bluedonkey wrote:Back to SMT. The rapid increase in the share price is of course due to the similar increase in the price of the underlying holdings. We are reliant on the management knowing when it's time to sell a very overpriced holding. That's not to say that their holdings are overpriced right now but presumably there could come a point when even the SMT management get vertigo.
When Tesla was at $300 people said it was overpriced, as did people when Amazon was $1,000. On conventional metrics that was true but, as we have seen, that didn't matter.
I think at this point investors know that SMT is a vehicle for investing in the disruptive high-flyers that are difficult or impossible to invest in as individuals. So the last thing we want is for SMT to change. At this point it is a thematic investment and we are entitled to know what its strategy is. If it kept chopping and changing, or timing and switching, then we would never know what its style is.
If you think Tesla, Amazon, Ali Baba and Tencent are over-priced then sell SMT, or short it. But don't ask SMT to keep changing its spots, especially when it has rewarded us so well. The only IT that has given me a better return in recent years is Lindsell Train. The rest are way behind.
I hope it keeps its faith and doesn't get tempted to second guess and market time.