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thank you for such a detailed reply- i am invested here for a long time and i am much like you in my style of investing- i find it always helpful to explore others people opinions- so thank you for that
ali1947fish - I am not qualified to give financial advice - therefore the decision to buy or sell will remain with you. The approach that I take (and others are likely to have different approach) before buying any share is to understand why I am investing in the first place and what my exit strategy is should I decide to own shares.
My reasons are that I want to invest in businesses that are well managed, have a successful track record and have little or no debt where the prospects for capital growth are high. I am prepared to accept a risk that I could lose 50% of my capital. I am not prepared to expose more than 4% of my portfolio to any individual holding. Sectors that I expect to do well include technology, healthcare and alternative energy. Geographic sectors of high appeal are N America, UK, Europe, Asia and South America in that order.
Specifically turning to ATT. It is an investment trust that is able to use leverage to advantage, has an execellent track record through its holdings in technology companies (if you ask the Company Secretary to provide you with a breakdown of ALL holdings, you will recive the information by return) to give exposure to technology giants and minnows that have rewarded their shareholders for many years or are pioneers with next generation cutting edge stuff.
If I were to buy the individual shares in just the 10 top holdings in the trust, I would be paying the market price. Buying them as the constituents of a trust allows me to buy the same shares (and many more) at a discount. That in itself is attractive. Next, if say there was a catastophic event to cause the collapse of say Microsoft, Apple and Google where the shares were suspended, I would still be able to deal in the shares of ATT. I might not like the price, but it gives the comfort of liquidity.
Have to be honest that I am selfish when it comes to looking after my money - I do not make investments with the intention of becoming poorer. If others make money through investment, I am delighted. I've never sold short and tend to focus on no more than 100 companies. I want to know how these companies make money (or expect to make money) and if I do not understand how they do it or what the company actually does, I will walk away. Thus, I am not in the least ashamed o be considered a simpleton. Simple and straightforward is good as far as I am concerned. I've learned that by making lots of mistakes and seldom repeating them.
So, is ATT a good punt or not? It features in MY portfolio but that does not mean that it will or should feature in yours.
Mr Flibbles, as regards HRI, my concern here is that this IT has a long history of trading at a significant discount. Over the past 12 months the average discount has been 11% and going back further (five years) the range has typically been between 10% and 20% even exceeding 20% in 2016. The current discount of 15% is simply more of the same as opposed to an aberration (which is my perception of the ATT situation). I feel more comfortable with ATT. This current situation is an anomaly, I believe. I believe that with reasonable good fortune (we always need this), there is a significant probability of the SP increasing. We will see?
as i dont understand your comments,i am more interested to know if this this is a good opportunity to add here given the discount and good management
While I have no doubt on the verisimilitude of your post regarding the T-44 tank, I am referring to index linked gilts.
T44 - The T-44 is a medium tank first developed and produced near the end of World War II by the Soviet Union. It was the successor to the T-34, offering improved ride and cross-country performance and much greater armor.
Herald features in both my ISA, a small trust that was setup in 2015 as I make preparation in advance of the transition of generations (no expiry date in my birth certificate, but rather pass my hard earned on to children to squander than have any Government do the same).
Insofar as inflation is concerned, I bought some T44 last year - too early, of course - but the developed nations such as US, UK and Europe, interest rates are at ridiculous level and far removed from those in say China, India etc. At least interest rates are not those in Turkey or Argentina.
Perhaps, on the subject of inflation and chucking money at things, we would all be wise to heed to lessons of history some 100 years ago when Germany had uncontrolled inflation. The printing of money has all the hallmarks of storing massive problems for youngsters. Rant over.
PS - sorry about all the typo's earlier. I've usually found that most people will work out the gist of my drivel.
Both, also take a look at HRI that focuses on smaller tech companies with a UK bias currently on 14% discount. As inflation fears deflate as they are we should do well. Note SMT was on a 7% discount now narrowed.
Alas_Smith, I like your disciplined approach. Sadly, discipline is not one of my strengths. My approach has always been to seek to identify anomalous situations and to benefit from them. This current situation is such an anomaly, I believe. I believe that with reasonable good fortune (we always need this), there is a significant probability of the SP increasing by 20% in the short term, with very little downside risk. We will see?
hghotsot, I've owned shares in thei IS for the last 9 years - one of my better performers - selling half my holding in ISA wrapper earlier this year to invest money elsewhere. During this time, the SP has closely tracked the NAV and very occasionally have there been buy signals through what is to all intents and purposes an abberation likened to arbitrage.
The most recent purchase was for my elder son in his ISA account. He is now fully invested but I have a monthly buy order in place in a small dealing account for myself. My ISA account typically places fewer than 8 transactions annually. Dividends from that account allow 1 new puchase at my standard bargain size to be executed annually.
2021 has been a difficult year but I have reinvested profits and am running a little ahead of my target at this stage in the year. I forecast 16.39% capital growth and things are set to exceed 20% growth.
Alas_Smith, the current discount is way out-of-line with the norm for this IT. I believe the discount will narrow significantly in the short term. I hope also that the NAV will increase so the lucky (astute?) holders will benefit from a double whammy.
hghotshot - the latest valuation has 311.04 and 308.34 (cum-income) which is a discount of somewhere between 9% and 10% depending on preferred numbers. With the NAV rising, either there is a worked order in the background that is keeping the price down or something substantial will change, either with the SP of ATT or a big drop in the NAV.
My hunch is on the SP in ATT rising over the next couple of weeks to close the gap to 5% and the NAV rising by a similar amount. It is very rare that I give a Strong Buy, but I think it is justified. Latest boker notes cite al the top 10 holdings for ATT with a Buy rating. No point in swimming against a tide.
OliG, thanks; all agreed. It is my understanding that current discount situation is an aberration which will disappear in the short term (in a few months). I too have topped up several times under similar circumstances. Let's hope the IT performance picks up too?
This discount to NAV happens to IT's and in particular to ATT. The market is often imperfect in the short term and this presents opportunities. In the last 18 months I have bought AAT several times when there has been a substantial discount and then sold when it has closed. The discount generally appears when there has been a drop in the nasdaq. Now is a great time to buy and I have added more to my position. I suspect within the next 3 - 6 months the discount will have narrowed to less than 1%. I'm in no rush as over the long run this IT does very well.
At yesterday's NAV of 287.43p the current buying price of 270p is a discount of more than 6%. A discount of this order of magnitude has persisted for a month now. What is going on here? As pointed out by tony_currie on May 10, this is very unusual for this IT. The 12 month average discount is close to zero (0.17%).
With the 10:1 split complete the new asset value is 288p - current share price is 266p so looking at over 5% discount on NAV. This is a real rarity for this trust.