Member Info for steph

Only trust pilot now down and by less. US tech flat.

So why are we down 6.2%? Makes no sense. Just lemmings maybe. Really annoying.

Our three traded shares down more than the market pulling us down. I do think investors are assuming our whole portfolio is similar.

UIPath down 2.5. Cazoo down 5% and trust pilots down 11%

However overall we still have a nice NAV upgrade due from last NAV calculation on these three due to trust-pilot. Not quite as much as we had 30th of September but still substantial. As in the past they probably will not book the traded shares at the September 30 cut off price but include any up to date pricing if it is negative. Conversely they don’t tend to price in rises since the cut off. I’d rather it be inflexible as clarity always best.

I assume this is some fund(s) that wanting out ever since we were 11.82 recently. What I don't understand is the double dip in the last month twice from the same level. Where are the funds that pushed up back up last time? Waiting on the sidelines I suppose.

I topped up a bit today. Could not resist but outside my comfort zone for sure.

Trustpilot down 7.1% and maybe some investors assume we are made up 100% of similarly listed shares and just use that traded indicator as a benchmark.

Bizarrely trustpilot even at this level will deliver 50m in NAV increase since last valuation with was the ipo price of 265. Cazoo and UI path will be down today when NY opens but not by anything like enough to cancel out the trustpilot add to NAV.

We had less volatility on the AIM.

Fan diagram of risk and opportunity.

My fan diagram penciled in but ever evolving looks like a cone. It starts one month from now with a bottom of 6 quid a share (and a top of 12.50). The bottom is 50% down from recent high and 40% down from current SP. It assumes quite a horrific and sudden (possibly overnight) market correction of say 30% within which we dip an extra 10% because we are small and relatively unknown. This bottom of the fan then rises slowly year on year to 7 then 8, etc. I trust SAGE would not think the bottom unreasonable.

The top of the fan starts at 13.00 1 month out. That assumes a major nice surprise in the preminary results and a stable background market. This is under 10% above recent highs so a nice boost but not stratospheric. The top of the fan rises 20% per year form there into the foreseeable future.

A SP below 6 can happen if we have nuclear war but then who knows what investment might be safe -and in any case I put those odds at 1/1000 or less. An SP above the top can happen if we have a buy out or take over. I actually think this is a significant possibly (1/5 or better) as our trailing NAV calculations when based on the previous funding round can be on average half or less of future funding rounds. Thus an arbitrage opportunity. If a fund wants the full core GROW portfolio may think it cheaper to buy GROW for up to twice trailing NAV/share and get the feeder funds, the stock picker team and revenue positive manage functions thrown in for free.

The middle of the fan keeps changing. At the moment it is 11.50 one month out and 12.00 2 months out -rising after that by 20% per year. It was just a week ago a bit higher than that but we will obviously be affected for a month or so as some confidence has been lost to the volatility. My middle scenario does not even predict recent highs until the final half term results. The middle scenario assumes stable background market conditions for the next 2 months which I think is over 90% probable so no need to go to cash. We are a long way from real interest rate rises and well worth the risk to be exposed by holding GROW at these levels.

Up 5% must help. Hoping grow are cashing out at these levels. UP path up and cazoo down but trust pilot on it’s own enough to give NAV/share a nice boost on half yearly results.

I always put sage’s “conservative” predictions inside any fan diagram of where I think the SP might go and ensure I have the funding depth to wait it out that long. My middle of the fan diagram is significantly more upbeat but events my dear boy events can overwhelm in the short run to be sure. I don’t ever want to be in a margin call I can’t meet situation and am happy to give up extra gains to be within the fan.

In addition I have stop losses in my spread bet that start to kick in at 6.80. I truly hope they will never be needed and think the odds of a dip below 6.8 pretty slim -but not impossible.

I still expect we will break 12 within 2 months. That is the middle of my fan.

It's a strange market to be sure and if one navigates it more or less correctly big prizes in the end but scary dips along the way .

We seem tto be in line with the US tech 100 in terms of when we dip although by different %ges. Not entirely unfair if we have 2 shares listed on the NY exchange.

US tech 100 down a bit (about 10% from recent highs) but up nearly 100% since the depths of COVID and up 80% or so from Jan 2020.

Of course that rate of growth is unsustainable but does it realy need a big correction or will it just rise more slowly in line with the pre March 2020 growth rate (still pretty good) ? The big US tech firms are dong quite well. Even TESLA is making money when back n Jan 2020 it was not. They are all moniterizing their dominant market positions in an economy shifting global in their direction so plenty of trillions to be had as apps and new software add value by replacing expensive labour. I think this "paradigm" shift has many years to run.

As for our tiny share I think in the long run we will have the fasted rate of sp growth of all. Growth in tech valuations are just on average steeper pre IPO. The big boys are increasingly getting bogged down in monopoly concerns and bureaucracy that inevitably comes with size. I am not surprised that in 2019 GROW reported average margins on it's pre ipo portfolio higher than listed tech in spite of the size differential.

I am surprised this current GROW retrace is as deep as it is. I wait every day for the last leg of my "W" to start. I suspect being in the ftse 250 has added volatility as some investors lump us with listed tech and sell when that index goes down a bit.

My confidence that we will hit and exceed 11.80 by the end of October update has been shaken a bit but for sure by the end of November when the get the formal half year results. There should be some post IPO realizations by then to report. Converting post IPO valuations to cash on it's own does not help our SP but news the money has been recycled in good pre ipo prospects certainly does.

My view rightly or wrongly is that if we can consistanlgty recycle money into feeder funds and early fundig rounds of UK/EU tech we can legitimately command a premium of 70 to 100% on trailing NAV/share. The rate of return in this sector is very high and even higher if one can, as GROW can, stock pick based on knowledge gained in feeder funds, board membership and proper live interviews. I think GROW has confused investors by holding on to 3 big shares post IPO and thus we are being buffeted about by market sentiment rather than fundamentals more than normal. I will cheer when we announce were are out of all post ipo holdings. It is not our value add to be there.

last year on the 29th of October an investment update was issued covering the first half. That update might have been delayed a bit as they were struggling with covid era valuations. This year shod be more strait forward. and thus maybe slightly earlier in the month.

Technicality trusts that trade in listed shares trade at a dis count to the daily nav value of the components by typically 2 to 3% but this can be larger (up to 8 or 9%) in times of market stress or volatility like now.

Trusts that are exclusively private tech companies do seem to trade at a premium to trailing NAV/share. There are not enough trusts that do this to know what is normal and a wider range of premiums seems to occur between similar trust companies and over time for the same company.

There are 2 big reasons and for the premium and many smaller reasons. Firstly trailing NAv/share is always 6 months or more out of date. With rapidly rising sales and thus NAV of the companies this can cause a 40% lag in NAV value on the day.

The second and maybe larger reason for a premium is that retail investors have no other way to invest in the private tech. portfolio. If as a whole the private tech portfolio is growing faster than the publically traded tech portfolio than this justifies a substantial premium.

The third reason is that GROW with the feeder funds,. board membership of feeder companies and lead role in funding rounds for private tech companies is in a very good position to stock pick the best ahead of private equity chasing the same sector. The importance of this third element is hard to value. Trusts of listed companies would trade at a small premium to the market if stock picking was given much general value. Personally I think in this complex sector with lots of hidden gems and lots of failures about to happen it is worth a lot but that may not be a majority view.

I do think that if GROW are sitting on too much cash to efficiently invest right now they should buy their own shares or start a dividend. Personally I think the sector is still booming and as long as the investments are sufficiency early in the cycle will return more than any other fund can possibly achieve. Steady 20%+ sp growth year on year.

https://uk.advfn.com/stock-market/london/draper-esprit-vct-DEVC/share-news/Draper-Esprit-VCT-plc-Transaction-In-Own-Shares/86178817

Maybe if temporarily GROW can’t find great upstream investments to absorb the cash pile they could do this which is allowed. Would help smooth volatility. .

But the great advantage of GROW’s business model is that it can use the feeder funds to go upstream if late stage funding rounds get frothy. No other trust can do that as well.

The start up seed fund to ipo value chain is becoming steeper from start to finish in terms of what an initial start up Investment can become in ever shorter time frames. . Steep is good. Flat is bad. Just a bit of turbulence along the way.

Must say surprised we dipped below 10. Waiting for the sp to turn on the last leg of the w I’m expecting to complete in the next few weeks. Seemed to be some biggish sells after hours.

Now at my top up limit on my spread for safety reasons. Achieved a 10.68 average on this top up. Never seem to catch the bottom.

Don’t like this volatility but we are where we are. Be nice to see a near complete sale of trustpilot. Love the share but we should be recycling the cash further upstream. Really love UIPath and may even buy a few directly if it dips under 50. Certainly if it dips under 40 with no change in growth. Long term hold though.

It is surprising how much ICT is in logistics. Germany a great player. Not surprised Draper involved. Lots of room to make the sector integrated.

Roughly I expect we will increase NAV on cazoo as it was ipo’d on august 27 and on our sept 17 update it was mentioned as 9 dollars a share. Trading down on that 8.22 but well up from the 27m to 37 million mentioned on the update based on 9 quid. SO 7 or 8 million contribution to NAV.

Trustpilot a star. IPO’d on march 24 at 265 and now flying at 370, We owned 7.9% of it post IPO which means we will get an additional NAV out of this in teh order of 50m. A real star. Hopefully as we are now outside the 6 month hold on disposal we will announce some realizations.

UIPath a great share but is down slightly on the IPO of 56 (currently 52). IPO’d on April 21 so still no permission to sell down until 21 October. I believe our NAV on year end results took into account the upcoming ipo at 56 so we will have a small decrease of a few million in NAV due to this dip.

OVerall though Cazoo, Trustpilot and UIPath path, our 3 post flotation shares, have made gains from the last NAV calculation of approximately 50m. Realizations will be unrestricted in the second half .

Quicker we are out off all post ipo shares the better. We can all hold those separately if we like. NO value in GROW doing that for us and just clouds the core business model and thus the SP.

Cazoo is riding the boom in online retail

https://www.thetimes.co.uk/article/48a74b88-2074-11ec-8cb7-e60ba8dbca61?shareToken=8d8794d8c165858e299f0264fbdb4c42

Hopefully we are now about to draw the last leg of a perfect “w” in the run up to results with 1182 to top and 1022 the bottom.

I dislike this volatility and on the whole don’t try to trade it. I go a bit long on a big unjustified dip and then trim back to my long term holding number of shares. It is more defiance than a trading strategy. I’m basically a long term hold investor.

If the general market holds I think we will nicely exceed the 1182 on results. we have reached and fallen back from twice now in the last month. I don’t like the fact we have nearly 20% of our NAV on traded US equity but I understand that after 6 months GROW’s policy is to unwind those position and recycle the money into it’s core business.

For now the traded positions are up from IPO price so we can’t complain -so long as they get out sooner rather than later.

. UIPath interesting. Yes on 46x earnings but what a company, Market leader in machine learning. This area is huge and lots of space for a trillion dollar company that is the current market leader. I personally would not buy it at 45x but I can understand why many smart investors would do so. Machine learned software will surround us soon enough from the vacuum cleaner to our car, factory, and office. Bright future for UIPATH, I just worry that the next 3 years are priced in.

As close to a one way bet to get back to 11:80 by results in October as they come. Even uipath up . Update should exceed expectations and forecasts.

Only a more general market crash in the meantime is the risk.

We have gone over 11:80 twice recently. Third time lucky to break and hold.

https://www.thetimes.co.uk/article/rolls-royce-soars-on-2-6bn-deal-to-supply-b-52-engines-for-us-air-force-d96t5r2hd

Imagine if we had that influence.

I’ve long assumed us tiddlers as so small we don’t move the market and thus it is in our individual and collective self interest to share our thoughts, data and analysis on a reciprocal basis . Ramping or deramping has little effect and it means a rational reciprocal discussion (that is in our collective long term interests) is spoiled.

Personally I like the discipline to post my analysis . Seeing gut feelings in unretractable words is a splash of reality. We all have confirmation bias and posting mitigates against that. History calls out a posted and thus traceable error. I like alternative opinions and find them stimulating.

We only have to be right 60% of the time to beat the market.

https://www.economist.com/business/going-public-here-is-a-how-to-guide/21805069

I bought some K3 on your recommendation but nothing yet. Hopes up.

I wonder if anybody bought on my time sensitive Rolls Royse recommendation September the 20th. That was at 109. It has been flying ever since.