Member Info for Beachhouse

ARK seems to be more actively managed than SMT

I remember on a skiing holiday in January 1988 there was a group of day traders staying in the hotel, they worked for Credit Suisse in London, they said they had to make an average of £1200 a day, I remember them saying, they even managed to achieve this over the previous year which included the black Monday crash of 1987.

Discount is narrowing

Over the years I've met a few company owners who in some ways came across as quite bonkers, yet they ran successful businesses, their personalities go to extremes, Elon musk is one of the most successful business men in the world, yet I remember his first day at Twitter he walked in carrying a sink.

The negative news articles from the pundits about SMT seem to have dried up, recently they have become much more positive, and the share price has been tentatively climbing.

I think SMT has held up quite well considering the sell off on the Nasdaq yesterday.

Nice positive article about SMT on citywire website, well worth a look.

Nice close above 700 with above average volume

Yes it bounced back off 700 recently, it should go through soon, then around 800 is the next level of support/resistance.

Don't worry, your in a good position, but you do need to wait, if you are able to wait. The fund managers say you need to hold for a minimum of five years, I would allow a year either side of that, but don't worry, a new high will come along. By this November it will already be two years in from the previous high, you do need an exit strategy as well.

Inflation in the USA fell faster than expected the FED reported this week, and the bank of England said they expect UK inflation to fall rapidly later this year, interest rates will follow at some point, this is good for growth stocks in general. For SMT, well moderna should improve later in the year as they roll out the winter vaccines. The pundits are starting to be more positive about SMT having previously sowed the seeds of doubt, especially about the private equity which used to be seen as one of its plus points. I think things are starting to look better but it may require an IPO to boost confidence and narrow the discount.

Just been reading an article on Trustnet that is recommending some Baillie Gifford trusts, SMT EWI and monks, sorry I don't know how to post a link but it's on the Trustnet homepage today.

It's a good thing, it will add to sentiment, and more will follow.

In my experience the general mood on these discussion groups improves as the share price goes up.

Just been looking at a couple of other long standing investment trusts I have held previously, TMPL and CTY, both UK focussed, dividend payers and quite well regarded, yet they have failed to regain their pre pandemic levels and the share prices are down over 5 years , not counting dividends. They don't seem to attract bad press, TMPL did have a boardroom bust up in 2020 but I do see it recommended along with CTY. Even at a 20% discount SMT is roughly where it was pre pandemic and up over 5 years, without the discount it would be doing well compared to these other trusts I have held.

My method will work on the S&P or NASDAQ to show the underlying trend, be careful using it on individual stocks though, it will give you an idea of where the share price should be today, and also an idea of where it should be projected into the future for buy and hold investors. If you want to try to pinch a bit more than a buy and hold strategy then try to buy when the price deviates downwards from the underlying trend and sell when it deviates upwards, this is where volatility is your friend, I know it's impossible to time the markets, but you do gain an advantage if you just try to buy when it deviates lower(it could go lower) and sell when it deviates high (it could go higher) you can shave a bit more off than if you just buy and hold. During the Dot com rally and the Pandemic rally you would have left most of the money on the table by buying and holding, you would still have made some money though because the underlying trend is upwards.

Investment trusts act like indexes, as they are a collection of individual companies. Bring up a historic chart of SMT on Google or Yahoo finance, they go back about 25 years, no moving averages just a basic line chart. You can see the underlying trend, ignore large deviations from this, market crashes and overblown rallies, these are transient, outside of market crashes and overblown rallies the share price has it's little ups and downs but it follows an underlying trend and it has an upward bias. If you go back to the Dot com rally and resulting crash, the share price deviated upwards then downwards then returned to it's original underlying trend, the same happened on black Monday in 1987, the financial crisis 2008, and the pandemic crash and rally, if you remove the pandemic crash and rally where would the underlying trend be now for SMT, around 850 which is where the nav is, the 20% discount to nav is also a deviation that will correct itself. The stock market doesn't like to go down, it likes to go up and it will be looking for a reason to go up. Over time prices of everything go up, including the price of SMT it has an upward bias, just look at the chart.

Rising inflation and interest rates have put downward pressure on growth stocks in general, then look at the negative press that SMT has received, concern about the private equity hitting the 30% limit, not having a director who is a specialist in private equity, and the high level of gearing were some the main points raised. For a renaissance in SMT what needs to change, well in the UK inflation is a problem, but SMT is a global growth trust, in the USA inflation is lower and falling, also interest rates are peaking, so that downward pressure is easing, then concerning SMT, they have appointed a director with previous experience in private equity, some of the private companies are planning to IPO soon, Northvolt looks promising, this would take the pressure off the 30% limit. The negative press putting downward pressure on SMT is being rectified bit by bit, very soon the negatives will be outwayed by positives and the press and the pundits will change their tune.

Thinking about the 2000 tech bubble, I remember reading back then an article explaining what had caused the bubble and market crash. Amazon for example was expanding rapidly, it didn't own any assets and had never made a profit if I remember correctly, yet it had a massive valuation on the stock market, there were many more stocks like this, stocks would jump 30% for just announcing they are thinking of creating a website, it really was a bubble of hot air. The Nasdaq rise during the pandemic was in percentage terms much less than the tech bubble and driven by successful, profitable and established companies, it has already retraced to roughly where it would have been if the pandemic hadn't happened and bounced off around the 10000 area, and is technically in a new bull market, Just a few generalised thoughts of mine.

Northvolt are planning to IPO , they have mentioned December this year or June next year as possible dates, I think this would really help SMT as it would take some of the pressure off the private equity side which seems to be the cause of a lot of the negative press