Member Info for lordloadsoflolly

Elephant1970 - But you might not be tomorrow! That's the thing, nobody knows where prices are heading from one day to the next. Which is why I generally place limit orders when markets are fairly calm, then try really hard not to revise them afterwards. If a buy or sell limit price looks OK at the time, with any luck it'll still look OK over time. That's not to say you couldn't have bought/sold better. Or that you'll never regret any trading decisions. But when markets are falling, it's all to easy to panic-sell. Or to sit on your hands. And sometimes that's not the best strategy.

Phyl - Pound cost averaging is certainly a valid strategy for ordinary shares. But with investment trusts you've more information, which to my mind makes "blind" drip feed buying less valid. If you'd used pound cost averaging over the past year, you'd have been accumulating SMT at prices over £12 since June '21. And (depending on which day each month you auto-bought), you'd have been lucky over the past year to buy ANY shares in SMT below £11. With my approach, you ONLY buy when there's an abnormally high discount to NAV. For the record, this happened again yesterday, triggering one of my limit buy orders & allowing me to top up again at just under £11.25. I think you're almost BOUND to do better if you buy on this basis than by buying "blind" monthly. That's not to say you'll always be buying at the bottom. My latest £11.25 purchase could well look ill-timed this afternoon, tomorrow or in a few months' time. But not nearly as bad as buying willy-nilly each month (including Oct - Dec '21 at prices between £13.50 & £15.00). The other thing with pound cost averaging is that it's mainly used as a buying tool. So how do you know when to sell? Do you drip feed that on a monthly basis too? If so, you could now be reducing stock at below £12 a pop, having paid £13, £14 even £15 for it just a few months earlier.

One other thing I'd add is that I find limit orders a really useful discipline. The problem with not using them is that you tend to judge a share or trust by what's happening to it right now. So if the price is falling (or has already fallen substantially), chances are you'll convince yourself it still has further to fall. In the short term you could well be right of course. But when the trend eventually starts to reverse, it's human nature to think thereversal will be short-lived. So you sit on your hands, miss a fair chunk of the potential rebound. By using limit orders, you can distance yourself from the noise and assess an investment based on its longer term trend and your take on its particular sector. In other words, limit orders can take away some of the emotion & perverse logic which often come into play when prices are falling rapidly.

PHYL - I'd argue it's precisely WHEN the discount to NAV is high that you should be looking to accumulate. Over the past 10 years, SMT has fluctuated between about a 5% premium and an 8% discount: hTTps://www.hl.co.uk/shares/shares-search-results/s/scottish-mortgage-it-plc-ordinary-shares-5p/share-charts. So by historical standards, the current 9% discount looks abnormally high. That's not to say the share price won't go lower. Of course it may (and probably will). But if you set further limit buy orders at, say, ever-decreasing £1 intervals, you'll eventually be buying near the bottom. And recent history suggests SMT's price rises can be as rapid and unexpected as the falls. PHIXION - you're right, a lot of posters do claim they've sold or top-sliced right at the top. I don't profess to have done this. As you'll see, my previous post said I'd bought back in at prices ranging from just below £12 to just below £10. So the ones bought at just below £12 are currently underwater. I also referred readers to my original posts, saying what I'd done at the time I actually did it. No investor - myself included - ever gets it 100% right all the time. And I've certainly made my fair share of bad calls. But as I've been saying for some time now with SMT, IMHO you can do a lot worse than letting the NAV discount/premium be your guide.

Some people have short memories! Go back less than a year and SMT "tanked" from a closing price of 1393 on 12 Feb 21 to 1017 on 1 March 21. That's a 27% drop. Similar arguments & panicky rationale were used then to explain the fall (and - in the case of some posters - to predict the sky was falling in on SMT). But at the lower prices, SMT's discount to NAV was way above the historical average. So instead of selling, I used limit orders to buy more - at prices ranging from just below £12 to just below £10. This, after I'd already top sliced at just over the £14 mark. You can read my posts on here & ADVFN from around that time, to see I'm not re-writing history! I'll be using the same tactic again now, adding further if the discount to NAV increases to 6% or more (it's currently at around a 4% discount, based on Friday 7 Jan's NAV). This again, after top slicing above £14 and again above £15, when the premium to NAV looked toppy a few months ago. DorsetLSE, in particular, has posted jittery comments about SMT for some time. I guess you could argue he was right, given the current price drop. But my hunch is that longer term, he'll have sold out at one of the worst possible moments. Unless you need the capital soon, it rarely pays to panic-sell, particularly when markets are jittery. Unless you intend buying back in lower down and are brave enough to follow through on this (and lucky enough to time the markets right).

To me, what counts is that the new Nominal Value Options "will be subject to a combination of performance and time-based vesting criteria. Performance criteria include revenue, profitability targets, and the commercial launch of SweetBiotix and Microbiome modulators, with option holders only able to exercise their options once the performance criteria have been met." So posters suggesting management might benefit even if the share price doesn't rise look wide of the mark to me. If revenues & profitability increase, it's unlikely the share price wouldn't follow suit.

beardface - I suspect you've answered your own question, though it's ultimately down to your risk profile. If you're 20+ years pre-retirement and you think SMT/Baillie Gifford will outperform Fundsmith longer term, why keep 60% in Fundsmith? Unless you're prepared to sacrifice potential extra gains for possibly lower volatility. My tip would be to spend a bit of time one cold winter weekend, studying the 3 & 5 year performance of all your holdings. Not just the last 3 -5 years, but over, say, the past 15 years (assuming your funds all go back that far). Whilst past performance isn't necessarily a guide to the future, I've found it pretty helpful - providing you go back far enough and are mindful of any likely future geo-political impacts. As you mention with SMT though, it's always worth being extra vigilant when fund managers change (though I'm reasonably confident in BG's succession planning).

DorsetLSE - for someone saying they still hold £140K in SMT, you've a very strange perspective on this fund IMHO. Why focus on last year to imply SMT has under-performed? Unless you're a trader, last year is fairly meaningless in the scheme of things. As is volatility. And frankly, what does it matter whether Tesla generated much of SMT's total price increase? An increase is an increase - and they've divested a significant chunk of their Tesla holding now anyway. Over the past 3 years, SMT's price has increased 188% and over 5 years 318%. Where comparatives exist, none of the alternative indices/funds you mention have come anywhere even vaguely close to that (despite all outperforming SMT in 2021). In short, I just don't understand your logic/motives. So needless to say, they won't be influencing my SMT investment decisions . But best of luck nonetheless with all your investments (including SMT & Fundsmith Equity, which I also hold).

Interesting (& perhaps telling) how Mark Ward's article suggests he's running the show. Whereas, he's actually a NON EXEC Director (albeit with the largest shareholding by far). Not that I'd complain if he was in charge, given his stellar track record elsewhere & his obvious confidence in IDP (given his ever-growing shareholding) .

forseti - I agree. Energy inflation is soaring. And it's set to continue that way in the UK for most of next year, given the price cap lag effect. Some dismiss energy as the main inflationary pressure. But the problem is, energy feeds into pretty much everything else. Manufacturing, transportation, domestic & commercial heating. So as well as every domestic customer, almost every business will be hit by this and will look to raise prices to offset the effect. Anyone predicting falling inflation anytime soon is IMHO totally delusional.

As you can tell, I like this share. It kinda counter-balances some of the racier "growth" shares I also hold (not all of which have lived up their billing recently!). Covid notwithstanding, it's been profitable every year over the past 5 years and - with one exception - has always paid a decent dividend. It's also got an excellent average Trustpilot score of 4.9 out of 5, from well over 4000 reviews in all. And let's face it, pawnbrokers are hardly likely to earn praise easily from their customers, who will often be going through tough times. I think that speaks volumes - over all it strikes me as a cautiously-run business, that doesn't take its customers/paymasters for granted.

One other thing in H&T's favour is its yield -currently back over 3%. Try getting that from any bank or building society!

HAT is a reasonably defensive, counter-cyclical share. The price has held up well since early Oct, unlike recent falls in the wider markets. Once the FCA investigation FINALLY concludes, I expect a further re-rate in HAT's share price. Can't see the regulator clobbering them any harder than is already priced in. And with the cost of living soaring, HAT's services will - sadly - be ever more in demand.

nbe22 - You say "SMT will finish the year on about 10-15% YoY all being well. Not great but not terrible all considered". Well, let's wait until the year end first of all. Also, I think it's a dangerous mindset that equates 10-15% growth as "not great". Sure, other funds may do better this year, but that's kind of irrelevant unless you bought SMT in January 2021 and are planning to sell soon. Longer term (which is how you should be investing in SMT), it has still done spectacularly well, outperforming most - if not all - the other funds DorsetLSE has highlighted. Talking of DorsetLSE - as I've banged on about for some time now, SMT is volatile. To reap the biggest rewards, it helps to monitor SMT's premium/discount to NAV and to top up / reduce slightly when this diverges from the long term average. I've been accused of day trading by some whenever I've suggested this. But that's NOT what I'm recommending. Simply trade in or out with around 10-15% of your holding whenever the NAV premium/discount looks abnormal. I did this earlier in 2021, selling at >£14, then buying back in again three times within the space of just a few months at <£12, <£11 & £10 respectively. I did it again in the autumn, selling a little at >£14 and again >£15. But I've not bought back in yet using the proceeds from these latest sales, as I expect increased market turbulence is imminent and am waiting for <£13 before re-investing.

I totally disagree about inflation subsiding by the spring. At least as far as the UK is concerned. For starters, energy prices are set to soar next April when the cap is next reviewed. And I mean soar. Like a 40% or so increase in the capped rate.

DorsetLSE - I agree that comparisons between Woodford & SMT are of limited value. Woodford made much of his reputation buying high-yield & (at the time) relatively steady-eddie stocks like tobacco companies. The problem came when he started going into unlisted companies which he & his team had much less experience & knowledge about. And the rest, as they say, is history. SMT has generally always had a tech bias with a penchant for unlisted companies it actually understands. That's not to say it always gets it right. No-one ever will. But it has backed the occasional winning 1000-1 shot. Which is "all" you need to cancel out the "did not finish" brigade and still make a handsome profit.

Remember, it's never a profit (or loss) until you sell! Might look great, sitting on huge % gains. But look what happened to investors who thought that just before the dotcom crash. So if, over time, you can recoup your original stake (letting the rest ride) by monitoring long term discount/premium trends & acting accordingly, why on earth wouldn't you?

Remember, it's never a profit (or loss) until you sell! Might look great, sitting on huge % gains. But look what happened to investors who thought that just before the dotcom crash.

BusPassGuru - I, for one, still have a significant portion of my total wealth tied up in SMT. But that doesn't mean I won't trade a small fraction of it, when I feel the discount/premium to NAV is excessive. Over time, usually retain a similar value overall - divesting a bit when the premium looks frothy, then topping up again once it reverts nearer to the long term average. I don't regard this as day trading. Just judicious financial management. Whilst I don't always get it right, so far it has paid off overall. Particularly over the past 12 months or so, selling a portion above £14.00, then buying back in just a few months later at prices between <£10 + <£12. I did the same recently, selling a bit when the price moved above £15 (and the premium again looked abnormally large). I haven't bought back in yet, as I think markets are generally still looking a bit toppy. But if we drop to <£13, I will.

robleo - no, they're all the same chart, showing the fund's premium / discount to net asset value. You can go back 10 years or more, giving a good feel for long term trends. When a fund then significantly deviates from this trend, it can be a good time to ask yourself "should I be topping up / divesting a bit?"