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This could be a catalyst if reports of 150bn valuation are true
Telegraph says buy, most of my purchasers around 10 t0 13, should I buy now or hold and wait?
@Stocksr you need to figure that out, based on your investment strategy (portfolio mix and time frames), risk tolerance etc.
HERE for long haul? THEN perhaps buying makes sense, though I wouldn’t trust anything a newspaper tells you lol.
My rule of thumb has been 'buy below £7' recently. But each to their own.
Certainly trust no newspaper, or any of the investment media in my mind. I'd say the most obvious markers are written big on the wall, but sentiment is still muted. I'd just look at what we know to be going on with this type of investment at the moment and the likelihood of travel direction. You then have to add in your assessment of risk. I'd never thought of SMT as a particularly risky investment despite it's volatility (which makes it a long termer unless you feel convinced it's at its low). Plenty of burned fingers for those who thought this, so caution is required.
I'd buy more if I had the cash spare, but that's me and if I then lost money in the immediate term I'd look back on my 30 years of investing, shrug my shoulders and wait for the upside.
That's how I've always done things but beyond thinking hard as to my purchases initially & spreading risk I've never actually developed a strategy beyond a few basics you could scribble on the back of an envelope :)
When it comes to investing I just use common sense and probabilities, there's lots of information out there thats easily accessible with the internet. We all know that rising inflation and rising interest rates are bad for growth stocks, looking at the news it appears that inflation is falling, interest rates will probably also start falling, probably sometime next year, this will be a positive thing for growth stocks. For SMT some IPO's of the private equity would be good, these have been mentioned in recent news, and may start to happen next year. Its hard to buy stocks when they are in the doldrums, it seems easier when the share price is in an uptrend and everyone is singing its praises, both ways work. If you buy now you may have to wait, but you are nearer to the bottom, or you can wait for a good uptrend and join in then, people make money both ways.
Hello Fellow Investors
How is everyone keeping? I decided to sort my portfolio out last week and sold all my SMT shares for a small loss that I can live with. I got disillusioned after the SMT investment seminar, especially with LB....I really don't think that he has a clue! I have popped my proceeds into my S&P 500 fund, where it will hopefully work -churn-compound over time. I am only a small-time investor who needs his cash to compound for retirement. Below £7.00 I may decide to buy a chunk for a swing trade, I don't know, but honestly I have lost faith in the managers. That's my story anyway. I really hope that you are all successful with SMT in the future and good luck to you all.
MrAmericano - fair enough. Hope you listened to Misty before making the move though!
MrAmericano - me again! You do realise you posted the following on 24 October 2023:
"My personal investing time horizon is at least 20 years. SMT is a down-on-its luck investment trust, with some very good holdings, and with it's current negative nav, a good buying opportunity IF you want to take some risk, AND have a suitable long term time line, OR maybe want to dollar-cost average down. I share a common interest as a fellow investor, and SMT could be a potentially long term lucrative investment."
It sounds like you first bought into SMT fairly recently, as you mentioned an average buy price of 740p. Which doesn't really chime with your time horizon of at least 20 years. Obviously, investors change their minds sometimes and it can be the right move. But trawling through your past posts, there's something not quite right here IMHO.
Lord Loads of Lolly
I simply changed my mind. My investing timeline is 20 years+, but with 30% of my portfolio in a fund that just isn't working my money, and yet to break even, I decided that I would put it to work in theS&p 500, where you are practically guaranteed a long-term CAGR average of 10%. Let's just say I took some advice. I think that SMT is a good 'poker-play' and you need to have a healthy risk tolerance to play the game. But as I said, I really don't rate the fund managers, I don't have faith in them. Which is why I am going all-in on a cheap index fund. I may decide to dollar-cost average into SMT...I don't know. But as I clearly said in a previous post, I did not understand what I was buying into with SMT. I did not understand Price-Nav, I also didn't understand the weighting of the private companies, and the impact on the sentiment. I just believe that my money will go to work harder in an index fund for now. Maybe a percentage in the NASDAQ 100 too. For me personally, this adds-up as a better long-term bet.
MrAmericano - Hmmmm.
@MrAmericano…30% was a significant amount and your decision seems pretty sensible to me. Good luck!
Happy with my 15% (currently < 2% loss). Will not be buying more.
Captlard
Hi Mr Captlard
It was a more sensible decision...thinking with my head rather than my heart, and taking some free advice off a family IFA.
If SMT drops below 7.00, I may buy some shares, but I bought in at around 7.80 and managed to average down to 7.40...I sold at 7.22...
Anyway, I feel that I can sleep better at night now.
Mr Lord Loads of Lolly
There's no 'hmmmmm' to it sir..
Just a simple, unemotional decision.
I am very sorry that you think there is 'more than meets the eye' at play. That's just plainly not true. And frankly quite offensive that you suspect foul-play. Just accept,.that some investors have different objectives to your own.
Quote "I decided that I would put it to work in theS&P500, where you are practically guaranteed a long-term CAGR average of 10%." Be careful on this one. I am old enough to remember someone in the late 80's saying that the Nikkei has just hit 40k and look where that went. There is also an interesting article in the Economist about the S&P493 which is the 500 minus the magnificent 7 and it shows a rather pedestrian performance of the rest of the US economy. I was pushing my 500 allocation up until I read this and realised that it's basically a bet on only 7 companies, most of which weren't around (or not doing too well) 20 years ago.
MrAmericano - I apologise if I got this wrong. It just looked totally at odds to me with all your previous posts & your reasoning.
But I appreciate different people have different objectives. And these can change over time - or following new advice received from others). Indeed, I've often said as much here.
Anyhow, good luck wherever you decide to park your cash. Just try not to move it around too often would be my main advice. Very often this just leads to chasing your tail & benefits no-one in the long term (except brokers/the government, who love all that extra commission/stamp duty!)
I'm very much an each to their own type of person and do feel that Mr Americano's 30% might seem too much for a great deal of people. Having said that we're 10% "practically guaranteed" in the game of investment then I feel leant towards saying that interest paying savings accounts would likely become a dinosaur of the past. Who would bother with them given such a gold plated return?
If Mr Americano's decision allows him better sleep at night then so be it. If it were me I would have perhaps balanced the decision at maybe a retain half approach. I currently hold 25% of my portfolio in SMT and would be loathe at this point to sell any. I did buy into Fundsmith by selling some PCT which I felt too entrenched solely in companies constantly targeted as having unfair monopolies plus too exposed to China (possible overeaction on my part), but am glad I did so as I feel it has leant a greater safety to my portfolio by doing so.
As inflation is dropping I'm just heading into the black as goes that investment (thanks for the advice from all here on that one).
As for SMT, my somewhat conservative belief is that it will likely go some way beyond 10% from today to 30th November 2024 (predicted therefore at around £8 minimum), but who knows to what extent the next big world event will scupper anyone's predictions?
I guess we will see, but everyone is going to have their individual strategies and perception of risk and so each to their own.
LLL . Absolute agreement to your final point. Think and buy well. Hold.
Buying and selling has costs attached to it and most often (in my experience) ends up with me kicking my own butt. It is after all knife catching and can be a bit disappointing when the purchased element underperforms the sold out one.
Imho (based upon my assessment of a most likely future), this will be Mr Americano's sum experience over the next 12 months and beyond as goes his decision, but as stated life is not about making money but being happy.
If holding SMT causes anyone sleepless nights I'd have no hesitation advising them to sell up asap.
Mr Lord Loads of Lolly
Thank you, apology most welcomed...I take on board what you have said and I thank you all for the advice. Let's just say that despite all, I hope that SMT works out for you all, honestly. I only wish for success for all investors, both big and small because it does take a toll on ones emotional well-being, both ups and downs.
And as I previously said, I may start dollar-cost averaging into SMT, but a small position, say 5%. That will do both me and Misty fine!
Dear Mr Walp
Thank you for showing understanding....it was indeed causing me a few restless evenings...I didn't fully understand what was underneath the SMT bonnet or how ITs work. It's been a learning curve!
MrAmericano - as Walp said, never any point in investing if it keeps you awake at night.
I wouldn't ignore investment trusts altogether though, as they can be a reasonably cost-effective option. And unlike OEICS, you can at least buy & sell at a known price.
Index trackers can also be low cost of course. And indeed, they always should be. Otherwise, even if they accurately track an index, they're always going to underperform it once the fees are factored in. Vanguard have a good reputation here. As I believe Fidelity do for their S&P 500 tracker. But I'm no expert in this area, so DYOR.
What joins us all together in this forum (whenever we started out SMT journey) is its our hope for a higher share price.
The real question I have is what will actually cause a turnaround in the poor 1, 3 and 5 year performances of SMT against benchmark. I know it’s a 10 year buy and hold but the amazing runs in AMZN and TSLA etc. were all a good few years ago.
For me, the SMT share price is less about the impact of interest rates and inflation, and the re-rating these macro factors have had on portfolio share prices. That’s easy to quantify and it’s seen in the NAV. All things being equal, the SMT share price should be c. £8.30.
Rather, my view is that the principal element that causes the SMT share price to languish is the uncertainty around the valuation of the private companies that make up of c.30% of the portfolio - I would argue that this is the primary reason why the average discount of SMT relative to its NAV has averaged nearly -17% over the last 12 months.
So getting any new piece of point data (like e.g. when Space X might sell some shares) is helpful but it simply does not provide enough sunshine to value a key part of the overall portfolio. Internal valuations done monthly or quarterly aren’t enough (in my opinion) to break through the ceiling on the share price. For the Portfolio Managers to earn their fees, they should be addressing this aspect fully.
Until these valuation elements are dealt with in a more structured way I believe the NAV discount will persist for many more years (or unless interest rates go back to near 0%).
Icarus321 - not quite sure what you’re proposing in terms of the unlisted holdings, given you think monthly/quarterly internal valuations are inadequate?
I agree that the current discount to NAV (whilst narrowing) is - at least in part - caused by uncertainty over the unlisteds.
But sentiment can change quickly. Or not!
A couple of options, e.g. perhaps:
Lower the percentage of private v public holdings from say 30% to 20% or even 10-15%, which was the limit set when they first sought mandate permission to move beyond publicly traded stocks, selling a portion of these stocks should then realise a healthy cash profit and crystallise some of the capital gain?
Lay out a multi-year roadmap of expected listings from private to public so that there is a forward view of upcoming liquidity events and a structured way to validate private valuations over time?
Aggregate the private funds held in SMT into a separate listed entity (e.g. like the Schiehallion Fund) that SMT could retain a stake in and through that although tighter valuation and scrutiny from the market - perhaps with a focus in later stage private companies like Space X?
Icarus321 - thanks; certainly some interesting ideas there.
Lowering the private % could only really be a longer term aim I guess, as & when their existing private holdings floated, with the proceeds then being reinvested into public companies.
SMT has gained access to the likes of Space X largely through its reputation as an early stage, supportive & exceptionally long term investor.
So my concern would be that any dramatic change of tack could lose them this reputation & leverage. It might also alienate a fair proportion of SMT’s existing investors who bought in on a long term view, precisely BECAUSE the fund’s gone big on speculative but potentially highly lucrative unlisted holdings.
Sure, that strategy’s been severely tested over the past few years. But less so if you look over longer timeframes (though admittedly, as you say, private holdings were less significant the further back you go).
Who knows, in another 4 or 5 years, 30% unlisteds could look like the dumbest move ever, with us all left scratching our heads as to how we could possibly ever have bought into it.
On the other hand it could, by then, also resemble an inspired bit of investment foresight, from which we’re once again reaping huge rewards….