Member Info for steph

I'm same as you. I don't have the information nor expertise to judge the structure of the core portfolio in relative terms but the sector is where I want to be.

Quite take your point on the internationalization of valuations and the risk that creates from our UK/EU low multiples of earnings backwater. Still much of our portfolio still private and "domestic" and this has had limited impact on earing's multiples sued for last round or estimates.

My Dad once told me the American troops with their much higher military salaries then the UK troops in the war were resented a bit as they got the girls by splashing about. Not much changes.

So Trustpilot about 40m contribution to first half results.

So just cazoo, Trustpilot and revolt alone are 220 m extra nav falling in first half. That's insane!

Maybe I'm missing something but I don't understand why our SP is below 12. Our portfolio is maturing nicely and generating big NAV/share upgrades. Sure some doubt as to whether this fabulous 2 years post March 31 2020 is replicable indefinitely but we are not priced to reflect this high rate of NAV/share growth.

At this rate trailing NAV/share will shortly be nipping at the heals of our SP. I respect SAGE's criteria but for my money I think it's wrong. Our growth rate should be better priced in. Sage and I likely agree that in the long run our NAV/share growth will lift our SP in proportion. The debate is from which starting point as a premium over trailing NAV/share will that occur. Also will that starting point shift over time as the market gets more familiar with us and prices in some more of our future growth.

I think it is silly for UIPAth to IPO on 46x earnings and for us to have a core portfolio NAV valued around 5x earnings. Either UIPATH is massively overvalued or we are undervalued or some combination in-between.

https://www.theguardian.com/business/nils-pratley-on-finance/2021/sep/15/darktrace-astonishing-rise-makes-city-forecasters-look-sillier-than-usual

also why our firms like NY listing and why I don't want to hold US tech. Too much money chasing too few genuine opportunities. I really like GROW's basic business model. UK/EU pre IPO teck with a poileline form early funding up to IPO.

https://www.channele2e.com/investors/uipath-ipo-10-rpa-takeaways-from-s-1-sec-filing/

UIpath is certainly spot on in terms of future potential. Never-the-less I prefer GROW to exit it's post IPO holding ASAP. Just not our trusts business model to hold post IPO. It confuses investors and muddies the case for a significant premium over trialing NAV/share. If UiPath (PATH on NY) takes a 50% SP dip on a moderate delay in it's very rapid expected ramping up it can bring down our nav by 50m or so. A lot of risk for us not based on fundamentals nor our stated business model.

That said UIPAth at the current traded price is no drag on our NAV/share and may even be an assist if GROW has sold some over the last 4 months as it was above the IPO price for almost all of this period.

It is a pity that page 10 of he Edison report is all we have to look at the investment portfolio one by one. Why can't we be told every year the revenue per share of each and in aggregate. Why can't we know the precise % of each company GROW owns at year end? I'm sure the big funds are told this before they invest in GROW so why put the GROW retail holders at such a disadvantage information wise? Hopefully with main index reporting the information will be more complete. Also missing the AGM has prevented us from attending a forum where these sorts of question can be asked and replies to be transparent and equal.

Anyhow even if GRWO has not exited UIPAth at a further profit the rest of the portfolio seems to be flying. I expect our half yearly and year end increase in NAV/share will exceed projections and be in excess of 207m. How the market reacts to that is unknowable. GROW seem to want to talk down expectations all the time. Better than a trust that ramps it's shares but if taken too far might benefit institutional investors who have greater information than we do and can make their independent forward projections. Edison was great but even Edison was unable to say the precise % ownership or the revenue multipoles used in the valuators by company.

Cazoo is not typical but I suspect we have a few more like it due to our early bird funding structure. We put 10m in after March 2020 and now worth at least 80m.

So just cazoo and revolt alone are 179m extra nav falling in first half.

Uppath no impediment to nav even if grow sold none post I’ll as soon at launch price not below.

yes UP path may not help our NAV (might if we sold some when above 28bn float price) but look at the others. We should rock on next update. REvolt alone will contribute 99m pounds to our first half results -nearly half our full year results last year. Insane.

UIPath contribution to Sept 30 NAV uplift =0 (unless we managed to sell post IPO when it was above offer price). If we did there might be a contribution of 10 or 20m.
I agree that UIPath at a 28bn dollar valuation is frothy. No matter if GROW have been selling off their stake post IPO when it was above offer price. At the moment it is exactly offer price so we will not get a further uplift in NAV related to UIPath for any shares we still own. One curiosity is that even though the IPO was 21 April well after the year end the IIPO estimate was sued for NAV valuation as of 31 March 2021. See RNS Number 1852W Draper Esprit PLC 21 April 2021 and page 59 of the final results.
UiPaths’s January 31 2021 year end revenues were 607m so 46x revenue. Even growth from previous years revenue of 332m do not justify 46x revenue. 10 to 12 maybe. No wonder they listed in NY. I’ll be glad when GROW confirm they have sold these shares post IPO.

Revolt will contribute 99m pounds to our Sept 2021 results.
Revolt had a fair value valuation in Grow’s books of 21.9m in March 2020 and the same in March 31 2021. Since then they IOP’d netting 24 billion pounds and our share is a NAV uplift of 99m pounds. Fabulous. Half our 2021 year end NAV increase in one share in one half.

Aircall will contribute maybe 20m to Sept 2021 results due to last round valuations lifting AIrcall to over 1bn.

Ledger has had a last round valuation of 1.5bn us . The 45.5m grow listed as its fair value as of March 321 2021 was based on round b so this is a lift (p59 of annual report) . Edison on page 10 listed our holding in Ledger as circa 8% in Feb 2021. The round c is about 3x the valuation of round b so maybe our 41m fair value has been lifted 80m. ???

Lyst has a new investment round in May 2021 which should lift our 35.1 m stake as of 31 March 2021 a bit.

Sportpursuit GROW exited Sportpursuit post March 31 2021 gaining 22.8 million over the March 31 2021 valuation of 18.5.

Cazoo
Our fair value holding was listed on 31 march as 25.7m pounds. It’s not clear for Edison roughly what our % holding is. The float was announced on 29 March 2021 but did not happen until the end of August 2021. The float was for 8bn us. Can’t determine what our holding is in CAZOO (under 5%) but I expect we got a nice NAV upgrade on the 8bn valuation from our 25.7 reported March 31 on our results.

topped up a bit. Pulled my average on this dip down to 1095. Slightly better but not as good as what you got.

I'm betting this dip is a repeat of May 3 to may 10 dip and will also be all over by results. We might have bottomed out yesterday at 10am although still a bit unsteady. The extra volatility may well be investors that want to hold long term accelerating a dip by selling on the momentum once it starts and then buying back once well down. Us tiddlers do the same but probably without the same precision.

annoying as it is I don't think this retrace of the past few days tells us much more than we will have these retraces from time to time on the long march up for reasons that may be entirely idiosyncratic to specific investors coming in or out. We had a very similar sized retrace between May 3 and May 12 and within weeks and results we had recovered and surpassed the previous high.

Interestingly these dips don't affect 1 year and 5 year prediction son the chart based technical analysis. I suppose the charts look over the volatility to see the underlying trend.

https://walletinvestor.com/lse-stock-forecast/grow-stock-prediction

I wish I had better information on the performance and NAV valuations of our core portfolio. Crucially what is the sales to NAV ratios of each one and what is the sales growth rates. Generally with rare expectations it seems our NAV is on very conservative valuations (especially if estimated). There appears to be one or two that have post IPO retail pricing and maybe an overexcited last round based valuation of one or two as well.

I think the confusion underprices us and might add to volatility. If all of our core portfolio was IPO'd and traded in the retail market our NAV would be much more than 7.45 (2 or 3 times higher I think) but we would have no SP premium to NAV. SP wise should not matter but in practice the confusion and the blending may underprice us. AN investment not understood is an investment that will more often than not be underpriced.

Thanks for the comprehensive analysis and explanation of your position. Certainly a position I will slowly shift towards but I do think grow has some fast so growth left in the tank and willing to ride that tiger for a while longer before I diversify to safety and retirement.

Nice buy in price

I’m stuck at 11:00 average for recent top ups. Jumped too soon.

always good to have a counter opinion to my optimism.

This is an annoying company specific dip but we did have a exhilarating company specific rise. General market ahs been flat.

For my money I think we are about bottomed out on tis dip, baring of course a hard general market retrace which is always a risk we have to take at these index levels.

Interesting thing about predictions on stock prices. The proof comes in as sure as night follows day.

I don't think there is anything to worry about. Just some taking a well deserved profit in relatively light trading. Hope I don't have to eat my words. Even with this dip and my top ups I'm not overleveraged so can still sleep at night.

went down today after being up on open on relatively light trading. 161,691 shares traded far. Volatility a real pain. Opportunity too but I'd rather have stability.

Last year we had update on half yearly results 26 October. Might be slightly earlier this year as they were having trouble with the valuations last year. I suspect we will have to wait for that update to see 11.88 again.

Bought a few more

https://walletinvestor.com/lse-stock-forecast/grow-stock-prediction

that would be nice. I think it is just based on charting though not fundamentals.

I still think all things considered 20% sp growth from her for the foreseeable future is a reasonable assumption. I do think 10% too modest given history and given sector growth.

yes my number one black swan risk, and by a wide margin, is a sudden general market retrace led by the overpriced us market. We have already had jitters based on any hint of slightly higher interest rates. Expectations of real interest rate rises to plus 2% might create a stampede. Very few shares will escape that type of dip. Certainly not anything in tech.

Personally my risk management strategy against that is just to have the patience and the financial position to wait it out if it happens. I genuinely believe GROW will be able to recover whatever it's SP was pre crash within a reasonable length of time. Our very conservatively estimated (when estimates are made) NAV is not based on much froth that might never return but real sales and growth rates that will shine through.

We are in a massive experiment in central bank interest rates below 4%, not to mention QE on top of low interest rates. Personally I think it is a new historical paradigm. There is a lot of capital sloshing about the world with nowhere to go and a deficit of genuinely new high profit markets (internal or international) to flow towards. The integration of the old USSR block and China into the global capital economy is now mature. Africa is just too badly governed to absorb much inward flows. India is underperforming and awkward and will remains so. This lack of opportunity coincides with all western government having low interest rates and printing money at the same time.

With high deficits they have every incentive and few constraints to keep interest rates very low for deceases. If a western nation breaks ranks and adopts a 4% central bank rate (or even 2%) they will be punished by capital inflows so extreme that their currency will rise to levels wear they can't export. This started to happen to Switzerland and they were forced to stop.

SO for my money I think the party will keep going for a long time. Yes there is a risk of a misstep that might start a chain reaction. I'll never again have 80% leverage in my spread for that reason. Tooo risky. It's a powder keg.

If one can borrow money long term at 1.4% to 3% do so and put it into proper assets like shares or property (careful of which global market, avoid overpriced Canada, Australia and new Zealand). Get rich on someone else's money. Property globally is repricing upwards to reflect the surplus of capital. Plenty of opportunities left in some national or city areas. Very disruptive to working markets where first time buyers can enter but that is the way of our economic system.

As for shares I expect markets will test new highs but as you say be volatile along the way. Roller coaster ride to be sure but I think on average ever upwards.

For me anyway it is a confusing forest of investment oppprtinites and risks in the tech sector. I’m happy to in effect contract out to GROW the picking and choosing of the companies themselves and determining the best time to buy and sell. IN any case the companies I most would want to invest in are pre IPO so I need a trust to do so.

Should GROW hold beyond IPO? Maybe for a bit to exit at a much better price for a fast growing company but I prefer no long term holds of traded stock. I can hold that post IPO’d stock directly and I prefer GROW to stay with a sector I can’t access any other way. GROW should not diversify it’s strategy so much that it is everything to everybody. It loses its focus and mojo.

Anyhow no investment is a flawless match with ones strategy and knowledge. I’m pretty pleased with GROW overall and in my ISA plan to hold a near 100% concentration for 2 or 3 more years and after that maybe at least 50% for a decade or two. Maybe I am right and we will get cerca 20% sp growth for the foreseeable future from here. Worth that and within my ISA I will get rich slowly. Even if it is more like the 10% you have pencilled in I will still get “quite comfortable” slowly.

Even a typical ISA holder who has made the maximum contribution for 10 years so far and enjoyed some good but not spectacular sp growth will have 2,200,000 after 20 years with 10% sp growth and no further contributions nor withdrawals. Life changing. If “my” 20% is maintained the 300,000 pot becomes 16,300,000. Truly lifted into the ranks of the rich.

The sector is a 10% plus sector to be sure over a 20 year period. Clever stock picking within the sector and concentration on pre IPO and to buy in as far upstream as you can to avoid retail froth is the way to go. Seems to describe GROW to a “t”.

Bought a few blue prism for a long term hold

As always voice of reason.

Yes some bits of the more retail portions of our portfolio frothy but we have a lot that is not.

I do think some internet retail companies have gotten well ahead of real sales and profit but happy for grow to pick through them. profit from them for a short ride and sell at the right time.

We’ll see if we caught the bottom of this small dip, or not, soon.

If not I have no fear we shall be 11.8 again within a few weeks regardless (baring a general market crash of course).

We do seem to move with the highly leveraged tech sector on hints of money printing slowing down and after that interest rates going up. Bit of an overreaction I think as we don’t have the same forward P/E leverage that makes us sensitive to small interest rate changes.

Not quite shooting fish in a barrow but I think this dip overdone and we will recover our mojo as half year results draw closer.