TIP526: Quality Investing: Lessons from Terry Smith

<p>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.&nbsp;</p><p>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.</p><p><br></p><p><strong>IN THIS EPISODE YOU’LL LEARN:</strong></p><p>00:00 - Intro</p><p>02:12 - Why Terry Smith only seeks to own high-quality companies.</p><p>04:52 - How investors can go about determining the quality of a business.</p><p>08:01 - How Terry Smith compares the valuation of his portfolio against that of the S&amp;P 500.</p><p>15:15 - Why investors must be cognizant of stock-based compensation when valuing a company.</p><p>29:28 - Why macroeconomic views and opinions are irrelevant for investors in quality businesses.</p><p>46:39 Why stocks are the best long-term investment relative to other asset classes.</p><p>53:51 - What Terry Smith’s top US equity holdings are today.</p><p><em>Disclaimer: Slight discrepancies in the timestamps may occur due to podcast platform differences.</em></p><p><br></p><p><strong>BOOKS AND RESOURCES</strong></p><ul><li>Terry Smith’s <a href="https://www.fundsmith.co.uk/analysis/" rel="noopener noreferrer" target="_blank"><strong>Shareholder Letters</strong></a>.</li><li>Rebecca’s Article on <a href="https://www.theinvestorspodcast.com/newsletter/spoiler-alert/" rel="noopener noreferrer" target="_blank"><strong>Mean Reversion</strong></a>.</li><li>Don’t miss our review of <a href="https://link.chtbl.com/WSB524" rel="noopener noreferrer" target="_blank"><strong>Four Wide Moat Stocks for 2023</strong></a>.</li><li>Check out our takeaways from <a href="https://link.chtbl.com/WSB521" rel="noopener noreferrer" target="_blank"><strong>Warren Buffett's Shareholder Letters</strong></a>.</li><li>Follow Clay on <a href="https://twitte