Scottish Mortgage heading for where

[thehaggistrap]

So Scottish Mortgage trust still ticking upwards...

One of the reason I like Investment Trusts is that it is easier to be less emotional about your investment. Let the fund managers take the hard decision when to sell (or buy) and take a longer term view. This approach seems to work better for me than individual stocks where spotting the bottom or top is a really difficult thing to do.

I am not about 150% profit on SMT over a period of several years. Very happy with the trust and its performance. Don't need the money (... and not sure where else I would invest it either). So do you just leave the profits invested to compound longer term ? I guess even with an investment trust it is still tricky to know when to take profit. Or just let your winners keep on running ?

[ADrunkenMarcus]

I guess even with an investment trust it is still tricky to know when to take profit. Or just let your winners keep on running ?

Trust the managers.

Run, run, run!

Best wishes


Mark.

[Urbandreamer]

Personally I have decided that whenever SMT becomes more than 11% of my portfolio I shall sell 10% of my holding in it.

This is not because I have any significant doubts in the managers, just that I don't want a portfolio that is mostly one investment. Which is what I suspect might happen. I last sold in Octobre and it's getting close to where I shall sell again.

[scrumpyjack]

Personally I have decided that whenever SMT becomes more than 11% of my portfolio I shall sell 10% of my holding in it.

This is not because I have any significant doubts in the managers, just that I don't want a portfolio that is mostly one investment. Which is what I suspect might happen. I last sold in Octobre and it's getting close to where I shall sell again.

We must all do whatever we feel comfortable with. I have just let it run so it is now just over 20% of my equities, but I don't think of it as 'one investment'. They hold share in about 83 companies, though most would be in about the top 20 holdings. But that is a lot different to, for example, my holding Persimmon. That is just under 10% but that really is 'one investment' to my way of thinking

[thehaggistrap]

I guess even with an investment trust it is still tricky to know when to take profit. Or just let your winners keep on running ?

Trust the managers.
Run, run, run!
Best wishes
Mark.

Yup - I think I am with you there...
Just leave and let the fund managers make the tricky decisions.
So far it seems to be working nicely.

[Bouleversee]

Personally I have decided that whenever SMT becomes more than 11% of my portfolio I shall sell 10% of my holding in it.

This is not because I have any significant doubts in the managers, just that I don't want a portfolio that is mostly one investment. Which is what I suspect might happen. I last sold in Octobre and it's getting close to where I shall sell again.

How did the proceeds when reinvested compare with SMT''s performance in the interval?

[Urbandreamer]

Personally I have decided that whenever SMT becomes more than 11% of my portfolio I shall sell 10% of my holding in it.

This is not because I have any significant doubts in the managers, just that I don't want a portfolio that is mostly one investment. Which is what I suspect might happen. I last sold in Octobre and it's getting close to where I shall sell again.

How did the proceeds when reinvested compare with SMT''s performance in the interval?

Not too badly.

I sold SMT @ 1051 and used the proceeds to buy PHI @ 629.
I can't be bothered doing the math, but PHI is currently 835, while SMT 1332.

The same will definately NOT be the case when I next sell as I currently feel that I need more income producing shares, rather than growth/total return types.

[Dod101]

I was in the same situation as Urbandreamer. I sold three tranches of SMT last year (and they remain my biggest holding!) and with the proceeds bought SSE, 3i Infrastructure, and Toronto Dominion Bank, all for income, and added to Baillie Gifford China Growth. They have all done quite well on the capital front as well as producing what I hope will be a growing income (except obviously BG China Growth)

Dod

[Bouleversee]

Well done both of you. SMT has been about the only holding that has done well for me recently but if one could guarantee that it would be there, which last year proved was often not the case for me last year unfortunately, I'd rather increase my income than build up a higher sum for the taxman to take when I pop my clogs which may not be too far hence. The other holdings which have done well so far as price is concerned aren't paying any dividend, apart from Persimmon. I don't need to worry about any of my winners being overweight.

[MaraMan]

I have done the same as Dod and Urbandreamer, in that I sold 1/3 of my SMT holding about four months ago and which I have held since 2018, and reinvested the proceeds in Pacific Horizons IT (PHI) and Baillie Gifford China Growth (BGCG) . It just helps me feel a bit more comfortable managing the outstanding success that the SMT managers have achieved and I didn't see a reason to move away from Baillie Gifford.

MM

[DavidM13]

Personally I have decided that whenever SMT becomes more than 11% of my portfolio I shall sell 10% of my holding in it.

This is not because I have any significant doubts in the managers, just that I don't want a portfolio that is mostly one investment. Which is what I suspect might happen. I last sold in Octobre and it's getting close to where I shall sell again.

How did the proceeds when reinvested compare with SMT''s performance in the interval?

Not too badly.

I sold SMT @ 1051 and used the proceeds to buy PHI @ 629.
I can't be bothered doing the math, but PHI is currently 835, while SMT 1332.

The same will definately NOT be the case when I next sell as I currently feel that I need more income producing shares, rather than growth/total return types.

I will do the maths for you then. Your new investment rose 33% compared to the old one which rose 27%. wooohooo!!

[Bouleversee]

I considered buying BGCG a few month ago but the premium to NAV put me off. I gather that they are to issue more shares which should reduce that gap so I must find out when that is happening and how to access the offer, or is better to wait till it has happened and see which way the wind is blowing? My hunch would be the former if the price is right.

[Dod101]

I considered buying BGCG a few month ago but the premium to NAV put me off. I gather that they are to issue more shares which should reduce that gap so I must find out when that is happening and how to access the offer, or is better to wait till it has happened and see which way the wind is blowing? My hunch would be the former if the price is right.

The premium is now only about 5% the last time I looked. Ever since Baillie Gifford took on the management they have been issuing equity on a more or less daily basis. It is great business for the trust because the shares that are being issued were those bought in at about 90% of NAV just before BG took over. You may recall that there was a limited tender offer to the then existing shareholders when the change of mandate to pure China was agreed. One of the few sensible things I did last year was to buy at £4.18, just before BG took over. The new shares are being issued at about a 1% premium. I assume they will continue issuing new shares so long as there is a premium. It is slowly coming down.

If I were you, I guess i would probably be buying now for the longer term. You may otherwise wait for long enough. Just realised, both of us are well off topic.

Dod

[Bouleversee]

Oops, so we are, Dod. Perhaps I should start a new thread to ask further questions about this. I see the premium is 6.16% today, which is still quie a lot.

[Adamski]

Checking Baillie Gifford ITs, SMT is the only one at a discount (-0.1%), rest at a premium. Maybe because some are saying the time to buy has been and gone, or due to heavy weighting in risk assets (Tesla) or possibly now is the time to bag a bargain before it's next growth run.

[Dod101]

Checking Baillie Gifford ITs, SMT is the only one at a discount (-0.1%), rest at a premium. Maybe because some are saying the time to buy has been and gone, or due to heavy weighting in risk assets (Tesla) or possibly now is the time to bag a bargain before it's next growth run.

There is a reluctance in the market to push it to a premium, maybe because it has grown so big and it may just be that there is not huge demand for SMT as these levels, however illogical that may be. Buyers are apparently content not to push it to a premium, unlike say BG China Growth which is still a very small trust in comparison.

However your guess is as good as mine.

Dod

[Urbandreamer]

I will do the maths for you then. Your new investment rose 33% compared to the old one which rose 27%. wooohooo!!

Ah, but I was not expecting to gain. To be honest, while I invested in a IT that I knew to be doing well, I'd have been happy with a gain of 15%. The object was to avoid Tesla, which I regard as a great company, I just don't want too much investment in them.

If and when I next sell I'll be investing in HFEL. Absolutely no growth, but a significant income. I believe that their main holdings are in Chinese banks. So I don't want too much of them either. However they are less than 5% rather than approaching 11% of the portfolio.

[ADrunkenMarcus]

The object was to avoid Tesla, which I regard as a great company, I just don't want too much investment in them.

Perhaps someone else can find the exact quote, however I read a comment somewhere to the effect that, had SMT not been selling down their Tesla holding regularly, it would have ballooned to 30-40 percent of the portfolio (I forget the figure). SMT has, in effect, taken an enormous profit from Tesla and locked it in, deploying the proceeds elsewhere in the portfolio.

Best wishes

Mark.

[swill453]

Perhaps someone else can find the exact quote, however I read a comment somewhere to the effect that, had SMT not been selling down their Tesla holding regularly, it would have ballooned to 30-40 percent of the portfolio (I forget the figure). SMT has, in effect, taken an enormous profit from Tesla and locked it in, deploying the proceeds elsewhere in the portfolio.

Possibly the profit would have been even more enormous if they hadn't sold it down...

Scott.

[ADrunkenMarcus]

Possibly the profit would have been even more enormous if they hadn't sold it down...

Definitely, at today's prices.

Best wishes


Mark.