Smithson Investment Share Discussion Threads

[wildshot] 02/11/2021 19:53

rvsy2, I'm sure there are many sources including the Fund factsheet however I found out here:

[rvsy2] 02/11/2021 19:46

hector please could you let us know where you saw that info.

[the juggler] 02/11/2021 19:32

One of things I admire about Terry Smith is he is not afraid to review companies that he has previously dismissed. Times change, the world moves on. Adapt or die.

[hectorscrackhouse] 02/11/2021 16:54

Terry has bought Amazon for the main fund!

I can remember his slagging them off at a few meetings. Thin ROCE and margins.

I am sure he knows what he is doing but it does seem a slight departure.

[the juggler] 18/10/2021 12:54

Today it is 3 years since Smithson launched and we cannot complain about an 87% gain in that time.

[hectorscrackhouse] 10/10/2021 09:52

Brief mention in the DT

"For a focus on small companies outside Britain, Mr Morgan tipped the Smithson investment trust, run by the investment firm founded by star manager Terry Smith. “The managers apply Mr Smith’s strategy but focus on the less well researched universe of smaller companies. I am confident it works there as well.”"

[madengland_] 07/10/2021 12:10

A good IT to keep dripping money into and ignore the ups and downs

[bezer] 02/10/2021 21:12

@ ali47fish

Check the news section of the Smithson website. On Friday, Simon Barnard (the Main Fund Manager of Smithson) bought £26K of it for himself. I would say just get in, you will be fine in three years time.

[ali47fish] 02/10/2021 12:25

given the retrace which might persist , is this a good entry point as I am new here

[ali47fish] 02/10/2021 12:23

given the retrace which might persist , is this a good entry point as I am new here

[marksp2011] 30/8/2021 15:07

8 wings for £12.5

Same price as three corn feed free range chickens from the meat market at Leadenhall

[danieldruff2] 17/8/2021 19:19

Sounds like bad news for chickens though!

[bezer] 17/8/2021 19:11

Just to say the Smithson half year report was released on August 9th. If there are any Accountants out there reading this post I would be delighted if one could please have a look at the numbers and say how much money has been raised in profit terms in equity release since launch? If any Accountant could be kind enough to post his/her views, I would be delighted to read them. Thank you.

On a separate note, I hope people find this of interest: an update on the ground regarding the latest Smithson investment, Wingstop. Last Thursday night, my Lodger (a fellow Fundsmith/Smithson Man) went to Wingstop, Gloucester Rd, London SW7. He reported brisk business, the place was packed and that was a Thursday evening..... He paid £12.50 (no drink with that) and brought back 8 rather small but delicious Chicken Wings and some lovely chips. He was kind enough to let me have a Louisiana Rub Wing (as recommended by Simon Bernard in the recent report). Have to say it was damned nice and the chips with sauce were great! We have a local (Isle of dogs) Chicken place which sells a scaled down version of this feast for about £5 including a can of drink. If they are making money (they have been in business for years) then the margins on Wingstop must be "pretty tasty".... Obviously, Gloucester Rd is not exactly poor, however he was impressed with the amount of business they were doing on a Thursday night...... Our conclusion was that the Wingstop product is a good high end Chicken 'n chips product which is expensive and if people are prepared to pay (we think over the odds) then this could be a very interesting investment by Smithson......

[bezer] 28/7/2021 10:10

The size of the fund could be an issue for the future. This is where a future "Smithgrandson" may come about. In the mean time, it seems like just enjoy.......

[bezer] 28/7/2021 10:05

Sorry, misread noting, for nothing.

[bezer] 27/7/2021 18:46

riveerman77: [Hands in the air, respect] Why is it worth nothing when we have already banked the benefits? It has been trading 95% of the time above NAV. If this continues then they will release equity at a profit which increases the NAV which benefits shareholders, regardless of how big the TF is...... Where is there a complaint? If I am wrong, please tell me.....

[riverman77] 27/7/2021 15:57

Worth noting that it does rely on the trust continuing to trade at a premium, and at some point they may need to slow down issuing new issues to prevent the fund getting too big, but I guess enjoy it while it lasts.

[bezer] 27/7/2021 15:27

riverman77: Thank you.

This "Party piece" of Smithson, that is sadly unavailable for the main Fundsmith Equity Fund appears to at least reduce the fees, if not paying for all of them. Call me wrong, but I just love it.......

[riverman77] 26/7/2021 19:57

Just stumbled upon this discussion - if an IT issues shares at a premium then yes it is accretive to NAV so would benefit existing shareholders through a slightly higher NAV. Depending on the level of issuance and the premium this could more than offset the management fee - I don't know much about this fund but there seems to have been a lot of issuance at a healthy premium so I would suspect the this would be the case here. I imagine if you look in the accounts they should provide a breakdown of all this.

[bezer] 26/7/2021 19:19

People:

For anyone interested, I have just been on the phone to a friend of mine who is Chartered Financial Analyst. Trust me - you EARN that qualification and they don't hand them out in Christmas crackers! Both Simon Bernard and Will Morgan (Smithson) hold the CFA. My CFA friend has more brains in his little finger than I have in my entire body.

I explained to my friend the question. He confirms the profits go into the NAV. Thus, they do pay towards the fees in reality through NAV increase. He says that every time he would see the issue of shares he would be happy as the profits go into the NAV and make shareholders richer. As they are issuing loads of new shares with indeed occasional large block listing, because of this phenomenon we may be, 'in reality' paying "negative" fees..... I am happy!

[bezer] 26/7/2021 18:59

Many thanks for the replies

wildshot: We are in agreement over the main Fundsmith Equity Fund structure.

Marksp2011: We are in agreement that there is a "profit" from share issuance in that they are sold at a premium to the market price. Are you able to confirm that this "profit" goes to the NAV? If it does, then surely shareholders benefit every time this phenomenon occurs? It occurs roughly 2-3 times a week, thus should be substantial over a calendar year and is well worth having and at least massages down the fees (that I am happy to pay anyway)..... I would love to know whether I am right or wrong in this matter...... Thanks again.

[wildshot] 26/7/2021 15:35

Hi bezer, I'm not familiar with investment trust accounting to be absolutely sure but I would have thought that the proceeds from issuing new shares would go into the share capital and share premium accounts and no profit as such is made from this. Shares are issued to increase liquidity of an investment trust so there are more shares which helps match more closely to demand and hence reduce the premium. Likewise if shares trade on a significant discount then many investment trusts buy back shares (increasing demand) and hopefully reducing the discount. I hope there is someone with investment trust detailed knowledge who can confirm exactly what is the case.

You are correct in that the fund does not issue shares and does not have a discount/premium. Instead it issues/cancels units to match with the daily flows of funds in or out of the fund.

[lomax99] 26/7/2021 15:32

The fees are optional, if you are not happy paying them then there is nothing to stop you taking your business elsewhere....

[bezer] 26/7/2021 15:14

Many thanks Wildshot:
Yes, it would be great if Smithson could make FTSE 100 status.
Yes, I am aware of the 85% up against the market cap. The following is my view and please correct me if I am wrong:
I hold both the main Fundsmith Fund (which I adore) and Smithson. I understand that fees are controversial to some investors....... Personally, I am totally relaxed about the fees as I am more than happy to pay for the excellent performance that I have enjoyed since I originally invested in the main fund in August 2018 and Smithson on day one.
Now, I believe that I am correct in saying that Smithson can issue equity but not the main Fundsmith Equity Fund. Smithson is regularly issuing new shares at a premium to NAV as the share price seems to spend approximately 95% of the time higher than NAV. The profits from this conveyor belt of equity issue all go into the NAV to the benefit of shareholders, as far as I am aware...... Thus, as the profits from this operation are considerable, are we not effectively having our fees paid for us and more by this process? This is not (cannot be?) the case with the main fund......
If I am talking nonsense, please put me right, but that is the way I see it. Every time they issue more equity at a premium to NAV these extra profits go towards our fees... Comments please! Thanks.