Member Info for lordloadsoflolly

Thanks to all who've already thrown in their two penny worth. Keep 'em coming! Interesting how approaches have varied, from a dividend-heavy emphasis to high tech concentration.

I guess what it shows (apart from investors having different levels of risk appetite) is that much depends on what you're relying on these investments for. Some will use it as their main pension income, others as a top up - or simply to pass on to the next generation. And that's likely to influence how diversified they choose to make it.

Ultimately there's no right or wrong approach you can know in advance. Though I guess the more diversified, the less chance of getting it completely wrong (or right for that matter!)

Thanks thefrogster & CaptLard. Interesting! Any others care to contribute?

FWIW, I too have a decent holding in Fundsmith. It’s underperformed against the benchmark since 2021, but has an above average long term trend. I see it as only a partial diversification away from SMT though, as it too is heavily US-focused - indeed even more so than SMT.

So does nobody else have any tips to share on how they’ve diversified to help offset the risk/reward inherent in SMT?

I don’t believe for a minute nobody else has thought to do this!

Come on, it could stimulate more interesting debate than endlessly speculating on timeframes for SMT’s resurgence/demise* (*depending on your perspective).

Well I'm glad we've got that sorted. Who knew my throwaway comment would generate so much interest!

Seriously though, I never stick rigidly to a set timeframe when investing. I simply mentioned 4 or 5 years, as that might suit my circumstances. But if, say, SMT rose significantly in less time and I felt it was becoming overvalued, I'd obviously reduce earlier. Likewise, if things hadn't improved in 4 or 5 years, but I felt they would imminently thereafter, I'd hang on.

We've probably covered this area enough now. So how about we discuss other investments we're using to counterbalance the risk/reward ratio inherent in SMT? (assuming others are also doing this, of course!)

I'll kick off - and I should caveat that this is NOT a general share recommendation. Simply a company I hold (similar % of my portfolio to SMT) that I consider more at the "value" / steady Eddie end of the spectrum. It's a high percentage to invest in any one company, I know. And I've reduced & increased my stake several times over the years, so it hasn't always been such a big holding of mine. But I figure right now that - for me - it's worth ploughing a decent amount into. It's a company called H&T - the UK's leading pawnbroker. Forward yield this FY of around 5%, profitable over the last 5 years (even during the Covid period, when most of their shops were shut) and a sector that - sadly - is likely to remain much in demand for at least the next 12-18 months.

Tell me what you think. But more importantly, tell us all what YOU'VE done - if anything - to help diversify your own investments.

Thefrogster - Quite. Incidentally, I don't plan to exit the market (or SMT altogether) in 4 or 5 years. Just rebalance my portfolio assuming SMT rises over that timeframe, as by then it would have become too big a proportion of my total holdings.

Only problem is, Simon Thompson of IC has been plugging TEK in his "bargain share" portfolio since the price was in the thirties. So I guess, like a stopped clock, he's bound to get the time right eventually.

Can't comment on fela96's logic (or otherwise), as I got fed up with banging my head against a brick wall and filtered him. My head feels so much better now - thanks for asking.

Nolupus - sure it may happen. But will anyone still be alive to see it?

I reckon inflation above 2% is likely to be with us - and most of the G20 - for a fair time. Could well be most of this decade. You could argue it only needed a small external trigger to render 2% an unrealistic target in the first place. And we've had more than our fair share of triggers, none of which have been that small (Covid, Putin, Truss + Kama Kwasi).

That said, humans are generally an adaptable lot and may soon regard inflation below, say, 5% as the new normal. Providing the trend is down or at least steady into 2024, with core inflation also looking more under control, interest rates will plateau and the investment landscape for "growth" stocks should improve.

There'll almost certainly be more bumps along the road, so SMT's share price may well be "nudging up & down" for a while yet. But I sense 2024 might - at least - be slightly calmer & more predictable than the current year.

As to whether now's therefore a good time to buy into SMT, let's face it nobody knows. Walp, Meconopsis & Captain Picard demonstrate this perfectly with their differing views on SMT's future. Me? I won't be adding, but that's mainly because I've a decent holding here already and was lucky enough to buy most of that at less than half today's level. Equally though, I won't be selling, as I suspect there'll be better opportunities to reduce/exit within the next 4 to 5 years.

Ilovemycombover - thanks for posting IC's latest update. For those who can't access via the paywall, the link below may help.

Whilst I generally don't pay much attention to IC/ST, I do actually think they've got it right on this occasion.

https://www.investorschronicle.co.uk/ideas/2023/08/08/markets-are-ignoring-h-t-s-soaring-profits/#:~:text=Diversified%20financial%20services%20group%20H%26T,market%20shunned%20by%20mainstream%20lenders

Wildtiger is best kept in captivity IMHO (i.e. filtered, like I've just done). Otherwise you'll just be subjected to endless fictitious tales of his successful long & short positions.

Of course you did, wildtiger.

It smacks of desperation when the RNS keeps trying to make out there'll be positive newsflow going forward. And that this in turn SHOULD lead to an improved share price. Let's just look at the past sharing agreements shall we? And I quote directly from the RNS:

"The Sharing Agreement is similar in structure to those undertaken by the Company with Lanstead in February 2016, June 2019, March 2020, December 2021 and August 2022 respectively. The first three of these arrangements have completed their settlement periods. The February 2016 agreement yielded a net gain to ImmuPharma of approximately £0.6 million more than originally subscribed by Lanstead. The June 2019 and March 2020 agreements yielded approximately £0.9 million and £1.0 million less than originally subscribed by Lanstead respectively. The fourth arrangement runs to March 2024 and is currently yielding approximately £1.1 million less than the pro rata amount originally subscribed by Lanstead on cumulative settlements to date. The fifth arrangement runs to August 2024 and is currently yielding approximately £0.3 million less than the pro rata amount originally subscribed by Lanstead on cumulative settlements to date."

So that's five agreements in total, one of which yielded a positive result (+ £0.6m approx). Currently the other four - of which two are already complete - have yielded a cumulative LOSS of £3.3m versus the current share price. WHAT A TRIUMPH!

Given the above, how many private investors (other than wildtiger of course) are likely to beat a path to the Winterflood Retail Access Platform so they can subscribe to the Retail Offer? Answers on a postcard please. Clue: the answer may be a nice round figure. At least it can't be negative. Unlike the Sharing Agreement outcomes to date.

Presumably you need less Microsalt to deliver the same level of saltiness in ready meals. Otherwise, why on earth would Presty have gone with it, particularly when Microsalt’s presumably costing them more than regular salt would have done.

Hardboy - glad we agree! Markets (hence individual share prices) do seem less predictable right now. Some (like H&T) appear unloved. Others (like Nvidia) seem ridiculously over valued. But generally, anomalies like this eventually come out in the wash.

I've usually managed to call H&T reasonably well, selling part of my holding above 500p, when I felt things started to look prematurely frothy back then. But I've been caught out by this latest downcycle, buying back in at around 450p, before adding yet again at just over 395p. As I said though, I'm not unduly worried at this stage. For me, the fundamentals stack up still. And the dividends offer some compensation for any premature, overzealous top ups!

On a 12 month view, I'd be more surprised to see a share price below 450p than above it.

Obviously TEK is more than just BELL though.

So the only obvious explanation I can offer is that investors see less value in its other holdings, thereby wiping out any gains from BELL.

Odd how the share price has dropped since the beginning of the year, whilst HAT’s prospects have - if anything - improved even more. Its progressive dividend policy means this now yields around 5%. H2 is traditionally stronger than H1 and the company has consistently issued positive outlook statements this year. Also, strong Director buying since Sept 22 (CEO c. £277k, Chair >£66k at prices between 425p & 444p).

I added recently at a fraction over 395p. The 6.5p ex dividend date is 7 Sept, so I decided

to lock that in. I really can’t imagine this dropping below 350p (short of a major general market crash) and can quite see it moving beyond 550p post FY results. Next trading update is in January ‘24, which should generate record results (though this may already be partly priced in, as it’s already widely predicted). Still, I expect a strong upward re-rate within the next 12 months and will be happy to add even further if the share price continues to drift.

I should have added at the end of my last post:

Unless share placings &/or dilutions explain the different direction BELL & TEK's share prices have taken recently.

Belluscura's share price was around £136 in January 22, before dropping to £24 in June 23, then recovering slightly to £48 currently.

Meanwhile, TEK's share price was 34p in Jan 22, before dropping to around 11p in June 23 , then slipping slightly further to its current 10.5p level since.

Whilst there was some correlation between BELL & TEK's share prices until June 23, BELL has since doubled in price, whilst TEK has done the exact opposite, falling slightly further.#

So I don't think yu can read too much into TEK's future share price direction by comparing with BELL.

TrustedInvestor - Pointless? I'd argue 471 reviews on Amazon count for rather more than one person's personal view on LSE.

Agricore - you're in the minority, saying low sodium competitors' salt "tastes dreadful". Have you read all the LoSalt reviews on Amazon? They're overwhelmingly positive (90% are 4* or 5*): hTTps://www.amazon.co.uk/Lo-Salt-Reduced-Sodium-Alternative/product-reviews/B004TEVING