Please Consider Upgrading to a Paid Subscription (Updated)

Announcement

(This post, first published in January 2024, has been updated as of April 2024.)

What is happening?

We have added a paid subscription tier to our Substack. Most articles are now only accessible in full for paid subscribers, but with signficiant portions still available as preview for free subscribers.

Paid subscriptions are priced at $10 / month and or $110 / year (or local currency equivalents), so you can save $10 by subscribing annually upfront. You can upgrade your subscription here:

Why are we doing this?

To put it simply, we have added the paid tier for validation. The paid option is the equivalent of you buying us a coffee once a month as a token of appreciation for our content. We have been publishing our long-form research free on Substack since last April, and we continue to post bite-sized news and insights on Threads and Twitter. While we are pleased that thousands of you have signed up to our mailing list, this will be more meaningful if it is more than just a free option.

(This is not to say I can’t use more money. In fact we had previously generated tens of thousands of dollars by publishing behind the Seeking Alpha paywall.)

What do you get as a subscriber?

Our Substack primarily consists of investment memos I write for myself as part of our investment process. This is how I manage 80%+ of my net worth, as well as some friends/family capital, which has been my full-time job since 2019. We typically publish 5-10 articles a month. Over time this has built up a library covering 30-50 companies at any one time, including 15-25 we own and track particularly closely.

We have also been publishing a “Select 15” model portfolio of our most preferred stocks, as well as highlights from commentaries by selected institutional investors. We may add other content, depending on subscriber numbers and other feedback.

What this Substack won’t be able to do.

To be clear, this Substack is a by-product of our investment process. My first responsibility is to the friends and family who have entrusted me with capital, and generating returns is far more important to me than adding subscribers. You can count on me to work hard, produce good research and publish it here, but a paid subscription does not come with any preset service level. (Specifically, while the Comments section is open, it is intended as a readers’ forum not a Q&A service.)

And, of course, nothing published here should be taken as financial advice.

Existing clients are upgraded free.

Clients of any of our bespoke products should have already been upgraded to the paid tier free of charge. Please contact us if this has not happened in your case, or if you would like to add more users.

Addendum: Use Cases for This Substack

(This is an extract from the March update of our “Select 15” model portfolio.)

Our investment strategy focuses on making money from owning a small number of high-quality businesses that compound their value over time. Our real-life portfolios closely mirror the “Select 15” model portfolio and, while we trade far more actively day-to-day, most of our trades are tactical exploitations of short-term price moves in the same stocks that we hold long term. Our research focus has therefore been on knowing a small number of sectors but knowing them well, and our published work reflects this focus; our “Select 15” model portfolio likewise only changes infrequently.

These dynamics present a challenge for our Substack proposition, including for this “Top Buys” series. Some of you may rightly question why you will now have to pay to see a model portfolio that can stay unchanged for multiple months, or indeed to read about the same dozens of companies over and over again in our wider research. Unfortunately this is a philosophical challenge for our entire industry, and I can only give you the same answers that Warren Buffett gave:

“You wouldn’t go to a doctor whose pay was totally contingent on how many pills you took.” (The Snowball)

“What witch doctor has ever achieved fame and fortune by simply advising ‘Take two aspirins’?” (1987 Berkshire Hathaway shareholder letter)

We are in the investing business (helping people’s health), not in the media business (prescribing pills and periodically rotating to new exotic ones to justify our fees).

For many readers, our Substack is the equivalent of “two aspirins” – simple, boring and cheap (only $10), but actually what is needed to give you the best outcome. While it may seem counter-intuitive that a low-turnover portfolio of established large- and mid-cap stocks can deliver better returns than portfolios that are constantly populated with new stocks that you had never heard of, the stellar performance of Microsoft and Alphabet (both in our model portfolio) within The Magnificent Seven provides supportive evidence, as do older Buffett/Munger picks like Coca-Cola and Costco.

For professional investors, our Substack has a further use case, which is to enable opportunistic investments into “quality” companies whose share prices have corrected substantially after temporary “glitches” (to use that well-known Terry Smith term). We track a small number of “quality” companies closely over time and, while we can be surprised by occasional “glitches”, we do understand their fundamentals well. Our research thus offers a way for you to get up-to-speed quickly to take advantage of share price corrections after “glitches”, potentially achieving even better returns than we do. (Examples last year included Admiral, which we timed well, as well as Bank of America and RTX, where we were too early but ultimately right.)

Incidentally, in case you have not seen it, I would recommend reading our full transcript of Fundsmith’s 2024 AGM, where Terry Smith talked about many of the same points discussed above. While Terry Smith’s philosophy is not necessarily unique or even original – he himself has described this as a “synthesis” of ideas from people like Cedar Rock’s Andy Brown – he expresses it much better than almost anyone else in the industry. It is not easy to retain clients on a 1.50% annual management fee (on the R Class) when one third of your investment mantra is “do nothing”.

Ends