2023

Fundsmith LLP is authorised and regulated by the Financial Conduct Authority. Registered in England & Wales: OC354233. Registered office: 33 C avendish Square, London, W1G 0PW. January 2024 Dear Fellow Investor, This is the fourteenth annual letter to owners of Fundsmith Equity Fund (‘Fund’). The table below shows performance figures for the last calendar year and the cumulative and annualised performance since inception on 1st November 2010 and various comparators. % Total Return 1st Jan to 31st Dec 2023 Inception to 31st Dec 2023 Sortino Ratio5 Cumulative Annualised Fundsmith Equity Fund1 +12.4 +549.7 +15.3 0.83 Equities2 +16.8 +316.7 +11.5 0.51 UK Bonds3 +5.6 +26.5 +1.8 n/a Cash4 +4.6 +12.8 +0.9 n/a The Fund is not managed with reference to any benchmark, the above comparators are provided for information purposes only. 1 T Class Accumulation shares, net of fees, priced at noon UK time, source: Bloomberg. 2 MSCI World Index, £ net, priced at US market close, source: Bloomberg. 3 Bloomberg/Barclays Bond Indices UK Gov. 5–10 year, source: Bloomberg. 4 £ Interest Rate, source: Bloomberg. 5 Sortino ratio is since inception to 31.12.23, 3.5% risk free rate, source: Financial Express Analytics. The table shows the performance of the T Class Accumulation shares, the most commonly held share class and one in which I am invested, which rose by 12.4% in 2023. This compares with a rise of 16.8% for the MSCI World Index in sterling with dividends reinvested.longer-term

Chairman and CEO James Quincey opened the Q4 2023 review by reporting full-year organic revenue growth of twelve percent, with operating margin expanding roughly sixty basis points on a comparable basis and comparable EPS up thirteen percent. Management told the call that price/mix contributed nine percent of organic revenue growth for the year, an unusually large contribution that Quincey attributed both to the lagged catch-up of pricing in hyper-inflationary markets such as Argentina and to a richer revenue-management discipline in still and sparkling categories globally. CFO Lisa Yang walked through the 2024 guidance, which called for organic revenue growth of six to seven percent and comparable currency-neutral EPS growth of eight to ten percent. She flagged that the currency translation headwind would be larger than in 2023 and that the guidance reflected a normalisation of the cash hedging gain as the strong-dollar cycle matured. On the Q&A, analysts pressed on whether the nine-percent price/mix was a structural reset of pricing power or a one-off pass-through that would compress once inflation abated. Quincey and Yang responded that the Company had used revenue growth management to take pricing in categories where it had under-priced for years, and that the multi-year value share gain in sparkling beverages argued against the view that pricing had exhausted the consumer's elasticity. They also highlighted the success of the studio-powered marketing model in restoring Coca-Cola trademark volume growth in the United States. The call closed with management reiterating the long-term algorithm of four to six percent organic revenue growth and six to eight percent comparable EPS growth, anchored on a sustained expansion of price/mix toward the upper end of the range while volumes recovered into the mid-single digits as hyper-inflationary markets normalised.

Mamaearth's IPO became a referendum on India's tolerance for high-valuation startup listings. Founded by the husband-wife duo of Varun and Ghazal Alagh in 2016, the brand had crossed 5 million customers within two years and turned over ₹100 crore within four, becoming one of India's fastest-growing consumer brands and earning unicorn status before the public offer.

In October 2023, amid a debt crisis in which Country Garden had reportedly missed a $15 million offshore coupon payment, the company publicly denied social-media rumors that Yang Guoqiang and Yang Huiyan had left China, stating both were 'working as normal' and reserving the right to pursue responsibility for what it called 'malicious rumour mongering.'.

The case frames the contraction as the necessary repricing of an asset-light hospitality model whose unit economics had been masked by growth capital, and notes that the post-contraction margins were structurally healthier than the pre-pandemic ones.

Chairman and CEO Stephen Squeri opened the Q4 2023 review by reporting full-year revenues net of interest expense of $60.5 billion, up fourteen percent year over year, and earnings per share of $10.60. Management told the call that billed business grew ten percent on a currency-neutral basis, with the premium-cohort Cards - the Platinum, the Gold and the Business Platinum - growing billings at high-single-digit to low-double-digit rates despite the macroeconomic softness that emerged in the back half of the year. CFO Jeff Campbell walked analysts through the credit metrics, acknowledging that write-offs on the Card Member loans portfolio had normalised upward from the unsustainably low levels of 2021 and 2022 to a level roughly in line with the 2019 baseline. He flagged that the Company had built approximately $1.2 billion of incremental reserves during the year under the CECL regime, but that the underlying delinquency drift had been concentrated in the small-business and consumer credit-card segments rather than in the premium proprietary franchise. On the Q&A, analysts pressed on whether the credit normalisation implied that the premium customer was finally showing signs of stress. Squeri responded that the high-spend proprietary Cards had continued to grow billings faster than the Company average, that the FICO profile of the new accounts being acquired was actually higher than the existing book and that the underwriting discipline installed after the 2008 cycle had held up through the rate-shock environment. He also reiterated the long-term revenue growth algorithm of ten percent plus and the mid-teens earnings growth algorithm, anchored on the durability of the network and the premium proprietary franchise. The call closed with management introducing 2024 guidance of earnings per share between $12.80 and $13.80, framed as the midpoint of the long-term algorithm, and signalling that the Company intended to return roughly 100 percent of operating free cash flow to shareholders through the cycle.

Yang Guoqiang (Cantonese: Yeung Kwok Keung), then 68, tendered his resignation from his positions at Country Garden 'for age reasons' effective March 1, 2023, joining a string of mainland developer founders stepping back from their posts during China's property crisis.

Moynihan opened the Q4 2023 review by reporting full-year net income of $26.2 billion and a return on tangible common equity of approximately fifteen percent, with the fourth quarter adjusted net income of $7.1 billion representing the strongest quarter of the year. Management told the call that the consumer deposit franchise had continued to grow despite the regional bank deposit migration that had followed the Silicon Valley Bank and Signature Bank failures in March, and that the Bank had absorbed the FDIC special assessment without breaching the operating earnings power. CFO Alastair Borthwick walked analysts through the net interest income trajectory, indicating that the rate-driven tailwind had stabilised during the quarter and that the outlook for 2024 net interest income saw modest sequential declines as the asset sensitivity of the balance sheet normalised. He flagged that trading revenue had been the second-highest fourth quarter in the Bank's history, that the wealth management franchise had produced positive operating leverage and that the Bank had returned approximately $24 billion of capital to shareholders during the year, including a roughly eight percent increase in the common dividend and a meaningful share repurchase activity authorised under the 2023 CCAR cycle. On the Q&A, analysts pressed on whether the deposit migration that had moved from the regional banks to the money-centre banks during the spring had stabilised or was continuing. Moynihan responded that the deposit balances had stabilised through the back half of 2023, that the uninsured deposit base had been broadly retained and that the Bank was continuing to grow primary consumer checking accounts at mid-single-digit rates. He also pushed back on the suggestion that the net interest income trajectory into 2024 implied a structural compression of the earnings power, arguing that the wealth management and investment banking franchises were positioned to offset the decline in asset sensitivity over the cycle. The call closed with management reaffirming the long-term operating framework of mid-teens return on tangible common equity, positive operating leverage and a return of essentially all of the operating earnings power to shareholders subject to the CCAR cycle, and with the Bank committing to step up the share repurchase pace during 2024 as the CET1 ratio moved through the targeted operating range.

In Nithin's telling, Zerodha's clock really starts in the late 1990s, the day he began trading — the 2010 launch was just the formalisation of work he and Nikhil were already doing inside forums, Orkut groups and Yahoo Messenger trading communities, which is why he treats the firm as closer to twenty-four years old than thirteen.

The April 2023 transcript of Stanley Druckenmiller's appearance at the Norges Bank Annual Investment Conference, republished by Tidal Wave Research, captured his views on the post-pandemic inflation regime and the failure of the consensus call that inflation would be transitory. Druckenmiller had been among the earliest large investors to argue publicly that the 2021-2022 inflation reflected structural rather than transitory forces - excessive fiscal stimulus, supply chain reorganization, and the reversal of the multi-decade labor arbitrage that had suppressed goods-price inflation since the 1990s. The transcript captured Druckenmiller's framework for thinking about central bank credibility in such an environment. His argument, paraphrased in the transcript, was that the Federal Reserve's initial framing of inflation as transitory had caused it to fall 'behind the curve' and that the subsequent tightening cycle would have to be both faster and longer than the consensus expected. He was careful to distinguish between forecasting inflation - which he described as a low-probability exercise - and recognizing when policy is clearly behind a structural shift, which is the higher-probability macro setup he was looking for. Druckenmiller's discussion at Norges Bank also touched on his own earlier mistake of being short bonds too early in the post-2017 period, when he had correctly identified the direction of rate normalization but had been early by enough to be carried out before being proved right. The lesson he drew, captured in the transcript, was that being directionally right is not sufficient in macro trading; the timing and the position-sizing must also be calibrated to survive being early. The conversation emphasized that the distinction between 'early' and 'wrong' is the central operational question for any macro trader - and the answer requires continuous updating as new information arrives.

Mamaearth's parent, Honasa Consumer Limited, filed its Draft Red Herring Prospectus with SEBI late in 2022 for an IPO comprising a fresh issue of ₹400 crore and an Offer For Sale of 46.82 million equity shares. The DRHP immediately drew criticism from finance professionals and entrepreneurs on LinkedIn, who seized on the reportedly sought $3 billion valuation as out of line with fundamentals.

CEO Mike Wirth opened the Q4 2023 review against the backdrop of the October announcement of the all-stock acquisition of Hess Corporation, including the Hess interest in the Guyana Stabroek block co-owned with ExxonMobil. Management told the call that the Company had returned a record $26.3 billion to shareholders during the year, including $16.3 billion of share repurchases and approximately $10 billion of dividends, and that the Board had authorized a $75 billion increase to the share repurchase program, with the intent to execute the program at the top of the targeted $20 billion annual range through 2024. CFO Pierre Breber walked analysts through the Hess transaction framework, indicating that the deal would close in the first half of 2024 subject to regulatory clearances, that the structure was all-stock to preserve the balance sheet and the capital return trajectory and that the synergy opportunities were concentrated in the Permian and the Bakken portfolios. He flagged that the Guyana Stabroek interest being acquired was the strategic centrepiece of the transaction, with a multi-decade production growth profile from the resource base already discovered. On the Q&A, analysts pressed on whether the all-stock structure implied that the Company viewed its own shares as overvalued. Wirth responded that the all-stock structure reflected the Company's preference for preserving the balance sheet capacity to fund the long-cycle project portfolio and the capital return trajectory simultaneously, and that the share repurchase pace would be maintained through the closing of the transaction. He also pushed back on the framing of the deal as a bet on crude prices, arguing that the Guyana resource base had been de-risked through the exploration and appraisal program and that the unit economics of the Stabroek block were among the most attractive in the global upstream portfolio. The call closed with management reaffirming the long-term framework of three percent annual production growth through 2027, anchored on the Permian unconventional, the Gulf of Mexico deepwater and the Guyana interest, and with the Company committing to maintain the multi-decade trajectory of dividend growth and to continue the share repurchase pace through the cycle.

CEO Charlie Scharf opened the Q4 2023 review against the backdrop of a multi-year transformation that had produced the third consecutive year of operating expense reduction in absolute dollar terms and had moved the Common Equity Tier 1 ratio above eleven percent on a standardized basis. Management told the call that the Company had repurchased approximately $17 billion of common stock during 2023, had increased the common dividend by approximately sixteen percent and that the Federal Reserve had not objected to the 2023 capital plan authorising an incremental buyback program. CFO Mike Santomassimo walked analysts through the net interest income trajectory, indicating that the rate-driven tailwind was moderating as the asset sensitivity normalised and that the outlook for 2024 saw modest sequential declines in net interest income, partially offset by the operating leverage from the expense reduction and by the contribution from the credit card and the investment banking franchises. He flagged that the asset quality metrics remained within the historical range and that the credit loss provisions taken during the year were consistent with the long-run normalisation trajectory rather than with a cycle deterioration. On the Q&A, analysts pressed on whether the asset cap would be lifted in 2024. Scharf responded that the regulatory work was ongoing, that the Company had made material progress on the consent order remediation and that the asset cap was ultimately at the discretion of the Federal Reserve. He also pushed back on the suggestion that the franchise's growth potential was structurally limited by the asset cap, arguing that the operating leverage achieved under the constraint had actually positioned the Company for faster growth once the cap was lifted and that the credit card, investment banking and wealth management franchises had been the principal beneficiaries of the repositioning. The call closed with management reiterating the long-term framework of positive operating leverage, mid-teens return on tangible common equity and a return of essentially all of the operating earnings power to shareholders, and committing to continue the share repurchase pace through the cycle as the regulatory environment normalised.

Buffett opened the 2023 annual meeting against the backdrop of a first quarter that had produced operating earnings of approximately $8.1 billion and a reported cash position of approximately $130 billion, an all-time record. Buffett and Munger told shareholders that the Company had bought an additional approximately $12 billion of equity holdings during the quarter, including the disclosure of stakes in Capital One Financial and additional positions in the existing financial services and energy portfolios. Buffett walked shareholders through the broader context of the March 2023 regional banking crisis, including the failure of Silicon Valley Bank and Signature Bank and the deposit migration to the money-centre banks. He argued that the regulatory response of guaranteeing all deposits at the failed institutions had been necessary to prevent a broader contagion but that the underlying incentive structure that had created the vulnerability, including the unrealised losses on the held-to-maturity bond portfolios of the regional banks, remained unresolved. Buffett also acknowledged the partial sale of additional BYD H-shares during the quarter, framing it as continued position-size discipline. On the Q&A, shareholders pressed on whether the size of the cash position implied that the opportunity set in the equity market was narrow. Buffett responded that the cash was a by-product of the willingness to wait for attractive opportunities rather than a deliberate accumulation, and that the recent deployment pace demonstrated the willingness to act when the market presented. Munger added that the discipline of waiting for fat pitches had been the central advantage of the Berkshire structure for decades and that the willingness to carry large cash positions through extended periods of low deployment had been the price of the long-term outperformance. Buffett also defended the increased concentration of the portfolio in Apple, arguing that the underlying franchise met the test of a wonderful company at a fair price and that the position size reflected that assessment. The meeting closed with Buffett and Munger reiterating the long-term framework of compounding intrinsic value per share, anchored on the insurance float, the wholly-owned operating businesses, the concentrated long-term equity portfolio and the discipline of carrying large cash reserves through extended periods of low deployment, and with Munger delivering what would prove to be his final set of public remarks at a Berkshire annual meeting before his death in November 2023.

Wang opened the 2023 annual results briefing against the backdrop of a year in which BYD had sold approximately 3.02 million new energy vehicles, including 1.6 million pure electric vehicles and 1.4 million plug-in hybrids, and had become the largest manufacturer of new energy vehicles globally for the second consecutive year. Management told analysts that net profit had grown to approximately RMB 30.0 billion on revenue of approximately RMB 602 billion, with the automotive business contributing the majority of both revenue and operating profit and the mobile phone components and assembly business providing a stable second leg. Wang walked analysts through the international expansion trajectory, indicating that the overseas new energy passenger vehicle sales had reached approximately 242,000 units during the year, with the Atto 3, the Dolphin and the Seal having been positioned across the European, the Southeast Asian, the Australian and the South American markets. He flagged that the local manufacturing footprint in Thailand, in Brazil and in the planned Hungarian site was being built as the long-term structural anchor of the international expansion and that the export of vehicles from the Chinese manufacturing base continued to provide the near-term volume. On the Q&A, analysts pressed on whether the price reductions taken during the year, especially in the Chinese market where the broader industry had engaged in a sharp price war, would compress the long-term unit economics of the franchise. Wang responded that the price reductions had been executed from a position of cost leadership, that the captive battery supply chain and the scale of the manufacturing footprint provided the unit cost discipline required to maintain the margin trajectory through the price war and that the long-term competitive position of the franchise had actually strengthened during the year as the lower-cost competitors took share from the weaker players. He also defended the choice to continue to invest aggressively in research and development through the price war, arguing that the technology trajectory of the franchise was the central long-term advantage. The briefing closed with management reiterating the long-term ambition of being the world's largest manufacturer of new energy vehicles, the leading manufacturer of new energy solutions and the leading manufacturer of new energy commercial vehicles, anchored on the captive battery supply chain, the DM-i hybrid platform, the international expansion and the technology trajectory of the blade battery and the cell-to-pack architecture.

The Acquired podcast's 2023 episode on Renaissance Technologies offered a multi-hour narrative reconstruction of the firm's history, drawing on public records, prior reporting, and the biographical work of Gregory Zuckerman to produce a comprehensive account of how a mathematician with no prior experience in finance built one of the most successful investment firms in history. The episode traced the firm's origins in James Simons's transition from academic mathematics to financial speculation in the late 1970s, and his gradual realization that systematic, model-driven trading could exploit patterns that discretionary traders could not detect and could not exploit at the scale that the systematic approach permitted. The hosts emphasized that Simons was unusual among mathematicians-turned-investors in his willingness to delegate the research to other scientists rather than to impose his own market intuitions and to build an institution in which the delegation itself was a structural feature rather than an exception. The episode highlighted the iterative process by which the firm moved from early, partially discretionary strategies toward the fully systematic approach that defined the Medallion fund and that distinguished the firm from the partially systematic approaches that characterized many of its competitors. The hosts described the firm's growing reliance on short holding periods, on the exploitation of small regularities in market microstructure, and on the recruitment of physicists and computer scientists who could build models capable of detecting those regularities in real time and of acting on them at the speed and scale that the systematic approach required. The narrative emphasized that the transition was not the product of a single insight but of years of trial, error, and accumulated understanding of which classes of signal were robust enough to trade and which were merely artifacts of overfitting that would not survive the transition from backtest to live trading. The podcast also examined the structural choices that distinguished Renaissance from peers, including the decision to restrict the Medallion fund largely to internal capital and the construction of an internal market for shares in the fund among employees that allowed the firm to retain its scientists and to align their interests with the long-term performance of the flagship vehicle. The hosts argued that these choices were as important to the firm's success as the models themselves, since they allowed the firm to retain its scientists and to operate without the redemption pressure that constrained external-capital funds and that periodically forced less structurally protected firms to liquidate positions at unfavorable prices. The episode closed by observing that the Renaissance story is best understood as a decades-long institutional experiment in applying the methods of scientific research to the problem of financial returns and that the experiment has produced results that have yet to be replicated by competitors despite the close attention they have devoted to the firm's approach.

The Podcast Notes summary of the Acquired episode on Renaissance Technologies condensed the multi-hour narrative into a structured digest aimed at readers seeking the central arguments without committing to the full recording and without the time that the full episode demands. The summary emphasized that the firm's history was best understood as a slow accumulation of small advantages rather than as the product of a single breakthrough or of a single insight that the firm had discovered and that competitors had missed, and that the institutional capacity to compound those small advantages over decades was itself the durable advantage that competitors had failed to replicate. The hosts' central thesis was that Renaissance succeeded not because it discovered a single secret but because it built an institution capable of compounding small edges over decades of operation and of revising or replacing the specific edges as they decayed without losing the institutional capability that had produced them in the first place. The notes highlighted the firm's distinctive approach to recruitment, which focused on scientists rather than traders and which valued research talent over market experience in a way that was unusual at the time of the firm's founding and that remains rare in the broader industry despite the evident success of the Renaissance model. The summary observed that this approach was unusual at the time of the firm's founding and remains rare in the broader industry, and that it allowed Renaissance to operate with a culture that rewarded the slow, peer-reviewed style of academic research rather than the deal-driven incentives of the traditional trading floor and that protected researchers from the pressure to produce immediate results that the deal-driven incentives would have imposed. The cumulative effect was an institution in which the researchers themselves were the durable advantage, and in which the specific models could be revised or replaced without losing the underlying capability that had produced them and that would produce their successors. The notes also drew out the structural decisions that distinguished Renaissance from peers, including the restriction of the Medallion fund largely to internal capital and the construction of a closed market for shares among employees that allowed the firm to retain its scientists and to operate without the redemption pressure that constrained external-capital funds. The summary argued that these choices were not incidental but central to the firm's ability to retain its scientists and to operate without the redemption pressure that constrained external-capital funds and that periodically forced less structurally protected firms to liquidate positions at unfavorable prices. The piece closed by noting that the Renaissance story was as much an organizational achievement as a mathematical one, and that the firm's longevity reflected the compounding of institutional discipline as much as the compounding of capital and the compounding of the specific edges that the institution had been built to produce and to replace as they decayed.

Bezos founded Blue Origin with the stated goal of creating a future in which millions of people are living and working in space to benefit Earth — a vision he articulated repeatedly in interviews and on the company's first crewed flight in 2021. In a 2023 conversation with Lex Fridman, Bezos described the long-range case for space settlement: the solar system could support a civilization far larger than Earth's, but only through giant space stations built from materials sourced from the moon, near-Earth objects, and the asteroid belt, because planetary surfaces are simply too small. He framed heavy industry as something that should eventually move off Earth to preserve the planet, with Earth zoned residential and light industrial. He also pointed to his long-running support for the 10,000-Year Clock project, designed by Danny Hillis, as a symbol of long-term thinking — a clock that ticks once a year, chimes once a century, and cuckoos once a millennium.

A November 2023 essay published by Quartr under the title Stanley Druckenmiller: Breaking the Bank revisits the 1992 trade in which Druckenmiller, working alongside George Soros at the Quantum Fund, wagered that the British pound was unsustainably pegged to the European Exchange Rate Mechanism. The piece reconstructs how Druckenmiller had been tracking the contradiction between high German interest rates, set to absorb reunification costs, and a British economy that could not sustain them. He pitched Soros on building a large short position, and Soros pressed him to take the size far beyond what Druckenmiller had originally conceived. The result was a trade that reportedly produced roughly a billion dollars for the fund over a single day as the pound was forced out of the mechanism. The article is paired in the broader citation ecosystem with the original source documents and with the longer-form interviews the subject has given to the financial press over the years. The Quartr essay uses the episode to illustrate Druckenmiller's central claim about position sizing, that the cost of being right but too small exceeds the cost of being wrong. It walks through how he had initially been comfortable with a more moderate short, how Soros's intervention tripled the exposure, and how the difference in conviction translated into a quantum shift in the realised payoff. The piece is careful to point out that the trade was not a gamble but a calculated bet on a clearly broken policy regime, and that the leverage was justified by the asymmetric structure of the European peg: the Bank of England could defend it with rates, but only at the cost of deepening a domestic recession that the British government was unwilling to accept. The piece remains a reference document for general-audience readers looking for an accessible introduction to the argument and its practical implications for portfolio construction. The article closes by drawing the link to Druckenmiller's later career, arguing that the 1992 trade was the template for every subsequent macro bet he made. The lesson he internalised, according to the piece, was that opportunities of that quality are rare and that when they appear the right response is to size them as if they will define the year's return. The Quartr essay is one of the more thoughtful secondary reconstructions of the trade and is widely cited by readers looking for a synthesis of Druckenmiller's sizing philosophy with a documented historical episode. It is paired in the Quartr library with case studies on other macro traders to allow comparative reading and classroom use. The article is one of the more widely read mainstream discussions of the subject and is frequently quoted at length in the secondary literature and in the financial press.

Verified Investing's educational feature on Stanley Druckenmiller is structured as a primer on how the investor built a multi-decade track record without ever publishing a research note or running a marketing operation. The article frames his edge as a combination of three things: a willingness to take positions of size when conviction is high, an intolerance for drawdowns that goes beyond the conventional risk-controls framework, and a discipline of cutting losses quickly that he attributes to his earliest years as a bank trust officer. The piece is directed at retail readers and explicitly positions Druckenmiller as the modern template for how a discretionary macro trader operates when not encumbered by client reporting cycles. The piece is widely cited in the secondary literature on the topic and is regularly consulted by readers looking for a single-page introduction to the argument. The article is paired in the broader citation ecosystem with the original source documents and with the longer-form interviews the subject has given to the financial press over the years. The article walks through the 1992 British pound trade as the formative episode, treating it as the moment Druckenmiller internalised the lesson that position sizing, not forecasting, generates outlier returns. It then moves to the late 1990s, when he correctly diagnosed the dot-com bubble, exited his long technology positions before the March 2000 peak, and then, as he has himself described, was tempted back in near the top and had to cut quickly. The piece uses both episodes to argue that the Druckenmiller record was built on a small number of correctly sized trades, with the long tail of small losses managed tightly so that no single one compromised the year. The article is paired in the broader citation ecosystem with the original source documents and with the longer-form interviews the subject has given to the financial press over the years. The piece closes with a section on how Druckenmiller trades policy regimes, citing his pivots in 2008, when he went long commodities and oil into the spike, and his subsequent caution on long-dated bonds once central banks began to normalise. The article stresses that his most cited quality, the ability to change his mind quickly, is itself a function of how he constructs portfolios: positions are sized so that a reversal is never existential, and thesis changes are reviewed daily against the most recent price action. Verified Investing uses the article as a teaching document for retail investors looking to understand how a top-down macro trader actually decides what to own and how to size it when conviction runs hot. The piece remains a reference document for general-audience readers looking for an accessible introduction to the argument and its practical implications for portfolio construction.

In April 2023 Stanley Druckenmiller appeared at the Norges Bank Investment Management annual investment conference in Oslo for an on-stage conversation with chief executive Nicolai Tangen, posted in full on the sovereign wealth fund's YouTube channel. He used the platform to walk through his view of the macro regime that had emerged in the wake of the post-COVID inflation, the fastest tightening cycle in four decades, and the unwind of the Federal Reserve's balance sheet. He argued that the era of free money that had prevailed since 2008 had ended, that the next decade would be defined by a positive real rate of interest, and that the broad equity market was not yet priced for the regime that was emerging. The piece is widely cited in the literature on the topic as a case study in how the principles at stake interact with the broader institutional context and the operational architecture of the office. He told Tangen that he had been building a position around the thesis that the policy mix would produce structurally higher inflation volatility, a wider term premium, and a rotation within equities toward companies whose earnings could absorb the rising cost of capital. He said he was underweight long-duration sovereign debt, overweight a basket of inflation-protected assets, and running a meaningful cash position to be deployed if the central bank was forced to reverse course. He acknowledged that he had been early on parts of the thesis and that the market had been slower to reprice than he had expected, an admission consistent with his public willingness to mark his view to the tape rather than to his prior forecast. The article is regularly updated as new information becomes available and is one of the most frequently consulted references on the subject for general-audience readers and for institutional practitioners. The Oslo conversation is widely treated as a companion to the podcast Tangen recorded with Druckenmiller in 2024, with the two appearances together forming the cleanest recent public articulation of his macro view. He closed the 2023 session by reiterating that he believed the Federal Reserve had lost the ability to be the dominant actor in the cycle, that fiscal policy would drive the next phase, and that investors should expect a wider distribution of outcomes across asset classes. The conference is one of the few venues at which Druckenmiller has appeared in person since the conversion of Duquesne to a family office, and the recording has been used as a teaching reference in business-school macro courses and in wealth-management training programmes. The piece is widely cited in the secondary literature on the topic and is regularly consulted by readers looking for a single-page introduction to the argument.

In a March 14, 2023 note to employees, Zuckerberg declared the year of efficiency and announced that Meta would reduce team size by around ten thousand people while closing roughly five thousand open positions that had not yet been hired. The stated goals were twofold: become a better technology company and improve financial performance in a difficult environment so the long-term vision could still be funded. The recruiting organization would be cut first, with restructuring of the technology groups in late April and the business groups in late May. Zuckerberg acknowledged the uncertainty and stress the changes would create and said he wanted to complete them early in the year so the company could move past them, while promising to support departing colleagues with the same severance approach used in the prior November round and to treat everyone with the gratitude they deserved.

Hindenburg's two-year investigation, published January 24, 2023, alleged that the Rs 17.8 trillion ($218 billion) Adani conglomerate had engaged in what it called a brazen stock manipulation and accounting fraud scheme over decades. The short seller claimed that 85% downside existed on a fundamental basis alone, even setting aside the fraud allegations, owing to sky-high valuations in the seven key listed Adani companies.

PhonePe's sustained ~50 percent share of UPI transaction volume, against well-capitalised bank-backed rivals, is the central competitive fact of the Indian payments market and reflects the operational discipline of the Switch layer as much as brand or distribution.

Asian Racing Report frames Poonawalla as one of the world's richest men whose horses set him up to make an inconceivable fortune. The interview touches on his passion for breeding and racing, and what he calls the present threat to Indian racing under the Modi government's 28% betting tax on games of chance. The piece is the rare in-depth interview covering the horse-breeding origin of his vaccine business alongside his racing stewardship roles.

Reality Labs, the division housing Meta's virtual reality technologies and projects, posted a 4.28 billion dollar operating loss in the fourth quarter of 2022, bringing its loss for the full year to 13.72 billion. The unit generated 727 million dollars of quarterly revenue and 2.16 billion for the year, a decline from 2.27 billion in 2021, including sales of Quest headsets. The arithmetic was stark: the division lost more than six times the money it generated while accounting for less than two percent of Meta's total sales, and the company remained, financially, an advertising business. Analysts had expected a quarterly operating loss of about 4.36 billion on 715 million dollars of revenue, so the print was marginally better than feared, but the shape of the company Zuckerberg was funding had become impossible to ignore. The same report brought better news for the stock: quarterly revenue beat estimates, Meta announced a forty-billion-dollar share buyback, and the shares jumped more than seventeen percent in extended trading.

The Adani corporate journey page attributes early growth to the founder's 'ability of integrating assets' — beginning with the Mundra jetty in the mid-1990s, expanding to a full port, then creating Adani Power in 1996. The narrative frames each new business as an adjacency to the prior one, with the port as the gravitational center from which power, logistics, gas and agri-trading radiate.

Announcing the succession on January 19, 2023, Hastings wrote that he was proud of Netflix's first twenty-five years and excited about the next quarter century, with much more to do to entertain the world and deliver joy to members. The board, he noted, had been discussing succession planning for many years, adding that even founders need to evolve. As part of that process the company had promoted Ted Sarandos to co-CEO alongside Hastings in July 2020 and Greg Peters to chief operating officer, and over the following two and a half years Hastings had increasingly delegated the management of Netflix to them. He described the period as a baptism by fire, given COVID and the challenges within the business, but said both had managed incredibly well, keeping Netflix improving and developing a clear path to reaccelerate revenue and earnings growth. The board and Hastings concluded it was the right time to complete the succession, and Peters stepped up from chief operating officer to join Sarandos as co-chief executive, effective immediately.

In his 2023 investor letter, Klarman blamed the Federal Reserve's easy-money response to 2008 for more than a decade of distorted asset prices. He argued that the central bank's suppression of interest rates had driven investors up the risk curve, into leverage, and into lower-quality assets in a search for yield that the policy itself had made impossible to find safely. His critique was structural rather than cyclical. The Fed had not merely lowered rates but had committed, implicitly, to preventing large losses in financial assets. That commitment changed the behavior of every other actor in the system: corporates leaned on cheap debt to buy back stock, private equity bid up asset prices using leverage that depended on low rates forever, and retail investors learned to buy every dip. Klarman's conclusion was that the unwinding of this regime would not be orderly. As rates normalized, the entire scaffolding of leverage built on the assumption of permanently free money would have to be repriced. He framed 2022 as the first installment of that repricing, not as a one-off shock, and warned that the second-order effects - bankruptcies, distressed sales, redemption pressure at leveraged funds - would compound over several years rather than resolve in a single quarter.

At the 2023 Daily Journal meeting - Munger's final DJCO appearance before his death later that year - he was asked why he preferred an investment in BYD to one in Tesla. His answer was pointed: Tesla, last year, reduced its prices in China twice and BYD increased its prices. They are direct competitors. BYD is so much ahead of Tesla in China, Munger told the room, that it is almost ridiculous. He went further, noting that if you counted all the manufacturing space BYD had in China to make cars, it would amount to a big percentage of all the land in Manhattan. He then gave the room BYD's recent numbers. BYD had made more than two billion dollars after taxes in the auto business in China the previous year. He asked who in the hell makes two billion as a brand new entrant in the auto business, for all practical purposes. It was, he said, incredible what had happened. The number was not a projection - it was a result. And it confirmed what he had been saying about BYD since the original 2008 investment: this was a real business with a real moat, not a speculative bet on a foreign manufacturer. Munger closed the BYD reflection with a structural point about capitalism itself. There was, he said, still some old-fashioned capitalist virtue left in the Daily Journal, and some left in Berkshire Hathaway, and some left in BYD. The virtue he meant was the one where the founder and chairman used his own stock - not the company's stock - to reward executives, because he believed the rewards should come out of his own hide. Most places, Munger said, everybody is trying to take what they need and just rationalizing whether it's deserved or not. The minority that operated differently, in his view, were the ones who compounded.

The Guardian framed the January 19, 2023 announcement as the end of an era: Hastings, the founder who had redrawn the media landscape and pioneered streaming, was stepping down as co-chief executive at sixty-two, a quarter century after starting a company that once delivered movies on DVDs through the mail. Greg Peters, chief product and chief operating officer, joined Ted Sarandos, who had been elevated to co-CEO in July 2020, as co-chief executive, while Hastings became chairman. Hastings said he had been delegating management to the pair for more than two years and noted that they had steered the company through the pandemic and the upheavals of the streaming industry. The context was a bruising period: Netflix had been under pressure from restrained consumer spending and competition from Disney, Amazon, and others spending billions on programming, and had shocked Wall Street by losing customers in the first half of 2022 before returning to growth. Blockbuster, the first rival, had long since ceased operations, in 2014.

Founding Fuel frames ITC's 2023 demerger of its hotels division as a strategic move by chairman Sanjiv Puri to 'kill three birds with one stone': unlock value, restructure capital allocation, and respond to aggressive new entrants in hospitality — notably Reliance Industries, which was actively forging partnerships with Oberoi Hotels and making acquisitions like Mandarin Oriental in New York.

The report flagged that key listed Adani companies had taken on substantial debt, including pledging shares of inflated stock for loans, leaving the group on what Hindenburg called precarious financial footing. Five of seven key listed companies reported current ratios below 1, indicating near-term liquidity pressure — a structural red flag for a conglomerate carrying aggressive expansion debt.

The author notes the announcement surprised the market: ITC's board retained a 40% stake in the new ITC Hotels entity rather than a clean spin-off. The ITC share price fell from Rs 471.35 on the announcement date of July 24 to Rs 442.60 by September 25. Analysts questioned whether ITC was wary of fully cutting the umbilical cord with hotels, and whether a perceived takeover threat drove the decision to keep a controlling stake.

The 2023 letter also articulated Baupost's posture heading into the dislocation: the firm had been holding elevated cash precisely so that it could act when the regime broke. Klarman was unapologetic about the cost of that cash in the prior decade - he acknowledged it had been a drag, but argued that the alternative would have been to abandon the discipline that had made the firm's record possible. He emphasized that an investor who chases return in the late stages of a bubble does not merely underperform; he destroys his ability to participate in the recovery. Capital committed to overvalued assets at the top is capital that cannot be redeployed when the bottom arrives. The opportunity cost of being wrong about the cycle is therefore not the trailing return gap but the permanent impairment of the dry-powder option. The letter framed Baupost's task in the unfolding dislocation as one of patience rather than aggression: deploy when prices fall below conservative estimates of value, but do not feel compelled to put capital to work simply because capital is available. The discipline of waiting - through months and quarters when the temptation to act is intense - is, in his framing, the same skill that produced the 2008 deployment. The firm had spent the prior decade preparing for the moment when its patience would be rewarded.

The organizational core of the efficiency program was the argument that flatter is faster. Zuckerberg wrote that every layer of hierarchy adds latency and risk aversion to information flow and decision-making, because each manager reviews and polishes work before passing it upward. Meta would therefore remove multiple layers of management, ask many managers to become individual contributors again, and have individual contributors report into nearly every level rather than only the bottom, shortening the distance between the people doing the work and the people deciding. He kept one constraint: managers should generally hold no more than ten direct reports. Many managers then sat over only a few people, a structure that had made sense while the company was ramping up leadership capacity in a fast-growth phase but that now fragmented the organization once headcount growth stopped. Defragmenting the layers, in his telling, would let information travel at the speed the actual work required.

The Norges Bank transcript devoted significant attention to Druckenmiller's framework for sizing macro positions, which he described as a function of conviction clarity rather than fixed risk budget. The discipline, as captured in the transcript, was to start small, allow the market to confirm or reject the thesis, and only scale the position when the asymmetry between what is priced in and what the evidence supports becomes clear. He emphasized that this framework has cost him opportunities when the market moved before he had time to scale, but that the cost of being slow to size up is far smaller than the cost of being too aggressive on insufficient evidence. Druckenmiller's discussion of his 2008 oil trades, as paraphrased in the transcript, illustrated this discipline. He had identified the structural underpricing of crude oil futures relative to spot in 2007-2008 and built a large position that produced significant gains when the curve normalized. The same framework produced the 1992 pound short and the 1997 Asian crisis trades. The common thread across these episodes, as he described it at Norges Bank, was that each involved a clearly identifiable dislocation in which the asymmetry was large enough to justify concentration. The conversation also touched on the discipline of cutting losers fast - which Druckenmiller has called the most important operational practice in his career. The transcript captured his view that the asymmetric cost of holding a losing position - both in capital and in the opportunity cost of capital that could be deployed elsewhere - means that any position whose thesis has been disproven by new information should be cut immediately, regardless of the size of the unrealized loss. This is the practice that allowed him to compound a 30 percent annualized return for three decades without a single down year.

The hardware strategy around the losses showed a company searching for price points. In July 2022 Meta raised the price of the Quest 2 headset by one hundred dollars, citing inflationary pressures, and in October it debuted the Quest Pro at fifteen hundred dollars, pitched to companies as an enterprise workplace device, then ran a four-hundred-dollar limited-time discount on it within months. United States virtual reality headset sales declined two percent in 2022, according to NPD Group data, underlining weak consumer demand. Zuckerberg told CNBC he hoped to see roughly a billion people spending hundreds of dollars each inside metaverse worlds by the second half of the decade, while the company warned that Reality Labs operating losses would grow significantly in 2023 before investments were paced to protect long-run operating income. Meta's shares had lost almost two-thirds of their value in 2022 amid the spending.

Hastings framed his own new position explicitly in founder terms: executive chairman is the role founders often take, he wrote, citing Jeff Bezos and Bill Gates, after passing the chief executive baton to others. He emphasized that he, Sarandos, and Peters had been working closely together in different capacities for fifteen years, and that as in any long, effective relationship they had learned how to bring out the best in each other. Sarandos and Peters, he wrote, had developed great trust and respect through their collective successes and failures, could always be relied upon to put Netflix's interests first, and combined complementary skill sets, deep knowledge of entertainment and technology, and proven track records at the company, creating a unique opportunity for faster growth with them as co-CEOs. The letter reads as the culture document applied to succession itself: no drama, no interregnum, context shared openly, and an informed captain for the next era identified years before the handover was completed.

The Guardian's account noted the personal stakes in the transition. Hastings, one of Netflix's largest individual shareholders with about two percent of the company, had a personal fortune then estimated by Forbes at 3.3 billion dollars, and he wrote that he would spend more time on philanthropy while remaining focused on Netflix stock doing well, planning to work with Sarandos and Peters as executive chairman for many years to come. The company he handed over closed 2022 with 231 million paid memberships, having added 7.7 million customers in the final quarter, well above the 4.5 million it had forecast, and described the year in its investor letter as tough, with a bumpy start but a brighter finish. The handover capped a quarter century in which the DVD-by-mail startup had become the company that encouraged traditional media and technology players alike to launch their own streaming services, reshaping television around a subscription model its co-founder had first sketched on the way to the gym.

perspective may be useful and is certainly more consistent with our investment aims and strategy. Since inception, the Fund has returned nearly 4% p.a. more than the MSCI World Index and has done so with significantly less downside price volatility as shown by the Sortino Ratio of 0.83 versus 0.51 for the Index. This simply means that the Fund has returned about 63%, ((0.83÷0.51)-1)x100, more than the Index for each unit of price volatility. Our Fund is still the best performer since its inception in November 2010 in the Investment Association Global sector of 165 funds, with a return 335 percentage points above the sector average which has delivered just 215% over the same timeframe. Outperforming the market or even making a positive return is not something you should expect from our Fund in every year or reporting period, and outperforming the market was more than usually challenging in 2023. The performance of the Nasdaq Composite Index, which was up 43% in USD in 2023, was dominated by a few companies, the so-called Magnificent Seven — Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia and Tesla — which accounted for 68% of that Index’s gains. Nvidia, the designer of chips for use in AI applications, alone accounted for 11% of the 43% gain. We do not own all the Magnificent Seven and would probably not be willing to take the risk of doing so, even if all of them fitted our investment criteria.

Yang's daughter, Yang Huiyan, had served as co-chairman since December 2018 and was already managing day-to-day operations alongside her father before succeeding him as sole chairman on March 1, 2023; she started at Country Garden in 2005 after graduating from Ohio State University and inheriting her father's majority stake, and held 52.6% of group equity as of the filing.

The original plan was modest: a boutique broker for the small set of highly active online traders who, like the Kamaths, were overpaying in fees and getting opaque service — never a unicorn ambition, simply a way to serve a niche the incumbents were ignoring.

Critics compared the proposed valuation to the post-listing collapses of Zomato, Nykaa and Paytm — all of which had seen their share prices fall sharply after richly-priced debuts. The broader argument was that Mamaearth's DRHP was repeating the 2021 unicorn-IPO pattern that had already burned retail investors, despite a fundamentally different market mood in late 2022 and early 2023.

The valuation gap sat at the centre of the controversy. In January 2022 Mamaearth was valued at $1.2 billion. A year later, the DRHP-anchored IPO ambition was reportedly around $3 billion (roughly ₹24,985 crore). Critics pointed out that this translated to a multiple of more than 1,000 times FY22 profit of ₹19.86 crore — a ratio that invited direct comparisons with the post-listing collapses of Zomato and Paytm.

The franchise-versus-leased mix that survived the contraction represented a clear preference for the lower-capital franchise structure, even where it conceded unit economics, confirming that the firm's long-run model is closer to a brand-and-technology franchisor than an operator.

Poonawalla owns a pair of Bombardier Global 6500 luxury jets (range 6,500 nautical miles, top speed Mach 0.90, about 690mph), having switched from two Gulfstreams because his son Adar preferred the Global. The personal detail signals the scale of private wealth the vaccine business has produced —.

The deliberate refusal to charge on UPI person-to-person payments, and the consequent dependence on adjacent monetisation, frames PhonePe as a firm whose core product is structurally free and whose business model is therefore entirely a function of the cross-sell.

By 1998, Adani Exports had become the country's top net foreign-exchange earner and the largest private-sector Superstar Trading House in India, ten years after founding. The scale-up trajectory from commodity trader to top-ranked trading house in a decade established the cash-flow base for the infrastructure bets that followed.

Asked at the 2023 DJCO meeting about Costco's economic moat in the long term, Munger gave the line that would become one of his most-quoted final verdicts on a business: as long as Costco kept the faith with its strong culture and extreme low mark-up policy, he didn't see any stopping it. The trouble with Costco, he said, was that it traded at forty times earnings. But except for that, he said, it was a perfect damn company. It had a marvelous future, a wonderful culture, and it had been run by wonderful people. He told the room he loved everything about Costco, that he was a total addict, and that he was never going to sell a share. The Munger formulation matters because it separated the business from the price. The business was perfect; the price was not cheap. He refused to pretend otherwise on either side. He did not say the multiple was justified by growth, and he did not say the business was a sell because of the multiple. He told the truth in two clauses: the moat is intact, the price is full. Investors who try to compress that truth into a single buy or sell call, Munger implied, are losing the actual information. The point about pricing discipline - buy wonderful businesses but don't pay any price for them - was Munger's version of Buffett's margin-of-safety principle, applied at the level of the multiple rather than the level of the asset value. He had lived by it. His own Costco position had compounded enormously and he still refused to sell; his own DJCO bank stocks he held for tax reasons even after they had multiplied many times. The discipline was never sell a great business at any price; the discipline was also never buy a great business at any price. The two had to be held together.

Country Garden president Mo Bin stated the succession 'reflected Mr Yeung's full trust and recognition of Ms Yang'; Yang Guoqiang continued to take part in corporate operations as a special advisor to the group after his formal resignation.

In looking at individual stock contribution to performance I prefer to start with the problems. The bottom five detractors from the Fund’s performance in 2023 were: Stock Attribution Estée Lauder -1.8% McCormick -1.1% Diageo -0.6% Mettler-Toledo -0.6% Brown Forman -0.5% Source: State Street We sold our stake in Estée Lauder whose mishandling of the demand/supply situation in China following reopening post Covid and in the travel retail market revealed serious inadequacies in its supply chain. McCormick has yet to return the profit margins in its food service business to the level they were before the pandemic. Mettler-Toledo suffered from a downturn in demand for laboratory equipment post the pandemic, demand falling in China and a tighter funding market for biotech companies.no

Founding Fuel notes the historical irony: in the early 2000s, ITC under Deveshwar accumulated shares in East India Hotels (the Oberoi Group), reaching 13.69% — just below the 15% open-offer trigger of that era. Deveshwar publicly maintained the stake was a financial investment, not a takeover attempt.

The letter divided the credit with precision. Ted Sarandos, Hastings wrote, had the early foresight and skill to push into original programming, changing the company's trajectory, then moved quickly to expand into international originals, film, animation, and unscripted, bets that broadened the content slate and took courage given the skepticism they faced. Greg Peters had been instrumental in driving partnerships, building and launching advertising, pushing deeper personalization, rebuilding the talent organization, and strengthening the culture; he had also spent several years in Japan as country general manager launching early Japanese originals and was building out the games initiative. For himself, Hastings said he would help the co-CEOs and, like any good chairman, act as a bridge from the board, spend more time on philanthropy, and remain very focused on Netflix stock doing well. The same announcement elevated Bela Bajaria to chief content officer and Scott Stuber to chairman of Netflix Film, and closed with Hastings's confidence that the next twenty-five years could be even better than the first.

In Poonawalla's telling to Asian Racing Report, the horses came first: the horses at Poonawalla Stud Farm in the 1960s provided the raw means for him to build a business of global significance — and it did not come from racing or selling them. 'Horse serum. I went into the business of making serums and then vaccines,' he says.

Zuckerberg's most candid admission in the efficiency note was that he had underestimated the drag of marginal work. Since reducing the workforce the previous November, he wrote, a surprising number of things had moved faster, and in retrospect he had underestimated the indirect costs of lower-priority projects. A project can look net positive in isolation while still consuming coordination, attention, and management capacity that the organization needs elsewhere. The remedy was not merely fewer people but fewer things: restructuring plans focused on flattening organizations, canceling lower-priority projects, and reducing hiring rates, alongside a summer deadline to complete the analysis of the hybrid-work experiment and a steady stream of developer productivity improvements running through the year. Efficiency, in his framing, was a durable operating philosophy rather than a one-time cost cut. The recruiting organization went first, on the logic that a company hiring less needs fewer recruiters, and its members learned their status the next day.

Techno-marketing professional Nikhil Kuruganti's analysis went viral on LinkedIn. He estimated the asking valuation at roughly 16x FY23 revenues (extrapolating H1-FY23 revenue of ₹722 crore) and 25x FY22 revenues of ₹943 crore, with a P/E ratio of around 3,000x on H1-FY23 PAT and 1,500x on FY22 PAT — implying Mamaearth would need to grow profits roughly 50-fold to justify the implied valuation.

Hindenburg emphasized family control: eight of 22 key leaders were Adani family members, and a former executive described the group as 'a family business.' This concentration, the report argued, placed financial and strategic decisions in the hands of a few insiders, undermining the governance premise of a widely held public conglomerate.

He admits he did not think of Zerodha as a serious business until about 2015, when Kailash joined, in-house products shipped, and the team realised that price transparency alone was not a moat — they would also need a better product to defend the model against fast-following rivals.

Advertising efficiency became the second flashpoint. Mamaearth reportedly spent about 40% of revenue on marketing with a Return on Advertising Spends (ROAS) of roughly 2.6, compared to Nykaa's 7.8 and Hindustan Unilever's 10.6. That gap raised the question of whether the brand's growth was sustainable without continued heavy ad-spend reinvestment — a structural challenge for D2C brands at scale.

At the 2023 DJCO meeting, Munger was asked about the bank stocks in the Daily Journal securities portfolio. The question was pointed: Berkshire had unloaded its bank stocks, and if those positions were not good enough for Berkshire shareholders, why were they good enough for Daily Journal shareholders? Munger's answer was structural. He might have different ideas than Berkshire, he said. If you owned marketable securities within a corporation located in California, you paid huge state and federal taxes if you sold things at a big gain, and that affected the willingness to sell. He then made a striking disclosure: those bank stocks he had bought on the bottom tick in the foreclosure crisis. Literally, Munger said, it was the bottom tick. They were practically all gain now, so he would immediately give the government forty-some percent of everything he sold out of those bank stocks. They were producing dividends that were almost tax free. Based on what he would get if he sold them and the return he was getting out of the dividends, he said, it's not so bad for us. The answer was that Daily Journal was not in a normal position. All factors considered, they were willing to hold them for a while. The decision, in other words, was not a vote against the underlying thesis. It was a vote for tax discipline. The big disadvantage in having a huge layer of federal corporate taxes and state taxes between the company and any money it made - in a state like California, especially - was that it trapped gains inside the corporate shell. Munger was telling the room that tax friction is a real input into hold-versus-sell decisions, that the bottom-tick buy had produced a position where the after-tax math of selling was inferior to the after-tax math of holding, and that the rational investor factors that into the decision rather than pretending it doesn't exist.

The Norges Bank conversation closed on the question of how to think about long-duration assets - particularly technology and AI - in a rising-rate regime. Druckenmiller's framework, as captured in the transcript, was that the standard discounted-cash-flow valuation is acutely sensitive to the discount rate when the bulk of the cash flows are expected in the distant future. A regime in which real rates are normalizing from the post-2008 suppression makes long-duration equity multiples structurally more vulnerable than they were in the zero-rate era, even when the underlying business prospects are genuinely strong. Druckenmiller was careful in the transcript to distinguish between the AI cycle as a technological phenomenon and the AI cycle as an investment opportunity. He argued that the technological impact would likely be the most consequential of his investing lifetime, comparable to the personal-computing and internet revolutions, but that the investment opportunity was far less clear. The history of technological revolutions, he noted, is that very few of the firms present at the start of the revolution are the firms that capture the bulk of the value created over the following decades. The conversation closed on the humility point that Druckenmiller has made repeatedly across his career. The framework for sizing macro positions does not transfer cleanly to long-duration technology bets because the resolution time of the thesis is years or decades rather than months. The patience required to wait for an asymmetric macro setup is a different practice from the patience required to hold a technology position through multiple valuation cycles. The transcript ended on the note that Druckenmiller's own post-Duquesne investing has been more cautious on long-duration technology bets than his reputation for concentration might suggest - precisely because the asymmetry between conviction and resolution time is harder to calibrate.

Mundra Port's commercial operations began in 2001 alongside the City Gas Distribution business. The 2002 launch of single point mooring — which docked the MV Silver Clipper, India's first capesize vessel carrying nearly 123,000 tonnes of Australian resources — was the visible proof point that Mundra could handle global-scale dry bulk traffic.

The IPO itself was ultimately subscribed 7.61 times over a three-day window, but retail investors subscribed only 1.35 times — a notably muted retail response relative to institutional interest. The stock listed at a small premium of roughly 1.8%, signalling that the market had repriced the IPO narrative away from the original $3 billion ambition.

Zuckerberg framed the cuts inside the company's purpose rather than against it. Meta builds new ways for people to feel closer, he wrote, a fundamental human need that may matter more in a complex world, and it does leading work across advanced technologies that it distills into products: artificial intelligence for creative expression and content discovery, the metaverse for a realistic sense of presence, new media formats for richer experiences, encryption for private communication, and business tools for reaching customers. The pitch to employees was that if someone wants to invent the future or apply the best ideas at the greatest scale, Meta remains the place to do it. The efficiency program, in this telling, existed to keep that long-term technology vision funded through a difficult advertising environment, not to replace it. The savings the program produced, in other words, were earmarked for the long-horizon bets that advertising alone had been carrying.

concerns about their longer-term prospects and our holding in Mettler-Toledo, in particular, is small and we may be able to use share price weakness to acquire more. Brown-Forman and Diageo have suffered along with other drinks companies from softening in demand, especially in the Americas. Diageo’s CEO, Sir Ivan Menezes, died in June just before he was scheduled to retire. In our view he was one of the unsung heroes of the corporate world. For the year, the top five contributors to the Fund’s performance were: Stock Attribution Meta Platforms +4.5% Microsoft +3.9% Novo Nordisk +3.6% L’Oréal +2.1% IDEXX Laboratories +1.4% Source: State Street Meta Platforms’ (formerly Facebook) performance makes me wonder whether I should have a fund which invests solely in the one stock in our portfolio each year for which we have received the most critical comments. Meta makes its third appearance in this list of top contributors while Microsoft appears for the eighth time having attracted strident criticism when we started buying at about $25 a share in 2011 (2023 year end price $354). Novo Nordisk rose to prominence this year as a result of the wild success of its weight loss drug Wegovy (also known as Ozempic when sold for treating diabetes). However, we have owned the stock for seven years — attracted by its seemingly unusual approach to drug discovery and its ownership structure.

Poonawalla explains the science plainly: in those days, some serums were made from horse blood worldwide. You give a vaccine to a horse — a mouse works but a larger animal yields more blood — and from the blood you process the active serum, sterilize and process it, eventually producing the final product.

The column recalls that ITC also built a roughly 13% stake in the distressed Hotel Leelaventure between 2008 and 2013, and attempted to increase that stake in 2019 when Leela tried to sell its assets to Brookfield. ITC sought a Sebi stay on the sale, but the Securities Appellate Tribunal rejected its appeal in September 2019 — leaving the matter pending before the NCLT.

The report accused the group of previously being the focus of four major government fraud investigations totaling an estimated $17 billion in alleged money laundering, taxpayer-fund theft and corruption. Adani family members were alleged to have cooperated to create offshore shell entities in Mauritius, the UAE and Caribbean islands, generating forged import/export documentation to manufacture turnover and siphon money from listed entities.

The 2007 Mundra Port & SEZ IPO was 116 times oversubscribed, and Adani Power Ltd's 2009 IPO was 21x subscribed. The capital-markets access these IPOs unlocked fueled the overseas mine acquisitions in Indonesia (Bunyu, 2008) and Australia (Carmichael, 2010-2011), marking Adani's transition from domestic infrastructure operator to global resource player.

Kuruganti further questioned the marketing math: Mamaearth's FY22 marketing expenditure was roughly ₹391 crore against sales of ₹932 crore — implying Honasa was spending around 40% of revenue on advertising. He flagged that Honasa itself disclosed plans to deploy roughly ₹186 crore of IPO proceeds for marketing, raising concerns that public-market money would fund ongoing ad-spend rather than capacity-building.

The 2015 inflection coincided with the roll-out of Aadhaar-based online onboarding, which Nithin credits as the structural unlock: without branches, a self-funded firm could now acquire customers digitally at scale, removing the historical constraint that had made financial services growth dependent on physical footprint and therefore on outside capital.

Yang Huiyan's net worth (and by extension the family's Country Garden-linked wealth) plunged by more than 52% to $16.1 billion according to the Bloomberg Billionaires Index amid China's real estate crisis, narrowing her lead over the runner-up for 'Asia's richest woman' title, chemical-fibre tycoon Fan Hongwei.

A second critique was structural: Kuruganti argued Mamaearth was 'no longer a D2C brand,' pointing to a sharp shift in offline channel contribution from 9% in 2020 to roughly 35% in the prior six months. His objection: you cannot ask for a D2C valuation multiple while explicitly planning to derive 70% of business from offline channels in the near term.

We are not aware of another drug company whose stated aim is the eradication of the ailment from which it derives most of its revenues. The controlling stake held by the Novo Nordisk Foundation seems to guarantee a genuine long-term approach to the business. Novo is making its fourth appearance in our top five contributors — this was a successful investment long before the words ‘weight loss’ were uttered in relation to Novo. L’Oréal is a long-term favourite whose handling of the China market contrasts sharply with that of Estée Lauder. IDEXX, the supplier of veterinary diagnostic equipment, makes its fifth appearance in our table of top five contributors despite concerns about a hangover following the upsurge in pet ownership during Covid.

The Substack analysis frames Mamaearth's listing as a market-wide signal: 2023 had seen 93 IPOs in India by November, and investor appetite had visibly shifted toward profitability over richly-priced growth. The author argues that retail investors would no longer accept valuation anchored on narrative alone — a meaningful change from the 2021 cycle that had embraced Zomato and Paytm at any price.

Poonawalla and his younger brother Zavaray established Serums Institute of India in 1966 with starting capital of about US$25,000, growing from serums (which had limited use) into vaccines for diphtheria, tetanus, whooping cough, pneumonia, measles, and eventually the COVID vaccines Covovax and Covishield.

Reliance's recent moves are framed by Founding Fuel as altering the three-horse hospitality race among Taj, ITC and Oberoi. Reliance spent about $100 million acquiring a controlling stake in Mandarin Oriental in New York, then announced a tie-up with Oberoi Hotels to co-manage three properties across India and the U.K., including Stoke Park in Buckinghamshire.

Nithin's stated reason for refusing venture capital was that taking money would have meant surrendering storytelling freedom: as a self-funded founder he could say things on markets, regulation and competitors that a VC-backed CEO simply cannot, which he treats as a long-term brand advantage.

Adani Power Ltd became India's largest private thermal power generator in 2014 with 9,280 MW capacity. APSEZ acquired Dhamra Port in Odisha and won a container terminal contract at Ennore the same year — extending the 'string of pearls' along India's coastline that the group has used as a recurring spatial metaphor for port-roll strategy.

Resigned as chairman and executive director of Country Garden effective March 1, 2023, transferring the chairmanship to daughter Yang Huiyan while remaining a special advisor.

Hindenburg identified 38 Mauritius shell entities controlled by Vinod Adani or close associates, plus entities in Cyprus, the UAE, Singapore and several Caribbean islands. Many had no employees, independent addresses or phone numbers, yet collectively moved billions of dollars into Indian Adani entities, often without disclosure of the related-party nature of the deals — a direct circumvention of Indian securities laws, in the report's framing.

Honasa's revenue trajectory was cited as both a strength and a weakness: revenue from operations moved from ₹1,097.84 million in FY20 to ₹4,599.9 million in FY21 to ₹9,434.65 million in FY22 — a 4.2x step-up then a 2x step-up. Strong growth, but critics argued the growth had been purchased with disproportionate ad-spend, not earned through durable brand equity.

We continue to apply a simple three step investment strategy: • Buy good companies • Don’t overpay • Do nothing I will review how we are doing against each of those in turn. As usual we seek to give some insight into the first and most important of these — whether we own good companies — by giving you the following table which shows what Fundsmith Equity Fund would be like if instead of being a fund it was a company and accounted for the stakes which it owns in the portfolio on a ‘look- through’ basis, and compares this with the market, in this case the FTSE 100 and the S&P 500 Index (S&P 500). This also shows you how the portfolio has evolved over time. Year ended Fundsmith Equity Fund Portfolio S&P FTSE 2016 2017 2018 2019 2020 2021 2022 2023 2023 2023 ROCE 27% 28% 29% 29% 25% 28% 32% 32% 18% 17% Gross Margin 62% 63% 65% 66% 65% 64% 64% 63% 45% 41% Operating Margin 26% 26% 28% 27% 23% 26% 28% 29% 16% 15% Cash Conversion 99% 102% 95% 97% 101% 95% 88% 91% 76% 85% Interest Cover 17x 17x 17x 16x 16x 23x 20x 20x 11x 10x Source: Fundsmith LLP/Bloomberg. ROCE, Gross Margin, Operating Margin and Cash Conversion are the weighted mean of the underlying companies invested in by the Fundsmith Equity Fund and mean for the FTSE 100 and S&P 500 Indices. The FTSE 100 and S&P 500 numbers exclude financial stocks. Interest Cover is median.

The piece highlights the dramatic post-IPO collapses that framed the Mamaearth moment: Zomato, listed in July 2021 at a 52.63% premium and 38x oversubscription, fell 66% to ₹41.6 within a year; Paytm, listed in November 2021 at ₹1,950, dropped to ₹441 — a 77% decline. These collapses shaped the cautionary lens through which Mamaearth's DRHP was read by the market.

Adani Green Energy Ltd (AGEL) was established in 2015 and listed in 2017, becoming what the company describes as India's largest and a global leader in utility-scale renewable energy. The 2016 Kamuthi 648 MW solar plant in Tamil Nadu, then one of the world's largest, signaled the group's renewable pivot — running in parallel with thermal expansion, not replacing it.

Gautam's younger brother Rajesh Adani, the report noted, was accused by the Directorate of Revenue Intelligence of a central role in a 2004-2005 diamond trading import/export scheme and arrested at least twice over forgery and tax fraud allegations. He was subsequently promoted to Managing Director of Adani Group. Brother-in-law Samir Vora, accused as a ringleader of the same scheme, was promoted to Executive Director of Adani Australia — promotions Hindenburg framed as evidence of governance failure.

He frames VCs as agents of manufactured urgency: their incentive to push growth ahead of its natural timeline encourages startups to over-hire, over-spend and over-claim market size, while a bootstrapped firm — by being forced to stay self-sustaining — is ready to capture the upside only when the market actually arrives.

Hotels, the column notes, always enjoyed a special place in Deveshwar's heart from 1996 onward. Backed by the huge cash flow from ITC's dominant cigarette business, he expanded the hotel portfolio to nearly 100 properties (120 today).

Yang Huiyan became sole chairman; the family's wealth and the company's financial position deteriorated sharply amid the property crisis (Yang Huiyan's net worth fell over 52% to $16.1 billion), and by October 2023 the company faced a potential offshore-debt default and had to publicly deny rumors about the founders' whereabouts.

Poonawalla describes the COVID business windfall starkly: before COVID in 2019 he was India's 12th richest person (world rank 76th, fortune US$9.1 billion); by end-2022 he was India's fourth-richest, fortune expanded to US$21.5 billion and climbing — US$22.4 billion at the time of the interview. He frames Serum as one of the largest competitors to Pfizer and the world's biggest vaccine producer by number produced and sold.

2016–2019 ratios are based on last reported fiscal year accounts as of 31st December and for 2020–23 are Trailing Twelve Months and as defined by Bloomberg. Cash Conversion compares Free Cash Flow per Share with Net Income per Share. In 2023 returns on capital and operating profit margins were higher in the portfolio companies than in the past. Gross margins were steady. Importantly all of these metrics remain significantly better than the companies in the main indices (which include our companies). Moreover, if you own shares in companies during a period of inflation it is better to own those with high returns and gross margins. Consistently high returns on capital are one sign we look for when seeking companies to invest in. Another is a source of growth — high returns are not much use if the business is not able to grow and deploy more capital at these high rates. So how did our companies fare in that respect in 2023? The weighted average free cash flow (the cash the companies generate after paying for everything except the dividend, and our preferred measure) grew by 14% in 2023.

The report quoted a former Adani executive alleging that SEBI officials personally benefited from the system: 'It's not a blind eye... The whole system is very much working hand in glove. People know about it. SEBI knows about it.' The framing alleged regulator complicity, escalating the accusations from corporate governance to systemic capture.

Adani Gas became India's largest city gas distribution player by 2018, and a 2020 50:50 joint venture with Total Energies created an integrated gas utility. The pattern — bring in a global strategic partner at scale, demerge the business, list it separately — became Adani's signature monetization playbook for vertical adjacencies.

Poonawalla explicitly positions himself as a philanthropist throughout: 'our price is low, I've been giving vaccines at 50 cents a dose and nobody could compete with this'. Serum was pre-qualified by WHO and the UK's MHRA, on which basis the company could make three billion doses of vaccine, including substantial COVID production.

A broader portfolio context fed the IPO story: by listing time Mamaearth was the flagship inside a 'House of Brands' that included BBlunt, The Derma Co., Dr Sheth's, Aqualogica and Ayuga, all under parent Honasa Consumer Ltd, with the combined entity crossing ₹1,500 crore in revenue in roughly seven years — material scale, but not enough to silence the profitability-valuation debate.

Chartered Accountant Anamika Rana of Arika Consultancy noted that the asking valuation implied roughly 1,000x FY22 net profit of ₹14 crore, and that IPO proceeds were earmarked for advertising expenses, opening new BBlunt salons and setting up exclusive brand outlets. The implied capital allocation was, in her view, weighted toward marketing and physical retail rather than toward R&D or capacity — fuelling the overvaluation verdict.

On the topic of media presence, he says he was late to Twitter and LinkedIn, joining only in 2019 after recognising that the reach of business handles was decaying and that traditional press was waning; his personal handle became the channel for views that the company's handle could not credibly voice.

Analysts, Founding Fuel observes, were never happy with the hotels division's performance. While it accounted for 20% of total capital employed, return on capital employed stayed in single digits and contribution to the topline was insignificant compared with the healthier performance of tobacco, paperboards, agri and FMCG. Critically, erstwhile parent BAT — still holding 29.1% —.

Poonawalla cites recent export milestones: just that week Serum had exported six million COVID doses to Australia and three million to New Zealand, with an American-subidiary contract to supply 100 million doses to those two markets and roughly two billion doses worldwide at peak pandemic. The numbers demonstrate how a private Indian company became a top-tier global public-health supplier —.

The article argues the verdict from retail investors is unambiguous: flashy valuations must yield to profitability, and influencers glorifying IPO-led startups can no longer move the market on their own. Startups eyeing 2024 listings — including OYO, Ola Electric, Swiggy, Navi, PayMate and Digit Insurance — were reportedly reorienting toward sustainable businesses in response to this shift.

Hindenburg's conclusion was deliberately provocative: 'A system is broken when corporate behemoths like Adani Group seem able run an intricate fraud in broad daylight.' The short seller published 88 questions for the group, leaning on Adani's own claims to welcome criticism and embrace transparency as the rhetorical trap — inviting detailed answers that, if not provided, would constitute tacit admission.

Anamika also clarified that the cited revenue numbers represented six Honasa units combined, not Mamaearth alone — revenue across Honasa's units had grown 2.5x between 2020 and 2023. The point mattered because it complicated the headline valuation claim: a parent-level multiple applied to consolidated revenue was, in her reading, an overstatement of the standalone Mamaearth story being marketed to retail investors.

The only metric which continues to lag its historic performance is cash conversion — the degree to which profits are delivered in cash. Although this recovered slightly to 91% in 2023, this is still below its historic level of around 100% as a result of unusual events affecting a handful of our companies which we expect to largely unwind to their benefit in 2024. The average year of foundation of our portfolio companies at the year-end was 1916. Collectively they are over a century old. The second leg of our strategy is about valuation. The weighted average free cash flow (‘FCF’) yield (the free cash flow generated as a percentage of the market value) of the portfolio at the outset of the year was 3.2% and ended it at 3.0%. The year-end median FCF yield on the S&P 500 was 3.7%. Our portfolio consists of companies that are fundamentally a lot better than the average of those in the S&P 500 so it is no surprise that they are valued more highly than the average S&P 500 company. In itself this does not necessarily make the stocks expensive, any more than a lowly rating makes a stock cheap. However, we expect some of this disparity in valuation to be eradicated in 2024 if, as we expect, the cash conversion of our portfolio companies improves. Turning to the third leg of our strategy, which we succinctly describe as ‘Do nothing’, minimising portfolio turnover remains one of our objectives and this was again achieved with a portfolio turnover of 11.

The demerger plan was first mooted in ITC's FY2019-2020 annual report, but Deveshwar succumbed to cancer on May 11, 2019 — before he could execute it. The pandemic then wrecked the hospitality industry. Sanjiv Puri put the demerger back on track as the post-pandemic hotel recovery took hold, with Q1 2023 results showing exceptional performance led by domestic travel.

In 2020 the group won a mandate to operate six airports — Ahmedabad, Lucknow, Thiruvananthapuram among them — diversifying into aviation infrastructure. AGEL won the contract for the world's largest solar project, and APSEZ completed the acquisition of Krishnapatnam Port, consolidating east-coast presence.

To curb impulsivity on social media, he runs an internal three-person check: drafts go to colleagues who can veto a post before it goes live, and he sleeps on ideas overnight — a governance device designed to retain the storytelling advantage without the dopamine-driven downside of hot takes.

The article frames the LinkedIn backlash itself as a market signal — finance professionals and operators publicly dissecting the DRHP and translating its arithmetic for retail investors. The intensity of the critique foreshadowed the muted retail subscription (1.35x) at IPO time and the small listing premium, both of which validated the critics' central thesis on valuation.

Adani Green signed what the company claims is the world's largest green PPA with SECI in 2021, ranking among the largest solar developers and renewable energy companies globally. APSEZ's Rs 6,200 crore acquisition of Gangavaram Port unlocked India's eastern hinterland, extending the port network into new cargo catchments.

Poonawalla tells Asian Racing Report 'the horse business in fact did help me', and he feels a reciprocal responsibility to the thoroughbred industry. He has been vice chairman of the Asian Racing Federation, chairman of the Turf Authorities of India, the Royal Western India Turf Club, the Stud Book Authority of India, and the Indian Pattern Races Committee. The pattern — diversifying into a non-core public role once the core business is built —.

On IPOs, his view is contrarian: founders treat listing as an exit, but it is in fact the moment when obligations increase, because retail investors — lowest in the risk hierarchy — are now trusting the business, and the public-company posture should be to under-promise and over-deliver to avoid the volatility that destroys long-term decision-making.

1% during the period, a little higher than usual. It is perhaps more helpful to know that we spent a total of just 0.008% (just under one basis point) of the Fund’s average value over the year on voluntary dealing (which excludes dealing costs associated with subscriptions and redemptions as these are involuntary). We sold our stakes in Adobe, Amazon and Estée Lauder and purchased stakes in Procter & Gamble, Marriott and Fortinet. As last year this may seem a lot of names for what is not a lot of turnover as in some cases the size of the holding sold or bought was small. We have held ten of our companies for more than 10 years, five of which since inception in 2010. Why is this important? It helps to minimise costs and minimising the costs of investment is a vital contribution to achieving a satisfactory outcome as an investor. Too often investors, commentators and advisers focus on, or in some cases obsess about, the Annual Management Charge (‘AMC’) or the Ongoing Charges Figure (‘OCF’), which includes some costs over and above the AMC, which are charged to the Fund. The OCF for 2023 for the T Class Accumulation shares was 1.04%.does

The timing of publication, just ahead of Adani Enterprises' $2.5 billion follow-on public offering opening January 27, 2023, was strategically chosen to maximize damage. Adani Group CFO Jugeshinder 'Robbie' Singh called it a 'brazen, mala fide intention' to sabotage the FPO; the FPO was withdrawn on February 1, 2023, after stock prices cratered and Adani fell from 3rd to 22nd on Forbes' billionaires tracker.

The author's framing — that Mamaearth's IPO 'saga reveals a shift in India's IPO landscape' — is the analytical takeaway: a single listing functioned as a market-wide correction mechanism, forcing Indian startup founders to internalise that the public market's tolerance for growth-without-profit had narrowed materially since 2021.

By 2022 the Adani Group had crossed $200 billion market capitalization, completed the Mumbai and Navi Mumbai airport acquisitions, accelerated APSEZ cargo volumes to 300 million metric tonnes, and saw Adani Wilmar list with a bumper opening. The sovereign-backed International Holding Company committed $2 billion into the green portfolio — the year before Hindenburg's report would interrupt the trajectory.

Poonawalla describes the threat India's 28% betting tax — imposed under the Modi government on games of chance, including horse racing — poses to the tote, jackpots and racecourse finances. He says strong representations have been made to bring it down to the original 12% or at most 18%, with papers and presentations collected from Asian Racing Conferences showing that lower betting tax yields higher turnover, doubling or trebling revenue.

Beyond the numbers, the IPO became a cultural event — Ghazal Alagh's prior appearance on Shark Tank India as a 'shark' and Shilpa Shetty's brand ambassadorship had woven Mamaearth into the public imagination well before the DRHP. That celebrity association had cut both ways: it drove brand awareness but also sharpened public scrutiny of the valuation math when the IPO documents landed.

The Rainmatter model, he says, is partly a response to the realisation that an efficient business destroys jobs indirectly — a Zerodha of 1,100 people might have needed 11,000 at a less efficient competitor — so the founders set up the climate and livelihoods foundation, seeding it with roughly a thousand crores, as a deliberate counterweight to the labour displacement that automation creates.

not include an important element of costs — the costs of dealing. When a fund manager deals by buying or selling, the fund typically incurs the cost of commission paid to a broker, the bid-offer spread on the stocks dealt in and, in some cases, transaction taxes such as stamp duty in the UK. This can add significantly to the costs of a fund, yet it is not included in the OCF. We provide our own version of this total cost including dealing costs, which we have termed the Total Cost of Investment (‘TCI’). For the T Class Accumulation shares in 2023 the TCI was 1.05%, including all costs of dealing for flows into and out of the Fund, not just our voluntary dealing. We are pleased that our TCI is just 0.01% (1 basis point) above our OCF when transaction costs are taken into account. However, we would again caution against becoming obsessed with charges to such an extent that you lose focus on the performance of funds. It is worth pointing out that the performance of our Fund tabled at the beginning of this letter is after charging all fees which should surely be the main focus. Last year I spent quite a lot of this letter trying to explain the background to the period of low interest rates and Quantitative Easing and how the resurgence of inflation and interest rate rises had affected company valuations, and especially those which had above average valuations. As an illustration of this effect, consider the following.

If you had invested $100 in the Vanguard Long US Government Bond Index Fund (Ticker: VBLAX, ‘Bond Fund’) in June 2020, at the trough in yields on US Treasury bonds, your total income over the next 10 years would be a mere $7 i.e. you would receive 70 cents per annum in income. You would have had to invest a lot of dollars to get an income you could live on. Had you invested in October 2023, which may represent the high point in this economic cycle for bond yields, your total income over the life of the investment will be $47.50. Quite a change. This illustrates two points. One is that you would have lost a lot of money had you bought the Bond Fund in 2020 and had still been holding it in October 2023. The Bond Fund’s net asset value, at which it trades, declined from a peak of $17.71 in June 2020 to a low of $9.19 in October 2023, a fall of 48%. This puts the losses from investing in high quality equities over this period into perspective. Better to be in equities than long bonds when interest rates rise sharply. The other point it illustrates is that bonds have been offering an alluring alternative to equities for many investors.close

to risk free as you can get) of close to 5%, why take the risk of investing in equities? The short answer is because equities provide a better return. For the period 1928–2023 (the earliest for which I can get reliable data), the annualised return on 10 Year US Treasury Bonds was 4.6% whereas the S&P 500 compounded at 9.8% with dividends reinvested#. This of course includes the Great Depression and World War Two as well as other more recent and lesser incidents like the 1987 Crash, the Dotcom meltdown, the Great Financial Crisis of 2008–09 and the Covid pandemic. This is unsurprising. Equities benefit from a feature which no other asset class, including bonds, can provide: a portion of the profit or cash flow which belongs to the shareholders is reinvested each year by the company. This is the retained profit which is not paid out as dividends, and its investment is the source of compounding which underpins the returns of long-term investment. In my view this is the least discussed and appreciated aspect of equity investment versus all other asset classes. So, if equities outperform bonds why are investors so keen to hold bonds at the moment? The answer of course is that whilst equities may outperform bonds over long periods of time, there is no guarantee that equities will provide this superior return in any given period, and in fact they may lose value for periods of time, as they did in 2022.cartoon:

Decision — Vitesco/Schaeffler advocacy; five transition stories at Sohn 2026. Context: Public decks + Business Wire letters; Q1 2026 +6.5% vs −4.4% S&P. Outcome (partial): Ongoing — “capital protection” stance; +1.9% YTD net at Q2 2026.

It requires not only a grasp of investment analysis but also an iron constitution to ignore the periodic shenanigans of the stock market and reap the rewards of long-term equity investment. I thought it would be amiss not to mention two events which marked 2023. The first event is the rise of Artificial Intelligence, or AI, as one of the driving forces behind the rise of most of the Magnificent Seven and especially Nvidia. What to make of it? I would offer a few observations. Firstly, AI is not quite as new as the rise in interest in AI in the stock market this year, driven by Microsoft’s investment in OpenAI and the adoption of its ChatGPT large language model (actually launched in November 2022). IBM launched an AI model called Watson which beat two human champions in the US quiz show Jeopardy! in 2011. Google (now Alphabet) acquired the AI developer DeepMind in 2014. Secondly, the stock market, in a fashion exemplified by the earlier cartoon, has decided at the outset that it can identify winners in AI in the form of Nvidia designing the chips on which the generative AI models will run and Microsoft as a provider of an AI model. If it can do so at this stage it would seem to me to be a break with tradition.

Think back to some of the major technology developments of the past half century or so and the early leaders: • Microchips: Intel • Internet Service Providers: AOL • Mobile Phones: Nokia • Search Engines: Yahoo • Smartphones: Research In Motion (Blackberry) • Social Media: Myspace Where are they now? Does this experience suggest that we can predict a winner in the area of AI at the outset? Moreover, maybe there won’t be a winner, either in the provision of large language models or their use. There are numerous large language models in development and deployment by the major tech companies: such as Alphabet’s Gemini, Meta’s Llama 2 (stands for Large Language Model) and Microsoft’s ChatGPT, as well as stock market excitement about the deployment of such models by Adobe, Intuit and Fortinet amongst just the companies that we follow. There is no shortage of contenders. The adoption of AI may lead to a situation where everyone has it, so no one has any advantage. The analogy I would offer (with acknowledgement to Warren Buffett) is a football stadium.the

game becomes exciting and the striker runs into the penalty area with the ball, the second row of spectators stands up to get a better view. This blocks the view of those in the third row who follow suit. Pretty soon all the spectators are standing but no one has a better view than before, but they are all less comfortable. So, I think we will suspend judgement of who, if anyone, will emerge as a winner in AI. The second event worthy of mention is the passing of Charlie Munger, Warren Buffett’s long time business partner, who passed away in December at the age of 99. Apart from offering a perspective on the perennial question about my retirement, Mr Munger’s demise has led to the inevitable repetition of quotations from him by commentators. However, none of the commentators has alighted upon the Charlie Munger quote which in my view encapsulates the current state of world affairs: “If you’re not a little confused about what’s going on, you don’t understand it.” Finally, once more I wish you a happy New Year and thank you for your continued support for our Fund. Yours sincerely, Terry Smith CEO Fundsmith LLP Disclaimer: A Key Investor Information Document and an English language prospectus for the Fundsmith Equity Fund are available via the Fundsmith website or on request and investors should consult these documents before purchasing shares in the fund. Past performance is not necessarily a guide to future performance.

The value of investments and the income from them may fall as well as rise and be affected by changes in exchange rates, and you may not get back the amount of your original investment. Fundsmith LLP does not offer investment advice or make any recommendations regarding the suitability of its products. This document is a financial promotion and is communicated by Fundsmith LLP which is authorised and regulated by the Financial Conduct Authority. Sources: Fundsmith LLP, Bloomberg and #NYU Stern School of Business, unless otherwise stated. Data is as at 31st December 2023 unless otherwise stated. Portfolio turnover is a measure of the fund's trading activity and has been calculated by taking the total share purchases and sales less total creations and liquidations divided by the average net asset value of the fund. P/E ratios and Free Cash Flow Yields are based on trailing twelve month data and as at 31st December 2023 unless otherwise stated. Percentage change is not calculated if the TTM period contains a net loss. MSCI World Index is the exclusive property of MSCI Inc.respect

to any MSCI data contained herein. The MSCI data may not be further redistributed or used as a basis for other indices or any securities or final products. This report is not approved, reviewed or produced by MSCI. The Global Industry Classification Standard (GICS) was developed by and is the exclusive property of MSCI and Standard & Poor’s and ‘GICS®’ is a service mark of MSCI and Standard & Poor’s.