Strategic Equity Capital.

[Parky]

I have just bought some SEC, as a long term holding. I wanted to invest in small cap shares, and like their methodical approach to evaluating opportunities, which I hope will avoid disasters. They had a good run a few years back, not so good more recently, but the shares seem to be picking up nicely with the general market rise. May be a chance of outperformance if the 15% discount to NAV can be reduced.
Any comments?

[TUK020]

Parky,
a comment that does not have any rational backing, and is probably not helpful at all:

I have an aversion to any fund, trust or investment proposal which contains the word "strategic".

"To assign a power to strategy independent of tactical results is to err" (or something close, from memory) Karl von Clausewitz, On War

[Pendrainllwyn]

SEC's investor presentation is well presented and argued. A concentrated small cap portfolio is riskier and less liquid than most and for that reason may always trade at a discount but I could see this in a well diversified portfolio. My approach would be to take a close look at their 19 holdings or at least the larger ones and see if they were companies I would want to invest in. I am not sure I have the time but would like to.

Best of luck with it.

Pendrainllwyn

[scotia]

SEC seems to have hit a high in July 2015 and has been going sideways and slightly backwards ever since. It also seems to hold substantial weights in individual stocks - a high risk in small cap. E.G. I know to my cost that one of its substantial holds - Proactis Group - has plummeted recently. There are several small cap funds and ITs that have easily out performed it over the past few years - including Amati UK Smaller Cos, Marlborough UK Micro Cap Growth, AXA Framlington UK Smaller Cos and Blackrock Smaller Cos IT - all of which I hold (I believe in diversification!).

[Parky]

SEC's investor presentation is well presented and argued. A concentrated small cap portfolio is riskier and less liquid than most and for that reason may always trade at a discount but I could see this in a well diversified portfolio. My approach would be to take a close look at their 19 holdings or at least the larger ones and see if they were companies I would want to invest in. I am not sure I have the time but would like to.

Best of luck with it.

Pendrainllwyn

Pendrainllwyn (and Scotia).

I appreciate it is a higher risk than most of my other holdings, which is why it is less than 2% of the portfolio, which is mainly (perceived) safer stuff, including nearly 30% at the moment in capital preservation trusts Personal Assets, Capital Gearing and Ruffer.

Interesting discussion point about "taking a closer look at their 19 holdings ...etc."
I buy Investment Trusts so that I don't have to do that work - I pay the ITs to do it for me. If I researched the underlying holdings, I would buy the ones I liked directly. Time will tell , but I will certainly keep a close eye on it.

[StOmer]

I think the 'good run' was under the previous manager Stuart Widdowson who left for Odyssean. If I have this right then RIT Capital Partners is a major partner with SEC whilst Chris Mills of Harwood is backing Odyssean.

[Parky]

I think the 'good run' was under the previous manager Stuart Widdowson who left for Odyssean. If I have this right then RIT Capital Partners is a major partner with SEC whilst Chris Mills of Harwood is backing Odyssean.

I checked up, and, yes, RCP has £22million invested in SEC, 0.7% of their assets (June 2018 half-year report). That is heartening, as I'm sure they know what they are doing much better than I do!

[Pendrainllwyn]

Interesting discussion point about "taking a closer look at their 19 holdings ...etc."
I buy Investment Trusts so that I don't have to do that work - I pay the ITs to do it for me. If I researched the underlying holdings, I would buy the ones I liked directly. Time will tell , but I will certainly keep a close eye on it.

Yes, completely understood. I suspect most people think likewise. Unfortunately for me I enjoy the work! Whilst I find the approach they outline very appealing, looking at the individual holdings helps me better understand what investments that translates into. Having done that I would feel more comfortable letting them get on with it.

Again best of luck with it,
Pendrainllwyn

[OhNoNotimAgain]

That is heartening, as I'm sure they know what they are doing much better than I do!

That is a resounding endorsement of its marketing effort and its corporate literature.

Investors struggle with the concept that if they understand compound interest and that no one can predict the future they know about as much as any "professional " investor.