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DorsetLSE - I totally agree with you about chartists & so-called experts.
About a decade ago, I recall many experts saying the US markets were over-valued & due a major correction. At that time, I had a decent chunk of my pension pot in European equities, going nowhere fast. Despite the prevalent “expert” advice, I decided to move from a European to a US fund. And boy am I glad I did.
Many experts are again saying the US is over-valued today. And they could be right eventually. But in the long term, I fully expect them to be wrong again. Most non-US markets are heavily influenced by American sentiment anyway. So if the US falls, Europe & the UK are almost bound to follow suit.
Let’s hope if there is any US downturn, it’s fairly short-lived & shallow, as SMT has a heavy geographic concentration there. I suspect the Fed will still reduce interest rates later this year or early next, which should help.
As for SMT “going nowhere for too long”, I know what you mean as it has seemed rangebound for some time now. It almost feels like a case of one step forwards, two back. But if you look at the share chart, that’s not entirely fair. It has actually gone up 37% over the past 12 months, albeit from a low base.
In my 40+ years of investing I have learned to ignore so called "experts" and chartists (a bit like fortune tellers) who usually have an agenda to talk up or down the stock values. Remember when oil was forecast by experts to go above $200? Valuing SMT is very difficult as it involves so much unquoted companies as well as the general market movement in the public stuff so I don't really believe the valuations. As for me I still have £22k in SMT and it represents just over 2% of my portfolio so no big deal but its been going nowhere for too long and at age 75 my investment horizon is getting closer :)
CaptLard - I think you'll find the answer in my previous post.
Unless you reckon its summary of SMT's figures is accurate:
Annual Sales, $-2,913 M, Annual Income, $-2,922 M
Can an automated BOT charting thingy actually analyse an investment trust, which is a very different beast to analysing the financial fundamentals of a "normal" business, where you can compare one business to another, like bank to bank?
I am not sure it can. Thoughts?
Ripley94 - not sure how reliable some of that data is.
For example, it says:
Annual Sales, $-2,913 M
Annual Income, $-2,922 M
What's that about?!
These chart experts say a good buy at present .
https://www.barchart.com/stocks/quotes/SMT.LN/overview
Barchart Technical Opinion
STRONG BUY
The Barchart Technical Opinion rating is a 72% Buy with a Average short term outlook on maintaining the current direction.
Long term indicators fully support a continuation of the trend.
Stuartrm, I was simply stating that we have reached that point and that this In my opinion will effect the fluidity of investment in the future.
I mentioned this as it had relevance to the poster before me.
In terms of effect all these things are worthy of consideration (as are the perhaps deeper technicals).
I'm not advocating a situation in which numbers are wiped out as that of course would be of no "benefit", despite (as you state) this being a possibility.
As every world economy depends on citizen to power it, the problem isn't going to particularly improve on any way.
I was simply tempering the recent posters expectations as goes continued appreciable recovery, despite feeling some distance on this is liable to happen nonetheless.
Apologies if it's too simplistic for this forum.
Regarding Walp’s comment that the world just has far too many people in it, even that may be resolved relatively soon by the increasing prevalence of natural disasters and the “ambitions” of Russia/China/Iran/North Korea and/or the “resistance” of Ukraine/USA/Nato to “a changing world order”. Whichever of these groups is right or wrong, or whether the truth is somewhere between, is not a debate for this board but the potential risk of a serious military clash between these political groups is clear to most. It is also clear that whatever “benefits” a resulting population reduction might bring are likely to be outweighed by the accompanying collateral damage. The Chinese curse “may you live in interesting times” has rarely been more apposite than now.
I'm with you on this Ripley94, but the news yesterday re increasing the UK defence input spending we are living in an increasingly volatile world which (imo) is increasingly imbuing volatility on the markets.
Once world inflation is tamed and interest rates are no longer an abject fear to those more inclined towards faster profits, I agree with you things will pick up.
My only reservation is that big bumpy and demoralising knocks may seem increasingly likely in a world that has just far too many people in it.
I had this note copied from here I assumed this time last year , but not among these posts here on that date .
Maybe my friend G sent privately , his sort of trade.
Not a bad return for one year 837p today approx 30%
23/4/23
Definitely Oversold IMHO. Bought £9K today ~648p. Fingers crossed. Growth will come back sometime in next couple of years and when it does SMT will start flying again.
walp - correct. I'm a holder, but won't be adding.
LLL, agreed as to the bulk cause of the issue, which is of course effecting the rest of the tech market and has been much in discussion over the last 18 months of pain. My point was the sub comparitive performances to the others and applying logic to those causes. Sure Anderson left and it has suffered, but have the decisions since then been destructive? Was Bilde correct in his assessment which then double labeled the trust as an issue? Are the constant articles labelling SMT as a failure in performance self prophesising?
Knowing the pessimistic nature of investors in general (who are after all naturally strongly speculative) I do feel a deal of the exaggeratedly bad performance is down to the spoon fed impression of a "good egg gone bad".
Do the unlisted concerns (and the rest of it) censure such fear and loathing, is the question?
Much as I would normally self with a consistent loser (maybe I should have way, way in the past) I (like you) have attributed the fall generally down to inflation.
I believe you are holding but not buying at the moment also?
Yes exactly, as Picard says the relevant returns are annualised PCA returns. Saying you could have made X return if you'd bought at Y and sold at Z dates, isn't meaningful. If a PCA strategy on the trust yields negative returns after more than 5 years, and the same strategy on a global index wouldn't have, then the trust is the problem imo.
I have been investing regularly monthly for 6 years and I am currently under! Started buying in at 4ish... was laughing when it was 15ish.... now questioning how my long term hold and acquire strategy will hold up.
llol - sure, you're up if you bought 5 years ago, in absolute terms. Minus inflation you're barely up at all, and against its benchmark (the FTSE all world index), you're down over 5 years, which is kind of shocking given that SMT's volatility is much higher than that index - volatility should be a price you pay for better performance, not worse.
fela96 - depends when you bought in. If you paid >£15, you're already down 60%. If you paid <£4, you're currently still quids in (albeit fewer quids!).
JDPT- "Woodfood decided to close down the management company" is a bit like "Truss/Raab decided to resign"!
INOV is down 82% since 2019 so for all intents and purposes it was wound up. To be pedantic, it crashed and burned due to liquidity issues.
If SMT falls >80% never to recover, that is as good as being wound up for most holders. So the question we should ask ourselves is could the same fate befall SMT.
walp - I agree that SMT v. WPCT is apples v. pears to a fair extent. But I don't think you can just blame the media/unhealthy speculation/complete conjecture for the recent huge underperformance. Even stripping out any discount, the total asset value of SMT's holdings has fallen dramatically since 2021. I'd argue high inflation, interest rate hikes & the consequent shift in investor sentiment from growth to value have far more to do with it than any media articles. I, too, suspect things here may look a bit rosier in 6-12 months' time. But I'd always advise against holding any investment purely on the basis it would feel too painful to sell at a huge loss. Rewind to Woodford and WPCT investors may well have felt something similar. And look how that turned out!
Dear God - I looked up INOV on HLs website and it is trading at a 46% discount to NAV!
https://www.hl.co.uk/shares/shares-search-results/s/schroders-capital-global-innovation-trust
Curious I also looked at Schroders website for it
https://www.schroders.com/en-gb/uk/individual/funds-and-strategies/investment-trusts/schroders-capital-global-innovation-trust/portfolio/
Extraordinary to see these 2 typos - you'd think Schroders could do better!!!
"Reaction Engines is developing its innovative SABRE engine to enable space and hypersonic travel more efficieint (*DOH!) and more accesible (*DOH!). (5.2% of total investments)"
Again, this is false. WPCT was not "wound up". The fund was simply taken over by Schroders as Woodfood decided to close down the management company that was running WPCT, presumabily due to the fact that his reputation was massively hindered and no investor wanted to be associated with his funds anymore.
You can find out more here: https://www.morningstar.co.uk/uk/news/196682/schroders-to-take-over-woodford-patient-capital-trust.aspx
The fund still trades on the LSE today under the ticker INOV.
Remember WPCT was a close ended fund too and yet it was still wound up. I don't think closed ended funds are immune to liquidity issues. The problem there though was that the fund held large (majority?) stakes in a lot (most?) of its holdings, as did the OEICs Woodford ran too (in the same companies), so when they became forced sellers the companies themselves were screwed.
If SMT's underlying holdings (even a few of them) survive and fulfil even 10% of the growth the managers believe they can, then this trust is simply free money right now.
Yes, the decline above all others of SMT is undeniably concerning, but I think a little logic is worthy of consideration as goes all discussed concerns.
What, in essence, is happening to the trust that is vastly new, different or concerning above all other similar AICs?
We know that the financial media have absolutely (gleefully) riddled the trust with tales guaranteed to sew doubt amongst the panicked herd, adding to that wholly unhealthy speculation surrounding the departure of its old head honcho and complete conjecture as to the possible inability of the rest of the team to maintain a decent strategy.
Not many tech buyers are likely to have had all of that pass them by, and so any out there wishing to buy into tech in a well timed fashion might seem most likely to leave SMT at the bottom of their purchasing list.
Placing the weight of likely negative against the weight of likely positive (and in the absence of any real discernible issues) I am holding come what may (and given the enormity of my losses so far, as well I might)...
Its a close ended trust and the Woodford argument seems rather unlikely to me in addition..
Right or wrong, selling right now would feel 10x the pain of just holding.
Inflationary recovery is turning out to be slower than forecast and Id bet my granny (probably... If I actually had one) that these will be worth rather a bit more than they are now in 6 months...
JDPT - spot on. Though personally I won't be adding, as I've a significant holding already & the risks remain high (whatever the short term share price movement).
There's too much speculation going on here.
SMT is a closed-ended fund meaning, it is a fundamentally different legal structure to that of Woodford's fund which was open-ended. Therefore, it's not possible for SMT to be forced sellers of illiquid assets and end up in the same situation.
Secondly, the reason for the huge discount is that there are investors that believe, due to the fact that SMT currently has almost 30% of its holdings in companies that are not publicly listed, that the NAV of SMT is simply not reflecting the value of the underlying unlisted assets. This is because they are hugely illiquid and their valuations can change by a huge amount instantly after these companies raise money at a new valuation (in the current economic climite this would likely be south).
This is speculation; I am yet to see any solid proof to this claim, and I am doubtful as to their claims as Baillie Gifford have an external company that assess the value of the assets on a quarterly basis.
Oh, and of course, another reason that the NAV discount is so large is that retail investors believe speculation that is not founded in reality and sell at a huge discount. I'll take your shares, thank you very much.