally" managed. Go figure.

Here's a very recent Eureka Report article related to this topic albeit perhaps a little biased in some respects:

Uncovering LIC manager fees

In summary, "rules of thumb" are useful but one really needs to look beyond this when choosing an investment product!

Not advice.

 

@austing none taken at all. the point of attending his course was after reading the LIC related threads here. and summarizing it with critique from people who's successfully invested is continuous learning for me.

Step by step progression

I'm thinking that he detests resources a lot. there were a couple questions raised by 'speculators' during the session about buying into BHP and Rio Tinto given their current low prices.

Peter's answer was using his Industrial vs All Ord vs Resources graph, that there is no reason to drag down his Industrials performance with some resources.

Like how you and the falcon have said, he provides a very strong foundation, it's up to us as individuals to expand on that foundation, for better or for worst.

I'd probably just keep it simple and focus on the few LICs, stock picking is definitely not for me!

 

He he, pretty much the same for me nowadays.

There was a time when I had the patience to research and analyse companies. But most of the time now I find it about as exciting as watching paint dry. And any rare bout of renewed enthusiasm is short lived.

I might be spending time here on the forum now but there have been times where due to other interests I haven't looked at my shares / LICs for a couple of years other than for tax and admin purposes. That's what I love about our LICs, you can just forget about them if you choose and they look after themselves. And for a rediculously low fee in many cases! Investments don't get much better than that. Total bliss!

 

@austing the different is you're retired and don't need the hassle while we are accummulating very big difference

 

Nope, wrong. No big difference at all.

Yes there were times I got more interested in direct shares but LICs were always at the heart of our investing. The direct shares aren't needed for success. In fact I regretted accumulating a higher number of direct stocks wishing I had just stuck will LICs only. Hence why we have reduced the number of stocks overtime.

As for being retired and not needing the hassle you can look at it another way. As a retiree I have heaps of free time on my hands so if I did want to pursue share research I'm in a much better position to do so compared to those who are busy with their jobs and family! But I choose not too, not just because I prefer to do other things BUT because I just don't feel it is needed for investment success.

In fact a danger for retirees is the amount of free time they have. Unfortunately I've seen it happen all too often were a bored retiree will decide to start messing with their shares and / or start trading as a hobby sometimes with disasterous consequences. A lifetime of savings lost or depleted and unable to return to work. A very sad situation.

And from your summary of Peter Thornhill's course one of the most important points which many will not really notice is the following:

Honestly this approach to investing is dead easy and boring. Whether you're a young accumulator OR an older retiree it makes no difference. Having the patience to stick with it is the terribly hard part!

Or perhaps I could have just saved myself some typing and kept it concise by saying DON'T MESS WITH THE OLD FELLA (only joking).

Not advice.

 

Its the boring stuff that works best. But people like things fancy - they feel like getting value for money.

 

I just ordered Peter's book - $36 including postage.

I had read it many years ago, but borrowed it. After all the comments I think I need to have a read again.

 

My copy is very old. I found the book ok but his various articles at times were somewhat more interesting to me. Some parts of the book got a bit too philosophical for my taste. That said it is an excellent book to have and worth rereading occasionally to keep one from going off the rails.

From memory unless it's been substantially revised I think this thread goes into a lot more detail than his book especially in a practical application of the approach. But please let us know if there is stuff in it that is not covered here. I'm trying to make this thread as comprehensive as I can in regard to this magnificent strategy.

You can probably tell as much as I like Peter's material I'm not a blind follower of his method. I will criticise things that seem contradictory or inconsistent for better or worse. I'm not suggesting for a moment that I have his knowledge and experience but we are all entitled to our opinions.

I assume you have watched his videos?

Welcome - Motivated Money

One day Peter might spot this and give me a serve for spreading a pack of lies.

 

Oh now you tell me - I could have saved $36! (joke).

Thanks for the videos - I didn't realise they were there.

 

Thank you for the continued dedication! This is a wonderful thread and there is so much knowledge packed in here! Would be worth printing off for record keeping.
Find myself going back a few pages to re-read on several of the awesome threads we have in this section of the forum.

Thanks to all the fantastic contributors!