Member Info for sageoflondon

I always like some volatility. I was 70% in cash back in March 2020. That fall enabled me to bank significant profits in the 6 to 12 months that followed. It allowed me to invest in some companies that I thought I might not get a chance to at a decent price otherwise. It was easy money. I'm about 20% in cash now, so plenty of topping up to do still on any falls.

I don't think it's just about technology companies. I think the market will likely have a bit of a pullback on inflation fears. It shouldn't impact a 10 year view, but could pull markets back a bit. Inflation is everywhere. The market is spending a bit of time thinking about what that might actually mean and how it might manifest in valuations. I think some of the companies that have decent pricing power will continue to cope well with a higher level of inflation. It might however mean those with earnings 'somewhere in the future' aren't worth quite as much today. Everyone (including the Fed, BOE etc) thinks they know where interest rates are going - me included. However reality is often far from expectation.

Grow is my biggest holding (just), fortunately some of the more 'stalwart' elements of my portfolio came to the rescue today. UPGS has had a great couple of weeks, really strong results, even Unilever has done well the last week or two. Shame they can't all move up together! If we fall to NAV or below I might pick up a few more here.

I think there are bits within Draper's control and bits that aren't. There is a real risk that Biden creates some (additional) inflation with the handouts and infrastructure spend, whilst increasing the tax take to pay for it. I think inflation is likely to trend ahead of expectation in the US. That is going to impact valuations of a lot of what Draper hold - regardless of where we are based. All will eventually come good, but in for a bit of additional volatility I believe.

I have a feeling this will close in on £2 very quickly post the presentation yesterday. Not only did this demonstrate an excellent understanding of current fundamentals and drivers of business performance, but also a detailed insight into what the future holds for UPGS. For me this is a company that can certainly continue to grow both domestically and internationally. It is also run in the way that an owner manager runs their business - i.e. prudently whilst being able to adapt quickly as the trading environment changes. The purchase, development and growth of new brands is likely to continue, which should have a positive impact on both sales and the operating margin. I am going nowhere and will be hanging on to my shares.

Snap. I took out a 5 year fix yesterday (to start beginning of Aug). I couldn't give up the last 3 months of my current tracker at 0.84%! I agree with you re EU / UK, just not so confident on the US. Providing they don't go up beyond expectations in the US I think we will be fine.

Very true. I think interest rates (particularly in the US) will have to rise a little however. That's one of the reasons we fell back today it appears. Most tech in the UK fell in sympathy with the US on the Yelland announcement. I think it is a reasonable expectation that rates will rise from where they are now. This is only a big negative if this is contrary to expectations. I don't think it's realistic to assume European tech won't be impacted, even if UK / EU rates don't need to rise to the extent US rates do. By its very nature a lot of our portfolio has an International element to it - e.g. Cazoo, Ui Path. If the Nasdaq falls they will fall. Stef - views on rates - you're a lot more qualified than most in this area....

Inflation is already here is it not?

That's because this sector has only known expansion. A basket of very average companies would likely have grown at that rate if you picked a broad enough basket. I think growth in this sector will be harder to come by in the next 5 years. It will be about picking the right opportunities. I think Draper have picked a number that are right. The easy money has been made. Future disrupters are up against global technology beasts who try and capture everything within their tentacles. Makes it harder to truly disrupt and survive. There is also an awful lot of dry powder PE money chasing deals. That will impact returns for a number of years. Anyway we shall see. I'm not selling anytime soon, but do expect a bumpy ride over the next 2 to 5 years in Grow. My worst performer today! I think I have other shareholdings over the course of the next 5 years that will likely outperform this, but I have this pegged for 10% per annum next 5 years. Possibly a pull back this year off the back of SPAC boom disappearing/lower valuations, US valuations coming off in tech a little. I could see this going down / remaining at the current price. It might do 20% per annum over 10 years, but there is very little chance this will be smooth. Likely to be up 60%, down 40%, up 20% etc. There will be some pullbacks as sector popularity waxes and wanes. Most of what Buffett invested in was value orientated and was already very profitable. He just made sure it was in some cases managed more effectively (both operationally and capital wise) or he exploited scale, market dislocation etc. He has fabulous access to capital via the Insurance companies Berkshire owns. Gives him real long term capital even if some is heavily restricted in terms of what it can be invested into. A number of companies in the Draper portfolio have a real possibility of failing outright - few in the Berkshire stable were likely to do that. Different model in my view. Both with their own merits.

There are not many like Warren Buffett. He has shown great skill and commercial acumen in doing what he has done. Simply too big now to keep it going - you can't just drop 100 billion on businesses effectively. The larger a company is the more likely it is to reflect an accurate valuation. Anomalies not as likely where market dislocation not present. He's struggling due to size - he needs to move the dial but it's not easy with the amount he needs to deploy.

This one is interesting. I can certainly see how this is very useful for higher value payload - but is is economically viable for a takeaway? These things are not cheap? Love the idea, but must be around the £50k mark to purchase, with maintenance on top. Bit like having a top end 5 series turn up with your food. There will however be many applications which are higher value - e.g. medicines, blood for transfusion etc. Potentially even organs for transplant eventually.

I agree. Grow is very unlikely to get the tailwind it had last year. I think achieving any real NAV increase will be tough. Any mis-step (e.g. Deliveroo type mishap, say with Cazoo) could also hold us back. I would be very happy with 10% in all honesty, so 15% would do very nicely. I have had to look to boring old Sugar for a good return today (Tate and Lyle) - I wasn't expecting that. I bought it a few months back for somewhere to park capital at around a 4% yield in the hope of 10% total return per annum. It's done a bit better than that. Back to Grow - I think the market knows Grow well and given the flow of information, a lot of it is already out there in terms of NAV gains. I think we might have to wait for the next blockbuster instalment (valuation) to get things going up again. I think the comment made about 'having to invest through the cycle' could also be interpreted as - things are not going to be the same this year as last year. I think there is an outside chance (but it's there) that we tread water, even pull back a bit over the next 6 to 12 months - but that will depend on markets in all likelihood.

Any rise beyond the current price will require a movement beyond the normal range of premium to NAV.........I'm not expecting one for the moment. I hope I am wrong. I think we now need a little time for the NAV to move forward. Without that I have a feeling we will be a bit range bound.

I am cautious in some ways yes. I manage risk for a living - maybe that's why.

If ever I have a bad dream (very rare) it is always of me waking up having failed to realise I have an A level or Accountancy exam imminently and not having prepared. Stupid really. 20 years since I completed all of these!! There must be something in my sub-concious that brings this out once in a while!!

I don't normally do this but....I had a little top up ahead of Monday as well.......very out of character for me.

Trustpilot 27% up on float price. We have circa 7.9% of that from what I recall. Say £109m roughly? That's not bad at all.

Fingers crossed for a good update on Monday!! No such thing as a 'sure thing' but I can't see how it can be a bad update.

I don't know AUGM so have no idea whether it's portfolio make up mirrors what we have here or indeed it's investor base etc, I can see it is a lot smaller and it looks like it focuses on Fintec, rather than broader technology. There are numerous examples that could be used to compare to. The more quoted investments we hold though, the less likely significant discounts or premiums to NAV are likely to be. Time will tell where we trade compared to NAV.

Stef - I still don't see a significant premium to NAV arising on a good set of results. Premiums / Discounts arise as a result of future expectations, which I don't think are as positive as they were on this sector overall. At present the market doesn't expect growth in these types of investments to be as explosive over the next 12-24 months. As a result I believe any premium will hover within a 5 to 10% banding of NAV - in addition to that we now have more quoted investments, albeit less than 50%, but nonetheless it isn't hard to pick up some UiPath, TrustPilot and eventually Cazoo. I still think this is a great place to park a portion of my portfolio (and won't be selling any), but think growth going forward will only be (harder) won by NAV increases arising from events that crystallise values. Basically is you are paying a 20% premium you are saying I expect this to grow by say at least 30% NAV within the next 12 months, so it's worth it for a 10% return. That was probably more than valid this time around. If we are at an NAV of say £8.50, the same return requirement with a 20% premium plus 10% return takes us to a share price of just over £11. I'm not sure we will get there by trading on a premium to NAV - ps I hope I am very wrong!

Mediclinic might be if they could raise the finance. I don't personally think they would consider it until the pandemic is well and truly behind us. Covid had a significant impact on Spire, but the picture going forward looks very promising indeed. They would need to pay close to £3 to purchase the rest of it in my view. I'm not sure there is the appetite for that.