Member Info for steph

But that means that there is no oil shortage and new supply from shale, and the sanctioned nations of Venezuela and Iran will bring down prices pretty sharply. I’ll top up my short I think.

Pumped = piped

Sorry for automated spell check. Changes the meaning too many times.

Rns says black rock has been topping up and crossed over 5%

For my money this war will come off the headlines in a few months regardless of the situation on the ground and the market will move on. Russian oil will be sold somewhere no matter what the sanctions. Sanctions will simply reshuffle the market (unless the Chinese stop buying) not reduce the total volume sold. Venezuela and Iranian oil, shale gas (now hyper booming) and Saudi ramping up will all kick in. I’ve open up a small short on oil. We could see a much lower oil price in a few months.

Gas is more interesting. Much higher percentage of supply pumped than oil so more dependent on infrastructure. ALso big liquification and de-liquidification facilities take at least 2 or 3 years to build even with land and planing permission. So can get hot spots of severe supply shortages. This is happening now but those crazy prices in teh headlines are localized. Easy for the Americans to say to EU to embargo oil and gas but they have little Russian oil and no gas. WIll be a lot of talk about a phased embargo which in reality is kicking it into the long grass. German BOrse very sensitive to this and even more volatile than others right now.

One-in-10 chance of nuclear apocalypse ‘but keep buying shares’, says investment firm
https://www.telegraph.co.uk/business/2022/03/06/one-in-10-chance-nuclear-apocalypse-keep-buying-shares-says/?WT.mc_id=tmgliveapp_iosshare_Ayn4rJ7z9XBL

If we do get nuclear war our investments will not matter. If not they will rise.

Must be a good time to buy if one has the cash.

I’m trapped by my margin play. ALl available cash needed to hang on right now.

I do think an overreaction but war can have unintended consequences. No sign yet of bank stress that might leave to sovereign risk as we had in the Greek banking crisis.

I would imagine soon we will get signals rate increases are off and money printing machines firing up.

https://www.atlanticcouncil.org/blogs/new-atlanticist/russia-crisis-military-assessment-why-did-russias-invasion-stumble/

I hope not but might be a longer conflict than many had predicted. Not establishing air superiority before moving troops and tanks is seriously amiss. Cruise missiles not having the needed intelligence and accuracy is big. Sounds like the Russian initial plan is off but there is not intelligent leadership to adjust to circumstances. Maybe Putin over concentrates military decisions to himself and thus slow to adapt to changed circumstances and challenged assumptions. Maybe like Hitler in the end staff are timid to give bad news so living in a bit of a bubble.

Of course the Ukrainian army is not doing as well as the west makes out. They have not hit a single target outside the Ukraine even though the Russians are still massed on the border and have vital supplies there. It is not a stalemate by any reckoning although the Russians are clearly taking more loses than they probably expected.

For a meaningful ceasefire the Ukrainian army needs to fight to a standstill on the multiple fronts. Otherwise teh Russians are now so committed they will slowly go into each city center and piece by piece declare military occupation. More Montgomery then Rommel but like Montgomery they have superior numbers on their side. I read public opinion holding well in Russia but no enthusiasm. No wartime rally to Putin as often happens. So troop moral likely to be low but not dangerously low. Media reports of mass defections are exaggerated. Always a few defectors and they have an incentive to trash their previous army.

Very sad to see war in Europe again. I went to Kosovo shortly after the war there. War is rarely a solution to even the worst provocation. IN WW2 and with direct military support from other nations the Ukrainians don't have the French army correctly realized they had been defeated long before there was street to street fighting in Paris.

It is in the interests of many outside Ukraine for Russia to have a hard time of this conquest to deter more adventurism elsewhere. However unless the Ukrainian army has a clear pathway to win I don't see how it is in Ukrainians interests. They are being egged on and feted but whose interests are really served? At some point when it is clear the war is unwinnable the Ukrainian army and chain of command might disintegrate quickly regardless of the undoubted social media tic toc successes of the entertainer of a president. I would not want an entertainer as a war time leader. Good communication skills helpful but good military and logistics organization vital. Churchill had both.

Nice to think of my tiny spread including our SP.

At any given second the SP is equally likely to go up or down. Otherwise it would be at a different level.

Clearly bad news is about and this has brought us to 45% off our recent peak in September. For my money I have assumed this is bottom and topped up a bit but who knows. Just odds not a crystal ball.

I am concerned SP wise as well as from a humanitarian angle the Ukrainian war is not ending quickly. The longer it drags on the bigger the exit to the international economy mainly through the feedback mechanism of energy prices and general mood.

I have looked for a bank and sovereign debt risk and there appears to be none. This is very much different than the Greek banking crisis which had a knock on effect on EU banks and through that mechanism on sovereign debt. I suppose few were lending money to Russian banks before this started and those that did were well diversified and can write that off.

THere may be some unknowns. This new segregation of Russian and world trade and assets may yet throw up some unexpected bankruptcy. It sounds like RUssia will retaliate to western side urges of its overseas assets and that of it’s “investors” by nationalizing foreign held assets in Russia. THis will cause some western pain and western banks who had Russian assets as collateral on loans may have big losses. Overall I suspect there is more western assets in Russia than Russian ownership abroad so this aspect of sanctions may be net positive for Russia even if net negative for the global economy.

For me a sell signal is any form of direct western military involvement in Ukraine. THis absence in spite of all the sanctions is important. It means the war wil be limited to the Ukraine and the global economy has always carried on when war is limited to one country. I suspect if Russia was not a nuclear power with full delivery systems there would be lots of direct western military intervention in Ukraine. Unfortunately a lesson for the non nuclear powers that non proliferation has risks for sovereignty. Sad. I was excited by SALT 3 negotiations between Gorbachev and Regan where a pathway to a nuclear free world looked possible and in mutual self interest. WOn’t happen in my lifetime I’m afraid.

De Vere wealth management giving their customers a buy recommendation.

I agree. Teh news is all slanted about how heroic the Ukrainian army and people are but the reality is the Ukrainian army did not even mass on the border in a position to stop the Russians crossing nor do they seem to have any major troop movements inside Ukraine at all. ALl they movement is Russian groups moving into poison around the major cities. Zero capability of Ukrainian army to bomb any Russian territory at all. It is not a war between two armies who might fight each other to a standstill somewhere where a demarcation line might be drawn. RUssia will slowly take over the bits it wants.

Ukranian President calling for ww3 by asking for. No fly zone enforced by western Jets but sensibly he is being ignored.

WHile horrific I can’t see how this militarily spreads beyond Ukraine. Teh main feedback loop to our sp is through high oil prices and general risk off attitude when you turn on the news an dit is all death an destruction. THis wil pas when the main fighting stops.

I’m no military analysis but I suspect this “war” is only gong to last a few weeks at this level and then there wil be some sort of zero or very low level conflict called a “cease fire” , “agreement” or something. I don’t know what the Russians want to do once teh nominally have control over Ukraine. Some relatively soft occupation with lots of promises of free elections in some unspecified date and then negotiations on that in exchange for lifting of sanctions.

SO when this hot phase of this conflict ends in a few weeks our SP and the market will jump. Ukrainians will be in an awful situation but the market is immoral and does not care.

Russias exclusion from the global economy is not much in itself impact on our SP. Secondary sanctions are the ones to watch. That is Us punishing companies who trade with sanctioned companies. CHinese to be able to continue to trade freely with Russian may have to split their companies into a group that trade exclusively with Russia and the rest who trade with the rest of the world.

Dropped like a stone right after my Molten and RR top ups. Jinx still valid.

The biggest black swan event of them all is thermonuclear war. Here we have it being threatened and Russian on alert accusing UK of starting it yet our UK share might even end up on the day.

I’ve topped up Molten and RR. I think we have a value hunter buyer in the background.

None of this nonsense makes any sense. Sadly the market is morally neutral. It cares not how much is destroyed and how many persons are displaced or killed nor conversely much how’ many children are educated not how many hospitals or schools are built.

Amazing we have hardly dropped on the news that thermonuclear war threat is being bandied about for the first time in 60 years.

One of the black swans I have always put in al ultimate risk risk equations is thermonuclear war with a very very low probability.

The fact this is even being talked about is a massive failure of our global governance system. There is not much one can do to protect investments in that type of black swan event other than own land and have passports in likely neutral nations.

For my money all this talk of arming Ukraine is hot air. The war wil be over before any of those new weapons get into the hands of a trained shoulder in a position to fire them. This is not a 48 hour victory for Russian but neither will it be a decade long debacle such as Afghanistan. The more days it goes on the higher the loss of life on both sides which is the ultimate tragedy. Encouraging Ukraine’s to fight without western troops involved is in western interests (imposes costs on Russia and deters future similar actions) but not necessarily Ukrainians. Their interests are probably served by showing they are willing to fight but to negotiate quickly something tolerable for both sides before the death toll gets into the 10’s of thousands. If they are a walk over they don’t get much say. No chance of winning in a military sense but still some negotiation benefit to make it hard.

for sure we need to get on the other side of this immediate crisis to evaluate the correct premium 9or lack of) to trailing NAV/share. I too feel we have overshot on the downside.

Trusts of private tech companies are still new enough that investors don't really know how to value growth. For a trust made up of traded shares there should be no significant premium. For trusts made up of untraded tech depend on the barriers to entry and the predictability of profit (basically the differences each half year between the NAV estimates of the component companies). I fear that the opaqueness of how our portfolio companies doing (in terms of sales growth, sales margins, net profit if any, runway length if not making net profit , etc) means we are undervalued in the good times and dip excessively in the bad (like now).

My hope is that over time as we turn in steady 15% plus NAv/share increases year on year more future growth will get priced in. We have significant barriers to entry into our sector and I hope we stay focused within that. We should not hold post IPO shares for any longer than the minimum necessary and maybe avoid frothy late private company rounds (which to be fair GROW admin often do avoid). We can specialize in the UK/EU feeder funds and the initial rounds as they grow into serious companies each with their own market niche.

For my money best shot at steady 20% year on year SP growth (especially from a starting point of anything below NAV/share) but my word what volatility along the way.

Bizarrely we may go up because geopolitical tension and rising oil prices may delay interest rate rises. It’s a funny world.

There is not rational connection between all this and our SP beyond the general risk off attitude we get caught up in. sales growth of our core portfolio should be 100% unaffected and in time that will use up our NAV/share and our SP.

Yes lots of bargains out there. I am looking to raise fresh money to buy. Can’t buy on my spread without fresh cash as I am too leveraged due to this dip. RR and spoons are on my list for buys. Hope these prices hold until I have fresh cash but I suspect they will go up over the next 4 weeks.

We will drop today again with the market. Will be microseconds on open and ten after that anybody’s guess.

I misunderstood the impact of. Ukrainian tensions. There is not direct western army against Russia army conflict. At most a proxy war and markets have not been much affected by those for decades. I predicted the end of the covid crisis very early on when South Africa was reporting it was milder but markets have dropped since not gone up as I expected. The only stock that went up as I predicted was AIG (British airways). Even Rolls Royce is in the doldrums in spite of being closely travel related due to hourly leasing of engines.

General risk off mood but not enough to pull general markets down by 30%. Just the more speculative bits of the market like us. I get Tesla but not most of our portfolio. I do think it is an overreaction partly driven by the lack of info.

I did think the quiet backwater of UK EU unlisted tech shares a relative safe haven. Lots of hidden value to compensate for market moods. May yet come to pass but we have to get through this volatility and out the other side. My leveraged part of my position is now my concern. No concern on the fully paid for pots. They will get back to 11.8 and beyond even if it takes 2 years from here.

If I come into some cash I’ll buy at these levels big time. For the moment am using what I’ve got to not receive a margin call.

Where next???
I appreciate we have very little information on the performance of the core portfolio companies which I think is a key reason we are below NAV/share. For my money I think the following is true.

1) All of our core companies are increasing sales nicely, even in this current market turmoil, and have healthy operating profit on those sales of circa 65% as reported in 2019. It is unknown if any of our core companies are making a net profit and if not how long the runway might be until they are forced to go to the market for fresh funds again. They may all be able to switch to slower growth but with a indefinitely sustainable net profit. We simply don’t know and thus market jitters hurting us hard.
2) Valuations of our 3 post IPO companies are transparent and there have been sharp decreases in the NAV since the last NAV calculation September the 30th. However the September 30th NAV was booked at the IPO launch value not the traded value on September the 30th. Conservative assumptions baked in. Also we have been selling down these traded shares aggressively so the decline in our NAV for those 3 might be much less than the market is pricing in. Also even at it’s peak post IPO shares were only 20% of our portfolio so investors may be overestimating the Molten impact.
3) Valuations of half our core portfolio is on multiples of sales and this ratio has been conservative and has not changed upwards at all in spite of the frothy recent market.
4) The other half of our core portfolio is valued at last round. IN the current market these can be influence by froth and thus our SP can be vulnerable to a flat or declining NAV on the next round. However not all our last round valuations will have been be frothy . Some will be earlier rounds or in places or sectors in the EU private startups the larger American VC funds have not reached. Also our not net profitable part of core might slow down growth and become net profitable. Many will be in this position. Be interesting to be able to directly compare the two valuation methodologies for our core portfolio in this position.
5) Our NAV is split roughly in 4 parts. 30% micro funds and services not affected by recent froth, 30 to 40% multiples of sales core, 30% to 40% last round core and about 10% post IPO. Only the latter 2 influenced by froth and the retraction of froth.
6) Interest rates will not rise to anything like pre-2007 levels and we have had a permanent shift the markets are not accepting just yet. Whole tech sector will go up when it is obvious the other side of the rate rising pause we are in which is spooking leveraged or currently healthy but unprofitable fast growing company valuations a lot.

Interest rates won’t hit pre-financial crisis levels, Bank hawk claims

https://www.thetimes.co.uk/article/ebddcb24-93fb-11ec-9aec-82f0032d4cd3?shareToken=a919250324da335753fa45d60d54baaa

https://thepaypers.com/payments-general/primarybid-raises-usd-190-mln--1254733

But competition from rivals makes this harder than it sounds. A vc firm that tries to align a funding round with the prices paid in public markets may find that another vc firm comes over the top with a better offer. Venture capitalists are caught between two opposing forces. On the one hand, they see that interest rates are going up and technology stocks are falling. On the other hand, there is an array of tempting startups that are also being chased by lots of rival shops.

The expectations of entrepreneurs matter in this regard. Many will look to the terms their startup peers achieved recently as a guide to their market value, says Simon Levene of Mosaic Ventures, a London-based vc firm. It is not healthy for startup founders to think that capital will always be forthcoming. But try telling them that. An excess of optimism is part and parcel of being an entrepreneur. People who are more mindful of risks get regular jobs. Memories do not reliably stretch back to the dog days of 2002 when vc funding was hard to come by. Founders grew up in a world of near-free money. It will take time for them to adjust to a different landscape.