RE: flib22 Nov 2020 12:40
Steph don't do anything rash this week.
You wrote: "I appreciate they are forced to do this as the NAV needs to be realizable at any time in case retail investors pull out of the trust and the trust in turn needs to sell some holdings" No. This is totally incorrect… well unless the trust has to be liquidated entirely (like Woodys WPCT), Trusts really don’t really have to worry about this unlike funds. All LPE (Listed Private Equity) should be held in Trusts and the capital deployed in a Trust is fixed. We buy a share of the Trust not the holdings like a fund. A Trust allows us to use gearing unlike a fund. When investors of Trusts run for the door all that happens is the share price falls under NAV and so we get a discount, for example, one of my favourite is HVPE (15% annualised) currently at a 20% discount and historically 15% discount to NAV and will typically be like this until accepted by the market long term. Like HVPE we have PIN, SLPE, 3i Group etc... discounts are typical. The reason for discount is the problem with LPE is that they rely on credit so during the financial crisis and Covid there are liquidy issues especially with transport, retail and industrial sectors during covid (which are proving to be false slowly and if anything LPE companies will take advantage on the way up).
Do note that GROW, HGT, AUGM, MERI are in the tech space and are not on a discount for good reasons.
I would rule out AUGM myself as it is too sector limited to fintec. Both MERI and GROW manage to pick the best from fintec anyway.
MERI is interesting and fell off its trendline into bearish territory on the 12th of last month. I love MERI but they do not have enough portfolio holdings to be self-funding through realisations. But they are working on it for a fact buy buying more holdings. MERI's NAV has been delayed and I am betting that it will jump up on NAV so a SP of 165p and not fall to resistance at 128p on a poor NAV.
GROW has many portfolio companies and are able to rotate quickly generating cash e.g. TransferWise and Peek Games. Because the market cap of GROW was above 500m you have the backing of Ballie Gifford the biggest backer of Tesla so you don't really need to draw comparisons with overpriced on fundamentals Tesla. I say fundamentals because Tesla is priced qualitatively by the market not quantitively with fundamentals. Qualitative factors include questions around futuristic things like space travel and electric cars for all etc... that is the SMT way.
GROW’s share price went into breakout territory this is the reason I thought it was toppy, however it is breakout or retrace back to trend lines. GROW either breaks out to who knows what say 700p or what I think is more likely fall back to 600p and the continue its trend and you may continue to reap rewards of 20%+ annualised growth targets across at least 5 years.
I tend not to look at accounts, you are far better than me on this. I did do in the past and learnt it was a
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