1/ I really like what Fundsmith does on their letters re: viewing their portfolio on a look through basis inspired by Buffett. Some links below and further discussion in this thread.

https://www.fundsmith.co.uk/docs/default-source/analysis---annual-letters/annual-letter-to-shareholders-2020.pdf?sfvrsn=4 http://mastersinvest.com/newblog/2017/2/19/the-buffett-series-focus-on-the-earnings
The Buffett Series - Look-Through Earnings — Investment Masters Class

The  Buffett Series  explores some of the interesting and timeless investment concepts discussed by Mr. Buffett in his annual Berkshire letters.  Over the years I've found there isn't a lot that Mr....

https://www.fundsmith.co.uk/docs/default-source/analysis---annual-letters/annual-letter-to-shareholders-2020.pdf?sfvrsn=4
2/ I’ve been thinking about how to apply this to my own portfolio. And have reached a few key things I want to convey including:

- Weighted Average Valuation movements
- Look-through Owners cash flow split into Dividends received and retained earnings.
- Capital contributions
3/ Using this, I can create a overview of Total book value growth in my portfolio that accounts for growth in the business - both earnings and dividends, as well as the respective mark-to-market movements.
4/ An example below where it assumes growth of $1 invested. Basically like treating your portfolio as if it were a holding company. You “Look-through” to see how much retained earnings is due to you on a per share basis and multiply that by the amount of shares you have.
5/ I like this method because, you focus on the business earnings and detach yourself from the whims of the market. The sole focus is to grow your net assets over time on an after tax basis including deposits. You can’t benchmark this but it’s what will actually impact your life.
Please I encourage feedback.

I’ll also credit @mastersinvest for referencing the look-through earnings article. It’s a wonderful website they have built.
Another great thread by @10kdiver on the topic https://twitter.com/10kdiver/status/1309903384195948544
You can follow @Tristanwaine.
Tip: mention @twtextapp on a Twitter thread with the keyword “unroll” to get a link to it.

Latest Threads Unrolled:
Those who think consciousness raising & movement building are disconnected, or even a distraction from electoral politics have not paid attention to the history of social change.In this thread, we
Read more
The 2020s will be known as the Remote Work decadeA few predictions of what is likely to emerge[ a thread ] Third Space: Office and Working from Home will
Read more
1/29: Have you ever had a concept explained to you that helps frame complex issues you’ve been wrestling with and opens your eyes to new possibilities? A concept that I
Read more
By continuing to use the site, you are consenting to the use of cookies as explained in our Cookie Policy to improve your experience.