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Stocksr- I don’t think the managers will “have adjusted their investments to more profitable equities.”
That’s not their style.
What HAS changed (& is largely responsible for the recent SP re-rate) is the big boost in share buybacks. Plus news that an activist investor, renowned for improving performance at another trust, has acquired a 5% stake.
Yes Zinc, I've been looking at charts all month, and against my better judgement bought today, about 5% of my available cash, I think it's past the bottoming out, so have every confidence in an upward surge, hopefully the managers have adjusted their investments to more profitable equities
Thrfrogster - I guess we'll never know their precise motivation. But whatever - from where I'm standing, it's hard to read any negatives into it.
Elliot's may have the same motives as previously with ATST or they may just see it as an opportunity for the hedge fund to make a quick buck. After all, it doesn't take a massive price increase to make a significant return when your stake is 5% of the fund.
As small shareholders there is not much we can do but stay onboard for the journey. Hope the price goes up in the meantime
StrictlyZinc - whatever attracted Elliott Associates to SMT, given their history they presumably view it as a fund whose recent underperformance they can help reverse. Otherwise, why increase their holding to 5%?
Doesn't necessarily mean they're right of course, but at least they've succeeded with others in the past.
Timing is interesting on this Elliot stake..
I wonder what their motivation is....they are activists after all.
So let’s assume that rather than being a millstone, the unquoteds include some real gems that are soaring in performance and value. How can Elliot’s get some of the action? They can’t without buying SMT.
The market always assumes the unquoteds are too risky and a drain on the share price. What is Elliot’s know better ??
I now wonder if the buyback decision was at Elliotts' "instigation"? The timing was very aligned...
Still ruing top slicing last week but hey ho that’s the game. Hopefully NAV is also on the up.
Laallee - thanks for this - an interesting development!
I see it as quite positive & it'll certainly keep SMT's managers on their toes.
Alliance Trust's SP has gone up from around 500p in 2015 to 1225p today. And it has way outperformed its benchmark over the last 5 years:
www.trustnet.com/factsheets/T/id56/alliance-trust-plc/
Contrast that with the 10 years prior to Elliott's 2015 intervention, when Alliance Trust rose less than 70%. Admittedly this earlier period includes the 2007/8 financial crisis, but even so.
Questions abound as Elliott takes 5% stake in Scottish Mortgage
Arrival of activist US hedge fund on the register of the Baillie Gifford global flagship revives memories of Elliott's successful campaign against Alliance Trust a decade ago.
Gavin Lumsden
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GAVIN LUMSDEN
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Elliott Associates, the much feared and respected US activist hedge fund, has emerged with a 5% stake in Scottish Mortgage Trust (SMT).
In a post-market disclosure to the stock exchange, the Delaware-based investment firm revealed it had bought nearly 0.5% of the Baillie Gifford flagship’s shares with a further 4.57% in equity swaps to take it just over the 5% threshold.
Founded in 1977 by Paul Singer, Elliott is best known for buying distressed emerging market bonds and pursuing Peru and Argentina through international courts when they defaulted on their debts. Closer in time and space, last month it made a takeover approach to electrical retailer Currys (CURY)
In the UK investment company market, the firm is fondly remembered, by most, for its campaign against Alliance Trust (ATST). After building up a 14% stake in the underperforming global equities fund, it obtained two seats on the board in 2015 before ousting chief executive Katherine Garrett-Cox and starting a process that saw her financial services empire dismantled and the company’s adoption of the multi-manager structure under Willis Towers Watson we know today.
As if SMT might be getting out of the complacency hole it dug itself a couple of years back.
Kind of similar CaptainPicard, sold 65% off and put into boring stuff as we are getting closer to early retirement. Just left with 5% of total portfolio in SMT (38k)
Before we, Inc me, get ahead of ourselves.. There could be a load of short investors readying themselves to take some nice profits..
One bit of less than positive news....?
Hopefully not.. 🤞🤞😆
Thanks LLoL, weirdly rather than feeling too hurt about losing out on some of todays gain I feel a little relieved to have turned those shares into Premium Bonds. Boring and likely to erode a little due to inflation there but it is safe and locked away. I still have a lot of SMT shares and I back the investment portfolio but as you say, if you are checkkng the share price on a sometimes hourly basis you are in too deep. I feel confident SMT will keep going strong. I really hope it does. I have learned to make sure your investment portfolio has diversification. I plan to use the money for private education for my son. I will need the money very regularly to hand in 5 years time. Hard to say where the SMT sp will be then. Best to bet on more than one horse and maybe have some locked away in cash too!
CaptainPicard - I think your actions perfectly illustrate risk management.
Every investor's circumstances are different. And to some extent - along with your personality - they're likely to determine attitude to risk.
Life's too short to have sleepless nights worrying about the investments you manage. So by taking action to address this, you've done exactly the right thing. So what if you could have got a bit more? You'd have still had that worry in the meantime. And you broke even at the end of the day (probably better, once dividends are factored in).
Plus, valuable lesson learnt. Always ask yourself BEFORE investing how comfortable you'd be if you lost some/all of the money. If the answer's "not very", invest less. Or choose something altogether safer.
I feel your pain. For once I am truly grateful I stuck with my plan and didnt sell
All this share needed was for me to sell some! Always the way! I sold half when I was just over break even. Feeling positive and comfortable now. I think I was over-invested before.
Gotoutjustintime - I certainly see their buyback programme as a positive. And so does the market for now.
It's no coincidence SMT closed at 781p on 14 March and is currently hovering around 859p, following their buyback RNS on 15 March.
Shano1 - that’s certainly one way of looking at it.
But one look at SMT’s share price since the buyback programme was announced suggests a possible alternative take on things.
Interesting article LLoL - I also saw this positive take on SMT in CityWire today:
https://citywire.com/investment-trust-insider/news/hewitt-scottish-mortgage-on-the-front-foot-as-top-growth-trusts-recover/a2438689?re=118494&ea=1988161&utm_source=BulkEmail_Investment+Trust+Insider+Daily&utm_medium=BulkEmail_Investment+Trust+Insider+Daily&utm_campaign=BulkEmail_Investment+Trust+Insider+Daily
So we now have £77679969 worth of shares held in treasury. This is dead money which holds back the future performance of the trust. Utter madness.
Personally I hope the comment referenced in my previous link about funding buybacks by "trimming positions based on their size" applies to Nvidia. No harm in top slicing, particulary when a holding has experienced a meteoric rise and is looking like it may now pause for breath:
www.hl.co.uk/shares/shares-search-results/n/nvidia-corp-usd0.001
Absolutely no need for anyone to apologise!
After all, there are no hard & fast rules on any BB - and I'm certainly not some kind of self-appointed moderator here.
Just better IMHO if we generally keep comments relevant to SMT. On which note, I found the following article on the recent buyback announcement interesting:
www.trustnet.com/news/13408629/how-scottish-mortgage-will-pay-for-its-1bn-buyback-scheme