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Scottish Mortgage heading for where

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

#392788

Postby Adamski » March 5th, 2021, 3:40 pm

Hariseldon58 wrote:Edinburgh Worldwide is also proving interesting...


In what way, as in also taken a big hit, and has potential to fall further or bounce back?

Dod101
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Re: Scottish Mortgage heading for where

#392800

Postby Dod101 » March 5th, 2021, 3:58 pm

The last price I saw, £10.32, is still higher than it was in July 2020 and when I sold some then at £9.17 that was because it seemed a good price. After all that was more than 50% above the price at 1 January. I have since sold more at £12.10 and then most recently £14.10 and my current holding is still my biggest holding about twice my median value. I will now just leave it and see what happens. Over the last 15 months I have extracted the value of my current holding so it has been a holding like no other for me. I now have no idea what I paid for my current holding but have long since extracted far in excess of it and it does not matter as it is in an ISA. You could say that it is losing its froth but so far no more than that.

Dod

Hariseldon58
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Re: Scottish Mortgage heading for where

#392807

Postby Hariseldon58 » March 5th, 2021, 4:02 pm

Edinburgh has come down quite a bit, similar style to SMT and its movements tend be in the same direction as SMT and again I am happy to be left holding it.

The price has peaked at 4.23 and I was buying this morning at 3.26, thats 23% off the highs of a month ago. SMT I bought this morning at 10.28 down from 14.15 within the last month, 27% off, in the same ballpark. Interesting.

Lootman
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Re: Scottish Mortgage heading for where

#392905

Postby Lootman » March 5th, 2021, 8:27 pm

Hariseldon58 wrote:SMT I bought this morning at 10.28 down from 14.15 within the last month, 27% off, in the same ballpark. Interesting.

You did well as I think the low was around 10.16 today. I guess there is support at the round number of 10.

In some ways SMT performs like Cathie Woods' Ark Innovation ETF in the US. That bottomed today at $106 or so and then climbed to $116 after the UK close. So SMT might see a good bounce on Monday morning.

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Re: Scottish Mortgage heading for where

#393160

Postby XFool » March 6th, 2021, 5:38 pm

bluedonkey wrote:At 1029p, that's a 27% drop from its high. I'm no TA expert but that seems to be more than a correction, more like a trend (down).

It's a trend alright! An up and down trend. :)

Adamski
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Re: Scottish Mortgage heading for where

#393174

Postby Adamski » March 6th, 2021, 6:36 pm

some thoughts... What sparked this sell off was the Treasury yield spiking after the Fed chief's recent remarks. So the market is now expecting some inflation and some interest rate increases. Which is supposed to hurt growth stocks, and help value stocks. So we have a rotation from growth to value, as we did end of last year. But wouldn't surprise me, if just like last time, we have a retreat back from value to growth again.

Why? Because, the value stocks have been wrecked by 12 months of economy wrecking by covid pandemic, and these companies aren't suddenly going to be profitable again.

And the inflation expectation may be overdone. And the tech sell off may be overdone as well. Hence I'm expecting a bounce back next few weeks, maybe even next few days. May be wrong, but in my just 3 years investing, seen bounce back after tech sell off several times. This is a big one, but It seems to be a fairly regular event every few months.

unperplex
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Re: Scottish Mortgage heading for where

#393290

Postby unperplex » March 7th, 2021, 11:08 am

Yes, Adamski, I hope they rise soon, but I am in no hurry.
My last two purchases were at 1149 and1167 .
The proposals of Sunak (and, as I understand it, other finance ministers worldwide) to increase taxes on “tech companies” may affect the share price of say Amazon (a substantial holding of SMT), but not, I trust, Meituan and some of SMT’s other Chinese favourites.

UncleEbenezer
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Re: Scottish Mortgage heading for where

#393300

Postby UncleEbenezer » March 7th, 2021, 11:50 am

unperplex wrote:Yes, Adamski, I hope they rise soon, but I am in no hurry.
My last two purchases were at 1149 and1167 .
The proposals of Sunak (and, as I understand it, other finance ministers worldwide) to increase taxes on “tech companies” may affect the share price of say Amazon (a substantial holding of SMT), but not, I trust, Meituan and some of SMT’s other Chinese favourites.


SMT is vulnerable to political nonsense anywhere in the world. China may be largely-immune to our government, but not to its own.

It's a risk we all take. But wearing my tech industry hat, it's been good watching China's rapid rise to genuine global leadership in recent years. If they're still only second (to Silicon Valley) is no longer entirely clear.

OllyDrod
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Re: Scottish Mortgage heading for where

#393324

Postby OllyDrod » March 7th, 2021, 1:06 pm

Adamski wrote:some thoughts... What sparked this sell off was the Treasury yield spiking after the Fed chief's recent remarks. So the market is now expecting some inflation and some interest rate increases. Which is supposed to hurt growth stocks, and help value stocks. So we have a rotation from growth to value, as we did end of last year. But wouldn't surprise me, if just like last time, we have a retreat back from value to growth again.

Why? Because, the value stocks have been wrecked by 12 months of economy wrecking by covid pandemic, and these companies aren't suddenly going to be profitable again.

And the inflation expectation may be overdone. And the tech sell off may be overdone as well. Hence I'm expecting a bounce back next few weeks, maybe even next few days. May be wrong, but in my just 3 years investing, seen bounce back after tech sell off several times. This is a big one, but It seems to be a fairly regular event every few months.


They've been 'wrecked' by discretionary consumer spending being severely curtailed due to lock-down restrictions. Taking the UK as an example, assuming restrictions are lifted this year as planned, and consumer spending patterns resume some semblance of normality, why wouldn't they become profitable again?

There are shades of grey here of course (airlines and travel in particular may take longer to recover) but I'd expect hospitality, entertainment, retail, etc to have a bumper summer! I'm certainly looking forward to visiting my local, having a few meals out and generally getting out of the house and having some fun. I highly doubt that I'm alone in this. If people are 'out and about' (rather than at home and in front of the telly/laptop), it seems logical that some of the star performers of the pandemic will see a drop in demand as a key driver for their stellar short-term performance is removed (eg: Just Eat, Netflix, Amazon). Long-term, I'd expect these firms to continue to do well - structural drivers for their success remain - but I certainly won't be surprised if this correction goes on into the summer (no doubt with some peaks and troughs along the way). This may be pronounced if the narrative around the resurgence of 'value' takes hold and investors come to believe that they no longer have to be in 'growth' in order to get a decent return; and if noise around inflation and rising interest rates continues.
- OllyDrod

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Re: Scottish Mortgage heading for where

#393330

Postby scrumpyjack » March 7th, 2021, 1:14 pm

OllyDrod wrote:
Adamski wrote:some thoughts... What sparked this sell off was the Treasury yield spiking after the Fed chief's recent remarks. So the market is now expecting some inflation and some interest rate increases. Which is supposed to hurt growth stocks, and help value stocks. So we have a rotation from growth to value, as we did end of last year. But wouldn't surprise me, if just like last time, we have a retreat back from value to growth again.

Why? Because, the value stocks have been wrecked by 12 months of economy wrecking by covid pandemic, and these companies aren't suddenly going to be profitable again.

And the inflation expectation may be overdone. And the tech sell off may be overdone as well. Hence I'm expecting a bounce back next few weeks, maybe even next few days. May be wrong, but in my just 3 years investing, seen bounce back after tech sell off several times. This is a big one, but It seems to be a fairly regular event every few months.


They've been 'wrecked' by discretionary consumer spending being severely curtailed due to lock-down restrictions. Taking the UK as an example, assuming restrictions are lifted this year as planned, and consumer spending patterns resume some semblance of normality, why wouldn't they become profitable again?

There are shades of grey here of course (airlines and travel in particular may take longer to recover) but I'd expect hospitality, entertainment, retail, etc to have a bumper summer! I'm certainly looking forward to visiting my local, having a few meals out and generally getting out of the house and having some fun. I highly doubt that I'm alone in this. If people are 'out and about' (rather than at home and in front of the telly/laptop), it seems logical that some of the star performers of the pandemic will see a drop in demand as a key driver for their stellar short-term performance is removed (eg: Just Eat, Netflix, Amazon). Long-term, I'd expect these firms to continue to do well - structural drivers for their success remain - but I certainly won't be surprised if this correction goes on into the summer (no doubt with some peaks and troughs along the way). This may be pronounced if the narrative around the resurgence of 'value' takes hold and investors come to believe that they no longer have to be in 'growth' in order to get a decent return; and if noise around inflation and rising interest rates continues.
- OllyDrod


Yes they will be become profitable again, but the losses racked up by these high fixed cost businesses during the crisis are generally many many years of profits and drove some of them near to the point of insolvency. So it isn't just a case of re-opening and everything is ok. It will take many years to make the profits to cover the gi-normous debts racked up to cover the losses. Dividends will be on hold or very small for a long time. You need to take that into account in deciding which are going to bounce back and which will be in the knackers yard for years with every step dictated by their bankers!

Dod101
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Re: Scottish Mortgage heading for where

#393336

Postby Dod101 » March 7th, 2021, 1:28 pm

But value stocks have been out of favour for years so why would a return to 'normality' make them favourites? It is quite likely, certainly if lockdown is more or less lifted in the second half of this year, for value stocks to recover, but that would still make them out of favour.

Scottish Mortgage could well sit at current levels for a year or so. It may be instructive to look at the historic prices for SMT. I can with no effort produce those since 1.1.15 to date, as follows.

1.1.15 £2.41
1.1.16 £2.77
1.1.17 £3.20
1.1.18 £4.50
1.1.19 £4.74
1.1.20 £5.79
1.1.21 £12.14

No share can continue indefinitely as SMT has done for the last year or so. It was inevitable that it would at least pause. Maybe as an investor in disruptors it can really be different and maybe it will soon resume its upward path but who knows? Just do not get too carried away. As of Friday closing SMT has now become my second largest holding after Unilever, even with the latter's price being well under £40, where it has not habitually been for about 4 years. I am though totally relaxed about that.

Dod

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Re: Scottish Mortgage heading for where

#393345

Postby bluedonkey » March 7th, 2021, 2:18 pm

Interesting sequence of prices from Dod. It's tempting to speculate on the price for 1.1.22. Higher than mean rises appear to be followed by reversion to mean. So £10 for 1.1.22? Bear in mind that SMT's management look for investments that grow by "only" 20% per year.

OllyDrod
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Re: Scottish Mortgage heading for where

#393349

Postby OllyDrod » March 7th, 2021, 2:29 pm

Dod101 wrote:But value stocks have been out of favour for years so why would a return to 'normality' make them favourites? It is quite likely, certainly if lockdown is more or less lifted in the second half of this year, for value stocks to recover, but that would still make them out of favour.


Arguably, they've been out of favour during an 'abnormal' (!) period of ultra-low inflation and interest rates. A return to 'normality' - with regard to consumer spending, inflation and interest rates and there's a potent argument for value. I don't say 'favourite' - merely that I don't expect growth to be the only game in town this year (due to the return of consumer spending) and (if we do enter a reflationary period) into the medium-term. It's not a black and white issue for me - I'm more naturally inclined towards value as I just can't rationally justify the valuations of the Teslas of this world, but hold ITs of both styles in my portfolio.
- OllyDrod

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Re: Scottish Mortgage heading for where

#393545

Postby airbus330 » March 8th, 2021, 10:13 am

Ouch, another 5% fall this morning. The old buying opportunity or falling knife question springs to mind.

bluedonkey
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Re: Scottish Mortgage heading for where

#393547

Postby bluedonkey » March 8th, 2021, 10:15 am

About 31% down from its high. That's a definite down trend surely. Falling knife I think.

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Re: Scottish Mortgage heading for where

#393551

Postby Bouleversee » March 8th, 2021, 10:22 am

About time we heard something from the SMT team methinks. That really is a huge fall. I felt sure they would be up a bit this morning. Shows how little I know.

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Re: Scottish Mortgage heading for where

#393558

Postby richfool » March 8th, 2021, 10:33 am

Technology is still falling, thus SMT is also still falling, as is PHI, USA and to a small extent Monks.

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Re: Scottish Mortgage heading for where

#393577

Postby UncleEbenezer » March 8th, 2021, 11:33 am

This is where, purely from an investment PoV, Dod's cautious policy of periodically trimming as it rose is vindicated. Cash in on that rise while you can ...

It could be quite a while before we see 1400 again.

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Re: Scottish Mortgage heading for where

#393583

Postby frunk » March 8th, 2021, 11:38 am

Bouleversee, SMT did blip up on the open this am, but it was only to jump off the cliff again. I bought in close to ATH (ignored the warnings about the over extended valuation of SMT parts like $TSLA, duh! ). SMT seems to have support around 970 this am now, good luck to those who checked out last month, for me, it's a long term hold now.

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Re: Scottish Mortgage heading for where

#393585

Postby Vince » March 8th, 2021, 11:39 am

Painful last couple of weeks, but the panic selling will stop to be replaced by people wanting to get into what is by any metric, a great investment.


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