In4themoney, I certainly don't blame anyone (and have sympathy for) for being bitter had they bought at anytime prior to the current slump, but it does seem logical to me that all investments have ups and downs.
I always loosely refer to SMT as tech, (which LLL rightly points out doesn't match the descripto perfectly).
The point is that they have slumped for much the same reasons that other closed ended ITs have done so during the same recent time frame (admittedly more so).
The question therefore is whether they have slumped more than others (above the obvious inflationary issues) down to inaction and mismanagement.
Although your suggestion that they buy into AI is a good one, I would certainly feel very uneasy about them selling the unlisted concerns (probably all now at their bottom valuations) to buy into an area which is likely being much speculated upon as we speak.
I'd also argue that a great many concerns held already have within them a burgeoning interest in the expanding world of AI (just Amazon is an example, as I'll warrant are the glut of holdings). Of course these companies will modify themselves to be on the cutting edge of AI both in development and acquisition).
The argument that they should be doing anything at all right now actually frightens me in many ways.
I for one would be more likely to consider ditching if they came out with a plan as you speak as in my mind it would suggest the following:
1) SMT don't have the courage of their convictions.
2) SMT make acquisition errors.
3) SMT have no longer have foresight.
4) SMT are being frivolous and cannot be trusted for new investment.
All of the above I don't happen to believe despite trying very hard to test the arguments, but all due respect to such arguments.
Apologies, In4the. Reading your post further down, I see you have remarked on a credible plan.
SMT have actually diversified themselves already and are a trust who tend to stick with their agreed strategies, and what they are doing by sitting on that strikes me as reasonable and conducive to their normal behaviour patterns.
I sympathize with all those who have lost big since their initial investments in this trust, although it has to be noted that all tech has lost over the same period, but none have been reviled by the media more than SMT.
There are those on here who feel it amounts to little in terms of investor assessment, but I believe it accounts for quite a lot of SMTs current performance.
The SMT team run to the same rules as we all do. Sell in haste to diversify beyond their clearly continuing convictions then buying other stuff on a whim really is proven time and time again the economics of the foolish. They are a tech fund and therefore beyond completely rebranding themselves, were it even possible, who exactly would sell promising tech at the likely bottom of the inflationary period to actually buy similar tech?
All that says to me is that they have likely already made reasonable decisions.
Fair enough in4themoney, but that doesn't amount in my mind to a credible analysis. What else are they expected to do other than sit on their hands? How would you managed it better? By selling various investments beyond the necessary diversifications they have already put in place? I for one am glad they have not behaved in an erratic manner.
How much of the problem is down to high inflation and what is the degree and nature of the SMT teams mismanagement, do you feel? Had you bought any tech just prior to Nov 21 you would be sitting on a loss right now, and although I agree SMT have sunk more than most I do believe a factor in this has simply been the paranoia caused by Anderson leaving (construed as a legend who was the only architect of the trusts success, no other could match him according to the media bombardment throughout the recent decline of tech), plus all the steady stream of negativity since then aimed at the biggest and best known example of these kind of tech trust investments.
Such stuff has a big subliminal effect and failure does tend to compound down to the herd instinct...
Most investors don't think that much about the technicals, and if a trust is failing more than another the herd instinct always wins over. That, ( believe, amounts to at least a very large part of the lower performance.
In short, underline the mismanagement you are seeing and elucidating on that and I'm all ears.
I've already heard the unlisted funds argument and Im personally feeling ok about that for a variety of clear & logical factors.
"Jokers", inforthemoney?? Can you just expand on what they've done wrong? Sure Anderson's gone, but what have the current managerial team done that's so awful to make you feel this way.?
Ive heard the unlisted funds argument and I don't see it as a big no no, but each to their own. I don't think Bilde was correct in his assessment (or even his bike), who knows?
What the trust is suffering right now is unpopularity.
That's pretty much it, really...
I take it you've sold out now as leaving your money in the hands of "jokers" doesn't seem sensible.
Fair enough, but I'm sticking until someone gives something really compelling that says SMT is stuffed... I still look at the spread of companies and believe in an upside, regardless of the unlisted stuff (which really isn't just a small time gamble).
Its getting a bit heated on here, tbh. That's a pity... :(
Sorry.. I meant view the real likely discount for all the non unlisted at 12%, as this seems to reflect the average of other closed ended investment trusts (not having unlisted investments) discounts to nav... Hope that makes sense.
Interesting... But I'd add in at least 12% estimate discount as this reflects the mean discount of investment trusts that don't deal in unlisted holdings... On that basis your assessment of discount for the unlisted stick alone comes out almost half of your assessment at 36%.
Even at that it seems a bit scary, but given the entirely academic & woolly "values" of the developing entities that these companies currently are (given SMTs approach), a premium representing their futures has equally not been accounted for.
I guess this therefore puts a great onus on the current quality of SMTs operation, and does increase their risk in a inflation averse market (whilst also increasing the potential future reward).
Given everything, I personally feel ok with it all and optimistic despite admiring the nature of your mathematical argument :)
Is it also even possible that unlisted concerns have a cumulatively negative yet benign influence on the dynamics of the Nav assessment...? Probably a naive question, but humour me?
The assessment of a credible net asset value for such non tangible rapidly developing investments has always slightly puzzled me.
Further to this I do understand the concept that the nav being twice as discounted as ATT for example (which doesn't do unlisted) might indicate on a mathematic level that the unlisted companies are held at an increasing loss, but wonder to the mechanism that can assess their actual value given they are very largely an investment in ideas and potential (the exact thing that SMT has always been rather good at).
Could the mechanism of net value assessment be conceivably skewed due to the influence of perceived risk?
Interesting and equally valid arguments, although I don't agree that the nav is a pure valuation of worth given (especially now) given that high inflationary makes future values so unquantifiable.
If it were so, why would the Nav almost daily rise or fall proportionate to the assessed price?
Can the true worth of a developing entity based upon skills, tech and often non tangible future development ideas be easily assessed in value as commodities are?
Despite also being a non technical contributor, but one who has invested in various stuff over the last 30 years I do see the risk in the various unlisted assets, but do go with SMTs argument that this doesn't carry the risks perceived (re Woodford). In short, I currently believe them to be properly equipped to operate as they are.
My (...basic, apologies) understanding is investments are worth what punters are prepared to currently pay for them, and accounting aside the obvious economic circumstances that dictate tech a current short term "loser" any further perceived risks (such as the unlisted stocks argument comparative to Woodford) seem likely to me to put SMT further down punters "to buy" list. I do accept that the perception of even higher risk as goes this particular trust re: unlisted stocks when compared to Woodford, which probably explains why a similar concern (ATT which doesn't do unlisted stuff) has a NAV discount of just 11%).
Its been my recurrent theme, but I do feel that the media generated perception (SMT having been exploded in negative media limelight) has a lot to do with everything at the moment.
Apologies if that's too basic an assessment and I'm happy to be corrected as goes the technicalities or even my (very primitive) understanding.
On the basis that lower interest rates are the natural endeavour of world economies , I'm in with LLL on this one. Healthy pessimism aside (and the goal of 2% inflation inarguably going to be a tough ask for some time again) I too favour a slightly more optimistic and expedient future.
Although I'm firmly planted on the glass half full side of the fence, I could be wrong which would be far from the first time.
I felt convinced and gave my opinion that we had hit the likely bottom at around 6.70 (that being it's lowest point in the last pessimistic dip 11 months ago), but am currently eating my hat.
As ever I am neither buying or selling, yet have waved goodbye to nearly 2/3 of the value height of my holding since November 21 (despite still being heavily up inflationary change accounted for).
Doggedly holding as further losses amount to a fraction of losses since then, yet I still see an upside before too long as inevitable...
Hope I don't have to replace my second hat :)
LLL, agreed as to the bulk cause of the issue, which is of course effecting the rest of the tech market and has been much in discussion over the last 18 months of pain. My point was the sub comparitive performances to the others and applying logic to those causes. Sure Anderson left and it has suffered, but have the decisions since then been destructive? Was Bilde correct in his assessment which then double labeled the trust as an issue? Are the constant articles labelling SMT as a failure in performance self prophesising?
Knowing the pessimistic nature of investors in general (who are after all naturally strongly speculative) I do feel a deal of the exaggeratedly bad performance is down to the spoon fed impression of a "good egg gone bad".
Do the unlisted concerns (and the rest of it) censure such fear and loathing, is the question?
Much as I would normally self with a consistent loser (maybe I should have way, way in the past) I (like you) have attributed the fall generally down to inflation.
I believe you are holding but not buying at the moment also?
Yes, the decline above all others of SMT is undeniably concerning, but I think a little logic is worthy of consideration as goes all discussed concerns.
What, in essence, is happening to the trust that is vastly new, different or concerning above all other similar AICs?
We know that the financial media have absolutely (gleefully) riddled the trust with tales guaranteed to sew doubt amongst the panicked herd, adding to that wholly unhealthy speculation surrounding the departure of its old head honcho and complete conjecture as to the possible inability of the rest of the team to maintain a decent strategy.
Not many tech buyers are likely to have had all of that pass them by, and so any out there wishing to buy into tech in a well timed fashion might seem most likely to leave SMT at the bottom of their purchasing list.
Placing the weight of likely negative against the weight of likely positive (and in the absence of any real discernible issues) I am holding come what may (and given the enormity of my losses so far, as well I might)...
Its a close ended trust and the Woodford argument seems rather unlikely to me in addition..
Right or wrong, selling right now would feel 10x the pain of just holding.
Inflationary recovery is turning out to be slower than forecast and Id bet my granny (probably... If I actually had one) that these will be worth rather a bit more than they are now in 6 months...
It also creates a lot of money for the financial industry, by inter juxtaposing positivity then contrasting negativity (oft puzzling given the proximity of forecasting) as concerns various trusts and funds at any given loose market sentiment trend.
Its obviously a money making giveaway strategy capitalised upon by the respected and less respected financial media out there, but none so audaciously IMO.
Common sense goes a long way here, and often negative headlines can depress prices enough to make a great buying opportunity.
For my part, I ignore most of it.
Both... At the moment.
Dependant on investor perspectives, the glut of which nudge towards the need for instant gratification.
As a matter of interest both ATT and PCT currently stand at a NAV of around -14.5%, SMTs being higher mainly on the basis (I personally believe) of being the focal point in recent media negativity.
I guess we shall see.