3 takeaway tips from Terry Smith’s latest letter to shareholders

first_img I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement. 3 takeaway tips from Terry Smith’s latest letter to shareholders Based on his track record, Terry Smith is a man worth paying attention to. As of 31 December 2019, Smith’s Fundmsith Equity Fund had achieved an annualised rate of return of 18.2%, compared to the 11.9% achieved by its benchmark.This translates to a cumulative return of a little over 364% for investors since its inception in November 2010. No wonder he’s often to referred to at the ‘UK’s Warren Buffett’. 5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…And if you click here we’ll show you something that could be key to unlocking 5G’s full potential…Like those of the Sage of Omaha, I think Smith’s annual letters to shareholders contain lots of great advice for all long term investors. Here are some of the key takeaways from this year’s reflections.Ignore the unpredictableDespite achieving a total return of 25.6%, Smith said the performance in 2019 had been impacted by the rally in sterling following renewed hope of a breakthrough on Brexit. Considering the majority of Fundsmith’s holding are US-based, this clearly had implications for how the portfolio behaved overall.Smith doesn’t think investors should lose sleep over such things. Instead, he recommended they imagine asking the management teams of those companies the fund owned to identify the top three factors responsible for their success. Things like “strong brands”, “market share” and “product innovation” would likely be mentioned. One thing they probably won’t talk about is currency movements.This way of thinking neatly sits well with the Foolish philosophy that part of being a good investor is learning what you can control and what you can’t. Since no one has any idea where anything related to the economy is going for certain, it’s far better to concentrate on finding great businesses that are worthy of your capital. Value isn’t everythingFundsmith’s investing strategy is simple. Buy great companies, don’t overpay, and then do nothing. Notice, however, there’s no reference to focusing on what’s cheap.Using an example from 2012, Smith suggested we should be wary of listening to anyone who believes that the strong run in stocks, such as those held by Fundsmith, was about to end and a rotation into value was just around the corner. Those taking this advice to heart, he said, would have lost out on all the gains achieved by so-called ‘expensive’ stocks in the years since. Cheap stocks are rarely good businesses, Smith added, because most won’t make good returns on the capital they invest. Moreover, anyone profiting from one would then need to find another. This incurs transaction costs that ultimately impact on performance. Whether you share his aversion to value for its own sake or not, it’s hard to argue against this last point.Keep an eye on liquidityWhile previously reluctant to do so, Smith also gave his thoughts on fellow fund manager Neil Woodford’s fall from grace. Like many others, he identified that Woodford’s woes (and, consequently, those of his investors) were caused by the “lethal combination” of operating an open-ended fund that had a lot of cash invested in unquoted, highly illiquid companies. This is problematic when everyone wants to get their money out at once.Given Smith’s assertion that 57% of his fund could be liquidated in seven days, it seems unlikely his shareholders will ever encounter this scenario.Nevertheless, his decision to mention this within his letter is a good reminder of the need to monitor the actions of those working on your behalf. 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In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations.And right now, we’re giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool. Simply click below to discover how you can take advantage of this. Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge! Paul Summers | Monday, 27th January, 2020 center_img “This Stock Could Be Like Buying Amazon in 1997” Our 6 ‘Best Buys Now’ Shares Image source: Getty Images See all posts by Paul Summers Enter Your Email Address Paul Summers owns shares in Fundsmith Equity Fund. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.last_img read more

Northern SportMod special Wednesday at Southern Iowa

first_imgOSKALOOSA, Iowa – John’s Tree Service and Carter Manufacturing sponsor the $750 to win Karl Chevrolet Northern SportMod special Wednesday night, April 23.Feature distance for the third annual event will be 30 laps with a pit stop at halfway. Drivers and their crews can make any repairs or changes, but can’t touch the front tires, in the allotted time.Wednesday is also opening night for the Mach-1 Sport Compacts and both divisions will be draw/redraw.Also racing will be the IMCA Xtreme Motor Sports Modifieds, IMCA Sunoco Stock Cars and IMCA Sunoco Hobby Stocks.Hot laps are at 7 p.m. and racing starts at 7:30 p.m. There will also be pace truck rides for kids before each feature.last_img read more

Lakers, Steve Nash both cautious and optimistic about health

first_imgThe enthusiasm in Steve Nash’s voice sounded infectious. His smile widened as he spoke. And the Lakers guard appeared relaxed after nearly completing a week of training camp in which he flourished on the court without injuring himself.Nash has spent the past four months in this state, reporting “no hiccups” this past offseason while healing the nerve root irritation in his back and hamstrings that sidelined him last season for all but 15 games. So even if Nash described his past two injury-riddled seasons as a “nightmare,” the Lakers’ 40-year-old point guard seemed as excited as an unproven rookie eager to crack an NBA roster.“Because it’s so tenuous, I never act like I’m ready to go and am past everything,” Nash said in an interview with this newspaper. “I’ve gone through too much to feel that way, but I feel good.” Nash could hardly describe himself the same way a day after saying those words. He missed most of Saturday’s practice after rolling his left ankle on the foot of rookie forward Julius Randle during a conditioning drill. Nash maintained he will practice today. But even if Lakers coach Byron Scott expressed optimism that Nash’s latest injury marks just a “minor setback,” the episode only illustrated the season-long uncertainty about whether Nash can stay healthy.Yet, Nash’s overall outlook has appeared different for one specific reason.Last year, his health had deteriorated so much that he spent most of his summer rehabbing his back and hamstrings with his personal trainer, Rick Celebrini. Nash could not sprint until two weeks before training camp started. This year, Nash reported feeling healthy enough by May to train both without restrictions and without Celebrini’s guidance. Hence, Nash may prolong his NBA career once his $9.8 million contract with the Lakers expires after this season. That decision hinges on a few variables.“My health, enjoyment and effectiveness,” Nash said. “If I have a chance to play, it would have to be here. I’m not going to at this stage move somewhere else for a season and move my kids there.” Nash also plans to stay in Los Angeles whenever he retires. But beyond staying involved as the general manager of the Canadian basketball team and with his film production company, Meathawk, Nash’s post-retirement life sounds uncertain. “Maybe it will take me a year, two years or five years,” Nash said. “The longer I take, the better. Then I’ll be certain with what I want to do instead of rushing into something.” The Lakers have stayed equally cautious about Nash.The Lakers declined to waive Nash this offseason through the stretch provision to maximize cap flexibility. But they also added more depth in case Nash returns to the trainer’s room. The Lakers acquired Jeremy Lin in a trade from Houston. The Lakers paid $1.4 million to the Washington Wizards to secure the rights to their 46th draft pick, using it to select Missouri guard Jordan Clarkson. The Lakers also added veteran NBA guard Ronnie Price.Both Scott and Lakers trainer Gary Vitti have suggested Nash will stay limited with playing time and on back-to-back games even if he stays healthy. “The nerves have calmed down, but they can become inflamed again,” Vitti said in an interview with this newspaper. “The idea is to try to play him, practice him and treat him in a way that he can accomplish the task without lighting up those nerves again.” So far, so good.Both Scott and Kobe Bryant have called Nash playing in training camp like “the old Steve” who won two NBA MVP awards and climbed to third place on the league’s all-time assists list. Nash has bought into Scott’s training camp that has emphasized both conditioning and sitting him at the end of practices. Nash also described Scott’s Princeton-based offense as “less complicated” than the one under Mike Brown, who was fired five games into the 2012-13 season. Even if Nash and Bryant have not played together since March 30, 2013, neither player anticipates much of an adjustment since they will play their natural positions as respective passers and scorers. That role differs to when Bryant last played with Nash as a facilitator, while he became a spot-up shooter. Scott has leaned toward starting Nash partly for that reason. But he may become a reserve, both to preserve his body and accommodate Lin’s growth. “I’ll do whatever is asked and what is best for the team,” Nash said. “I would love to leave the guys with something and see them flourish.”It appears Nash has already made a difference. Beyond Lin soaking up how Nash thrives with superior footwork and pick-and-roll execution, Lin sounded inspired about his rigorous dietary and recovery habits.“To do it for a prolonged period of time is something you have to appreciate,” Lin said. “It’s always hard to stay at the top.”Nash has understood that reality for the past two years, his reunion with former Lakers coach Mike D’Antoni hardly capturing the magic they produced with the Phoenix Suns. “I felt bad for him,” Nash said. “He did a terrific job with the guys that he had. We were always injured and we had new guys together. I don’t know if anyone could have a great season.”So what about Nash’s upcoming season?“If I’m mobile and moving well, I think I can play at a good level,” Nash said. “We’ll see how that is. It’s been so long since I’ve had a good run at it. I’m going to try my best.”center_img Newsroom GuidelinesNews TipsContact UsReport an Errorlast_img read more