Member Info for steph

I rarely like to delegate on my investments but happy for GROW management to make these judgment calls for me. Sounds like Graphcore is a gem. The below sounds fantastic to my 13 year old son. Good enough for me.

the Graphcore IPU-M2000 packs 1 PetaFlop of AI compute and 450GB Exchange-Memory.

in my limited experience a burst of volume usually precedes or is part of a rise up. Of course in theory it can indicate likely change in either direction but since we have been generally rising since March nadir recent volume spikes have preceded rises.

Our SP has been held back a bit by the lack of broker attention since the half yearly. We have specialist sites recommending us at this SP level like Motley Fool, Investors Chronical, FT, and Citywire.

Arbitrage opportunity I think.

I think the broker's guidance has more weight on investors than even all of the 4 mentioned specialists combined. So reaching broker guidance means we need the brokers to guide to the mid or high 700's to advance much further.

Of course SP bounces around in the short and medium term when a fund comes in or out for reasons that may have nothing to do with us. I like the fact the black swans are receding as this background stability means less risk of a GROW invested fund suddenly needing cash. Trump's ability to start a distracting war or no UK deal now off the table. Neither Biden or the thin Brexit we have is deal but much better than some of the grim scenarios that were possible just 3 weeks ago.

In fact I can't really see any big black swans swimming about right now. Vaccines will mean a fast bounce back no matter how chaotic covid restrictions might be in any country. Even Cuba about to have a home developed vaccine. There will be many more vaccine approvals over the next 2 months and the roll out will accelerate. By June Covid should be well on the run in the g20 and with that economies should get a bounce. Largely priced in already but nice to have never-the-less. Our dip in March was nothing to do with us just background jitters so background stability good. Roll on a GROW SP 50% above NAV/share and roll on a less conservative NAV calculation.

Thanks

Yes a gem

If you could post an extract of FT article most appreciated. It is premium content that requires a subscription.

Many thanks

thanks

just bought a few DVRG and will monitor to add more.

We (GROW) are a bit beyond the previous high achieved August 16 2018 of 648. GROW much stronger since then so we are not near the top yet. Not getting any broker reviews since mid year results has held us back a bit but gas in the tank for us long term holders is almost as good as immediately being reflected in SP.

I did have a think about this sector but did not invest some years ago. Lots of potential but no way of making a sector bet (that I know about) and I'm cautious about betting on an individual listed company. If there was a trust that specialized in this sector including start ups and privates I'd buy quite a few shares.

"Marijuana is big business
The North American marijuana business posted a revenue of $9.7 billion in 2017 – 33% up on the previous year. 2018 saw a similar rise, and now Canada has legalised recreational use, and many US states have followed suit, the green rush shows no sign of slowing down.

There are huge profits to be made trading on marijuana stocks, but only if you pick the right companies. The Cannabis Report analyzes the fundamentals of these relatively new companies and helps you to make the right trading decisions on the right companies at the right time.

It tracks a portfolio of cannabis stocks and lets you follow their progress. Each week we report on the Model Portfolio – which has risen spectacularly since its setup in August 2018."

https://growgroupplc.com/

looked like an interesting investment bet although a different GROW and I can't invest in it directly as it is private and I don't know a trust like our GROW that does.

Good luck Troajan. Well spotted. I'm sure this company will fly.

As always I worry about erratic regulatory risk and this area is highly regulated which is a threat and an opportunity. Canadian marijuana companies are struggling after an overly optimistic run up to legalization of recreational marijuana. I also worry about synthetics within pharma that can blow away a specific natural product with high production costs. Pretty amazing what pharma can invent nowadays with tools such as DNA splicing.

Happy new year.

No idea how to advise. I'm 95% of investable capital in GROW which I consider a sector bet rather than one on an individual company such as TESLA would be. Wildly over concentrated by all measures for sure but works for me.

For me risk management is best served by understanding what I am investing in (deep investment) rather than diversifying for it's own sake. I just personally feel more comfortable that way.

I lost money on oil futures at the start of the pandemic because I did not fully understand how oil was owned. I got my economics right (oil would bottom out and then rise to plus 40 ) but not the specifics of how to exploit that knowledge with a specific dated futures position and how much margin I needed for a set position. I sold at a low when the price dipped erratically and I realized I just did not understand the risk I was taking.

I'm sure there is money to be made on bit coin or block chain but I worry that regulatory risk I don't understand is present.

Who could have predicted that UK banks would still be trading at financial crisis lows 10 years on due to regulatory changes?

I like TESLA. Risky as hell but at least a transparent risk. You get what you see on the tin. There is about to be game changing improvements in battery range and on the back of that a lot of competition from traditional players, software firms and start ups. I'm watching a private sector Tesla like start up called LUCID who are about to produce in Arizona. Except for the battery and self driving it is pretty tesla like. Faster though. I think it will succeed.

Self driving features as a market differentiator slowing down a bit due to regulatory conservatism. Battery range will be a big differentiator shortly.

Longer term self driving will be a big differtiator -once levels 4 and 5 are allowed. Don't need to produce a car to make money on that though. Just license the software and own the driving log data needed to make continuous improvements in the software. It is a natural monopoly like airbags.

90% of airbags in all auto brands are produced by one company in one place. The intellectual property and product development lead that comes from being the licensed global safety equipment provider is self perpetuating and self reinforcing. Same will hold true for self driving which is the ultimate highly regulated safety feature.

It will be a bloodbath soon and a dominant player will emerge. Possibility of regulators deliberately or unwittingly fragmenting the global market into 3 regions, US, EU and China. If I knew which company to invest in I'd go for a Chinese owned self driving player. Best shot at a large protected market and thus some protection from the global bloodbath to come yet ability to play or partner out of zone. US anti Chinese sentiment a factor but that will incentivize the Chinese to develop national champions in every sector of the future.

"good year" as in above 20% increase in SP. I have penciled in a long term 20% SP increase year on year so above 20% is above trend.

Sentiment returning and a bit of gas already in the tank (due to conservative NAV valuations March 31 2020 and September 30 2020).

https://www.bloomberg.com/news/articles/2021-01-02/dizzying-valuations-ipo-craze-tick-boxes-on-bubble-checklist

I've got 10 quid penciled in for October 2022 in my spreadsheet but of course hopeful it might be faster than that as sentiment returns both at a share level and general UK market. 2021 should be a good year. Ridiculous we are trading near NAV/share when NAV is fast growing. Means almost no value given to the future. That will shift at some point but impossible to know when.

89 is a great age to be.

Yes nice both motley fool and investors chronicle are tipping GROW..

I think it is a hidden gem.

Welcome

Next few months should be good ones here.

I cant wait for year end results. I think they held back a bit on the valuations for half yearly. Should drift up in anticipation.

https://www.telegraph.co.uk/business/2020/12/23/investors-bet-surging-pound-brexit-deal-close-struck/?WT.mc_id=tmgliveapp_iosshare_Awbyxqwb4Cl4

I'm waiting patiently for the broker upgrades that will help SP. Only IC has commented on the results and they are not a broker.

I think it is a steeper temporary dip than normal probably due to some individual selling into a light market. I'm now stretched but hopeful for a short term boost back to 6.70 and beyond. Short term being a month or two.

I think on year end results in July 2021 we will get a big boost. Call that medium term.

Long term these are gems and I fully expect circa 15 to 20% NAV/share growth over a 10 year period. As the market gets used to the business model the SP premium over NAV/share will increase so total return above 20% for SP growth.

Possibility of the "gas in the tank" being used as well and NAV calculated in line with 2019 norms and not 2020.

Brexit mess heading for a probably resolution that will be mildly positive to the UK market as no deal partly priced in. GROW should get a small boost on that along with the general UK market.

https://www.theguardian.com/business/2020/dec/13/financial-markets-brace-for-volatile-week-as-brexit-uncertainty-continues

It seems that the worst that can happen is an orderly no deal -that as you say has little impact on GROW. The key for GROW was an agreement on equivalence for business and financial services and a smooth transition to any new regime. We seem to be heading for that regardless of whether or not we get tariffs on traded goods. Having tariffs hurts manufacturing but not GROW's ICT sector.

There is no further Brexateer talk about not meeting the financial terms of the withdrawal agreement (paying the remained of the budget cycle) -which would have truly been chaos as it would have soured relations for years and ended up in the courts. That "no event" counts as wise political leadership these days.

GROW would have benefited by an agreement on financial services that kept passporting as well as benefiting by freedom of movement for skilled workers. The new regime is more paperwork on both counts but hardly game changing. The ability of UK tech companies to bring in tech workers from the EU is pretty much the same under the new immigration rules. Indeed the new UK immigration rules are more liberal with regards to the rest of the world than what we had with regards to skilled tech sector workers. This could have big implications for Indian and Chinese tech workers.

It is getting into the UK Polish shop assistants and hotel staff that will become restricted and difficult. I'd imagine the iconic Polish plumbers will get nicely over the new minimum income restrictions so no change there either.

So yes Brexit damages the UK economy but not the ICT bits where GROW has it's portfolio. Indeed the new liberal skilled worker immigration rules might even be a hidden gem for us.

I've topped up a bit too at these levels.

I'm still assuming a deal on Brexit and am positioned accordingly. I assume that all this doom and gloom is posturing and poor Boris management not a real desire to have no deal.

I understand there is a compromise more or less agreed on fishing and the rachet on standards is a sovereign respecting proposal as it works both ways (just as EU free movement did so maybe not the closing argument).

Quite how the UK could credibly push the 27 nation EU to higher environmental, food or product standards is not laid out in public. If agreed it would be interesting. Boris has promised higher environmental standards than the EU has so the ratchet might work in reverse and allow Boris to ponce about saying his new UK standards pulls the whole of the EU along -and the EU playing along because the big EU nations may not be worried about being forced into higher standards on issues they could not get through a 27 member unanimity requiring decision. They are held back by the Hungaries of the EU.

It would be the opposite of what some Brexiteers imagined as the benefits of Brexit but these are strange times and Johnson is a strange hybrid of environmentalist (requires international collaboration) and Brexiteer (maximum UK sovereignty).

yes low rates for the foreseeable future has caused a paradigm shift in sustainable P/E's for stocks and maximum sustainable multiples of earnings for house prices. It is a crazy unprecedented situation. Lowest rates in 300 years.

https://www.imf.org/external/pubs/ft/fandd/2009/09/pdf/picture_spread.pdf

I can't, however, see any way for at least 10 years that we will have central bank rates at 2% or more. You can get 10 year fixed mortgages at 2.1% so the market is not expecting any rise back to a "normal" 4% central bank rate. As a forward indicator beyond 10 years some UK equity release mortgages can be had for 2.3% even though they might run for 25 years or more. Low rates are probably with us for the foreseeable future and that has consequences.

Sub 2% has doubled affordability for many a mortgage and pushed even late stage pension calculations into shares. Now with COVID debt all major central banks will be even more reluctant to pull out as the respective treasuries need the cheap borrowing to avoid a fiscal crisis. Whole system has changed. Even printing money or negative interest rates, theoretical possibilities only until 2009, have been tested in the markets and there are not the major downsides that was expected.

no broker views updated post results. Last was

Thu, 29th Oct 2020 13:18 Draper Spirit: Berenberg reiterates buy with a target price of 700p.

Annoying. I was expecting brokers to up the targets a bit and thus help SP.

thanks for the chart. I've been buying on the dips but mostly a buy and hold so my positon gets larger over time (as does averaged buy in price).

I'm positioned in my portfolio for a Brexit deal and a fast vaccine. We shall see on Brexit. Vaccine definitely coming fast. I have a few ICA (BA) and picked up a few more yesterday.

A Canada minus deal which is what we seem to be getting is still far better than no deal -although light years away from staying in the single market as a member able to influence the evolution of the rules.

Brexit has influenced my long term strategy. Until Brexit I was confident that one did not have to pick the economic sector that would succeed. All one had to do was chose a secondary beneficiary of the concentration of global skills needed by multiple modern emerging sectors in a global innovative city. A bit like a strategy to concentrate on local food, tents and mining supplies during the Alaska gold rush. It did not matter which minors struck gold (most did not) you made excellent money off them all.

For me pre Brexit the London property market and east London in particular was the beneficiary of multiple growing sectors. Fin tech, ICT, streaming entertainment, online content, as well as globalization of regular business and financial services (lawyers, accountants, business advisers) into a few hubs. Industrial decisions (where to produce what to produce) that previously were made inside "the industrial sector" at the company HQ somewhere in the world (normally in some awful industrial town where they were founded) were increasingly being transferred as outsourcing globally -and thus a decision within the global business and financial services sector. A key proportion of that was London. A business and financial services job in London determined if a chip was produced in Malaysia or China.

It really did not matter which companies or even sectors won out -the hub in London was bigger than the parts.

That is why I was 100% into Telford Homes. It was not the builders sector in isolation. It was a way of betting on globalization and London's growing sectors indirectly with a 20 year horizon of TEF SP doubling every 4 to 6 years.

I now lack the mining supplies equivalent and need to invest upstream directly.

I've settled on pre IPO profit making UK/EU tech. GROW within that is the best long term fit. I quite accept there will be other companies such as MERI that may temporarily offer better short term value. I am just not a short term investor. It is beyond my expertise and I worry about jumping about when there are full time teams of analysts I am up against.

I want to make a 10 or 20 year deep value assessment on the place and sector and then the best company to exploit that sector. After that not trade much and let that strategic decision mature. It is more of an ISA decision and not a trading decision