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We had the big brexit dip in 2016 on the suprise results so I think the brexit discount is baked in. that did not prevent us from a slighty froty rally in 2021. WOudl have been forthier wihtout Brexit so maybe a back handed favour.
SO may factors why similar tech companes in uk eu trade at roughly half us valuations for similar but mainly availability of capital. Uk out of favour to be sure but reasons are mainly sentiment rather than hard facts. US in pretty big trouble as well and governance issues worseethan here. Liz Truss looks quite safe and sane compared to many candidates for the Republican Party nomination for presidency.
But there must be some connection between our low sense of economic self-worth and the miserable valuation multiple that’s applied to British shares. It’s hard to imagine that the outlook for British companies is only half as good as for their US counterparts. But that is what the market is telling us.
Just treading water near bottom. I suppose funds than need to come out as we exit 250 are doing so but we do not yet get the funds that want to hold AIM for the tax benefits
Arm flotation helpful. SHOws IPO market still alive and in volume if priced correctly. Revival of IPO market would have a dramatic impact on our SP even if multiples of sales are as low or lower than 2018 pre covid. Our portfolio has been expanding based on sales quite sharply since 2018 so and decrease will be well covered and we should be back to our pre covid SP pretty sharpish.
Graph-core the wildcard as few commercial sales but lots of valuable IP. The commercial sales they have are industry leaders like universities research departments so may well still come good.
When I chose to concentrate in GROW I believed with some evidence that a cross section of EU UK tech fast growing start ups diversified by geography and maturity would be a sweet spot of the least volatility relative to the most upside potential (due to the long term nature of most of the investment -including sovereign wealth funds like the Irish).
What I missed was the retail wrapper could leverage angst and cause disproportionate outflows due to being more liquid than the majority of the asset. Also such a black box and new asset class it just has no history of dips and recoveries to go on so the worst is assumed on a dip.
Of course on the upside the reverse will happen. I wait with bated breath.
Thats my assumption. 100% invested and all in GROW (wihc in turn is 1,700 Eu Uk tech start ups in various stages of development). I’ll diversify when we are over 12 quid whenever that is. Wish me luck.
Https://www.economist.com/business/2023/08/24/arms-flotation-could-revive-the-market-for-ipos
I’m an economist -sadly. I agree that 5.5% interest rates not a reason to think whole pipeline of start up tech dead or significantly overvalued. Massive overreaction. We will get a massive correction upwards at some point. Just don’t know when. Did not get my remortgage so grimly hanging on. Makes no sense to be below our launch price 9 years ago. Portfolio much lareger and stronger. .
Recessions good for our sp so nothing to fear on that front. Unpriced black swans nowhere to be seen. War in Ukraine priced in. High interest rates more than priced in.
War in Europe -nuclear or conventional -beyond Ukraine not priced in but I think still unlikely. NO safe investment if that happens. Could trigger sovereign defaults so even government bonds not safe in a big war scenario. farming land in NZ the best under that black swan.
For my money i think all central banks right now are talking tougher than they will turn out to be. bias towards a carney “guidance” stance until inflation near target.
lots of political and economic stability pressure to cut earlier than later. cant do so until data gives cover but will be aggressive when they can. recession overall good for grow as lost market for goods or services tiny compared to positive aspect of much lowered interest rates
Https://pitchbook.com/news/articles/HSBC-bank-venture-debt-vs-private-fund-loans
Its a mortgage on a recreational property.
i expect a full sp recovery (defined at 9.00 plus) by october 2024 but i will be able to wait if delayed. indeed additional borrowing has the objective of allowing more time on what i have and not just adding some.
the sectors that went down with interest rate rises will go up on anticipation of drops . still choppy waters on interest rates do not yet.
i genuinely thought that a tech unlisted portfolio of over a 1000 firms diversified by tech sector and eu uk geography was diversified enough but sadly no. yes a risk of management c_ck up but rather low risk i think for grow. c_ock up would need to be borrowing to invest just before a downturn and running out of operating capital just when realizations are hard to get even at discounted prices. trust structure itself can never go bankrupt if not leveraged and portfolio will never be worth zero even if a historically high percentage fail.
i never anticipated this volatility of the retail wrapper given the slow moving asset base but live and learn. with such volatility need some diversification so i can sell when needed without selling grow at the wrong time. indeed thd higher the volatility the more smaller a percentage of my holdings grow can be.
Im remortgaging to give me the ability to top up seriously.
our nav per share never went crazy in 2021 surge and we never had much to drop to get back to our long term trend line. no reason to be this far below and it will correct itself. companies we own in rude health and growing sales rapidly.