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Scottish Mortgage heading for where

Closed-end funds and OEICs
Dod101
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Re: Scottish Mortgage heading for where

#426404

Postby Dod101 » July 10th, 2021, 12:27 pm

Matchless wrote:With an investment like Scottish Mortgage (or Bitcoin come to that) how does one determine when to crystallise ones gain? Because as we all know one only makes anything when one sells this sort of investment.


I am somewhere in the middle between your sentiment and Srumpyjack's. I crystallised a gain several times last year as the price kept rising and my last sale was at £14.10 in February this year. I still hold more in SMT now than in January 2020, so I tend to sell to catch the rises. As it happens I would of course have been better just to have held them all but how do we know? My policy is to invest in the likes of SMT and then as gains arise sell and buy something else, usually with a decent dividend. That does two things, gives me a bit more income and a bit more diversification. I do not necessarily buy something new, it might just be a top up of one or two existing holdings.

Dod

dealtn
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Re: Scottish Mortgage heading for where

#426419

Postby dealtn » July 10th, 2021, 1:05 pm

Matchless wrote: Because as we all know one only makes anything when one sells this sort of investment.


Count me out of that "we", as my view is that is complete nonsense, which also applies to losses.

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Re: Scottish Mortgage heading for where

#426559

Postby jonesa1 » July 10th, 2021, 10:40 pm

Matchless wrote:With an investment like Scottish Mortgage (or Bitcoin come to that) how does one determine when to crystallise ones gain? Because as we all know one only makes anything when one sells this sort of investment.


You have a choice of strategies, including: 1) guess the top and sell then, 2) decide maximum percentages for each asset (could be a blanked x% rule for all) and periodically trim those that exceed the limit, 3) decide a target price when you buy (probably time bound) and sell when that is reached, 4) if buying an IT at a discount, set a target lower discount

1) is probably sub-optimal,
3) and 4) imply some belief that there's an underlying reason why the targets will be achieved
2) can be used to manage risk for long term holdings by limiting the dominance of any one asset

It's also a good idea to have a strategy for what you do with the proceeds.

Trent
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Re: Scottish Mortgage heading for where

#426575

Postby Trent » July 11th, 2021, 1:10 am

Dod101 wrote:
Matchless wrote:With an investment like Scottish Mortgage (or Bitcoin come to that) how does one determine when to crystallise ones gain? Because as we all know one only makes anything when one sells this sort of investment.


I am somewhere in the middle between your sentiment and Srumpyjack's. I crystallised a gain several times last year as the price kept rising and my last sale was at £14.10 in February this year. I still hold more in SMT now than in January 2020, so I tend to sell to catch the rises. As it happens I would of course have been better just to have held them all but how do we know? My policy is to invest in the likes of SMT and then as gains arise sell and buy something else, usually with a decent dividend. That does two things, gives me a bit more income and a bit more diversification. I do not necessarily buy something new, it might just be a top up of one or two existing holdings.

Dod

Hi Dod

I see your logic - a matter of interest what would you reinvest in?

Regards

Dod101
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Re: Scottish Mortgage heading for where

#426586

Postby Dod101 » July 11th, 2021, 7:01 am

Trent wrote:
Dod101 wrote:
Matchless wrote:With an investment like Scottish Mortgage (or Bitcoin come to that) how does one determine when to crystallise ones gain? Because as we all know one only makes anything when one sells this sort of investment.


I am somewhere in the middle between your sentiment and Srumpyjack's. I crystallised a gain several times last year as the price kept rising and my last sale was at £14.10 in February this year. I still hold more in SMT now than in January 2020, so I tend to sell to catch the rises. As it happens I would of course have been better just to have held them all but how do we know? My policy is to invest in the likes of SMT and then as gains arise sell and buy something else, usually with a decent dividend. That does two things, gives me a bit more income and a bit more diversification. I do not necessarily buy something new, it might just be a top up of one or two existing holdings.

Dod

Hi Dod

I see your logic - a matter of interest what would you reinvest in?

Regards


At the risk of being off topic, I bought at various times on five separate occasions, Diageo, Chesnnara, 3i Infrastructure, Legal and General, SSE, National Grid and Alliance. 3i Infrastructure was the only new holding. Had I not sold, SMT would be now have been around 15/17.5% of my entire portfolio. A nice problem to have had. It would have been a high risk strategy just to have left it but in the event would have been the correct one for capital growth but how do we know?

As it is SMT is around 6.5% of my portfolio. It has not done much this year, in fact it has fallen back from its high of £14.10 at which I sold some in February 2021 and the rest of the market has moved forward.

As you can see I am primarily an income investor.

Dod

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Re: Scottish Mortgage heading for where

#426680

Postby UncleEbenezer » July 11th, 2021, 1:21 pm

jonesa1 wrote:
Matchless wrote:With an investment like Scottish Mortgage (or Bitcoin come to that) how does one determine when to crystallise ones gain? Because as we all know one only makes anything when one sells this sort of investment.


You have a choice of strategies,


One option is regular disposal. It applies the same principle as "pound cost average" buying in reverse: you get more pounds when the investment is up (as opposed to buying more shares when it's down).

Indeed, if you ignore dealing costs, a winning hedge would be to combine the two. Buy each [month/quarter/year/whatever] for a fixed £ value, and sell a fixed number of shares. If your amounts are set for long-term balance, then when an investment is up you're a net seller, but when it's down you're a net buyer.

Probably even more relevant to something without the underlying value, like bitcoin or gold.

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Re: Scottish Mortgage heading for where

#426724

Postby scrumpyjack » July 11th, 2021, 3:48 pm

Two of my reasons for holding investment trusts are to get a good diversification because the IT will be invested in many companies and to be able to leave selection and buy / sell decisions to the managers. So unless I need cash for something specific, they are a buy and forget investment. That assumes you have confidence in the managers of course. SMT now represent over 18% of my holdings but that 18% is spread over about 85 companies and both BG's choice of investments and the timing of their buy/sell decisions have been far better than I could hope to do myself. So I will continue to leave well alone.

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Re: Scottish Mortgage heading for where

#426795

Postby scrumpyjack » July 11th, 2021, 7:15 pm

Just one further point on leaving sell decisions to the IT manager. If they realise a profit (as they did on Tesla), there is no CGT, but if I realise a profit, the gain is chargeable to CGT. So having shares in SMT allows the underlying gains to roll up without a tax event, whereas if I held the underlying shares personally, that would not be so.

Obviously this comment is only relevant for holdings not in a tax free wrapper (ISA, SIPP etc)

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Re: Scottish Mortgage heading for where

#427018

Postby ten0rman » July 12th, 2021, 1:08 pm

We have held SMT since Sept 2005, but only in my wife’s ISA portfolio since Dec 2009 when it was re-invested on an “invest & forget” basis. Recently, I have been becoming more and more concerned as it’s growth seemed to me to be typical of a bubble and thus maybe heading for a disastrous fall.

Over the weekend, I did some checking and discovered that as part of my wife’s ISA portfolio, SMT was 42% in Jan 2019 (or 14% of our combined ISA accounts) whilst by Jul 2021, it accounted for 57% of my wife’s portfolio or 25% of our combined totals. This was worrying, so as of this morning we have halved the actual sum invested in SMT which brings the percentages down to 27% of my wife’s portfolio or 12% of our combined portfolio.

I still think that 27% of my wife’s portfolio is perhaps somewhat high so I will be watching carefully to see what happens with a view to a further reduction should SMT continue to climb.

Just out of interest, the sum removed from SMT has been reinvested in SAIN. It remains to be seen what will happen over the coming years – provided I live long enough!

ten0rman

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Re: Scottish Mortgage heading for where

#427490

Postby thehaggistrap » July 13th, 2021, 8:27 pm

scrumpyjack wrote:Two of my reasons for holding investment trusts are to get a good diversification because the IT will be invested in many companies and to be able to leave selection and buy / sell decisions to the managers. So unless I need cash for something specific, they are a buy and forget investment. That assumes you have confidence in the managers of course. SMT now represent over 18% of my holdings but that 18% is spread over about 85 companies and both BG's choice of investments and the timing of their buy/sell decisions have been far better than I could hope to do myself. So I will continue to leave well alone.


That pretty much mirrors my thoughts....

Buying, and particularly selling, at right time is tough thing to do for a private investor. Far too easy to become emotionally attached to individual stock. Or panic following a drop... Simpler solution is to let a professional fund manager do the job - plus I find it easier to leave money in SMT (or similar trust) longer term than individual shares.

Assuming fund going up over time there is no immediate rush to cash in. The manager will be taking profit and reinvesting it for you

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Re: Scottish Mortgage heading for where

#427492

Postby thehaggistrap » July 13th, 2021, 8:31 pm

ten0rman wrote:I still think that 27% of my wife’s portfolio is perhaps somewhat high


27% across 90 odd companies choose by SMT...

Although SMT is notionally invested in "tech" the fund is diversified across different sectors : green energy, medical, transport, it etc. The value comes from innovation being applied to each of those sectors.

Certainly don't want all eggs on one basket. However so long as you are happy to leave money longer term then SMT is good bet

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Re: Scottish Mortgage heading for where

#427578

Postby Matchless » July 14th, 2021, 9:57 am

Woodford was/still is a professional fund manager. Well a thought of at one time.

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Re: Scottish Mortgage heading for where

#429401

Postby scrumpyjack » July 21st, 2021, 5:37 pm

I see the Net Asset Value is now at a new high of 1372.96p higher than the point in Feb when the SP hit 1415p. NAV then was 1369p

https://www.londonstockexchange.com/new ... s/15067886

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Re: Scottish Mortgage heading for where

#430093

Postby richfool » July 24th, 2021, 10:45 am

From today's Telegraph (may involve a paywall):
Britain’s largest investment trust, Scottish Mortgage, is famous for its bold and early bets on technology giants such as Amazon, Tesla and Netflix.

But a deeper look inside its £19bn portfolio reveals something unexpected: the two largest holdings are now healthcare companies and almost a fifth of its investments are linked to life sciences.

DNA mapping company Illumina and biotechnology business Moderna, now a household name thanks to its Covid-19 vaccine, represent a combined 12pc of Scottish Mortgage’s portfolio.

The trust also has holdings in 12 private healthcare companies, such as Tempus Labs, a firm that gathers patient healthcare data, and Recursion Pharmaceuticals, which uses machine learning to aid drug discovery

https://www.telegraph.co.uk/investing/f ... xt-amazon/

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Re: Scottish Mortgage heading for where

#430100

Postby ReallyVeryFoolish » July 24th, 2021, 11:22 am

richfool wrote:From today's Telegraph (may involve a paywall):
Britain’s largest investment trust, Scottish Mortgage, is famous for its bold and early bets on technology giants such as Amazon, Tesla and Netflix.

But a deeper look inside its £19bn portfolio reveals something unexpected: the two largest holdings are now healthcare companies and almost a fifth of its investments are linked to life sciences.

DNA mapping company Illumina and biotechnology business Moderna, now a household name thanks to its Covid-19 vaccine, represent a combined 12pc of Scottish Mortgage’s portfolio.

The trust also has holdings in 12 private healthcare companies, such as Tempus Labs, a firm that gathers patient healthcare data, and Recursion Pharmaceuticals, which uses machine learning to aid drug discovery

https://www.telegraph.co.uk/investing/f ... xt-amazon/

Thanks, that article is well worth a read.

RVF


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