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Fair enough, but it does leave the fair question, perform relative to what? Zero, some equity index, LT gilt yield., property yield..........................the list goes on. You have to put it in some sort of context and maybe that is for each individual to decide. On their website SMT use the FTSE All World index and on a Nav basis they beat it, on a share price basis they don't. Is that the right benchmark? Should we use Nav or SP? Or should we just all move to Thailand?
I dont know what the right comparator is for SMT, given a 70:30 mix. However, what you cannt say is that a share that has returned 36.9% over 5 years or 6.48% CAGR is failing. That is factually untrue. We have spoken on this board before that this is largely a retail share not an institutional share. Its individuals saving through ISAs, pensions......loads of reasons. These will be UK individuals making decesions on where to put their money. So, those individuals that will compare to putting money in to UK funds will feel good about their SMT decesion where they will have had no return. The more sophisticated might think about other comparators but a large body will compare against the FTSE 100 or 250. Their analysis will centre on how much they made not on whether it is the "right" benchmark and they will think 6.48% compounded when their cash was earning nothing was quite good & smart. The Thai example has no relevance and does not reflect the actual position of the majority retail investor base in SMT. Therefore you won't get much support for a failing tag on SMT even confining yourself to the 5 year view. The LT average return of the S&P 500 since Dec 1990 is a CAGR of 8.20%. So to answer your question, FAILING? Definitely not, not even over 5 years. And over same period SMT has done 11.97% compounded. So using Failure and SMT in same sentence makes no sense. Was their better over last 5 years, sure. But failure, definitely not.
Its true Apple's market cap is almost equal to the FTSE 350, only about £200bn short in sterling terms. Not sure £2.5 trillion market cap of FTSE 350 is best described as niche. It's in decline for sure & the decline of GBP against the Dollar since the GFC is remarkable. Given the GFC was exported by the US to Europe because European & UK banks believed the slick Wall St sales patter on CDOs and CDOs squared which clearly no one understood, including the mathmatical geeks who ran the trading rooms back then. Most investors compare returns relative to their own backyard, that is natural and totally rationale. An investor can benchmark it against anything they want. Their money, their rules
That sort of depends. Depends on what you compare it to. For ex, over last 5 yrs SMT +37.68%, S&P 54.13%, Nasdaq 100 103%. So they definitely lost out here. BUT as a UK investor, if you compare to FTSE 100 + 18.7%, FTSE 250: +1% or World Index ex US: +10.48%. So depends what you compare to. I suspect a lot of UK investors will use FTSE 100 or 250 or some composite. I know that not like for like but nothing is like for like, SMT.
The Dow Jones is a price weighted index and as such extremely dangerous to use to measure a market performance. The stock with the biggest price has biggest weighting. The only advantage it has is it makes the maths easy. The S&P 500 is up 19.67% from the Oct low, thats not rangebound. Another .33% and its officially in a bull market.
if you go back to pre-internet bubble, 31/12/99; smt up 930.7%, nasdaq 292.63%, netflix 33,753.51%, msft 818.2% and meta 609.15% and berkshire 810.96% and nvidia 42,976.97%. all have 23.45 yrs data. so james andersen did a marvellous job and handed something of poisoned chalice to his two deputies. buffet is often revered as the lt investor but andersen sitting in edinburgh with a much lower profile did a great job, no question. will the future generation be able to make 10.46% compounded returns over 23 odd years out of lt fundamental investing, be that with publics or privates. buffet himself has said he wont consistently beat the s&p but then he does manage much more than £9bn so maybe their is hope for smt. everything evolves and i just want them to add some tactics to their ****nal and not answer every question, "yes but you must evaluate us over 5 years". in today's fast moving world that is an extreme luxury that few, as managers, are afforded.
From Dec to March 31 they bought $855M AMD. None were placed in SMT. You will never find out from 13F where the shares were allocated but the 31-3-23 AR of SMT confirms none went there. That was their biggest purchased followed by Samsara and Solar Edge. Biggest sales Salesforce, First Republic and Illumina & in fourth place NVIDIA!!! Lol, its true, they sold in Q1 $380M worth. Where it was taken from, easy to find out but lots of work.
Its up 174% year to date and is at 3 sigma on the UBB which happens less than 1% of the time. There are no certainties with stocks but you are a fool if you dont play the odds, especially when they are at extreme levels. Explaining everything away with a 5 year view is just too easy, any fool can do that and when you find out they are indeed a fool its too late. Tactics are important and part of that is knowing the boundaries of cheap and expensive. If SMT havent sold down a significant portion of NVIDIA it will say a lot about what you are getting when you buy SMT. A LT view and some tactics are not incompatible in my world.
I for one hope SMT is selling in to the NVidia strength and holding some increased cash as I think a 45x P/E is a 2.2% earnings yield. Even if profits double thats 4.4% earnings yield in a 5.25% 1 month T-Bill yield environment. 52M shares have traded so far, $20bn. I hope SMT have sold out. Will they be that tactical, its not really in their gene code to think that ST but lets see. Nvidia now worth $1 trillion and in the last full year made $9.8bn, double 21. Lets say they double again, call it $20bn thats your 50 PE. Pro-forma 2% earnings yield in the price. Sell it SMT, sell it. Sell at least half of it, be tactical.
Doesnt that mean 77% is retail? No sophisticated investor needs SMT to buy listed stocks and pay them 0.3% for the privelege of managing. God knows what goes in to that definition of institutional. HL are in there and they are just an intermediary for retail. Finn and Investec similar. So they are not what I call sophisticated institutional
From 31/3/23 SMT SP is down 1.8%. Over the same period the weighted Top 30 (holding privates constant) are down 2.3%. The privates are held by SMT largely at the last funding round valuation with exception of Stripe where they marked this even lower which you can see from AR. So while Nvidia is up 40% over this period some big holdings are down; Moderna -18%, Meituan -30%, Tencent -16%, Illumina -16%, Zalando -26%, NIO down 27% and so you get a weighted down for Top 30 of -2.3%. So SMT is following the weighted public prices. BUT the 20% discount when applied to privates only is 60% odd and thats way too much. SMT is cheap, very cheap if you believe the last funding round valuations. Even if you dont and you thought it should be 25% lower, SMT is still very cheap. SMT do a dreadful job of explaining this. Their IR needs to wake up, this is an easy story to tell. Market is being dumb largely because institutions dont need SMT to buy the big liquid stocks and their mandate doesnt allow them to own privates. This leaves retail as investors and they need to be fed the factual information. Its in the AR but you need to know how to find it.
Calc done May 30th, informed May 31. Molten needs to increase 10% and Gore street decline 10% for Molten to have any chance. Castlegate timing seems odd but maybe it is what made block of shares available? For now looks smart by T Rowe Price
They also marked ByteDance down 6.74%, Northvolt 20% and 12% depending on class. Spacex the same, Brandtech up 8% and Zipline up 41% and 24% again depending on class. I havent checked yet but my bet is that is in line with their April funding round so I think it beyond any reasonable doubt that SMT are robust on private valuations which is what they have always presented. A 20% discount to a 70% public portfolio and 30% private means that if you apply the total discount to privates implies 67% discount on the privates. I see no reason for there to be a material discount to very liquid public stocks. So buying SMT at a 20% discount you are getting the privates at a very meaningful discount to some of the biggest private investors in the world. Makes no sense! SMT should forget UK listing and move to US but I guess that would mean losing Inv Trust status?