Member Info for steph

Ahmex = AGM

Thanks for the quality debate. I topped up. Scary times.

Hopefully we will get more detail on grow portfolio especially if any are net profitable and the runway lengths for those who are not. Ahmex is a place we can ask those qs if not. Might look much better under the hood than the rest of the sector.

Big Tech Is Getting Clobbered on Wall Street. It’s a Good Time for Them.
https://www.nytimes.com/2022/05/20/technology/facebook-amazon-apple-markets.html?referringSource=articleShare

Great debate, many thanks. We will have a lot more data on final results and hopefully a chance to go virtually or in person to AGM and ask further detailed questions. On GROW I think the black box approach is hurting value recognition. I was scheduled to go to the AGM July 2020 and then COVID intervened. I once phoned GROW CEO for some additional info and he was quite guarded but accessible.

We normally track us tec so maybe our dip yesterday not so surprising. Was really good news on thought machine 100% increase in NAV on a recent round d. SHows the strength and hidden value of our portfolio is credibly enough to withstand the headwinds on valuations more generally (at least of r our privately held portfolio. OUr public ally held portfolio is being decimated but GRWO assure us that is offset by increases elsewhere.

Our directors topped up in January between 7.45 p and 880 p. They must be getting as ticked off as we are with sub 6 quid. Ridiculous. There is no reason why high inflation will hurt sales. Indeed it will flatter nominal sales value on the same actual number. The covid big economic dip was good for sales. We don’t move with GDP up or down.

The only way inflation hurts us is the expectation that the risk free return will go up and there will be a general drain from jam tomorrow assets. I for my money think the stampede out for us is well overdone on this and we will therefore bounce back soon. We were never priced at levels that put net profit far into the future nor do we have too many many shooting star cazoo type start ups that went fantastically up fast but may encounter tough competition that limits growth or profit. A lot of our portfolio is the relative tortoises like thought machine that are chugging away behind all the froth and excitement we had in 2021.

Must be we have a fund that sells into any good news so they don’t dip the SP too much. It will clear. Great results.

I once met a hedge fund manager in Mayfair and he was quite polished.

We have an RNS today that shows a round d fo thought machine uplifted NAV by 100%. This comes on top of a round d uplifting Aiken as well. So in our core portfolio in spite of the sheer chaos out there we are still getting NAV increases on late rounds.

TO me it indicates we are oversold and should return our SP to at least NAV/share shortly. Be interesting gon finals to see the broker predictions. At the moment all above 1000 including Berinberg who still have 1300 as late as mid March so it took into account the global dip.

Cash is king for big fund managers as global fears pile up

https://www.thetimes.co.uk/article/64170d26-d5f1-11ec-bb99-1bcd45646516?shareToken=7a06a62910e1eea5d2d85c75f4adc357

Hard to know if we are at bottom but the rise will be fast on the other side of this retrace. War will end it’s active stage as will threats of further interest rate rises stop at some point as inflation starts to fall. Unemployment in both USA and UK very low so quite a weird situation. Stagflation normally accompanied with high unemployment.

For my money relatively cheap money here to stay and the threatened rises in interest rates will be more moderate in practice then current signaling. Central banks know raising interest rates does little to curb inflation right now and in the short run adds to it. It is more politics that they are signaling big rises in rates while actually doing the rises as slowly as they can get away with. Fiscal actions by the government (not central banks) are the best tool for protecting the vulnerable population to the decrease in real income. Tax cuts and grants to the low paid rather than interest rate rises. All new territory. Tough time to invest but lots of opportintuy for the brave.

I’m shorting oil a bit right now. Convinced it will dip under 100 within 2 months. Lots of reasons. Medium term no way it can remain above 80 so if one holds the short long enough it will come good. There is a dropping shadow price for the energy content of oil that renewables provide and that currently is about 60 and dropping. So long term oil can not exceed 60. I expect it will drop to circa 40 and then slowly decline after that. Very comfortable with shorting at 113 therefore even if I have to wait to cash out

Both now show on our RNS below 5% holdings. THis caused us to underperform the sector for a bit to be sure.

They may be back even at a higher price after making a killing somewhere else.

Thanks for the interesting postings.

We have been oversold due to some fund(s) coming out for their own reasons. A big international hedge fund may simply have some fantastically discounted shares to temporarily move into (Cazoo, trusts, ui path for example) and will pivot back to a less volatile trust like us after they have made a large short term return. So the very volatile share gets a bit of stabilizing arbitrage and we get a bit of additional undeserved volatility.

Volatility a pain. I got an automated sell at 5.40 on my spread. Never thought we would ever be at that level but we did and I have the t shirt (or digital screen shot). We just have to accept this level of volatility as part of the package I’m afraid or just buy treasuries and get 1%.

I still believe in the long run our SP should be above a 30% premium to trailing NAV/share. We have been there about half the time in the post 2016 period and I was expecting that % to rise over time as well as the premium. Time will tell.

Week 19: GROW is down 8.7% this week, while the market is up 0.2%

I agree looking at patterns we have one or two big sellers. It will clear at some point and we will get a bit of a bounce relative to the market rather than underperformance relative to the market.

I trying to raise some top up money to put in before our finals in mid June. May be a historic opportunity for many shares grow included.

Shroders holding dipped below 5% yesterday so our dip ahead of the sector probably just one or two funds chasing crazy prices elsewhere in the world. As you say intrinsic value will cause sp to return and one need to ignore short term volatility. .

What a god awful retrace. 20 months of solid growth based on excellent management and temporarily at least for naught.

I do wonder if we might be now attractive for a management buy out. they have access to the sorts of funds that do just that inside their portfolio. This far below NAV/share is fantasy value for somebody able to take a medium term perspective. Needs no growth in NAV at all just to hold on. Almost shooting fish in a barrel.

NO I did not meant to say GROW had dumped all of CAzoo. Just hoping it is most of it and before the is last dip.

In theory at least any decrease in valuations due to less money cashing the sector affects the whole of the development chain form seed and round a to round e and IPO. A cash rich VC able to invest upstream and in EU/UK seed funds as well as in late rounds will be able to buy cheaper and still get the same percentage uplift. Both buy and sell on the development chain will be at less cash for the same % of shares.

Of course any change downwards will affect GROW temporarily but in the medium term not a problem. I do think if GROW was ever to have a half yearly retrace on NAV/share it would have been in the September 30 to March 30 half year. “Half year horrible” Our above sector sales growth, stock picking expertise due to seed fund knowledge, conservative valuation methodologies and a reluctance to hold post IPO have all combined to make this relative to peers a defensive stock within the sector. I think we have been oversold drifting along with the sector trends and our individual situation not correctly priced.

Be interesting on the finals what the forward guidance is. I am hoping for guidance of at lest 10% NAV/share growth and that should put the doubters to rest. NO reason to trade below NAV/share if we never have a slowdown in NAV/share growth never mind a retrace. If no retrace now in these conditions when?

Cazoo was more of a dot com entity. Glad we are out and we made big money fast when the going was good on that one. Money to now reinvest in seed funds and series a and b.

UIPath more solid. Real new technology and solid sales of circa 1 billion. Forward guidance by the company warns of caution on growth due to Ukraine and related general uncertainty. May prove overly cautious. No particular reason why sales should slow down due to Ukraine. Not net profitable yet so has been clobbered.

Ditto for Trustpilot. SP dropped due to forward cautious guidance and a slow down in sales in USA but UK and EU seem to be holding up. Knot conquering the world though but dominant in it's EU niche. Not net profitable so clobbered. I like truspilot but easy to imagine a competitor to emerge. They are up against US competitors stunting growth in that market.

In any case I expect on full results we will have a relatively small holding of all 3 traded shares.

For the untraded core portfolio will be interesting to know what % is last round and when those last rounds were conducted and how much of a deflater was used just for prudence. If many (say half) were last half of year than risk of over valuation going forward to only 1/4 f portfolio and a deflater was used as well to mitigate that (we don't know the amount of deflater used or when).

All those core stocks on multiples of earnings never were inflated by last years valuation boom. The multiple used was the historic one and to me quite conservatively applied. Was a good case to use US not UK/EU multipliers which was not done.

I don't think the market remotely takes into account our conservative valuations methodologies (nor yet our companies forward guidance that NAV/share is still increasing not decreasing) and we are getting caught up with the general flow out of the sector.

If going forward NAV/share is still increasing 15% plus per year (given we achieved a rate of 20%/pa in a really horrible half year between September 31 and March 31 not unreasonable or ambitious) there is no reason to trade below trailing nav/share no matter how jittery the market. Fast sales growth on average in our core portfolio of 60%/pa means the ones we have are true growth shares. Just good grooming and picking going on in a tough market.

The peak to trough drop of 600 pts from 11.82 to 5.80 and now well below NAV/share of 928 is overdone. NO sign of retracing on NAV/share valuations gong forward to justify that and some indication we are still growing nicely NAV/share in a tough market.

Surprised at this level we have not bought some of our own shares or that some fund (or GROW management with funding) has thought about taking us private again. Happened to me on Telford homes when the stock SP was similarly dragging it's forward potential Arbitrage encouraged the move. When we are 30% above NAV/share maybe not worth it as any bid needs to be 30% above whatever current SP to stand

Great strategy sage. WIsh I had it. For now I will just hang on and hope GROW rise again in the not distant future.

I think we wil get helped by our year end results around June 17th and also the general market will realize that the coming recession (especially EU adn UK) will do all that is needed to ease inflation so interest rates will not go up as much as feared. General slow down will quickly ease supply side bottle necks. Oil wil go below 80 in the next few months if not sooner. China will relax zero covid policy. Rest of world learning to live with it quite successfully. Good time to go long regardless of stock or sector.

War in Ukraine of course a cause for uncertainty. A risk it could spill over into neighbours. Wars often do. In this specific case I think the west’s objectives are adequalty met by arming Ukrane and giving Russia a bloody nose. Russia has no interest in escalation, it can’t even win in Ukraine alone. It’s military just does not have the size, sophistication or configuration to go further. A paper tiger.

BIg win for NATO. The Russian military threat is much less that thought due to a lack of capacity. We really don’t need such high military spending to counter it just a unified approach to any Russion attack -which is what NATO is designed to do and does. Even indirect military aid to Ukraine, a poor and corrupt country, is proving quite sufficient. So maybe in time some sort of a “balance of power” dividend.

IN the short term our military spending will go up but in the longer term may now go down. It does seem that in modern drone and intelligence assisted warefare the ratio of forces needed to attack has changed. It was always though 3:1 was sufficient to attack. Now it may be 10:1 or more. Defense of territory is just much easier these days -if you are willing to accept horrific human losses and you have access to the wests best defensive kit.

I expect PUtin will accept a stale mate (not peace just a cease fire on existing lines) pretty soon and this wil give all stocks quite a boost. He just seems to lack the ability to gain territory faster and surround the Ukranian troops in Donansk. Ukranian government not inclined to offer a cease fire unless in theory some way of rolling back the new Russian Ukranian “border”. Some political fudge needed. Biden not firing on all brain cells so maybe leadership on this wil come from elsewhere. Turkey, CHina India even.

I meant multiples (P/E or sales) for defense industry not tobacco.

Take your point that tech may suffer wage inflation more than rest but ability to pass on costs better too. As mentioned nominal increases in the price of sales flatters profit in nominal terms so long as the company can pass increased costs neutrally onwards.

Anyhow I think we are near bottom. Scary dip though and I wish I had your cash reserves right now. this dip has caused my overall spread positions to be 2x leveraged which is too high for me. I consider high risk to be 60% ((1.6). A 30% drop from here would cause margin call problems. surprised I am anywhere near here but never expected a 50% drop from September highs on the news we have had.

I also thought PUtin’s speech should have assured markets he is not the madman incapable of responding to real data (ie: the failure to dominate the battlefield) they make him out to be. He seemed to be resetting expectations to hold onto 2014 territory rather than some large territorial expansion. A deal to be done in the near future if the Ukrainian government willing to take it. Some ceasefire kicking the issue of who governed what provinces into the future is doable and might be acceptable to both sides. Can’t see Russia agreeing to any pathway where Crimea might have a real vote on who to align with but if Putin were bold enough that could be offered. He did hold a controlled referendum in 2014 and a real one backed by the UN might return a pro Russian majority and there would be little Ukraine could do about that if it were ever held. Whole of Donansk is probably too much territory to return a genuine pro Russian vote so as the British before did with the 1922 Irish agreeing the boundary of the partition need to count the votes before setting any new border. Putin may be too risk adverse to do that (agree to willingly give up territory based on a genuine sovereignty vote) but you never know. He has no risk free options right now and at least in the past was not stupid. Maybe there is a brain working. He did pull out of Kiev before serious damage to the city when it was obvious it would be a horrible fight -indicating he is not a Hitler in a bunker. He is adapting to the circumstances as they are and not as he thought they would be from the start. US has an intent in bleeding Russia for years on this as they did with Afghanistan just to weaken Russia (weirdly the US was funding the Taliban and Bin Laden aback them to hurt USSR’s support for a far better Afghan government than any that came afterwards). Alls not fair in love and war it seems.