The Most Important Thing 4 – Patience and Luck

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  1. Avatar Bryan Matthew says:

    An interesting read again, Mike. I think two points emerge:

    a) the recent COVID-19 crisis spooked a number of UK investors as in early April when the FTSE stood at 5,400 they sold £700m worth of units in the Fundsmith and Lindsell Train equity funds. Following the market hitting the 6,110 figure this month investors poured nearly £3bn of money into equity funds including both of these. Between these dates the market rose over 12%- sitting tight with your investment strategy and avoiding all the noise around you can reap big rewards!

    b) as the article suggests, you need to look under the bonnet of active fund managers and assess why they perform – are they one or several hit lucky wonders or do they have genuine skill? It is noteworthy I think, that the funds that have done consistently well prior to the crisis are still doing that (Fundsmith, Scottish Mortgage, Buffettology, Slater Growth, Guiness Global Equity Income and Threadneedle Global Bond are all still top quartile) that must demonstrate some skill, whilst the dog funds before (M&G Recovery, Invesco High Income, LF (ex Woodford) Equity Income) are still 4th quartile and their managers (or ex managers) are culpable rather than capable!

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The Most Important Thing 4 – Patience and Luck

by Mike Rawson time to read: 4 min
More in Marks
The Most Important Thing 3 – Psychology and Contrarianism

Today's post is our third visit to The Most Important Thing by Howard Marks.

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