Gordon Stein, CFO of CleanTech Lithium, explains why CTL acquired the 23 Laguna Verde licenses. Watch the video here.
To maximise total return from a portfolio of long term investments chosen on a global basis, enabling the Company to provide capital and dividend growth.
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from the SMT annual report
The Drawdowns of Today
Moderna has experienced a 70 per cent. fall from the highs of last year. While the market focus has been on the longevity of Covid vaccine revenues we have felt this overlooks the progress being made to apply its mRNA technology to a broader range of healthcare problems such as flu, Zika, HIV and even cancer. It is hard to argue significant value is being placed upon that broader potential platform when the company is valued by the market on a mere five-times earnings and has nearly one-third of its market cap in cash. We have therefore used the falls in the share price to add. This has in large part been funded by reductions to Amazon and Tesla.
Delivery Hero, is a local delivery company headquartered in Berlin but operating across 50 countries around the world from Argentina to Singapore. It suffered a particularly precipitous fall in its share price. Nonetheless, when re-visiting our investment case and accompanying scenario analysis we assessed that, if anything, the likelihoods of success may have actually increased. Our biggest concern had been competition in the key market of South Korea. Nonetheless, the most recent evidence is that it is growing rapidly and continuing to hold its near 80 per cent. market share in the
country. Looking across all the markets it operates in revenues grew over 50% annually in the first three months of this year with a significant long-term growth opportunity still remaining. Continued progress does not appear to be recognised by the market. Indeed, over the last two years revenues have increased nearly four-fold and yet the share price has fallen over 50 per cent. during that same period.
We would far rather endure painful drawdowns such as these than too readily abandon the companies and founders that have the potential to deliver the rare outlier returns we seek. We remain deeply enthused by some of the long-term changes we are seeing in the world and the companies bringing those changes to life. The continuing digitisation of our society, the intersection of biology and information technology and the much needed energy transition,
each offer tremendous long-term structural opportunities
This is worth a watch
https://www.youtube.com/watch?v=16OTs9Tql7Y
I'd suggest there's no real point in sniping at one another. Nobody knows when the war will end and how long it'll take to bring inflation back under control. Sadly, I don't see the latter happening by year end though YngGun27, but as I say nobody knows. I don't think it's right to imply SMT has no core tech holdings. They may not all be fully established tech yet (i.e. Microsoft), but they include several profitable & well-known brands. Equally, tech isn't SMT's sole focus. In fact it has a higher proportion of holdings in the consumer cyclical & healthcare sectors. As to where it'll find a level price-wise, again nobody knows. But one thing I would put money on is that if SMT falls to £4 before the year's out, value shares will also have dropped significantly from their current level. Nothing will be immune from global inflationary pressures & an increasingly likely-looking recession. Indeed this may make "value" shares start looking cheap for a reason.
YG27 I am retiring in a few months time before I am 55 and is totally due to investment return.
The thing about timing a sell is it impossible to call the top because people will just keep buying even when the numbers look ridiculous. The old saying the trend is your friend is quite important. So now real growth shares are crashing and the trend is saying that this will keep going for a long time and SMT are only invested in real growth with no core holdings like Microsoft. If you want tech buy PCT. So growth is still expensive, the macroeconomic is certainly against growth and the trend is not growths friend. I predict 400 before the year's out.
On the contrary, being old(and tired) may limit your acceptance and understanding of the digital world we live in and the potential returns that can be made from disruptive companies. You guys should stick to bank and energy stocks perhaps which pay dividends but do not offer attractive compounding returns. I would rather my companies reinvest capital to grow rather than paying dividends. A good article was written by Terry smith on dividends if you want to get up to speed (and yes I am a massive Fundsmith fan having first invested 8 years ago and now holding a substantial investment there ((this has also been hammered recently)).
Well said Lord. Markets typically overshoot. If the war ends and inflation gets under control by year end, we could see a 15-20 percent bounce minimum in the tech sector. A few percentage increases in interest rates won’t be harming the fundamentals of high quality growth stocks, many of which can simply pass on their increased costs to the consumer… looks at the recent large price rise Microsoft implemented. Who is going to move away from Microsoft? No one as there is no other option.
Few shares (even value ones) have done particularly well in recent months. FTSE100 - & more especially FTSE 250 - down YTD. Ditto CAC 40, DAX, Dow Jones, S&P500, Nasdaq, Nikkei etc. etc. War & inflation have seen to that. Sure, there has been some significant rotation from growth to value stocks and this may continue. But given the huge rebalancing already experienced, I'd be reluctant to say "The move from extremely over valued growth stocks held by SMT to value/core stocks WILL BE massive". HAS BEEN might be a more appropriate term.
Age is irrelevant. Anyone with a brain (young or old) can analyse history. And history shows high quality growth businesses outperform. History also shows if you are patient and have time on your side you will make a good return, even simply following a tracker fund. There has been a rotation but I expect in the near term there will be some rotation back. You are 6 months late flagging these warnings. I’m not sure what your purpose is here.
YG27 you are missing one very important point the downside has only just begun and like many young investors you are too young to either understand or contemplate. The move from extremely over valued growth stocks held by SMT to value/core stocks will be massive.
That is sensible. I know the downsides to SMT but I also know there is tremendous upside, evidenced by performance since the 1990s. I am happy with the risk / reward profile for 5% of my portfolio.
YngGun27, your reply says it all. The reason for my success in the stock market is that I always look at the downside of every investment as well as the upside. Unbridled optimism about any investment has bankrupted many people. My natural scepticism has helped me enormously in my investing career. There are many better prospects in the stock market than Scottish Mortgage once you factor in the risks here which are very large indeed.
Thanks oldandtired for your patronising comment. You know nothing about me. I may well be a lot smarter than you. As I said, I do not care about the next month / months or even 5 years. Look at the long term chart of the S&P and Nasdaq. It's up. Just like property. It all depends on your time horizon. I invest a relatively large chunk of money each monthly and let it compound. Retirement at 55 is my goal.
And this isn't a "punt". Maybe the reason you are still here at your age is because you have been making "punts" all your "investing" career?
YngGun27, you say that you are 35 years old. Quite simply, you are a baby when it comes to investment. I remember the bear market of 1974; that was a real bear market. I regard Scottish Mortgage as uninvestable at the moment. Far too many of its investments are still way too high. The level of gearing here is also at a dangerous level. I expect to see Scottish Mortgage at a much lower price than this in the next few months. It might be worth a punt then.
Indeed the comparison to the dotcom bubble and the "15 year stretch" are funny because SMT isn't tracking an index. It's an actively managed fund that picks specific stocks it thinks will grow the best.
The world we live in today is very very different to 2000 so you cannot compare the two time periods. I am only 35 and have 5% of my portfolio here for many many years. In any case, look at SMT performance going back to 1993. It has returned 1600%. That will do me when I am 65 thank you very much.
Why didn't you jump on here 6 months ago. You would have been much more credible then. Either you are an intelligent de-ramped or an unintelligent "investor".
From the Nasdaq high of 2000 it took 16 years to do a new high - growth is in decline and so is SMT for many years to come.
" growth story has ended for now but it will come back but it tuck 16 years last time."
took 16 years? Nike is a growth company. If you held Nike during this 16 year period, you'd have done pretty well today. Same for starbucks, same for Amazon, same for Apple, same for Google. The list goes on.
BTW I also like North sea oil and gas. Recently X4 on Kistos. Bought myself a Ferarri 488 Pista with the proceeds ;)
Let's see where Amazon's share price is in 5 and 10 years v today. Remembering that SMT bought many years ago so any return from today's price is massively compounding. Good luck.
I disagree. Tesla does have a moat. It has the first mover advantage, scale and production capabilities no other car maker has for EVs and the brand. Cars are not it's only source of review. Battery storage is the future and it is a leader in this area. Tesla has the brightest and best working for it and will therefore continue to innovate. If you were a leading engineer graduate, would you prefer to work for Tesla or Vauxhall or Nissan? I think we know the answer.
Yes you are talking about shares which are way over valued and if it was not for Amazon cloud they would be losing billions. Think about the quality of the earnings not the badge.
I am talking about Amazon, Kering, Ferarri, AirBnB to name a few. People buy in to SMT knowing the risks but also knowing the massive potential upside. Over 10 years this has out-performed and I believe 10 years from now it will also have outperformed. Each to their own though.
YngGun27 you are talking about Microsoft, Alphabet and maybe Apple - how many of these shares do SMT invest in?
YngGun27 was it your dad that wrote the very same thing in May 2000 that this time it is different?
Anybody who thinks that Tesla is good value at the current share price shouldn't be investing in the stock market at all. Note that I am not talking about Tesla's business; I am talking about Tesla's share price which cannot be justified under any sane forecasts. Also Tesla has no moat around its business activities.
CHRI5P, sorry but you are talking nonsense. You cannot compare 2000 decade to now. We are in a different world. If you bought Amazon in early 2000s you'd be a multimillionaire now. Whereas if you held cash you certainly wouldn't. Tech, AI, digitalisation and clean energy are the future. Many of the companies SMT holds are leaders in their field, highly profitable and have strong balance sheets (Amazon, Tesla). Raising interest rates a few percent isn't going to make a difference to their balance sheets. The hit to growth stocks is overdone IMHO and will bounce back strongly for the quality stocks with "moats" around their business. Value stocks trade on lower P/Es because they are simply not as good businesses. Compare banks / energy and resources against growth companies over the last 50 years and come back to me.
Also people think Tesla is just a car company. It's not.