Scottish Mortgage heading for where

[scrumpyjack]

I see BG have now released the summary of holdings as at the end of August (after, I think, the Tesla reduction). Tesla is still 14.3% of the portfolio and would have been nearing 25% if they had not reduced, according to comments on the net.

Still pretty high? Posters had been a bit worried by it being 13.2% at the end of July!

https://www.bailliegifford.com/en/uk/in ... &Portfolio

[Bouleversee]

So, after the damp squib of Battery Day, Tesla was down 10.34 % yesterday and another 1.52% today when I checked a few mins. ago, which doesn't seem to be fully reflected in SMT's share price if their holding in Tesla still represents 14.3% of their portfolio and if my calcs. aren't up the creek, which is highly possible. Can we expect further falls in SMT's s.p? I had been on the point of making a modest top up but perhaps I should hold my horses and hope to get them cheaper.

[Urbandreamer]

I share your thinking. I don't hold SMT but would consider a stake at the right time.

RVF

This is only my opinion:

If you don't hold any SMT then the time to buy is always now.
If you do then the time to sell some is often now.

It seems to grow and threaten to take over portfolio's.

I keep thinking about selling some, then a price fall makes it less urgent. I'm not talking about timing the marker, rather about diversification.

[Dod101]

Writing of selling, I have sold some 3 times this year and as it happens I would obviously have been better hanging on but it is still my biggest single holding.

It also depends on what you buy with the proceeds. My best buy was 3i Infrastructure on which I am well up but the other two buys are not so good, Diageo and L & G. Both of these are down on my buying price but not by too much and they have helped improved my income, in fact all three have.

However it can be volatile and if buying, I would do two things. Set a price, not necessarily firm but say somewhere around £9, or maybe anything below £9 and when the price is at a discount. It an be volatile so these may well be achievable.

SMT has been my stand out success for the last few years though.

Dod

[tikunetih]

Couple of things:

1. Bear in mind that market setbacks and their subsequent recoveries tend to comprise different phases; the optimally performing asset class / market sectors / stocks change as those phases progress. For example, during the Covid "crash", we first had "safe assets" (govt bonds) outperforming as stocks crashed; then "pandemic plays" outperformed, such as tech companies that are driving and benefit from the digitalisation of the the global economy, the type of stocks SMT has significant exposure to. The later stages of the market recovery will be characterised by other sectors and types of stocks outperforming for a while, eg. growth/value hybrid businesses that have resilience (eg. strong balance sheets) but who are seeing temporary loss of demand, with the final recovery phase being when unloved "deep value" stocks eventually begin outperforming, although note that some of these will turn out to be value traps that never properly recover or even come to fail.

You see this type of phased recovery pattern occurring across every market crash and subsequent recovery - the specifics change, ie. the make-up of the different phases, depending on the nature of each crisis and who has suffered/benefited the most, but the general idea of there being phases of recovery repeats (hence why you see investors attempting sector rotation to harvest these relative trends).

My roundabout point here is that as a broad economic recovery takes hold then SMT may (will) for a time come to underperform "the market" or other collective investment vehicles that have different exposure, so just bear that in mind and don't be lured into extrapolating more recent performance (beware recency bias). In other words, expect to see posts along the lines of "now that I've finally bought it it's gone off the boil / begun to fall!".


2. For those wishing to open a new long-term investment position but remove some of the stress of judging the timing of purchases, a common approach is to scale in over a predetermined time period:
- decide how much you'll be investing and the date by which you wish to be fully invested, eg. 10k fully invested by Christmas (3 months time) NB choose a time period you feel comfortable with on-balance;
- divide into 4 tranches, the first 2.5k to be invested today into the target;
- by default, make a further purchase of the target each month, on the anniversary of the first purchase, over the next 3 months;
- Optionally: if in the meantime your target suffers a material pullback (you decide the threshold level, eg, 10% pullback) then bring forward your next tranche purchase;
- if you happen to do that (bring forward your next purchase), then subsequently still keep to your original planned purchasing schedule, but divide up the remaining money so that each of those remaining purchase tranches is evenly sized;
- any additional pullbacks of the same threshold quantum (eg. an additional 10% fall from the low point), repeat the steps to bring forward the next purchase, then divide up the remaining cash and deploy that on the original schedule.

In the absence of possessing any timing skill, this overcomes indecision and gets you invested for the long-term; gives you a plan to follow; gives you a shot at moderating your "regret" if either (a) your target purchase keeps rising in price, or (b) if it suffers a setback.

[CryptoPlankton]

I share your thinking. I don't hold SMT but would consider a stake at the right time.

RVF

This is only my opinion:

If you don't hold any SMT then the time to buy is always now.
If you do then the time to sell some is often now.

I suspect the same sort of sentiment was widely shared back in March 1999 when tech stocks (and SMT?) seemed like a "no brainer". As it turned out, if you'd bought SMT then you'd have had to wait 7 or 8 years to sell at a profit and, if you missed the modest gain (30% or so) available for a year or two then, you'd actually have been about 25% down on the tenth anniversary of the purchase. As has been mentioned, recency bias is something to be aware of.

Of course, if you'd hung on for 21 years you'd now be knocking on the door of a ten bagger, but how many of us are considering buying today with that sort of time horizon in mind? Clearly SMT has been a great investment over the past few years and, though I have some exposure to its main holdings through other investments, I would have loved to have been along for this particular ride. But, for me, the bandwagon is looking a little overcrowded. I wish anyone hopping on now the best of luck, but it's moving too fast for me. If it stalls badly then I may consider climbing on, but I'm not going to let a fear of missing out overrule my other instincts.

[Dod101]

An all time high is not necessarily the best time to be buying SMT but who knows? I have held it since about 1995 and have done enormously well with it. It is still my biggest holding and I have sold some many times over that period and never bought any more.

One point to bear in mind is that if/when we do get a vaccine, SMT is likely I would have thought, to benefit less from any economic recovery than some shares. However, I would trust James Anderson and the Baillie Gifford stable. They are growth above all else and although SMT will almost certainly have some setbacks, if you have a ten year horizon it should be fine.

I have identified 9 shares that I have held since about 1995, including Caledonia, Alliance and SMT. These nine have far and away given me good returns except possibly HSBC, although if I include dividends I will easily have had a decent total return. LTBH works as long as you avoid or at least are very alert to the possibility of a Carillion. ITs help with that.

Dod

[Urbandreamer]

I suspect the same sort of sentiment was widely shared back in March 1999 when tech stocks (and SMT?) seemed like a "no brainer". As it turned out, if you'd bought SMT then you'd have had to wait 7 or 8 years to sell at a profit and, if you missed the modest gain (30% or so) available for a year or two then, you'd actually have been about 25% down on the tenth anniversary of the purchase. As has been mentioned, recency bias is something to be aware of.

I didn't invest in SMT back then, but I was invested in ARM et-al.

I even managed to sell Baltimore at about it's peak. The share price had gone geometric but the writing was on the wall with IPO's of travel companies selling like hot cakes because the name had a dot in it.

[martinc]

Over £10 today, I have sold half my holding. It was 15% of my portfolio, now 7.5%. What to buy now?

[Dod101]

Over £10 today, I have sold half my holding. It was 15% of my portfolio, now 7.5%. What to buy now?

If you want to stick to the same stable, you could do what I have just done and bought some BG China Growth. (The old Witan Pacific) This is not a recommendation!

Amazing news on Scottish Mortgage though.

Dod

[Urbandreamer]

Well my SMT holding hit 11% of my portfolio.

So I've sold a bit (about 11% of the holding). I sold at £10.51.

As others have said, my key concern was the amount of Tesla, though in portfolio terms I hold more RCDO. The difference is that I can increase or reduce that single share holding. Which obviously I can't directly do with Tesla as a component of SMT.

Where shall I reinvest? I believe that I shall pick PHI*.

*Why didn't I reinvest when I sold? Well the sale was a "limit" order, triggered by the price.

[UncleEbenezer]

Well my SMT holding hit 11% of my portfolio.

So I've sold a bit (about 11% of the holding). I sold at £10.51.

Oh my. Is this how early holders of Berkshire Hathaway felt?

I wondered if it was sticking at £10 as people took profits suppressing any further rise. But it seems not!

[MaraMan]

Having sold a third of my holding in SMT in July as it had become too large a part of my portfolio, it's growth since then has meant that again it is becoming too large . Think I will hold all my SMT for the time being though.
I bought some Blue Whale and Smithson with the funds from SMT, not a recommendation by any means, but they have done pretty well.

MM

[Dod101]

Scottish Mortgage £10.72. Who would have that?

Dod

[bluedonkey]

Scottish Mortgage £10.72. Who would have that?

Dod

Yeh. Some guy posted this months ago: "Current share price £7.15. Wow!"

[scrumpyjack]

umm. I think this will carry on for awhile but it's now 20% of my equities and 40% of my pension fund.

Usually if I don't know what to do, I do nothing so inertia rules the waves again!

I know nobody goes broke taking a profit, but one can miss huge gains by not just letting the winners run.

[Bouleversee]

umm. I think this will carry on for awhile but it's now 20% of my equities and 40% of my pension fund.

Usually if I don't know what to do, I do nothing so inertia rules the waves again!

I know nobody goes broke taking a profit, but one can miss huge gains by not just letting the winners run.

Lucky you. It's only a tiny fraction of mine which has a lot of red in it. What percentage gain on yr cost price?

[bluedonkey]

Even with the big jump in the share price, SMT is only just over 3% of my total portfolio. However, I do think of it in the same grouping as my holding in Fundsmith which is just over 6%, so a total of nearly 10%. Still, I am not in top slicing territory. Would love to be!

[Dod101]

I have more records than I thought I had and have just been tracking Scottish Mortgage. I first bought my current holding in 2008 in the midst of the doom and gloom of the financial crisis at £6.6978 in old money because they had a 5 for 1 split in 2014 so that equates to £1.34. It promptly halved in value in that year and the following year I bought a few more. It was then untouched until I extracted more than my original purchase price in 2015. That is the basis of my holding today. This year I have sold down 3 times and it remains my biggest holding at about 8% of my total portfolio and well above its monetary value at 1 January 2020. This last couple of years have been quite remarkable and it is just about an eight bagger for me. Had they bought later in 2008 than me it could easily have been a ten bagger for some. Most of the growth though has come just in the last three years. 3 years ago it was around £3.40.

Wish all my investments were like that!

[scrumpyjack]

umm. I think this will carry on for awhile but it's now 20% of my equities and 40% of my pension fund.

Usually if I don't know what to do, I do nothing so inertia rules the waves again!

I know nobody goes broke taking a profit, but one can miss huge gains by not just letting the winners run.

Lucky you. It's only a tiny fraction of mine which has a lot of red in it. What percentage gain on yr cost price?

Like Dod I bought the personal holding in 2008 at an adjusted 136p. The pension fund holding in March 2017 for 367p

Also bought ages ago for my children.

Fortunate that my pension fund has enhanced protection taken out in 2006!

Don't worry there have been plenty of disasters too along the way!