London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
Good Afternoon everyone
For your interest or not, there is an Index called FTSE All-Share Closed Fund Index, of which tracks the performance of closed end ITs..SMT being the largest constituent
This was new to me, and may or not be of use to anyone, but it should allow you to track the investment trust sector against the broader market(s).
Have.a great weekend!
Possible $20 bln valuation on Northvolt.
https://www.ft.com/content/ca7a87b7-8f37-411e-851e-cb83750dba0f
Not to gatecrash the conversation, but I would like to add that an IPO for Northvolt is imminent, and Star Link, a subsidiary of Space X has been hinting at an IPO. Considering how X is now valued at less than 50% of what Musk paid, and that Tesla is struggling, I would not be surprised to see a Starlink IPO in 2025. This is why I hold SMT, for it's private company exposure. If you want the mega caps, then a decent technology or NASDAQ tracker will suffice, at over half the OCF of Polar Capital, even an S&P 500 Tracker, which is nearly 30% megacap.
Steeplejack - SMT's volume holding in Moderna will have changed (possibly many times) over time. I'm intrigued how you could possibly know all their buys & sells (& their exact timings) to reach the conclusion you do?
Https://www.thisismoney.co.uk/money/investing/article-12698807/The-best-investment-trusts-past-decade-going-cheap-SIMON-
Interesting article.What it shows is that amongst a list of well known investment trusts SMT is the worst performer over one and three years.Thus the discount to NAV is in part at least justified by poor performance.The mystic that SMT enjoyed is being steadily eroded.Polar Capital looks a far less controversial choice given it doesn’t have a 30% interest in unquoted.I suppose you’re left struggling with semantics when considering whether SMTs investment strategy needs more time to play out.How long is long term?However,this bottom of the table position,suggests that SMT has a lot of stale bull holders who’ll be only too keen to get the hell out when things do hopefully recover.I estimate that SMT’s holding in Moderna has(compared with having the money in cash)knocked around 6% off SMTs NAV.
Hi Tambo
Yes, I have just seen the results for MRNA...I can see it really falling hard. BG are the 3rd biggest institutional share holders of MRNA from what I can deduce.
LordLL
Her name is Misty, but I am fond of 'Winalot', and will bare that in mind for the future!
BTW MrAmericano - MRNA disappointed the market again.
The only way this stock is going to have a floor is if they exclude COVID revs completely from all quarterly presentations.
Unless its free, you're not going to get bumper revs.
Icarus321
"Question Three:
At the end of the day and despite all the good arguments you make about the strength and size (and therefore the valuations) of the private companies in the portfolio, is the discount to NAV not driven primarily by the fact that public valuations are treated with a higher level of certainty than those obtained privately? If so, how then do you close the NAV discount and unlock that value for shareholders?"
Slater's answer was rubbish.....everyone else is down so why can't we? Err...at 20% discount? And as big a fund as yourself.
MrAmericano - Tracker is defo a good call....you may not catch the biggest spike should it happen, but nothing wrong with slow and steady. Global growth funds too have less volatility and you can see a nice uptrend, even if the gradient is not steep. Polar Capital tech trust is another similar themed to SMT, just with different minds in charge.
Anyway, I'm looking at purchasing Gilts at the moment and lock in some below par bonds at 5% for 20 years.
I too was somewhat underwhelmed by the performance of our two managers on yesterday's call.
I submitted 3 questions none of which were addressed. I suspect elements of those questions have been picked up elsewhere on this forum over the past months. Here's what I asked:
Question One:
The central investment hypothesis underpinning SMT is that within a portfolio of high growth, disruptive and highly innovative companies a few stocks will deliver such massively high multiple returns that they will offset the mediocre or negative returns from all the others in the portfolio and thereby meaningfully outperform the chosen benchmark:
1. If the expected timeframe to expect these superior returns is c.10 years, then does the core investment hypothesis still hold true based on past performance over the last decade, i.e. in terms of your own numbers SMT’s 1, 3 and 5 years have now significantly underperformed the benchmark and although the 10 year is still a beat (i.e. 50% higher than benchmark) one assumes that it would only be in the last years (e.g. 8, 9 or 10) of the current cycle where the out performance has come (you do not publish the results for the intervening years)?
2. Put another way unless there is a huge sea change in returns over the next year or so, this 10 year cycle is a fail?
Question Two:
Although there is truth to the growth/disruption narrative being a driver of growth in the SMT share price/NAV, is the primary catalyst not rather the abnormally low levels of interest rates and the easy credit brought on by QE that has persisted for the past decade? If we are returning to the historic mean on interest rates for a prolonged period of time, then the future value of the growth stocks in the SMT portfolio is therefore muted and offers dull prospects for any out performance?
Question Three:
At the end of the day and despite all the good arguments you make about the strength and size (and therefore the valuations) of the private companies in the portfolio, is the discount to NAV not driven primarily by the fact that public valuations are treated with a higher level of certainty than those obtained privately? If so, how then do you close the NAV discount and unlock that value for shareholders?
MrAmericano - delighted to hear you're enlisting your terrier's skills for this week's lottery.
Does (s)he have a name yet? If not, may I suggest Winalot?
I haven't watched the webinar (& doubt I'll bother).
I rarely find them very illuminating, unless you like staring into the whites of managers' eyes to try to work out if they're bluffing.
No fund manager is ever likely to say "we stuffed up, haven't a scooby where markets are heading & have even less idea how our fund is placed for the future". Yet in reality - to a greater or lesser extent - every fund faces these sort of uncertainties. Especially at the moment.
I, too, have found LB uninspiring in the past. He just doesn't come across as particularly dynamic. Nor does he instil huge confidence IMHO. I've found TS succinct in his replies, which I guess you could also interpret as arrogance. Let's hope they don't turn out to be another Woodford, who also came across as a calm, "we've got this" kinda guy. Until it became pretty clear the only thing he'd got was a huge problem on his hands.
I personally don't feel comparisons between SMT & Woodford's erstwhile funds have any validity. But the point I'm trying to make is that these in-house fund webinars rarely serve any useful purpose for the majority of existing investors. I see them more as a sales vehicle for potential new punters. After all, to most, Neil Woodford came across in interviews as a successful & credible "safe pair of hands". Which history shows us proved somewhat wide of the mark.
Hi Tambo210
Again, I absolutely concur with your perception of the Webinar. LB seems to be a tad camera shy, and really does not inspire any confidence. Slater on the other hand, is calm, very cool and almost Vulcan-like. I asked the question regarding Moderna, and I don't think that the answer LB gave was satisfactory. I believe that Moderna has earnings today and I will be interested in the results. My guess is that SMT were topping up on this when it was $200-300 per share back in 2021. As I previously mentioned to TheFrogster, I think that I am done with buying more Smt Shares for now and I heed the advice of LordLL given a week or so ago, concerning too big an exposure to SMT, which Is currently 30%. I am currently debating whether to start drip feeding into JP Morgan Global Growth and Income invest Trust alongside an S&P 500 tracker. Thanks for the comment, it's good to learn from experienced investors Good luck everyone one.
Well, I found it pretty pedestrian.
They weren't going to admit to any wrongdoings or massively poor choices of picks.
I'm glad they confirmed they kicked out ILMN. The company has problems it just can't fix in its current form.
They pretty much avoided answering the question regarding price to NAV discount. More, well every other trust is at a discount so why can't we? Errr 1) not entirely true, 2) You're SMT and perhaps you should be a bit more concerned 3) why nearly 20%?
At times, I felt Slater was a tad arrogant. He came across as :" This is a waste of my time!"
Hi TheFrogster
Thanks for your input, I agree with you, which is as good an analysis of what was (or indeed wasn't) said. I am probably going to leave buying more Scottish Mortgage shares for the foreseeable future as it's currently 30% of my Portfolio (which is only modest in value), and admittedly I am 12% in the red with said shares . But I won't be selling, as I hope that they will ripen in 5-10 years and bare fruits. If not, well that's investing for you. Maybe my terrier will choose the weekend lottery numbers correctly with his wagging 'financial indicator' tail. Good luck to you all!
Hi MrA, I felt that it was like most of the other webinars I've seen over the years. I agree that TS does come across well - not so keen on LB though. I didn't feel that I gained any more knowledge on the portfolio or strategy and the message I received was it's 'business as usual and we ain't changing a thing'. To be honest, I'm not too interested in the granular details of each company within the portfolio and trust them to make adjustments/purchases/sales where necessary. I'm not concerned about the future of SMT but after another chunky buy earlier in the year (when I wrongly thought it had bottomed out), I won't be making any more purchases in the near future as I feel I've got enough exposure to SMT at the moment.
Hi everyone
After listening to the webinar, how do investors feel about the future prospects of Scottish Mortgage, say in the medium term? Did it inspire confidence in you to purchase more shares at a discount? I actually thought that Tom Slater gave a good account of himself. He's very unemotional and cool-headed and insists that the fund is performing as it should in the context of today's geopolitics, high inflation rates etc. I would be interested in what other investors views and perspectives on this are? Thank you all and have a great afternoon.
Hi Frogster
Thank you for the offer. I received the link this afternoon by way of Email. I will most certainly be listening in to this. Exciting!
Yes MrA, do you need the link or have you already got it?
Is anyone dialling into this tomorrow?
MrAmericano - thanks & good luck to you too. Don't give up on intuition just yet. I'm sure that Terrier of yours can be trained still!
LordLL
I do believe that 'gut' instinct can help..maybe intuition is the edge that some investors have and are able to take advantage of that. I unfortunately don't have that 'edge' so I have to rely on market inefficiency and lady luck! I do at least review my SMT holding regularly though. Good luck to you all!
MrAmericano - shame your pet Terrier is unlikely to win you the lottery any time soon. Commiserations!
Cost averaging certainly takes the psychology out of investing. But it doesn't really help with selling. And I personally feel some investors fare better with gut instinct anyway.
Sure, they'll never call the peaks & troughs exactly. And they'll likely be way out at times. But their gut may well help them avoid buying at the very top &/or selling at the very bottom.
That's how I operate anyway. I sold a bit of SMT when it rose above £15, buying back in lower down. As it transpires, I should have sold more when it went above £15 & waited longer before buying any back in. But at least I wasn't purchasing above £15 (or selling at £6, come to that).
LordLL
That's why imo, dollar-cost averaging is still the best long term strategy, when it comes to investing in mutual funds, index funds, ITs etc. Many investors think that they have an 'edge' but actually have as much accuracy for market timing as my pet Terriers poops.
Sadly, no-one can ever know the floor (or peak) in any share price.
It’s never anything more scientific than a hunch. Might be right, might not.
At the end of the day, every investment decision’s a calculated gamble at best. It only takes another black swan event (positive or negative) to throw any theory completely off course. Think Covid, War in Ukraine, Israel Palestine conflict etc. etc.