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Terry Smith's Investment Philosophy - Episode 501
Terry Smith has added sizable positions to Amazon and Alphabet. Both companies I hold myself in 2020 and 2021 he started to make church and Dwight a core holding. This was definitely one of my favorite episodes today as I personally aligned pretty closely with how he invests, put a lot more focus on buying quality companies.
On today’s episode, Clay Finck discusses the investment philosophies and framework of Terry Smith, who is the founder and CEO of Fundsmith and also known as the Warren Buffett of Great Britain.
Smith started Fundsmith in 2010, and ever since has returned 478% to his investors versus his benchmark returning 256%. He did this using the simple framework of buying good companies, not overpaying, and holding them for the long-term.
IN THIS EPISODE YOU’LL LEARN:
00:00 - Intro
02:12 - Why Terry Smith only seeks to own high-quality companies.
04:52 - How investors can go about determining the quality of a business.
08:01 - How Terry Smith compares the valuation of his portfolio against that of the S&P 500.
15:15 - Why investors must be cognizant of stock-based compensation when valuing a company.
29:28 - Why macroeconomic views and opinions are irrelevant for investors in quality businesses.
46:39 Why stocks are the best long-term investment relative to other asset classes.
53:51 - What Terry Smith’s top US equity holdings are today.
Disclaimer: Slight discrepancies in the timestamps may occur due to podcast platform differences.
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