The latest Investing Matters Podcast with Jean Roche, Co-Manager of Schroder UK Mid Cap Investment Trust has just been released. Listen here.
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Cardinal,
I like the pragmatic, unorthodox approach of Ruffer and its definitely more defensive than SMT.
Interestingly, it won't have escaped your notice that SMT now have holdings in two Crypto linked companies, one directly and the other more Blockchain focused. That should maybe give us an idea of direction of travel of this theme.
Sorry last word as it's a bit of topic.
I personally think SMT is under-exposed to crypto. A couple small holdings in some crypto exchanges/platforms is not really what I consider a proper bet.
VC and SV is pouring cash into crypto right now. "Killer applications" (beyond speculative trading) for it are beginning to show but the way it can integrate into the future metaverse is potentially very exciting and a possible growth area. Just look at Gemini who raised 400mil recently to push their crypto platform toward metaverse.
I know metaverse is a bit cliche right now (and it is) but try not to get wrapped up in the emotions of it. Even if 30% of metaverse ideas going around at the moment turns around to be possible/delivered in the next 10 years then that is a big deal. Metaverse is also wrapped up in the whole "Web3" wave which is coming.
The key driver of SMT appears to be whether its 'big bets' will disrupt their sectors. The big bucks they made out of Amazon and Tesla moved the needle. If Moderna/ASML/Illumuna blow away competition, SMT will do well. Seems a shame to miss out on long-term potential for a point of two of premium. If you don't think managers have ability to pick companies with the potential of explosive growth, SMT is not for you.
From what I recall from one of the SMT webinars their position is that they act like a venture capital company where they invest in small companies pre IPO. They admit that this is risky and that most of their investments go nowhere but this is far outweighed by the few that make it big, the classic one being Tesla where one report puts the BG outfit making £24bn overall. This of course, relies on a long investment horizon. To some extent this is not that different to the direction Woodford was going in but he had a few things against him like using an OEIC structure, using the Guernsey stock market to get around holdings limits and most of all investing in fairy tale no hope businesses.
The SMT managers will only invest in an unlisted company if it has a value of over $1bn. If anyone thinks the SMT strategy is similar to that of Woodford, the obvious solution to to sell out asap. I have faith in the SMT strategy as being thought through. I seem to recall a conversation with Tom Slater and he indicated that they get many offers for unlisted investments and take about one in a hundred.
DorsetLSE - I agree that comparisons between Woodford & SMT are of limited value. Woodford made much of his reputation buying high-yield & (at the time) relatively steady-eddie stocks like tobacco companies. The problem came when he started going into unlisted companies which he & his team had much less experience & knowledge about. And the rest, as they say, is history. SMT has generally always had a tech bias with a penchant for unlisted companies it actually understands. That's not to say it always gets it right. No-one ever will. But it has backed the occasional winning 1000-1 shot. Which is "all" you need to cancel out the "did not finish" brigade and still make a handsome profit.
I was just saying guys that even the best investors can make some bad investments sometimes, at no point did I say I had no confidence in smt or that I thought smt was a bad investment, as bus pass was suggesting, he was picking out certain words and trying to twist them, to make out I was, just a bit over the top I think
In fact I'm very happy with the way my investment is going here so far, and hopefully it will stay that way for some time to come
best of luck to you all
Your sound Robleo I wish I had hung on but I didn’t good luck to you mate , don’t let anyone get to you your your own man be proud mate .
Thanks oldsid, and best of luck to you, whatever you're into now
The Woodford fund was open-ended which meant that if a large number of investors wanted out the manager had to sell the underlying assets. That was a problem as in effect there was no market for the amount of unlisted stocks which were part of the ensuing fire sale. SMT is a closed end fund, so If a whole batch of SMT investors want to sell there is an interaction with potential buyers who are willing to pay whatever price, but the managers don't have to liquidate parts of the portfolio.
U/T, 01-Dec-21 16:35:20 1,503.00 178,670 Buy* 1,500.50 1,502.50 3m
That's a SP of c.£16.79!