Merchants Share Discussion Threads

[zac0_4] 09/8/2020 17:46

CHC15 - as an example my largest holding by far is the Fundsmith Equity fund. A £10,000 investment made here 5 years ago would have paid out a total of £2,718 in dividends but today your capital has fallen to £7,500! If you had made the same £10,000 investment with Fundsmith and at the end of each year taken capital to the same value as the MRCH annual dividend, you'd have paid yourself the same £2,718 but your capital is now worth £19,399! As the advert says, you do the maths!!!! Good Luck!

[chc15] 09/8/2020 17:35

Agreed, it's just a nonsense to buy income inv trusts that charge high fees and underperform. Reversion to the mean always happens with active mgrs. Buy a good tracker, keep adding and stay the course.

[zac0_4] 09/8/2020 17:23

CHC15 - without exception all of my individual shares and investment trusts that pay dividends have performed terribly. This is one of the worst. Luckily only about 20% of my portfolio sits with dividend paying holdings. The balance I have split across 12 (ish) investment funds. I invest in the accumulation version, not the income version, in all cases. The difference in performance between my funds and my dividend paying holdings is startling. When I feel the time is right all my dividend paying holdings will be sold. From what I can see you enjoy good income at the expense of capital destruction! That makes no sense to me.

[chc15] 09/8/2020 16:57

The more videos I watch of John Bogle, founder of Vanguard, the more convinced I am to sell all my inv trusts in a few years time, and switch all to a 60/40 index strategy.

[chc15] 09/8/2020 16:55

https://www.dailymail.co.uk/money/investing/article-8607677/Will-trusts-bounce-dead-ducks.html

[zac0_4] 08/8/2020 23:05

Well I must admit, as a relative new holder here, I'm not sure where this is heading. Year to date FTSE is down -21% MRCH is down -38%. Over 3 months FTSE has returned +2% and MRCH -5%, and over the last month FTSE is down -2% and MRCH is down -8%. The only conclusion I'm reaching to date is that the trust is simply chasing dividends at the expense of any capital recovery. I expected more!

[superiorshares] 08/8/2020 11:23

tim 3 .. Get your facts right . Cancer kills no less , none smokers than it does smokers .

[superiorshares] 08/8/2020 11:10

Oh and Caradog . You fail to mention how many people who died of Cancer from smoking also consumed hard drugs . All you smoking demonisers put your money elsewhere . Or you will be Sanctimonious hypocrites as well !

[tim 3] 06/8/2020 09:39

Caradog my best friend died in the way you describe at 56 due to smoking.

I do not claim to be an ethical investor but have always been uncomfortable investing in tobacco.

Their whole business relies on them getting people addicted to a product that if they continue to use it will kill around half the people that smoke with horrible diseases.

Thats pretty bad.

[bluemango] 06/8/2020 08:45

#798 Generally in agreement on much of the political points (eg lefties quite happy with 'wacky backy'!)

But disagree with your apparent certainty about div being cut. Possible, but you should not be boldly stating 'will' be.

[mister md] 05/8/2020 08:14

there may be reasons for tobacco stocks performing badly such as longer term decline due to healthier lifestyles, increased taxation etc Then of course the ethical side of things, which in turn could deter potential investors in MRCH. A lot of stocks are at cheap valuations at the moment and I wouldnt have a problem with them switching into some other high yielding opportunities

[bluemango] 04/8/2020 23:52

Tobacco may cause ethical issues for many, but the dispassionate fact is, as investments they provide dependable, reliable (and generally high) yields and are likely to continue to do so. BAT is yielding close to 8% at the current price, with a product that is going to be amongst the last in people's list of things to ditch in hard times. Harsh, but true. I therefore have no issue with Merchants Trust having these in their top 10 holdings. (And I can also understand some may have a problem with this)

Plus, I would not be impressed with a fund manager that chose to ditch a core investment at a price close to its 10 year low.

[tim 3] 04/8/2020 22:37

Yes and get rid of all that tobacco rubbish.

Bat is near the lows again.

[bluemango] 04/8/2020 21:28

#793 Good!

[che7win] 04/8/2020 19:31

BAE now a top 10 holding...

[superiorshares] 01/8/2020 11:29

Goldpig
In answer to your questions
Coronavirus will be with us for at least 4 years if not forever .
If you look at MERS and SARS they were far less effective. Being ex military it suggests to me Covid 19 has been enhanced by Scientists ?
A vaccine is all but guaranteed to arrive by 2021 at the latest. How effective it is and if the majority of people will be willing to take it is another matter.
It is already proven that the markets have become stimulus markets and not stock markets. There is no bounce back in the real economy.
A second wave cant hit because the first hasn't finished yet and it is rampant !
Unemployment has gone through the roof. please check the figures.
The Travel Industry is already in ruin. Please check the figures.
Oil will take years to recover . Listen to people in the know Looney. Buffet all the Airline chiefs etc
All of these issues have not been at the forefront of my investment decisions, Today. They have been at the forefront since the days when 61 cases rapidly rose to 121 in China
All who are too complacent are going to get an incredible shafting !
Beware Folks

[mister md] 31/7/2020 22:24

agree with both of you. I try to hedge a little with gold miner stocks and occasionally short ETFs but with the market already down over 20% you dont want to reduce gains when the market slowly recovers again.

I see Ftse closed at lows today whilst Dow then recovered from over -200 points down to finish up over 100 points

[bluemango] 31/7/2020 16:53

Not wishing to state the obvious, the past is not necessarily the guide to the future. What is performing well currently, could slip back. And, individually, what's performing badly now could look healthier in coming months. And both the above, can happen concurrently!

[zac0_4] 31/7/2020 16:05

Mister MD - even 450p looks a stretch to me at the moment. That's 35% growth from here. I think the point I'm making is that none of my UK based, 5%+ dividend paying shares or trusts, have protected capital during this period. Most of my funds, which don't pay dividends, have. And surely capital protection has to be a number 1 priority irrespective of your overall investment style.

[mister md] 31/7/2020 14:34

The thing is, with FTSE at multi-year lows, if you doubled your MRCH holding at these levels then you would reach break-even on the shareprice at 450p or so, vs start of year and make gains above that as it slowly gets back to the start-of-year price of 550p (when FTSE was at 7500 approx). With dividends as added bonus.

With individual stocks I buy and sell, but with an IT like this I just hold & add.

[zac0_4] 31/7/2020 11:45

Hi bluemango - I've been investing for probably 20+ years and have only just come to the conclusion that investing for income, and investing in single stocks is not for me! Here's some 6 month performance figures that make very poor reading. Single stocks: L&G -32%, SLA -18%, TW -44% (this was sold earlier this year). Income paying investment trusts: MRCH -37%, HHI -27%, HFEL -10%. Investment funds: Fundsmith Equity +6%, Lindsell Train Global Equity +2%, L&G Global Tech +13%. So, my plan, only when the time is right, is to completely move away from individual shares, probably stick with the investment trusts I hold and monitor performance and, without hesitation, continue to top up my investment funds. Funds get a lot of negative press on various discussion boards but I'm a huge fan! Good luck.

[bluemango] 31/7/2020 11:18

Agreed, I guess I'm just suggesting that ITs still have a role and can avoid the catastrophic situation where you're reliant on income and holding individual stocks that suddenly suspend the dividend and the capital also erodes immediately. Yes recovery for MRCH from here could be a long haul but if one believes the income can be more or less sustained and the capital gradually moves upwards too, that's reason enough to stick with it. Great in hindsight for those who moved into cash early in the year but we're faced with the situation now.

"Don't look back, always forward"