Scottish Mortgage heading for where

[mark88man]

Hello

I reinvested in a basket of IT when I moved my company group pension/plan to my SIPP around this time last year

SMT has been amongst my better performers (unlike SERE as although the income is nice the capital position is shocking). I enjoy reading this board, as an amateur it gives me both confirmation bias and information !! My decision is to rebalance or let my winners run (I am wary of not missing some returns if it heads South again - as has been discussed before).

Does anybody have any thoughts or updates on their own thinking.

Much appreciated
Mark

[kempiejon]

Does anybody have any thoughts or updates on their own thinking.

I have bought and sold SMT a couple of times over the past 5 or 6 years. I liked the techie theme, and stayed for the rise adding on the way up. I saw my holding double and then some and took a profit in my tax planning, selling at it all 1400 which looks clever with hindsight but wasn't. I re bought a smaller amount at a lower price in my SIPP and would not get back as much as I paid for it should I sell now. It'll stay where it is for now. I think the theme is still good and I've just checked the top 10 holdings and they look like shares I'm inclined to keep.

[clissold345]

...
Does anybody have any thoughts or updates on their own thinking.
...

I have a smallish investment in SMT. SMT is still supposedly on a 10% discount (they have sizeable investments in unlisted companies). SMT seems to have occasional dramatic rises and dramatic falls. It's had a good run up (from dismal lows) in the last four months or so. If it has another similar runup this year or next year, I'll probably sell half.

[scrumpyjack]

I have a large holding bought as low as 135p. I have kept them throughout and obviously it was a mistake not to get out at 1500p, particularly as I thought at that time that they were over exposed to China and were mistaken not to recognize the huge political risks there. Still inertia has always been the driving force of my investment strategy and has usually, in the long run, turned out to the correct.

I will hang on and my rationale for doing so is that I think their unquoted investments will come good. They have large holdings in companies like Space X and, apart from the China mistake, I still back their judgement on these things.

[mark88man]

Thanks for those updates. Sorry for delay I have been away from my laptop for a few days

[yorkshirelad1]

Times 13 May 2024
Elliott reaps reward as it retreats from Scottish Mortgage Investment Trust
https://www.thetimes.co.uk/article/elliott-reaps-reward-as-it-retreats-from-scottish-mortgage-investment-trust-fcntvmmlm (paywalled)
http://archive.today/2024.05.13-174002/https://www.thetimes.co.uk/article/elliott-reaps-reward-as-it-retreats-from-scottish-mortgage-investment-trust-fcntvmmlm (non paywalled)
https://www.sharecast.com/news/press-round-up-short-premium/tuesday-newspaper-round-up-tesco-openai-housebuilding--16771819.html

[daveh]

Final results:
https://www.investegate.co.uk/announcem ... s-/8215961

Some selected quotes from the chairman's statement:

It has been a challenging yet rewarding year for the Company set against a backdrop of volatile markets. Conflicting forces have been pulling investors in different directions. There is a sense of optimism regarding the integration of Artificial Intelligence ('AI') into business models. Meanwhile, the macroeconomic and geopolitical factors driving market anxiety are too numerous to mention. Much of this was reflected in unusual patterns of stock market returns. Gains were highly concentrated, driven by a handful of large AI enabled companies in the US, augmented by beneficiaries of strong energy prices and high interest rates.

Scottish Mortgage remains well positioned to navigate such environments. From a portfolio perspective, our long investment horizon provides the opportunity to step back from the noise. Our managers, Tom Slater and Lawrence Burns, continue to be constructive and patient owners of a diverse range of resilient companies that possess the potential to shape the future of the modern economy. It is pleasing to note that these companies continue to deliver strong operational performance and remain in robust financial health. As such, competition for capital within the portfolio remains high.


Following two years of negative returns in both NAV and share price terms, the Company posted a positive return over the past year. The strength of the share price performance, relative to the NAV, reflects the reduction in the discount (after deducting borrowings at fair value) from 19.6% to 4.5% over the year to 31 March 2024. Whilst it is pleasing to note these one-year returns, we feel that this represents too short a time frame on which to judge performance given the long-term nature of the investment strategy.

Outlook

Change drives growth. The pace and scope of transformation is accelerating, in many cases fuelled by the adoption of AI. History has shown, in such conditions, a small number of exceptional companies drive change and dominate stock market returns.


Your Managers possess a clearly defined investment philosophy that is centered on identifying these rare businesses and patiently owning them over long periods. Alongside this, your Company possesses a strong balance sheet, high conviction in the current portfolio and a commitment to facilitate trading of its shares around net asset value in normal market conditions. I believe the combination of these factors puts your Company in a strong position to maximise returns for shareholders over the coming years.

I have an interest in the dividend (in that, unlike most of my other holdings I want it to be low as I hold SMT in my GIA as my growth holding and want my non sheltered dividends to remain within the £500 dividend allowance).

The Board recognises the importance to some shareholders of a predictable and growing dividend. The Company is an 'AIC Dividend Hero' having increased its dividend for 41 consecutive years. The Board plans to continue this trend and is recommending that this year the total dividend be increased by 3.4% to 4.24 pence per share (2023 - 4.10 pence per share). Assuming approval by shareholders, a final dividend of 2.64 pence per share will be paid on 11 July 2024.

Ex and record dates of 13/14 June

[gadgetmind]

I've held Scottish Mortgage for just over a year. I'm 95% passive but have 5% of each portfolio for active investment, which is nowadays mainly acquiring "unloved" ITs on big discounts and waiting for them to recover. TBH this has worked so well over the last decade that I'm tempted to move up to 10%.

I'm looking around for another candidate, and just went for TRY (TR Property) in one portfolio, but may well just continue to hold SMT for now.

[Lootman]

I've held Scottish Mortgage for just over a year. I'm 95% passive but have 5% of each portfolio for active investment, which is nowadays mainly acquiring "unloved" ITs on big discounts and waiting for them to recover. TBH this has worked so well over the last decade that I'm tempted to move up to 10%.

I'm looking around for another candidate, and just went for TRY (TR Property) in one portfolio, but may well just continue to hold SMT for now.

There is the quirky Lindsell Train (LTI) at about a 19% discount to NAV. For years it was consistently at a premium, sometimes a large premium.

It holds a 25% or so interest in its private parent fund management company and so is not a pure play on its listed holdings. But Train has a solid record as a fund manager and at around 800 a share, compare to an all-time high of 2,000, you might find this gives you all the excitement you can throw a stick at.

I hold SMT, TRY and LTI, and I do not have a lot of ITs.

[gadgetmind]

Thanks, and I do have a tab open for LTI. It's their large holdings in their parent that put me off, but maybe it shouldn't?

I've got about £28k in SMT so could go 50:25:25 between this and Caledonia and LTI? There is probably no right answer and this is part of my portfolio marked as "Themes" in my spreadsheet but I have mused on renaming as "It seemed like a good idea at the time". Though I suspect that if I dug into the numbers, buying ITs on big discounts and then forgetting about them for a few years is a decent strategy if you don't need the income or bet the farm.

[mark88man]

The strategy of look for big discounts and wait for improvement seems good until the discount gets bigger (SERE).

SMT and SERE combined together over the last 15 months still gave me a net gain but I suspect with SERE the return to a lower discount may take a while. Although its dividends are good.

I now have a dozen ITs forming the bulk of my SIPP and plan to leave all for a few years. I believe SMT will continue to do well and hope that the thesis around large discounts turns true. My belief is that within the SMT investments is AI that will return like TESLA did for SMT earlier, I may be over optimistic

[Mike4]

Thanks, and I do have a tab open for LTI. It's their large holdings in their parent that put me off, but maybe it shouldn't?

I've got about £28k in SMT so could go 50:25:25 between this and Caledonia and LTI? There is probably no right answer and this is part of my portfolio marked as "Themes" in my spreadsheet but I have mused on renaming as "It seemed like a good idea at the time". Though I suspect that if I dug into the numbers, buying ITs on big discounts and then forgetting about them for a few years is a decent strategy if you don't need the income or bet the farm.

I think my whole portfolio should be named this. I can barely think of a share I hold that hasn't tanked since I bought it.

And yes I hold a few Scottish Mortgage.

[gadgetmind]

I don't tend to go for many individual shares nowadays after 10+ years of the thrills and spills of the classical HYP (high yield portfolio). My HYP did massively better than the FTSE 100 TR, but I put this down to good luck on entry point rather than anything else.

I've sold 50% of my SMT and I've gone roughly half and half on CLDN and LTI. My ISA now has 12 holdings, with the vast bulk in global ETFs with a bias towards income and away from the UK. My "active fun" aka "themes" aka "Good idea at the time" is now sitting at 7% and I suspect any further trading will be 2-3 years hence if/when any discounts shrink.

I nearly didn't go for the LTI after I spotted £800 plus per share and a massive spread: who do they think they are, Personal Assets Trust?