Member Info for sageoflondon

I can't help thinking they have all run the numbers and had a look at the books with a view to potentially acquiring or at least taking a stake. It's also possible that there wasn't enough that interested them when it actually came to writing the cheque - that's pure speculation though. Microsoft lost interest and cancelled their deal per the press.

Nvidia, Intel, AMD etc, lots of trade buyers out there with deep pockets if they believe there is hidden value over and above what they would need to pay. Something being classed as anti-competitive hasn't stopped approaches for other assets - even if they have sometimes ended up getting blocked!

I think you are right re Graphcore - but I think there is a bigger question over value - why not wait for it to go pop - must be burning through cash, rather than pay billions for it...........I can't help feeling that if it was that crucial it would likely have been bought already...I don't know anywhere near enough about it technically however, but business wise that's what normally happens.....just like Youtube - they saw the future value and bought it.

A lot of 'stories' become stale after a while - I am not saying this applies to Graphcore - I don't believe it is at this stage yet. An example is a good friend who recently started in a senior position for a bioengineering start up - when I looked it had been operating for 13 years and hadn't sold a thing - 13 years hardly counts as a start up and if they don't generate significant sales soon they won't exist. I have always thought about Ocado in the same way - 20 years and still no real profitable breakthrough in terms of what they are trying to do. Maybe they get there - personally I don't buy it. The rate environment means such companies no longer have an infinite runway to get to their destination.

How is Graphcore much bigger now? It can't be much bigger in terms of revenues - any company with the finance in place can become bigger in terms of number of employees etc, but spending more doesn't mean its value should go up? What do you mean by bigger? My view would be the more time that elapses without any progress, the less likely success is. After all successful companies often get bought way before they become successful - e.g. Youtube....

Results show real resilience for me. Supermarkets de-stocking a little to be expected, online sales growth however very strong. I would imagine (but don't know for sure) that this is one of the factors facilitating margin maintenance without price rises - more pricing power online than with the supermarkets - so not a bad thing. As I said previously, quite normal these days for a large drop with an in line performance. Maintaining prices could improve market share as well given the pressure consumers are under....just a thought. Very happy to hold here.

Amazon did something new and gained significant scale, developed amazing logistics, it's own third party retail platform, AWS etc, I don't think that can be compared at all, albeit Amazon is big part online retail. It was revolutionary. Cazoo and Allplants are neither in my opinion. There are plenty of car retailers where you can order a car online - these were there way before Cazoo, same for vegan ready meals. I understand what you are saying but true technology companies - really? Why isn't COOK ecommerce then? I can order those online? It's not really e-commerce that's why - it's a food manufacturer with both a bricks and mortar and online retail platform. It has been going for many years etc. I'm sure they are growing, but it will be a niche business, just like Cazoo (if that survives).

I think you are right re the comment you make about technology companies - i.e. 5 times isn't a lot for a true technology leader etc, which is likely to scale. There are however a lot of pretenders to that 'title'. Companies like Cazoo and Allplants are not in that league - they are mature businesses that already exist elsewhere that are masquerading as technology and don't deserve a technology multiple as all. Since when have ready meals been a true technological breakthrough? Things like Graphcore however very difficult to value - could be $10bn, could well be nothing. The you tubes are few and far between in terms of investment return.

I think the overall multiple of sales that the current share price here implies would still be quite shockingly high, the NAV obviously more so given the current discount to NAV. There is an awful lot of hope and delivery in a valuation of say 90 times sales - an awful lot. That's an example before anyone attempts to pin me down to an individual company. Also no way the same sales multiple should hold really in a 0% versus 4-5% rate environment.

and now they are buying ahead of the results - same pattern everytime......likely to be a sell off after results, even if they are decent based on previous buying / selling patterns!! I will be here rain or shine for the long term.

Ok, so it isn't really that relevant. The overall average must be way above that. More likely 30 plus. Potentially larger given the outsized impact something like Graphcore would have on that multiple.

Steph - how do they arrive at a 7.9 multiple of sales? I don't understand that - the impact of the big portfolio companies (way above 7.9) would mean some companies on 1 times sales or less lower down? Graphcore is like 360 times or something similar? Revolut, Aiven, Thoughtmachine - all considerably above 7.9, yet taken together those must account for a significant proportion like 15-20% of the portfolio and have to be weighted accordingly or something in that region?

No it's a tag name for this platform that has no relevance to anything whatsoever!! I work in a senior position in FS and wouldn't use anything remotely resembling my real name - just came to mind at the time!!

An awful lot of the riskier constituents within the market are getting hit today - Grow, Ocado, Synthomer etc. In all honesty it looks like expectation of even higher rates that originally anticipated is driving some of this , Synthomer something else I am assuming....haven't checked.

That's a strategic holding that has been there for ages - thought it was UK and Irish government, primarily the latter. They aren't going to be pushing share prices up in this sector by entering later stage funding rounds etc. I think it has to be accepted that (at best) this will see a relatively modest increase in share price at some point, there is also the possibility that it falls further. In this intervening period the share price will be very volatile. Once inflation has subsided and peak rates reached this will see a modest increase, when (and indeed if) rates start to decrese, will see a more robust increase. I still don't see this over £6-£8 for the next 5 years or so. There is also the potential that it gets a lot lot worse. If one or two of the main holdings require funding at considerably less than current valuations that will cause a decent sized hit.

That's grasping at straws - i.e. relying on government funding to support a share price! In 10 years this will either be doing ok, possibly not ahead of where is was at peak valuation, or it may not exist in its current form. Difficult to say. Depends if it has to sell off some crown jewels along the way.

You are much more confidents re rates declining later this year - I hope you are right, but I also fear an overshoot as inflation continues to be sticky, meaning we end up at 5-6%. I hope this doesn't happen, but given economists rarely get things right, that for me is where the risk sits. Trying to expect the unexpected, but not positioned for it if it does happen is where I am at.

Possibly, but regardless a solid cash producing mature profitable company like Apple is always likely to have a lower Beta - just doesn't represent as much of a risk from an investment perspective. Much can go wrong in unproven start-ups and likely will go wrong. In addition to that unlisted investments are difficult to exit etc. All of this adds up to significantly more risk here. This is always likely to be volatile - easy money and this flys, much more difficult with normalised rates. Not just for Grow, but portfolios similar to this one full stop.

Why would we follow profitable US technology - we are at the opposite end of the spectrum? Amazon, Google, Tesla, Microsoft etc have no need to raise capital and are producing significant cash - maybe not so much Tesla, but you know what I am saying. This is at the more speculative - might survive / might not survive end of the tech spectrum. This will largely follow any speculative risk off / risk on view the market might take. It's going to be a long while before any risk on happens consistently. Rates where they are also likely calls into question some business models. I have no idea which, but regardless, it's likely to shorten the runway in a number of instances. Every day you're not making money you are down by inflation etc.

Personally - I think this is a very well run company. Most companies don't have ever increasing earnings without any blips - this looks to be about as close as you can get. At present this company isn't valued as a brand owner in my opinion - it now owns Salter and Beldray etc. Salter isn't going to set the world alight growth wise but it should add stability to UPGS earnings - a great buy at a decent price. Unless there is something I am missing I think this is an excellent long term investment. When the market doesn't like it we are provided with an opportunity to top up at a discount - make the most of it as appropriate. Collect the dividends as you wait for the market to re-evaluate the valuation.