Technology stocks are difficult to assess but unlikely to collapse, he said One of the most famous fund managers in Europe.
Terry Smith, who was He called it the English Warren BuffettBecause of his investment approach, He wrote a letter to investors The question of whether companies like Facebook should be considered a communications service or a technology company.
The largest investment in a Fundsmith stock fund of £ 23 billion is the technology sector accounting for 28.9%. For the year, the fund’s top five performance contributors are: PayPal PYPL,
+ 5.1%, IDEXX IDXX,
+ 3.1%, Microsoft MSFT,
+ 2.8%, INTUATE INTU,
+ 1.5% and Facebook FB,
The bottom five are: Amadeus AMS,
-1.1% sage sage,
-0.6%, IHG Intercontinental Hotels,
-0.6% Becton Dickinson BDX,
-0.4%, Philip Morris BM,
„Some commentators have attributed our recent supremacy to the performance of technology stocks accompanied by warnings that a“ bubble „is building up in technology stocks like the dot-com bubble, and that it may burst with similar ill effects, Smith wrote.
However, the valuation differs for companies with intangible assets.
„The return on intangible assets is higher because they often need to be funded with equity rather than debt and attract an adequate return. Lenders seem to crave the often bogus collateral of lending against tangible collateral. Intangible assets can also last indefinitely if Well maintained by means of advertising, marketing, innovation and product development, the life of an asset is an important factor in knowing its true returns. ”
Smith, Founder and CEO, jewelerWhat is the common denominator between the following companies? Citing Amadeus, Automatic Data Processing ADP,
Facebook, Intuit, Microsoft, PayPal, Sage, Visa V,
„They are all owned by our fund and all are classified as technology companies,“ he wrote. However, they do include airline reservation systems. Payroll processing; Social media, digital advertising and communication; Accounting and tax software; Operating systems, distributed computing („the cloud“), software development tools, business applications, and video games; And payment processing.
„I would suggest that the secular drivers of these companies have some distinct differences and that their prospects are not subject to one factor – technology. A one-size-fits-all rating doesn’t help much in assessing them.“
Valued at nearly £ 300 million ($ 411 million), Smith established his reputation in Barclays de Zoet Wade and UPS Phillips & Drew, becoming CEO of Collins Stewart, which became the middleman among traders Tullett Prebon before splitting again.
„Böser Kaffee-Nerd. Analyst. Unheilbarer Speckpraktiker. Totaler Twitter-Fan. Typischer Essensliebhaber.“