Scottish Mortgage heading for where

[yorkshirelad1]

No point in saying 'Simple' It is not, but by golly you need to learn from your mistakes.

Dod

Indeed. And that's what I enjoy TLF and listening to others. TY.

[UncleEbenezer]

Both The Telegraph and The Times rate SMT as a buy this morning.

OhBugger.

Though they can't be wrong every time, can they?

[BullDog]

Both The Telegraph and The Times rate SMT as a buy this morning.

OhBugger.

Though they can't be wrong every time, can they?

Only down 0.3% this morning

[Eboli]

As I noted here (#387447 on 17 Feb 2021) I sold in tranches from £8 through to £13.80 by which time although SMT had become my largest holding over WWH (Worldwide Healthcare) it was all pure profit. On reflection I think there are three points:

1. It's never wrong to take a profit on your winners
2. Bubbles always burst later than you think
3. Plunges are always easier to stomach when the holding has cost you nothing

Why did I sell? The value had gone above the collar I had placed upon the holding. So it was a purely mechanical process and I claim no prowess. As has my recent purchase.

Eb.

[BullDog]

Well, on a drifting down a bit day for the FTSE, SMT manages a near 5% rally today. Perhaps it's not all 100% doom and gloom at Scottish Mortgage

[Dod101]

Well, on a drifting down a bit day for the FTSE, SMT manages a near 5% rally today. Perhaps it's not all 100% doom and gloom at Scottish Mortgage

Of course it is not all doom and gloom but the current drift could go on for some time yet. I do not even bother to look at the day to day movements; it is the broad moves we need to know about and I think for the moment it is in a 'pause' phase and could easily drift lower.

Dod

[AsleepInYorkshire]

Well, on a drifting down a bit day for the FTSE, SMT manages a near 5% rally today. Perhaps it's not all 100% doom and gloom at Scottish Mortgage

Of course it is not all doom and gloom but the current drift could go on for some time yet. I do not even bother to look at the day to day movements; it is the broad moves we need to know about and I think for the moment it is in a 'pause' phase and could easily drift lower.

Dod

Hi Dod,

I hope you're well. My daughter and I are interested in SM as a long term buy and hold for her JISA. I'm struggling to tell her what I think the stock is worth. My best guess based on the "chart" tells me the stock is trying to test a price below £6 (but that's just a pure guess by a rank amateur) I can analyse an individual stock reasonably well and I can help her with that. But other than saying the stock has a discount to NAV (which I hasten to add I suspect is pointless as if the stock is always running at a discount it will sell at a discount too).

Can you or anyone reading point us in the right direction please. I hasten to add we are currently thinking of investing about 10% of her JISA in SM, but until we understand more about it we're keeping our powder dry.

Thanks in advance

Take care and I hope you've some lovely plans for the weekend

AiY(D)

[Dod101]

Well, on a drifting down a bit day for the FTSE, SMT manages a near 5% rally today. Perhaps it's not all 100% doom and gloom at Scottish Mortgage

Of course it is not all doom and gloom but the current drift could go on for some time yet. I do not even bother to look at the day to day movements; it is the broad moves we need to know about and I think for the moment it is in a 'pause' phase and could easily drift lower.

Dod

Hi Dod,

I hope you're well. My daughter and I are interested in SM as a long term buy and hold for her JISA. I'm struggling to tell her what I think the stock is worth. My best guess based on the "chart" tells me the stock is trying to test a price below £6 (but that's just a pure guess by a rank amateur) I can analyse an individual stock reasonably well and I can help her with that. But other than saying the stock has a discount to NAV (which I hasten to add I suspect is pointless as if the stock is always running at a discount it will sell at a discount too).

Can you or anyone reading point us in the right direction please. I hasten to add we are currently thinking of investing about 10% of her JISA in SM, but until we understand more about it we're keeping our powder dry.

Thanks in advance

Take care and I hope you've some lovely plans for the weekend

AiY(D)

I am sorry to say that I cannot really help you. My current holding is still over 4% of my total portfolio but it is all 'free' so that makes a difference. It could certainly drop below £6 but who knows? It is very volatile. It has long been overtaken by Alliance Trust in my portfolio which is doing fine for me. I would probably, if starting from scratch, allocate funds 50/50 between the two but everyone has their own ideas. I would think 10% is too much for any one share, particularly Scottish Mortgage. One day it will take off again and then you will be holding too much of it!

I hope others contribute to give their opinions because there is no 'correct' answer to your query.

Dod

[monabri]

Simply Wall Street calculates a "fair price" for SMT based on estimated cash flows. They refer to their calculation method as an " excess returns model".

https://github.com/SimplyWallSt/Company ... calculated


https://simplywall.st/stocks/gb/diversi ... ust-shares

( you might need to sign up (free) to view. They don't pester and are a reputable company).

I suspect that by the time I've understood the model and established If it is credible then the World will have moved on !

The fair price being somewhat higher than the current price at £16.03 per share.

I'd treat the valuation method as one snippet of information in making a decision.

[scrumpyjack]

Well, on a drifting down a bit day for the FTSE, SMT manages a near 5% rally today. Perhaps it's not all 100% doom and gloom at Scottish Mortgage

Of course it is not all doom and gloom but the current drift could go on for some time yet. I do not even bother to look at the day to day movements; it is the broad moves we need to know about and I think for the moment it is in a 'pause' phase and could easily drift lower.

Dod

Hi Dod,

I hope you're well. My daughter and I are interested in SM as a long term buy and hold for her JISA. I'm struggling to tell her what I think the stock is worth. My best guess based on the "chart" tells me the stock is trying to test a price below £6 (but that's just a pure guess by a rank amateur) I can analyse an individual stock reasonably well and I can help her with that. But other than saying the stock has a discount to NAV (which I hasten to add I suspect is pointless as if the stock is always running at a discount it will sell at a discount too).

Can you or anyone reading point us in the right direction please. I hasten to add we are currently thinking of investing about 10% of her JISA in SM, but until we understand more about it we're keeping our powder dry.

Thanks in advance

Take care and I hope you've some lovely plans for the weekend

AiY(D)

One needs to look at SMT in the context of its net asset value as against its shareprice and whether you have confidence in the manager's ability long term to make successful investments. At present they are on a high discount to NAV 766p vs 862.59p. Usually the price has been at a small premium to NAV.

Another factor is the value of their unquoted investments. They have a regular rotational review of the value of these so it is possible one reason for the current level of discount is that the market thinks NAV overstates the value of them.

Generally they have a history of making good calls, but they admit they got too heavily into China and underestimated the risks.

In spite of nearly halving they have done me very well and I will stay put (now a 5 bagger, was a 10 bagger).

So long term I think they will do well but everyone needs to make their own judgement and not blame anyone else if it does not work out!

[SalvorHardin]

Simply Wall Street calculates a "fair price" for SMT based on estimated cash flows. They refer to their calculation method as an " excess returns model".

https://github.com/SimplyWallSt/Company ... calculated


https://simplywall.st/stocks/gb/diversi ... ust-shares

( you might need to sign up (free) to view. They don't pester and are a reputable company).

I suspect that by the time I've understood the model and established If it is credible then the World will have moved on !

The fair price being somewhat higher than the current price at £16.03 per share.

I'd treat the valuation method as one snippet of information in making a decision.

I run across Simply Wall St now and again, when they do a writeup on Ocean Wilsons Holdings (which I hold) as it gets picked up by Google Alerts and a link to their analysis appears in the next email. Their method seems to treat every company as an operating company and as a result it doesn't perform well (that's me being polite) when it comes to investment trusts and investment companies.

[AsleepInYorkshire]

Well, on a drifting down a bit day for the FTSE, SMT manages a near 5% rally today. Perhaps it's not all 100% doom and gloom at Scottish Mortgage

Of course it is not all doom and gloom but the current drift could go on for some time yet. I do not even bother to look at the day to day movements; it is the broad moves we need to know about and I think for the moment it is in a 'pause' phase and could easily drift lower.

Dod

Hi Dod,

I hope you're well. My daughter and I are interested in SM as a long term buy and hold for her JISA. I'm struggling to tell her what I think the stock is worth. My best guess based on the "chart" tells me the stock is trying to test a price below £6 (but that's just a pure guess by a rank amateur) I can analyse an individual stock reasonably well and I can help her with that. But other than saying the stock has a discount to NAV (which I hasten to add I suspect is pointless as if the stock is always running at a discount it will sell at a discount too).

Can you or anyone reading point us in the right direction please. I hasten to add we are currently thinking of investing about 10% of her JISA in SM, but until we understand more about it we're keeping our powder dry.

Thanks in advance

Take care and I hope you've some lovely plans for the weekend

AiY(D)

One needs to look at SMT in the context of its net asset value as against its shareprice and whether you have confidence in the manager's ability long term to make successful investments. At present they are on a high discount to NAV 766p vs 862.59p. Usually the price has been at a small premium to NAV.

Another factor is the value of their unquoted investments. They have a regular rotational review of the value of these so it is possible one reason for the current level of discount is that the market thinks NAV overstates the value of them.

Generally they have a history of making good calls, but they admit they got too heavily into China and underestimated the risks.

In spite of nearly halving they have done me very well and I will stay put (now a 5 bagger, was a 10 bagger).

So long term I think they will do well but everyone needs to make their own judgement and not blame anyone else if it does not work out!

Hi SJ,

Thank you for your reply. May I assure you "we" wouldn't blame anyone else at all. It seems as if the discount to NAV appears to be the way most review the value of the SM shares. I thought I was missing something. I'm surprised anyone invests in China given the level of corruption. However, I hasten to add my judgement is no better, so I'll zip it I also see what you are saying about the size of the discount possibly being linked to nerves regarding unquoted investments and I see that with interest rates rising, inflation sprinting ahead and other macro-economic events nerves on "unquoted investments" may be running high.

Thank you for your insight, greatly appreciated.

AiY(D)

[AsleepInYorkshire]

I am sorry to say that I cannot really help you. My current holding is still over 4% of my total portfolio but it is all 'free' so that makes a difference. It could certainly drop below £6 but who knows? It is very volatile. It has long been overtaken by Alliance Trust in my portfolio which is doing fine for me. I would probably, if starting from scratch, allocate funds 50/50 between the two but everyone has their own ideas. I would think 10% is too much for any one share, particularly Scottish Mortgage. One day it will take off again and then you will be holding too much of it!

I hope others contribute to give their opinions because there is no 'correct' answer to your query.

Dod

Hi Dod,

Thank you for your reply. All taken in and duly added to our list of considerations. My daughter has 9K to invest in her JISA. We were going to look over this sooner, but I've not been able to look with her until now. Firstly the amount "we" are considering investing in SM is £1000 or roughly 10% of her JISA this year. What I want to do, if for no other reason than to explain "pound cost averaging" to her is trickle that money in each month at £100.00 per month. I know the trade costs will be more but if I've understood them correctly I think it's buttons compared to tackling the risk of a falling stock or bear market. Also I think your advice regarding 10% is completely correct. I should have explained myself a little better. We are going to select 9 stocks or funds at £1,000 each. Mum and Dad are paying her trading costs. But also for the next 3 years until she is 18 we are putting £9K per annum into her JISA. Whilst we don't propose to select 36 stocks we just felt we needed to start somewhere. So hopefully over our four year plan (of which we're 15 months into) the SM investment will represent 2.8%, assuming, off course it is all invested today. Hopefully, you can find the logic in that I think overall we will have 15-20 stocks or funds in her JISA.

I'm also very interested in your comment that I interpret that you will monitor a stock and if you feel its hit some of your filters or benchmarks you top skim? I want to explain this my daughter as I see a reasonable argument for risk reduction with this kind of approach.

I've gone a little off topic and I hope this boards moderator allows my breach please but SM is on "our" watch list and I wanted my reply to Dod to respond to all the points he has kindly raised.

I propose to pick this up on the correct board where I've raised the issue of my daughters JISA before now.

Thank you all for your patience and thank you Dod for replying

AiY(D)

[Hariseldon58]

@AiY

SMT has had a fabulous run, clearly the tide has turned against its style of investment.

No one knows what will happen but I would not be surprised to find the market fell and drifted for quite a while. The sentiment is definitely poor and presumably your in no rush to invest.

I’d go back to basics and consider how long you expect to hold the investments. If it’s less than 5 years then I would look at 0-5 US Tips.

If the investment horizon is longer, then placing the 9 investments at roughly 6 week intervals would be a sensible move. It’s far easier to spread the money over time, if markets fall then you are buying bargains, if they rise you’ve had some profits !

SMT outlook is probably good on a 10 year view but sentiment has turned and no one will be surprised if it descends further. It’s hard but being patient is often rewarding.

[DavidM13]

I am sorry to say that I cannot really help you. My current holding is still over 4% of my total portfolio but it is all 'free' so that makes a difference. It could certainly drop below £6 but who knows? It is very volatile. It has long been overtaken by Alliance Trust in my portfolio which is doing fine for me. I would probably, if starting from scratch, allocate funds 50/50 between the two but everyone has their own ideas. I would think 10% is too much for any one share, particularly Scottish Mortgage. One day it will take off again and then you will be holding too much of it!

I hope others contribute to give their opinions because there is no 'correct' answer to your query.

Dod

Hi Dod,

Thank you for your reply. All taken in and duly added to our list of considerations. My daughter has 9K to invest in her JISA. We were going to look over this sooner, but I've not been able to look with her until now. Firstly the amount "we" are considering investing in SM is £1000 or roughly 10% of her JISA this year. What I want to do, if for no other reason than to explain "pound cost averaging" to her is trickle that money in each month at £100.00 per month. I know the trade costs will be more but if I've understood them correctly I think it's buttons compared to tackling the risk of a falling stock or bear market. Also I think your advice regarding 10% is completely correct. I should have explained myself a little better. We are going to select 9 stocks or funds at £1,000 each. Mum and Dad are paying her trading costs. But also for the next 3 years until she is 18 we are putting £9K per annum into her JISA. Whilst we don't propose to select 36 stocks we just felt we needed to start somewhere. So hopefully over our four year plan (of which we're 15 months into) the SM investment will represent 2.8%, assuming, off course it is all invested today. Hopefully, you can find the logic in that I think overall we will have 15-20 stocks or funds in her JISA.

I'm also very interested in your comment that I interpret that you will monitor a stock and if you feel its hit some of your filters or benchmarks you top skim? I want to explain this my daughter as I see a reasonable argument for risk reduction with this kind of approach.

I've gone a little off topic and I hope this boards moderator allows my breach please but SM is on "our" watch list and I wanted my reply to Dod to respond to all the points he has kindly raised.

I propose to pick this up on the correct board where I've raised the issue of my daughters JISA before now.

Thank you all for your patience and thank you Dod for replying

AiY(D)

I know you have covered it off above but my opinion is ignoring trading costs at such a low trading level is quite a bad lesson compared to the other very good lessons you are teaching her!! Of course it also depends what your trading costs are but its a hefty percentage gone before your money has even begun to start working. Maybe investing quarterly rather than monthly will reduce that burden.

I just put more in to SMT today for my SIPP. Has to bounceback one day (hopefully!)

[Adamski]

@DavidM13, bounceback is possible but could get decade of value outperforming growth? Arguable that bubble has burst with growth stocks - hyped up tech stocks crashing, has happened many times before - dotcom, 2008, now lockdown winners - and if we are now in era of permanently higher inflation and interest rates, growth could underperform value for a long time.

[DavidM13]

@DavidM13, bounceback is possible but could get decade of value outperforming growth? Arguable that bubble has burst with growth stocks - hyped up tech stocks crashing, has happened many times before - dotcom, 2008, now lockdown winners - and if we are now in era of permanently higher inflation and interest rates, growth could underperform value for a long time.

YIKES!! Ok, maybe I will hold off buying any more of that stock then. Its only my SIPP so 20 years away to make good....

[Dod101]

@DavidM13, bounceback is possible but could get decade of value outperforming growth? Arguable that bubble has burst with growth stocks - hyped up tech stocks crashing, has happened many times before - dotcom, 2008, now lockdown winners - and if we are now in era of permanently higher inflation and interest rates, growth could underperform value for a long time.

YIKES!! Ok, maybe I will hold off buying any more of that stock then. Its only my SIPP so 20 years away to make good....

Closed last night at under £7.........

Dod

[Nocton]

Closed last night at under £7......... Dod

Perhaps we have all got too greedy and thinking too hard about SMT. For my grandchildren, investing regularly over 10 years, I have no complaints.

In March 2020 I was quite pleased to top-slice and sell some of my holding at £5.70, making a 3X gain on the price bought over the previous few years. I never dreamt the price could go to ~£15 within the next 18 months.

[Dod101]

Closed last night at under £7......... Dod

Perhaps we have all got too greedy and thinking too hard about SMT. For my grandchildren, investing regularly over 10 years, I have no complaints.

In March 2020 I was quite pleased to top-slice and sell some of my holding at £5.70, making a 3X gain on the price bought over the previous few years. I never dreamt the price could go to ~£15 within the next 18 months.

I am not complaining and have always recognised SMT as volatile. Even at March 2020 my holding was all 'free' as I had ling since extracted my original investment and as I have recorded, I then took money out of SMT throughout 2020 on four separate occasions and then again in 2021 just short of its peak price so it certainly owes me nothing. I was mentioning the current price simply to follow up on discussion further up this thread as to how low it might go.

Dod