Scottish Mortgage heading for where

[torata]

Not sure which is more annoying - selling something that then goes up or buying something that then goes down?

If my understanding of Kahneman and Tversky is right, the second is more painful.

torata

[Dod101]

Personally having taken cash out as the share has continued upwards has delighted me as I am still in the money but have secured hard cash to invest elsewhere as well.

Dod

[Bouleversee]

Personally having taken cash out as the share has continued upwards has delighted me as I am still in the money but have secured hard cash to invest elsewhere as well.

Dod

And how has the elsewhere done comparatively?

[scrumpyjack]

Interesting article in today's Investors Chronicle - interview with James Andersen and Tom Slater.

https://www.investorschronicle.co.uk/id ... al-change/

Nothing really new but it does give a deeper explanation of their strategy and why they don't think the companies they have invested in are in a bubble.

Sorry if it is behind a paywall for non subscribers

[scrumpyjack]

Their comments on Tesla are interesting
"Much of the trust's recent asset growth has been fuelled by Tesla (US:TSLA), its largest holding, which appears to have defied traditional valuation metrics and shot up more than 780 per cent over the year to 11 December. While many investors worry the stock is far too expensive, James Anderson and Tom Slater, co-managers of Scottish Mortgage, see it quite differently.

“Tesla is not just about electric vehicles," says Mr Slater. "If you look at some of their other efforts around autonomy, software, robo taxis and the like, I don’t think there is anyone else close to challenging that.” He isn’t concerned about other carmakers catching up, either, because Tesla delivered under half a million cars in a global new car market of about 100m last year; there is little evidence of demand constraint any time soon.

The managers’ conviction in Tesla feeds into how they think about investing more broadly. “The rise of Tesla is a symbol of a revolution in energy," says Mr Anderson. "It’s basically the ability to use energy in large forms without malign consequences at very low cost that underwrites economic progress. We’ve had such revolutions only three or four times in human history, and are having one at the moment. And I’m pleased to say it’s driven by economics even more than by climate change as we are now in a position where solar power plus storage is cheaper than any other element or energy provision.”

They believe long-term equity returns are concentrated in very few companies, and these are the firms they look to own. "

[Dod101]

Personally having taken cash out as the share has continued upwards has delighted me as I am still in the money but have secured hard cash to invest elsewhere as well.

Dod

And how has the elsewhere done comparatively?

A fair question except that I was selling because SMT had become too big a component of my overall holdings, as it is today at 8.7% of my investment holdings.

In January I bought Diageo at £31.90, well before the pandemic. Today about £30
In April I bought 3i Infrastructure at £2.52. Today about £2.95
In July I bought Legal & General at £2.165. Today about £2.50

Obviously I would have been better to simply have continued to hold Scottish Mortgage, but I wanted to sell some anyway. I am very happy to have extracted some profit from SMT and put it to work to earn some dividends for me and the three I topped up are very much LTBH. All transactions were either in my SIPP or an ISA so no tax implications.

Dod

[richfool]

I understood there was a bit more mileage yet to be gained from Tesla's admission to the S&P 500, and wondered whether SMT's managers were waiting to capitalise on that before perhaps further reducing their holding. Though, as said before, on this and other threads, I leave all that to the manager. He is the expert and he is who I am paying to make those sorts of decisions.

[Bouleversee]

Personally having taken cash out as the share has continued upwards has delighted me as I am still in the money but have secured hard cash to invest elsewhere as well.

Dod

And how has the elsewhere done comparatively?

A fair question except that I was selling because SMT had become too big a component of my overall holdings, as it is today at 8.7% of my investment holdings.

In January I bought Diageo at £31.90, well before the pandemic. Today about £30
In April I bought 3i Infrastructure at £2.52. Today about £2.95
In July I bought Legal & General at £2.165. Today about £2.50

Obviously I would have been better to simply have continued to hold Scottish Mortgage, but I wanted to sell some anyway. I am very happy to have extracted some profit from SMT and put it to work to earn some dividends for me and the three I topped up are very much LTBH. All transactions were either in my SIPP or an ISA so no tax implications.

Dod

Thanks, Dod. I shall hang on to mine for the time being as I am not in the fortunate position of being anything like over weight in SMT, more's the pity. They are certainly not brilliant for income but if I need more to spend I have a large choice of disappointments to eradicate first.

[Dod101]

To round off an amazing year for Scottish Mortgage I have again top sliced this time at £12.10 into a strong market this morning. Who would have thought? I am planning on buying a few more TD Bank to increase my income a bit. They do not seem to mind Jack Ma's problems very much.

Dod

[JonnyT]

Two things from me:
1) Where it goes, nobody knows
2) Better to run your winners...

[kempiejon]

Two things from me:
1) Where it goes, nobody knows
2) Better to run your winners...

Although a little early I have been contemplating my position in advance of the new tax year as SMT in my taxable account is pregnant with capital gain and at a near maximum. Between now and April the price will vary and I hope continue upwards so I'm contemplating a limit as I don't watch prices closely during trading hours.

[Lootman]

Two things from me:
1) Where it goes, nobody knows
2) Better to run your winners...

Although a little early I have been contemplating my position in advance of the new tax year as SMT in my taxable account is pregnant with capital gain and at a near maximum. Between now and April the price will vary and I hope continue upwards so I'm contemplating a limit as I don't watch prices closely during trading hours.

If the kind of shares that SMT invests in have a big decline it will likely be very quick indeed. And because the US and Chinese markets are in different time zones, SMT would gap down at the open of London trading. A limit order will get you out but not necessarily at the price you set the limit at.

What would really be great is the ability to hedge by buying put options on SMT so you can profit from any downside whilst not having to sell your position and pay CGT. That is not possible as far as I know, however.

[kempiejon]

Two things from me:
1) Where it goes, nobody knows
2) Better to run your winners...

Although a little early I have been contemplating my position in advance of the new tax year as SMT in my taxable account is pregnant with capital gain and at a near maximum. Between now and April the price will vary and I hope continue upwards so I'm contemplating a limit as I don't watch prices closely during trading hours.

If the kind of shares that SMT invests in have a big decline it will likely be very quick indeed. And because the US and Chinese markets are in different time zones, SMT would gap down at the open of London trading. A limit order will get you out but not necessarily at the price you set the limit at.

What would really be great is the ability to hedge by writing put options on SMT so you can profit from any downside whilst not having to sell your position and pay CGT. That is not possible as far as I know, however.

Realistically I'll probably spend a few weeks pondering what could happen and then at a convenient time and price I'll sell. If that means I'l have a larger or smaller profit I can't know today and although a limit order to shoot for a higher price, or stop loss to try and protect against downside are mechanisms available I doubt I'll bother. I bought in 2017/18/19 at £3/4/5 I sold in February for a similar tax plan at what was then an all time high of £6.30 and re-bought in May and July at £6&9.

[scrumpyjack]

Two things from me:
1) Where it goes, nobody knows
2) Better to run your winners...

Although a little early I have been contemplating my position in advance of the new tax year as SMT in my taxable account is pregnant with capital gain and at a near maximum. Between now and April the price will vary and I hope continue upwards so I'm contemplating a limit as I don't watch prices closely during trading hours.

If the kind of shares that SMT invests in have a big decline it will likely be very quick indeed. And because the US and Chinese markets are in different time zones, SMT would gap down at the open of London trading. A limit order will get you out but not necessarily at the price you set the limit at.

What would really be great is the ability to hedge by buying put options on SMT so you can profit from any downside whilst not having to sell your position and pay CGT. That is not possible as far as I know, however.

I can't see CGT being at a lower rate in future so will probably sell the holding in my taxable account before 5th April. If Rishi changes anything CGT will be higher from April 6th, IMO

[Dod101]

My holding is all in an ISA which is wonderful. At my recent selling price they remain my largest holding after selling four times this year, each for about 15% of the value at the time of sale. I do not mind what they do now as they most definitely owe me nothing but I will be delighted if they continue upwards.

I usually set a limit order for both buys and sales. In this case I waited three days before I got my £12.10.

Dod

[Laughton]

Always interesting to hear what James Anderson and Tom Slater have to say - Investors Chronicle interview podcast released today:-

https://www.investorschronicle.co.uk/po ... in-energy/

It's free and you don't have to be an IC subscriber.

[UncleEbenezer]

What would really be great is the ability to hedge by buying put options on SMT so you can profit from any downside whilst not having to sell your position and pay CGT. That is not possible as far as I know, however.

Who would stand as counterparty there?

I hope you wouldn't expect the taxpayer to step in and bail you out if your counterparty - having lots of such business - went bust on that sudden crash. AIG and the likes all over again - no thanks.

[Lootman]

What would really be great is the ability to hedge by buying put options on SMT so you can profit from any downside whilst not having to sell your position and pay CGT. That is not possible as far as I know, however.

Who would stand as counterparty there?

I hope you wouldn't expect the taxpayer to step in and bail you out if your counterparty - having lots of such business - went bust on that sudden crash.

With listed options your effective counterparty is the exchange on which they are listed. You do not know who the ultimate other side of your trade is but that doesn't matter any more than not knowing you bought the 1000 shares of BP that you sold.

For over-the-counter options the counterparty is the financial institution that wrote or issued that option, and so in theory there is credit and settlement risk there.

There are no listed options on any investment trust as far as I know, although SMT might be large and liquid enough for options to be feasible.

[UncleEbenezer]

I can't see CGT being at a lower rate in future so will probably sell the holding in my taxable account before 5th April. If Rishi changes anything CGT will be higher from April 6th, IMO

Neither can most of us, but Rishi has his personal finances and his even richer wife's to consider. The latest Private Eye reports that he failed to declare some very large interests while acting in parliament to favour them (though the actual cases pre-date his time as chancellor).

Somewhere to look for straws in the wind? Can one find out if Mrs Rishi is positioning herself to minimise the impact of future CGT (perhaps even taking a hit this year) in those assets that are subject to UK tax?

[Lootman]

I can't see CGT being at a lower rate in future so will probably sell the holding in my taxable account before 5th April. If Rishi changes anything CGT will be higher from April 6th, IMO

Neither can most of us, but Rishi has his personal finances and his even richer wife's to consider. The latest Private Eye reports that he failed to declare some very large interests while acting in parliament to favour them (though the actual cases pre-date his time as chancellor).

Somewhere to look for straws in the wind? Can one find out if Mrs Rishi is positioning herself to minimise the impact of future CGT (perhaps even taking a hit this year) in those assets that are subject to UK tax?

Do politicians have to declare assets that they do not personally own or control?