Isn’t Terry’s basic problem that he avoided a sector that he was familiar with, because he thought it was a “value trap”? He was very wrong! BGEO (and European banks generally) have done well rather well since early 2022. But he was proudly telling investors that as a former bank’s analyst, he understood banks extremely well, and that’s why he’d never invest.
Isn’t Terry’s basic problem that he avoided a sector that he was familiar with, because he thought it was a “value trap”? He was very wrong! BGEO (and European banks generally) have done well rather well since early 2022. But he was proudly telling investors that as a former bank’s analyst, he understood banks extremely well, and that’s why he’d never invest.
Isn’t Terry’s basic problem that he avoided a sector that he was familiar with, because he thought it was a “value trap”? He was very wrong! BGEO (and European banks generally) have done well rather well since early 2022. But he was proudly telling investors that as a former bank’s analyst, he understood banks extremely well, and that’s why he’d never invest.
Isn’t Terry’s basic problem that he avoided a sector that he was familiar with, because he thought it was a “value trap”? He was very wrong! BGEO (and European banks generally) have done well rather well since early 2022. But he was proudly telling investors that as a former bank’s analyst, he understood banks extremely well, and that’s why he’d never invest.
Interesting article. My understanding is that Fundsmith has historically owned large-cap, high-quality businesses trading at premium valuations. Those multiples were easier to justify when their moats appeared secure and their growth durable. But at 20x+ earnings, much of the value depends on distant cash flows, so it is unsurprising that the threat of AI-driven competition caused some of these businesses, such as Intuit, to de-rate sharply, even though they may very well turn out to be survivors and even winners when the competitive dynamics find a new equilibrium.
In the course of this disruption, I am surprised Smith did not instead pivot toward other high-quality businesses with less exposure to AI-related disruption, as TCI appears to have done. That approach seems more sensible to me than competing in a momentum trade where faster institutional and retail investors are likely to have the advantage.
Isn’t Terry’s basic problem that he avoided a sector that he was familiar with, because he thought it was a “value trap”? He was very wrong! BGEO (and European banks generally) have done well rather well since early 2022. But he was proudly telling investors that as a former bank’s analyst, he understood banks extremely well, and that’s why he’d never invest.
Isn’t Terry’s basic problem that he avoided a sector that he was familiar with, because he thought it was a “value trap”? He was very wrong! BGEO (and European banks generally) have done well rather well since early 2022. But he was proudly telling investors that as a former bank’s analyst, he understood banks extremely well, and that’s why he’d never invest.
Isn’t Terry’s basic problem that he avoided a sector that he was familiar with, because he thought it was a “value trap”? He was very wrong! BGEO (and European banks generally) have done well rather well since early 2022. But he was proudly telling investors that as a former bank’s analyst, he understood banks extremely well, and that’s why he’d never invest.
Isn’t Terry’s basic problem that he avoided a sector that he was familiar with, because he thought it was a “value trap”? He was very wrong! BGEO (and European banks generally) have done well rather well since early 2022. But he was proudly telling investors that as a former bank’s analyst, he understood banks extremely well, and that’s why he’d never invest.
Interesting article. My understanding is that Fundsmith has historically owned large-cap, high-quality businesses trading at premium valuations. Those multiples were easier to justify when their moats appeared secure and their growth durable. But at 20x+ earnings, much of the value depends on distant cash flows, so it is unsurprising that the threat of AI-driven competition caused some of these businesses, such as Intuit, to de-rate sharply, even though they may very well turn out to be survivors and even winners when the competitive dynamics find a new equilibrium.
In the course of this disruption, I am surprised Smith did not instead pivot toward other high-quality businesses with less exposure to AI-related disruption, as TCI appears to have done. That approach seems more sensible to me than competing in a momentum trade where faster institutional and retail investors are likely to have the advantage.
Having ben a spectator at many West Side Soccer games watching clumps of little kids moving up and down the field, I appreciated the meme stock image.
Have you seen the meme of 3 pro Japanese players against 100 children? It's great
Great story Harvey! I have had some of the same thoughts...
Thanks!