Member Info for steph

https://simplywall.st/stocks/gb/diversified-financials/aim-grow/draper-esprit-shares?blueprint=1360431&utm_medium=finance_user&utm_campaign=cta&utm_source=post#intrinsic-value

https://www.bloomberg.com/news/articles/2020-10-13/china-tech-stocks-seen-a-better-bet-than-u-s-peers-under-fire?srnd=markets-vp

UK and EU mid sized profit making tech has more room for growth than large US tech.

https://tradingeconomics.com/italy/government-bond-yield

My indicator of euro trouble and Eu bank problems that can reverse the stock market (2010 and 2011 ) is showing strong stability.

Printing EU money, ultra low interest rates plus some sharing of the spoils of printing is helping enormously.

https://www.bloomberg.com/news/articles/2020-10-12/goldman-says-short-dollar-as-odds-firm-for-biden-win-vaccine?srnd=premium-middle-east

markets starting to price in vaccine success and Biden win. Dollar drooping and euro going up means in relative terms GROW will gain as 70% of global tech stock is in dollars (so tech stock indexes or funds such as Polar will have a dollar related headwind) and GROW is in pounds and euros.

I think we are getting a golden alignment even at 6.18 SP. I think the next 2.5 months will be very good for our SP.

1) NAV will re-price upwards on half yearly results. It was always silly to mark NAV down in corona virus panic March 31 2020 as GROW portfolio on the whole was about to benefit not dis-benefit from Corona virus accelerated trends towards exactly what GROW portfolio does.
2) Brexit deal (Canada equivalent but maybe with a few extras) will be reached by Dec 31 giving pound a big boost as well as uk market in general. Only 2 big issues remain fish and state aid and I don't think Boris cares much about either. A compromise will be found. Real trouble is on the EU end in distribution of the cuts in fish catches between remaining members. They can kick that in the long grass by deferring a final reallocation to beyond Brexit. State aid is a leftie issue not a Tory one. Thatcher would be appalled to see her party promoting state aid. She tried to get rid of it. Surely Boris will be flexible on that. Not worth dying in a ditch for to be sure. Fish quotas (as they are) predate EU entry and thus in theory are not directly connected to Brexit but there will have to be some change of quotas for UK political reasons. NO deal means a sudden shift. I think the EU accept that but the devil is in exactly how much of a shift and how fast. Can't see no deal on the back of a few fish we never bothered to catch pre EU entry. It is a tiny jobs and GDP amount but politically sensitive. Whole Brexit mess has few real economic benefits and this is one of the few real tangible ones so Tories can't let it go.
3) Pound and Euro will rise flattering any portfolios in those currencies.
4) Biden win will drop dollar (printing presses at the ready) and provide some geopolitical and trade relations stability.
5) vaccine will be approved for use by December 31 providing an end date to crisis even if manufacture and distribution takes 6 months. Markets will jump on this news ahead of actual mass vaccination being achieved.

Macros should support a sp rise before dec31 on top of GROW specific good news on half yearly update.

I expect a clean win in USA which
will stabilize things. I also expect a brexit deal by dec30. I also expect a vaccine to be a certainty by dec 30 if not quite in process of mass role out which will have a massive impact on spooked markets as it gives an end date to crisis.

https://www.nytimes.com/2020/10/07/business/stock-markets-biden-trump.html

Economist predicting today a 90% chance of a Biden win and a 70% chance of democrat majority on senate.

I don't consider that a black swan event for us. I think the markets will be neutral or even welcome a bit of stability.

There is still Johnson's no deal black swan swimming about but I suspect Johnson needs a Canada style deal more than the EU does and will make the compromises necessary to get it. Of course he will declare a great victory over he EU but for us we just need stability even if the result is sub optimal medium and long term for the UK. Setting himself up as capable of being stupid (break international law) and then delivering something stable will count as wisdom in these crazy norm busting times. IN any case it will be good for the UK markets.

https://projects.economist.com/us-2020-forecast/president
https://www.economist.com/leaders/2020/10/03/bidenomics-the-good-the-bad-and-the-unknown

Fear of just such a leftward lurch under Mr Biden is circulating among some American business leaders. However, as we explain (see article), the charge is wide of the mark. Mr Biden has rejected the Utopian ideas of the left. His tax and spending proposals are reasonable. They imply only a modestly bigger state and attempt to deal with genuine problems facing America, including shoddy infrastructure, climate change and the travails of small business. In fact, the flaw in Mr Biden’s plans is that in some areas they are not far-reaching enough.

https://www.investorschronicle.co.uk/shares/2020/10/06/draper-esprit-raises-another-110m/

Investors Chronicle maintain buy even at 590. IC tends to be more conservative on the buy rating as most corporate analysts. IC likes to identify bargains.

I do feel that GROW portfolio is not driven by eye catching market leading firms that might begetting a lot of press. More the quiet ones who have demonstrated they can already make profit in the sector . This can include some unexciting oddballs but I have more confidence in the GROW team knowing they have "unfashionable" but fast growing profit making private sector firms on valuations as low as 3.2 earnings within the sector. I think they look at it as accountants might as well as strategic sector investors. Good combination.

I do now have a small bit of diversification but only GROW gives me confidence of year on year SP rises of 20% pa average for the foreseeable future.

IN my ISA that means every 100,000 turns into 732,000 over 10 years with the daily compounding effect. Life changing

IN my spread using (net of costs) 50% leverage on 100,000 grows to 2,000,000 with daily compounding. Better than life changing but a bit of "not sleep at night" risk to that. This share, along with most, can retrace 50% on a large external crisis which would test severely any leveraged position -even a quite modest one. So a 10 year leveraged positon assumes no sudden 50% retrace for a couple of years until organic SP growth organically reduces the leverage to 25%. A risk worth taking but a risk.

https://citywire.co.uk/investment-trust-insider/news/investors-pile-into-draper-esprit-s-pandemic-growth-story/a1407861

Visión is great but what’s wrong with profit making pre float eu tech stock as a strategy

Also valuations of underlying profit making shares at 3.2x earnings is miles ahead on long term value. Visión alone can’t make up for that.

RESULTS OF THE PLACING

Draper Esprit (AIM: GROW, Euronext Growth: GRW), a leading venture capital firm investing in and developing high growth digital technology businesses across Europe, is pleased to announce that, further to the announcement made yesterday, it has secured funding commitments to raise gross proceeds of £110 million at a placing price of 555 pence per share (the "Placing Price") by way of the conditional placing of 19,819,820 new ordinary shares (the "Placing Shares"). The Placing was oversubscribed.

I even topped up a tiny bit at 598 a record for me.

Reaction today means 100k probably already committed and expecting good things shortly on nav/share.

I suppose a placing at 555 means that is our floor or it would not work. given we are at 552 good news.

I suppose investors in the placing are expecting nav upgrades soon to pay that. Indeed the announcement hi to at that.

last day of our half year.

Now we need to wait patiently for the update, then the results and as I hope broker upgrades and NAV/share .

Strange political and economic times but does not seem to be having a catastrophic effect on our SP. I'm finding UK banks, travel and home builders too volatile though to dip in in spite of attractive SP's. Whole thing could damage permanently their profitability and this dip might be long term.

The 2009 recession and regulatory aftermath did that for UK banks who have never recovered pre crash highs and are languishing on 1/3rd or less than that over 10 years on.

Opportunity to top up for me. In my spread I’m at 1.8 leverage which is my voluntary max. In my isa almost 100% GROW.

In time the underlying value will show through and be priced in but not yet.

I have big hopes for a partial rebalancing on half yearly results in about / months time with nav correction and broker upgrades but it may take years for the 3.2 earnings used to create nav either to be ignored by the market (and thus we start trading at a substantial premium to nav) or corrected by the auditors to something closer to sector averages for fast growing tech stock.

Hidden gem I think

I've had in the past too much leverage (3.0) and paid a high price on the sharp dip August 2012 for that.

These days I have never exceeded 1.8 hoping that any sudden dip would never exceed 50% on the portfolio I have. Keeps me awake at night, though, having anything more then 1.6 leverage on my spread pot. So as Grow goes up on half yearly results I hope that my leverage ratio will naturally come down and I don't plan to add once it does.

ON a rising share leverage is of course your friend. For a share like GROW which I expect 20% annual SP growth even just 1.5 leverage means 30% plus annual and if you must be outside an ISA the additional benefit of capital tax gains free as well.

Our banks are basically leveraged business models on loans. Why not us small fry.

https://www.ft.com/content/d82d9866-7081-44bf-a8bc-69b7e8003836

EU tech the correct sector and GROW the best bet within that.

Many black swans swimming about yet I am fully invested with nothing in cash. Indeed due to part of my positions on a spread I'm slightly leveraged. Across all the 3 pots I hold GROW my full position is roughly 125% of the cash that backs it up. Quite aggressively invested but I hope not recklessly.

Yet with Fed talking about not worrying about inflation targets, BOE printing money and talking seriously of negative interest rates and all global central banks roughly the same all asset classes are being stimulated. This must trickle down to global shares and will do so as long as this unprecedented loose money is about.

Unprecedented loose money means unprecedented P/E ratios for stocks and unprecedented earnings to purchase values for housing. I think it is a permanent new normal. I can't see 4% central bank rates for the foreseeable future. Certainly beyond my 10 year investment horizon.

Within that GROW who has private profit making EU technology stock ( that has not had the SP stimulus of being open market traded) is the cream. Valuations at 3.2 x earnings is silly in this environment but that is where we are.

So in spite of the black swans and poor political leadership I am all in and even beyond that slightly leveraged.

I think Biden will be good for global stocks. He will be just as fiscally loose as Trump but without the scary baggage. Boris is turning out to be a much worse PM than he was a Mayor but there are checks and balances in the UK system and there is only so much damage that his erratic leadership can do. Generally, expect for Brexit, he is pro business policies that help shares.

https://www.nytimes.com/2020/09/17/business/small-tech-stocks-coronavirus.html?referringSource=articleShare