Apple and Microsoft have alternated as the world's most valuable company. Microsoft recently took the lead in January 2024. We'll explore this rivalry and major events over the past two decades using Companies MarketCap data.
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•Despite having a portfolio of "expensive" stocks in their portfolio, Fundsmith's measurable risk is lower than the market.
Sharpe Ratio:
•Fundsmith: 1,11
•Index: 0,56
•Taking on “less risk” and getting a better return, sounds pretty good.
1. Fundsmith identifies fantastic businesses at fair prices 🏰
•Unlike other funds, Fundsmith never looks for low PE bargains.
•Many of their top holdings have PEs over 30. For example:
- Microsoft
- Novo Nordisk
- L’Oreal
- Estee Lauder
So, how does Terry Smith continue to beat the index year after year?
It is simple, he focuses on:
- Buying great businesses
- Not overpaying for these businesses
- And do nothing
Lets break it down 👇
Fundsmith is a London-based investment firm founded in 2010 by Terry Smith.
The fund has 23.4 Billion GBP under management.
For its size, Fundsmith has outperformed the index by a wide margin, showcasing impressive performance:
Terry Smith is considered the Warren Buffett of Britain
$10.000 invested in his fund in 2010 would be $52.780 today
That's a CAGR of 15.4% vs. ~9.8% from the MSCI World index
Smith has a dead simple strategy that everyone can learn
Let's break it down:
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