Perpetual Income, Temple Bar, Murray Income Trust

[Noiseboy]

Good Morning,

I've held Perpetual Income and Growth (PLI) and Temple Bar (TMPL) in my SIPP for a number of years now.
Currently they are both at the bottom of the pile at a decline of around -38%. I'm wondering whether to cut my losses but I realise
they have both sacked their managers and are trading at a decent discount at the moment.

I'm interested to canvas opinion on whether they are worth hanging on to or whether there are perhaps better options in UK Equity Income.

The rest of the SIPP portfolio is CLDN, SMT, AAIF, EAT, NCYF, HICL, HRI, BRWM, SLI, SSON, SLPE, JMF, JPS, HSL.

Moderator Message:
A small group of related threads merged into one. Please don't start a new one. Thanks - Chris.

[toofast2live]

Both are “value” investors and value has been trashed by quality and growth, picked by fundsmith and Lindell train, over the last few years.

Flog ‘em and you can guarantee value will outperform over the next few years....

[Dod101]

By coincidence I have just sold my holding in Edinburgh IT, another who sacked Mark Barnett (like Perpetual). I also hold Temple Bar which I am still looking at. I am a bit reluctant to sell until I see who they appoint as they have not yet actually sacked their current manager, but they are seeking applicants (including the current lot). UK Equity Income ITs are struggling at the moment. I am actually thinking of moving back into an individual share, probably a utility.

I appreciate that toofast2live is probably not entirely serious and if you believe that you will never sell anything. If I were the OP if he does sell, I would just spread the proceeds around his existing holdings.

Dod

[MaraMan]

Whilst not disgreeing with the others I think it depends on your time horizon. If you are planning long term then maybe there is some merit in holding on until the investment landscape changes and these value shares come back into fashion. By selling now you are crystalising a significant loss and maybe buying into growth shares at their peak. I guess if it was me I would probably split my strategy, sell half and retain half. It looks like you have a fairly well diversified portfolio so maybe their impact has been mitigated by SMT etc. I expect eventually IT's like SMT will stop their meteoric rise, maybe reverse, and the currently unfashionable sectors of the market have their day.
If however your timeframe is shorter, say sub 5 years, then sell out and try and get on the back of the growth shares wave.
Good luck with it anyway.
MM

[scotia]

Good Morning,

I've held Perpetual Income and Growth (PLI) and Temple Bar (TMPL) in my SIPP for a number of years now.
Currently they are both at the bottom of the pile at a decline of around -38%. I'm wondering whether to cut my losses but I realise
they have both sacked their managers and are trading at a decent discount at the moment.

I'm interested to canvas opinion on whether they are worth hanging on to or whether there are perhaps better options in UK Equity Income.

The rest of the SIPP portfolio is CLDN, SMT, AAIF, EAT, NCYF, HICL, HRI, BRWM, SLI, SSON, SLPE, JMF, JPS, HSL.

If you are determined to continue your investment in UK Equity Income, a sector which is currently out of favour, then it may be wise to introduce a bit of growth into it. My largest IT investment in this area is currently Finsbury Growth and Income Trust (FGT).
Both PLI and TMPL seem to be only at the stage of looking for new management teams, so its difficult to predict what will happen.

[JohnW]

Did you make any written notes when you bought those two, or have any recollection of your investing plan when you bought them? Might be worth refreshing your memory of why you bought them and how you would handle them.
Would you have written 'I'll only sell these when I'm desperate for some cash or they're trading at a substantial discount'?

[Dod101]

I at least mentally do what JohnW is suggesting and my reason (and I imagine the OPs reason) was to get some reliable dividend income. That has been achieved (so far) but at the cost of capital. I have got some decent growth ITs alongside such as Finsbury, Smithson and Scottish Mortgage and I suppose you could argue that they compensate for the lack of capital growth with the income ITs.

Dod

[Noiseboy]

Thanks for all the replies, Very constructive!

Yes, The main original reason for these purchases were as Dod said, some reliable dividend income for the SIPP (both Quarterly now)

I guess neither have decreased dividends thus far but one cannot rule out cuts in the future. I note that Temple Bar are possibly going to change
the remit more towards sustainable value. Perhaps better to sit tight and await further news for the moment.
Hopefully I have time on my side in the SIPP as I am 42.

[Hariseldon58]

The simplest way to judge these matters is “Would I buy Perpetual Income and Temple Bar, with new money, at the present prices/discount?”

If the answer is yes, then you hold, if they are on a list of possibles your would seriously consider, then its probably a hold...

Any other answer is a SELL.

[Dod101]

The simplest way to judge these matters is “Would I buy Perpetual Income and Temple Bar, with new money, at the present prices/discount?”

If the answer is yes, then you hold, if they are on a list of possibles your would seriously consider, then its probably a hold...

Any other answer is a SELL.

If only investing life were that simple. There is another way which is a HOLD and not just 'if they are on a list of possibles'. In fact for me Temple Bar is a HOLD, partly because I currently hold it but also because I would like to see what any new manager might do or at least whether the directors will be happy to change the remit for any new manager (in the same way that Witan Pacific's Directors have done.

I do not have a lot of confidence in the Edinburgh new managers, Majedie, so I have sold.

Dod

[G3lc]

The simplest way to judge these matters is “Would I buy Perpetual Income and Temple Bar, with new money, at the present prices/discount?”

If the answer is yes, then you hold, if they are on a list of possibles your would seriously consider, then its probably a hold...

Any other answer is a SELL.

If only investing life were that simple. There is another way which is a HOLD and not just 'if they are on a list of possibles'. In fact for me Temple Bar is a HOLD, partly because I currently hold it but also because I would like to see what any new manager might do or at least whether the directors will be happy to change the remit for any new manager (in the same way that Witan Pacific's Directors have done.

I do not have a lot of confidence in the Edinburgh new managers, Majedie, so I have sold.

Dod

How interesting, is your lack of confidence in Majedie to do with past performance, culture or lack of ability to foresee the future, or anything else relevant ?

[scotia]

How interesting, is your lack of confidence in Majedie to do with past performance, culture or lack of ability to foresee the future, or anything else relevant ?

The past performance of majedie has been discussed elsewhere.
viewtopic.php?f=54&t=23461&p=309422&hilit=majedie#p309422
And on that basis I can fully understand a lack of confidence.

[Dod101]

How interesting, is your lack of confidence in Majedie to do with past performance, culture or lack of ability to foresee the future, or anything else relevant ?

The past performance of majedie has been discussed elsewhere.
viewtopic.php?f=54&t=23461&p=309422&hilit=majedie#p309422
And on that basis I can fully understand a lack of confidence.

Looking back at the thread you highlighted, it is quite interesting and there is nothing in it that In posted anyway that I would now disagree with.

Having just sold Edinburgh, I will now hang on to Temple bar and see what they do about their manager.

Dod

[Mememe]

The thing for me is that I’m not entirely sure the uk equity space is just ‘out of favour’. I’m more inclined to think it’s packed with old world companies, in old world sectors, that are slowly dieing a death. I sold all my Uk only investments over the last couple of years. Not because of concerns around the uk economy but because I look at the underlying holdings and I’m totally underwhelmed.

My philosophy is if in doubt buy an all world tracker. You get a spread of value and growth but don’t have too much of the dross that makes up the UK equity market (or at least the ftse 100)

[Dod101]

The thing for me is that I’m not entirely sure the uk equity space is just ‘out of favour’. I’m more inclined to think it’s packed with old world companies, in old world sectors, that are slowly dieing a death. I sold all my Uk only investments over the last couple of years. Not because of concerns around the uk economy but because I look at the underlying holdings and I’m totally underwhelmed.

My philosophy is if in doubt buy an all world tracker. You get a spread of value and growth but don’t have too much of the dross that makes up the UK equity market (or at least the ftse 100)

I am not sure that you are wrong but I am not so sure that you are so right as to sell 'all my UK only investments'. I do not know your definition of 'UK only investments' anyway. The fact is that we have some good worldwide investment companies in the form of the pharmas, tobacco, banks in the form of HSBC, Unilever, Reckitt Benckiser, Shell, and the likes of Schroder but then we may be struggling. We certainly lack the FANGS, but do not knock the UK financial sector.

Dod

[EthicsGradient]

I am not sure that you are wrong but I am not so sure that you are so right as to sell 'all my UK only investments'. I do not know your definition of 'UK only investments' anyway. The fact is that we have some good worldwide investment companies in the form of the pharmas, tobacco, banks in the form of HSBC, Unilever, Reckitt Benckiser, Shell, and the likes of Schroder but then we may be struggling. We certainly lack the FANGS, but do not knock the UK financial sector.

Dod

But the tobacco sector has a product which kills its users, and so is under long-term pressure to go out of business (both from regulating governments and, you know, killing its consumers), and the world financial sector hasn't exactly shown itself to be competent, or honest, over the past 15 years. Many have survived by being 'too big to fail', and so being propped up by governments where necessary. Shell's main product is also a long-term threat to the world, and their future depends on moving to other forms of energy providing; they haven't looked that nimble so far.

[Dod101]

The point I was trying to make was that there are very few 'UK only' investments around. I can only think of Primary Health Properties (and they now invest in the Republic of Ireland) and maybe a few of the utilities.

I agree with you about tobacco as a dying industry in I suppose every sense of the world, but not Shell which is Anglo Dutch anyway and is as international a company as we are going to find. It is I am sure well aware of the need to develop away from oil and indeed it is doing so.

If you are really serious in your comments then maybe investing is not for you. We could find things to be critical of with almost any company you care to name.

Dod

[Mememe]

The thing for me is that I’m not entirely sure the uk equity space is just ‘out of favour’. I’m more inclined to think it’s packed with old world companies, in old world sectors, that are slowly dieing a death. I sold all my Uk only investments over the last couple of years. Not because of concerns around the uk economy but because I look at the underlying holdings and I’m totally underwhelmed.

My philosophy is if in doubt buy an all world tracker. You get a spread of value and growth but don’t have too much of the dross that makes up the UK equity market (or at least the ftse 100)

I am not sure that you are wrong but I am not so sure that you are so right as to sell 'all my UK only investments'. I do not know your definition of 'UK only investments' anyway. The fact is that we have some good worldwide investment companies in the form of the pharmas, tobacco, banks in the form of HSBC, Unilever, Reckitt Benckiser, Shell, and the likes of Schroder but then we may be struggling. We certainly lack the FANGS, but do not knock the UK financial sector.

Dod

When I say UK only I mean investments trusts or funds that buy UK listed shares only

Yes they earn a lot of revenue abroad but that doesn’t mean they aren’t placed in stagnant sectors.

Tobacco, banks, oil companies, mining. Not for me

I can think of a handful of UK listed shares I’d want to hold, two of which you’ve named. For me there aren’t enough decent UK listed shares to warrant having a UK specific fund. If some shares are worth holding, like Unilever, then that will be included in an all world tracker and/or can be included in a trust/fund with a global mandate, I’ll leave that to the manager but I certainly won’t want to restrict him to fishing in the Ftse 100 pond (or 250 for that matter)

[Noiseboy]

Well looks as if PLI will soon be no more and become Murray Income.
I think worth sticking around to mop up the Special Dividends at least!

[Dod101]

Well looks as if PLI will soon be no more and become Murray Income.
I think worth sticking around to mop up the Special Dividends at least!

Have you news that would be of interest to others?

Dod