The Lemon Fool

Dod101 wrote:I suppose 1446.35p fair means calculated at fair value. The Google definition does not get me much further but I think for our purposes we can accept that it is a reliable value. I do not think that Baillie Gifford are given to inflating values.

I would imagine that the BG is the more up to date and most ITs do a daily valuation so I think that that plus the current share price would suggest that the NAV is currently around the 1446p mark. All looking good.

Dod

Per today's RNS announcement NAV at the close of business last night was 1447.58p on a cum fair basis
they give 4 different figures
Cum Par NAV: Net asset value per share in pence, including income, with debt at par value.
Cum Fair NAV: Net asset value per share in pence, including income, with debt at fair value.
Ex Par NAV: Net asset value per share in pence, excluding income, with debt at par value.
Ex Fair NAV: Net asset value per share in pence, excluding income, with debt at fair value.

There is only a few pence difference between them (range 1446.85 to 1452.99)
The 'fair' bit means that debt is taken at market value rather than nominal value

BG publish these figures every day on the Stock Exchange RNS

https://www.londonstockexchange.com/new ... s/15127724

Bouleversee wrote:

scrumpyjack wrote:Historically they have tended to be priced at a premium of about 2.5% to net asset value. When they hit the high of 1410p 6 months ago the NAV was 1369p. NAV now is 1418p.

BG site says NAV is l446.35 fair, whatever that means

From their monthly factsheet: https://www.bailliegifford.com/en/uk/in ... factsheet/

"In this document all references to NAV and NAV performance are calculated with borrowings deducted at fair value. Borrowings at fair value is borrowings (if any) at an estimate of their market worth"

scrumpyjack wrote:

Dod101 wrote:I suppose 1446.35p fair means calculated at fair value. The Google definition does not get me much further but I think for our purposes we can accept that it is a reliable value. I do not think that Baillie Gifford are given to inflating values.

I would imagine that the BG is the more up to date and most ITs do a daily valuation so I think that that plus the current share price would suggest that the NAV is currently around the 1446p mark. All looking good.

Dod

Per today's RNS announcement NAV at the close of business last night was 1447.58p on a cum fair basis
they give 4 different figures
Cum Par NAV: Net asset value per share in pence, including income, with debt at par value.
Cum Fair NAV: Net asset value per share in pence, including income, with debt at fair value.
Ex Par NAV: Net asset value per share in pence, excluding income, with debt at par value.
Ex Fair NAV: Net asset value per share in pence, excluding income, with debt at fair value.

There is only a few pence difference between them (range 1446.85 to 1452.99)
The 'fair' bit means that debt is taken at market value rather than nominal value

BG publish these figures every day on the Stock Exchange RNS

https://www.londonstockexchange.com/new ... s/15127724

Thanks SJ. That makes perfect sense. With not much between them we really do not need to worry too much but it is encouraging to see the figures. Would suggest that there might be a bit more in the share price.

Dod

Bouleversee wrote:
Acc.to ii website, NAV is shown as 1255.10, smt s.p. 1400.50, BG site says NAV is l446.35 fair, whatever that means. Quite a difference. How often do these figures get updated and which is correct?

Where does the 1255.1p figure show up? If I look at the SM info on II now (which goes to a Morningstar-derived page), it says a share price of 1394p, and a discount of 3.15% - which works out as NAV of 1439p.

Many thanks to all for your input. Still trying to get my head round a market value for debts but let that pass. I have now topped up at £13.91. Watch them drop now!

In answer to Ethics Gradient, I haven't time to log on yet again but IIRC I went on to my portfolio which already included SMT and clicked on it on the left of the page which came up with the current price and day's movements and a graph and under that it gave the NAV. I also noticed that at the top of the page it had no figures entered for yield or P/E ratio though lower down there were some. I am not impressed by their website. Nor was I impressed when I asked for a buy quote to be faced with 2 pages of small print about charges etc. which I was supposed to confirm I had read before continuing to get a quote; I printed them out to read later. That's never happened to me before.

I wish I had known about SMT earlier instead of being introduced to HYP which has only lost me money. My ii ISA contains several dogs which I should probably bite the bullet and get rid of so I shall build up the few which are profitable and since I am LTBH rather than a trader, transfer those to my main ISA and close the ii account as the fee and expiring credit basis doesn't suit me. Hopefully, the Morrison's t/o will get sorted soon so that will be one of the losers finally returning my stake and a small profit after many years.

On which board should one post a query as to which of the losers have any chance of recovery, a difficult question I know in these turbulent times? I do have some excellent long term holdings though not all of them have escaped the consequences of the climate change, Brexit or the pandemic and some may never get back to their former glory. Hence, my wish to transfer to trusts but as we know, not all of them are safe either.

Bouleversee wrote:Many thanks to all for your input. Still trying to get my head round a market value for debts

ITs tend to borrow money on a long term basis at a fixed rate of interest. Brunner for example used to have substantial borrowings at a rate of about 11%. Obviously that liability is a lot greater than the nominal value of the borrowings when the market rate for fixed term borrowings is say 3% and they are committed to paying 11% for another 20 years. In their case they eventually bought out the outstanding debt at a substantial premium to par value.

So that is what is meant by 'fair value' of debts. If the IT had borrowed £100m at a rate that meant the fair value of that debt was £150m, then they would value the debt at £150m in calculating NAV, and the net assets for the equity would be £50 m less than if nominal value was used.

Ah, I see now. Thank you and sorry to be so dim.

Bouleversee wrote:In answer to Ethics Gradient, I haven't time to log on yet again but IIRC I went on to my portfolio which already included SMT and clicked on it on the left of the page which came up with the current price and day's movements and a graph and under that it gave the NAV. I also noticed that at the top of the page it had no figures entered for yield or P/E ratio though lower down there were some. I am not impressed by their website. Nor was I impressed when I asked for a buy quote to be faced with 2 pages of small print about charges etc. which I was supposed to confirm I had read before continuing to get a quote; I printed them out to read later. That's never happened to me before.

Ah, I think I can see where you got 1,255 from now. That graph is for growth from an arbitrary starting point of 1,000 at a certain time period before, and it shows you SM share price, SM NAV, the relevant MSCI index and the industry sector average - for the past 6 months, the NAV has grown relatively from 1,000 to 1,255. But it's not the NAV in pence. Below that is another graph titled "Our Discount % Cum Fair", and that gives you a daily figure for the NAV discount (or premium).

Yes, that could be confusing.

As far as the small print, I've seen that "please tick here to indicate you've read the small print for this investment" for years, and they are putting it at just the right place - the quote is time-limited, so you have to tell them you've read it before they give you a quote for a specific stock or fund. If they gave you the small print after you'd made a bargain, there'd be all kinds of legal problems.

It would make more sense to make you sign that when you opened your account. As it is, by the time one has dealt with it (it has never come up when I dealt previously) the quote, which one hasn't even seen yet, has expired and one has to start all over again. A good enough reason to put clients off dealing in individual shares and just have a few IT or fund holdings.

Thanks for the explanation re the NAV graph.

Bouleversee wrote:I wish I had known about SMT earlier instead of being introduced to HYP which has only lost me money.

That's you for the chop then!

https://www.youtube.com/watch?v=bO_JqQz ... nsionCraft

Fair Value as videos go.

Bouleversee wrote:It would make more sense to make you sign that when you opened your account. As it is, by the time one has dealt with it (it has never come up when I dealt previously) the quote, which one hasn't even seen yet, has expired and one has to start all over again. A good enough reason to put clients off dealing in individual shares and just have a few IT or fund holdings.

Thanks for the explanation re the NAV graph.

Maybe we're talking about different small print - I was thinking of the documents specific to each investment - KIDs and so on. And II present these, and the "click here to say you've read them" button - before the button that gets the quote is enabled, which is what I thought you meant.

scrumpyjack wrote:

Dod101 wrote:I suppose 1446.35p fair means calculated at fair value. The Google definition does not get me much further but I think for our purposes we can accept that it is a reliable value. I do not think that Baillie Gifford are given to inflating values.

I would imagine that the BG is the more up to date and most ITs do a daily valuation so I think that that plus the current share price would suggest that the NAV is currently around the 1446p mark. All looking good.

Dod

Per today's RNS announcement NAV at the close of business last night was 1447.58p on a cum fair basis
they give 4 different figures
Cum Par NAV: Net asset value per share in pence, including income, with debt at par value.
Cum Fair NAV: Net asset value per share in pence, including income, with debt at fair value.
Ex Par NAV: Net asset value per share in pence, excluding income, with debt at par value.
Ex Fair NAV: Net asset value per share in pence, excluding income, with debt at fair value.

There is only a few pence difference between them (range 1446.85 to 1452.99)
The 'fair' bit means that debt is taken at market value rather than nominal value

BG publish these figures every day on the Stock Exchange RNS

https://www.londonstockexchange.com/new ... s/15127724

For reference for anyone that isn't aware, the "Industry Standard" NAV, which is used on the vast majority of solutions powered by the major data providers is the Cum Fair NAV.

DavidM13 wrote:

scrumpyjack wrote:

Dod101 wrote:I suppose 1446.35p fair means calculated at fair value. The Google definition does not get me much further but I think for our purposes we can accept that it is a reliable value. I do not think that Baillie Gifford are given to inflating values.

I would imagine that the BG is the more up to date and most ITs do a daily valuation so I think that that plus the current share price would suggest that the NAV is currently around the 1446p mark. All looking good.

Dod

Per today's RNS announcement NAV at the close of business last night was 1447.58p on a cum fair basis
they give 4 different figures
Cum Par NAV: Net asset value per share in pence, including income, with debt at par value.
Cum Fair NAV: Net asset value per share in pence, including income, with debt at fair value.
Ex Par NAV: Net asset value per share in pence, excluding income, with debt at par value.
Ex Fair NAV: Net asset value per share in pence, excluding income, with debt at fair value.

There is only a few pence difference between them (range 1446.85 to 1452.99)
The 'fair' bit means that debt is taken at market value rather than nominal value

BG publish these figures every day on the Stock Exchange RNS

https://www.londonstockexchange.com/new ... s/15127724

For reference for anyone that isn't aware, the "Industry Standard" NAV, which is used on the vast majority of solutions powered by the major data providers is the Cum Fair NAV.

Thanks. That would seem to be the only of the four measures that gets as near to an actual liquidation price as we are likely to get.

Dod

A surprising, but enlightening, conversation between managers on the Schroders value investing team and Tom Slater of Scottish Mortgage on 'The Value Perspective' podcast. It lasts for 48 minutes and is illuminating on process and philosophy.

https://schroderstvp.podbean.com/e/tom-slater/

They aren't all winners with SMT:

Biotech is risky but we're no Woodford, insists boss of Scottish Mortgage trust as some of his picks have become worthless

Tom Slater admits that some of his picks have become worthless
One of its healthcare stocks, Zymergen, lost 80% of its value last month
But he said these only made up a small part of the £20.4bn investment trust
Among its holdings is Clover Health, where Chelsea Clinton is a director

By Emma Dunkley For The Mail On Sunday 11 September 2021

One of the UK's most influential stock-pickers has warned that some of his bets on biotech stocks will turn sour – but said it is the price to pay for the chance of making top returns.

Tom Slater, co-manager of Scottish Mortgage, one of Britain's most popular investment trusts, admitted biotech is risky, pointing out that some of his picks have become worthless.

However, he said these only made up a small part of the £20.4billion investment trust, and that failed investments are a risk worth taking for potential winners.

https://www.dailymail.co.uk/money/marke ... dford.html

I have a larger holding of Monks than I do of SMT.

richfool wrote:They aren't all winners with SMT:

Biotech is risky but we're no Woodford, insists boss of Scottish Mortgage trust as some of his picks have become worthless

Tom Slater admits that some of his picks have become worthless
One of its healthcare stocks, Zymergen, lost 80% of its value last month
But he said these only made up a small part of the £20.4bn investment trust
Among its holdings is Clover Health, where Chelsea Clinton is a director

By Emma Dunkley For The Mail On Sunday 11 September 2021

One of the UK's most influential stock-pickers has warned that some of his bets on biotech stocks will turn sour – but said it is the price to pay for the chance of making top returns.

Tom Slater, co-manager of Scottish Mortgage, one of Britain's most popular investment trusts, admitted biotech is risky, pointing out that some of his picks have become worthless.

However, he said these only made up a small part of the £20.4billion investment trust, and that failed investments are a risk worth taking for potential winners.

https://www.dailymail.co.uk/money/marke ... dford.html

I have a larger holding of Monks than I do of SMT.

Surely this is a non-story. Is this not how investment trusts work?

In fact how all share investing works? Except with ITs we delegate the choosing of investments to full time professionals who (we have decided) can do it better than us.

Mike4 wrote:

richfool wrote:They aren't all winners with SMT:

Biotech is risky but we're no Woodford, insists boss of Scottish Mortgage trust as some of his picks have become worthless

Tom Slater admits that some of his picks have become worthless
One of its healthcare stocks, Zymergen, lost 80% of its value last month
But he said these only made up a small part of the £20.4bn investment trust
Among its holdings is Clover Health, where Chelsea Clinton is a director

By Emma Dunkley For The Mail On Sunday 11 September 2021

One of the UK's most influential stock-pickers has warned that some of his bets on biotech stocks will turn sour – but said it is the price to pay for the chance of making top returns.

Tom Slater, co-manager of Scottish Mortgage, one of Britain's most popular investment trusts, admitted biotech is risky, pointing out that some of his picks have become worthless.

However, he said these only made up a small part of the £20.4billion investment trust, and that failed investments are a risk worth taking for potential winners.

https://www.dailymail.co.uk/money/marke ... dford.html

I have a larger holding of Monks than I do of SMT.

Surely this is a non-story. Is this not how investment trusts work?

In fact how all share investing works? Except with ITs we delegate the choosing of investments to full time professionals who (we have decided) can do it better than us.

I'm still losing a large percentage of the money I put into Woodford's Patient Capital Trust and I haven't forgotten I lost all of my investment in the Slater Walker Investment Trust run by Tom's father when it went bust. My holding in SMT is so far doing very well but I am conscious of the fact it is now under new management and that may make a difference. I hope it has a large holding in Oxford Nanapore which is about to float and am happy to leave the choice of pharma shares to the SMT management as which will succeed in this field must be particularly difficult to forecast. Fortunately, they have a diverse basket of holdings and have the advantage of having access to many companies not available to the ordinary investor so should beat me hands down.

Bouleversee wrote:I'm still losing a large percentage of the money I put into Woodford's Patient Capital Trust and I haven't forgotten I lost all of my investment in the Slater Walker Investment Trust run by Tom's father when it went bust.

Are you sure that was an investment trust?

BBC News

https://en.wikipedia.org/wiki/Slater_Walker#History

"Slater Walker then changed strategy, from a corporate-conglomerate into what eventually was recognised as an unauthorised and unlicensed international investment bank, through gradual disposal of its industrial interests."

XFool wrote:

Bouleversee wrote:I'm still losing a large percentage of the money I put into Woodford's Patient Capital Trust and I haven't forgotten I lost all of my investment in the Slater Walker Investment Trust run by Tom's father when it went bust.

Are you sure that was an investment trust?

BBC News

https://en.wikipedia.org/wiki/Slater_Walker#History

"Slater Walker then changed strategy, from a corporate-conglomerate into what eventually was recognised as an unauthorised and unlicensed international investment bank, through gradual disposal of its industrial interests."

With my declining memory, I am not sure of much these days. I think it was Slater Walker Growth (which could have been a fund though I thought it was an IT) that we were invested in. Does it matter? I think we lost our stakes in Surinvest Performance and Invan as well. The point is that these "experts" don't always invest your money better than you could do yourself if you had the time and investing is always a gamble. Who bargained for Covid and climate change when they started investing?