Monks Inv Trust

[richfool]

For anyone interested in Monks, I note the latest Half Yearly report is out, which includes reference to their portfolio changes:

https://www.investegate.co.uk/monks-inv ... 00039781G/

[scrumpyjack]

Thanks, recently topped up my holding. Interesting to see that apart from the tech holdings they have bought BHP and Rio. They must share Goldman's view that the commodity price cycle is starting a major up trend. Not so sure about their upping their Ryanair holding. Maybe my dislike of Mr O'Leary is clouding my judgement?

[77ss]

Thanks, recently topped up my holding. Interesting to see that apart from the tech holdings they have bought BHP and Rio. They must share Goldman's view that the commodity price cycle is starting a major up trend. Not so sure about their upping their Ryanair holding. Maybe my dislike of Mr O'Leary is clouding my judgement?

One of my larger IT holdings.

I too was very interested in the RIO/BHP purchases as RIO is my largest individual holding. With a current yield of about 6%, capital growth on top would be a bonanza. I had been contemplating a top-slice (being rather overweight) - maybe I'll hang on.

[Dod101]

Thanks, recently topped up my holding. Interesting to see that apart from the tech holdings they have bought BHP and Rio. They must share Goldman's view that the commodity price cycle is starting a major up trend. Not so sure about their upping their Ryanair holding. Maybe my dislike of Mr O'Leary is clouding my judgement?

One of my larger IT holdings.

I too was very interested in the RIO/BHP purchases as RIO is my largest individual holding. With a current yield of about 6%, capital growth on top would be a bonanza. I had been contemplating a top-slice (being rather overweight) - maybe I'll hang on.

The results are reassuring but I wonder if it is just a little too close to Scottish Mortgage to hold both?

Dod

[scrumpyjack]

Monks is only 1.4% of the family portfolio but if it became 18.5% as SMT has done, then yes that might be too concentrated.

Still compared with holding individual shares these trusts are very much wider spread and so lower risk IMO.
The risk must be much much greater with some of the portfolios listed under the HYP where a few Carillions could wreak havoc. At least Arcadia was privately held by Phil and his wife as I understand it!

[MaraMan]

Thanks, recently topped up my holding. Interesting to see that apart from the tech holdings they have bought BHP and Rio. They must share Goldman's view that the commodity price cycle is starting a major up trend. Not so sure about their upping their Ryanair holding. Maybe my dislike of Mr O'Leary is clouding my judgement?

One of my larger IT holdings.

I too was very interested in the RIO/BHP purchases as RIO is my largest individual holding. With a current yield of about 6%, capital growth on top would be a bonanza. I had been contemplating a top-slice (being rather overweight) - maybe I'll hang on.

The results are reassuring but I wonder if it is just a little too close to Scottish Mortgage to hold both?

Dod

I take the point but I very much like Baillie Gifford and so am happy to hold fairly large amounts of both. Monks is a little more diversified I think and it's growth although not as meteoric at Scottish Mort, is still very acceptable and it is my second best performing IT investment. It has smaller holdings in the big "tech" companies and none, I believe, in Tesla. Anyway I like them both so have stuck with them for a while now.

MM

[Dod101]

One of my larger IT holdings.

I too was very interested in the RIO/BHP purchases as RIO is my largest individual holding. With a current yield of about 6%, capital growth on top would be a bonanza. I had been contemplating a top-slice (being rather overweight) - maybe I'll hang on.

The results are reassuring but I wonder if it is just a little too close to Scottish Mortgage to hold both?

Dod

I take the point but I very much like Baillie Gifford and so am happy to hold fairly large amounts of both. Monks is a little more diversified I think and it's growth although not as meteoric at Scottish Mort, is still very acceptable and it is my second best performing IT investment. It has smaller holdings in the big "tech" companies and none, I believe, in Tesla. Anyway I like them both so have stuck with them for a while now.

MM

I like Baillie Gifford as well and the record of both trusts is very good. Monks is maybe a little more conservative and mainstream so it could be that they fit well. In fact were it not for the obvious comparison with SMT we would all be very pleased indeed with Monks.

Dod

[richfool]

Thanks, recently topped up my holding. Interesting to see that apart from the tech holdings they have bought BHP and Rio. They must share Goldman's view that the commodity price cycle is starting a major up trend. Not so sure about their upping their Ryanair holding. Maybe my dislike of Mr O'Leary is clouding my judgement?

Yes, my thoughts entirely.

I recently added BERI (Blackrock Energy & Resources Income trust) to increase my exposure to miners, commodities and renewable energy. But, ... I didn't like seeing Monks increasing its exposure to RyanAir, even though they may be looking well further into the future beyond Covid.

I too am happy to hold both SMT and Monks. It increases my exposure in some key areas whilst also broadening diversification of holdings and geographies,and adds some diversification of managers (even though both trusts are in the same stable).

PS. I also have some further overlap by holding USA from the same BG stable.

[Dod101]

It quite amuses me to see the criticism of the holding in Ryanair. Of course they are looking to the future and what better time to by an airline than now? When I buy a holding in a big generalist trust I am as much as anything else buying the judgement of the manager and if you are going to second guess him all the time better find another one. Whether Ryanair will prove a better buy than say Easyjet I am not competent to say and so I would trust the manager's judgement.

Dod

[richfool]

It quite amuses me to see the criticism of the holding in Ryanair. Of course they are looking to the future and what better time to by an airline than now? When I buy a holding in a big generalist trust I am as much as anything else buying the judgement of the manager and if you are going to second guess him all the time better find another one. Whether Ryanair will prove a better buy than say Easyjet I am not competent to say and so I would trust the manager's judgement.

Dod

Well, my comment and thoughts apply to all airlines really, as I think, even post-covid, there is unlikely to be the same demand for air travel as before. I feel there will be a something of a reappraisal of air travel, for a number of reasons, not least the environmental implications. But yes, you're right, I don't like RyanAir because of the provocative comments their CEO so often makes, such as the one about passengers paying to use the toilets, and not least the adverse reviews about the airline and its customer service. I prefer to invest in quality, not cowboys.

[scrumpyjack]

Of course the reason I put some of my portfolio into investment trusts is that I accept that my judgement on individual companies may sometimes be wrong (as has indeed proved to be so) and so I entrust others to run some of my investments to reduce the risk of my portfolio suffering catastrophically if I do get it wrong.

That doesn't mean I can't question some of the judgements the managers make, but still be content to let them make them.

As for airlines, Warren Buffet famously hated airline stocks for decades and I recall some comment of his about airlines always losing their shareholders money in the end.

Eventually he accepted he might be wrong and invested in airlines. He subsequently found he had not been wrong and dumped them all.

As I said the particular thing I don't like about Ryanair is it's seemingly very unpleasant CEO, which often does not bode well for the company. Perhaps Ryanair will be OK, and I will let BG make their judgement. It is a small investment in the overall picture.

[Dod101]

Don't get me wrong. I would never invest in any airline, because even in normal times it is either feast or famine. So many moving parts, Quite apart from a high load factor just to break even (although admittedly after that nearly all the subsequent revenue is profit) there is the cost of fuel, often heavily unionised staff and so on.

I suspect that Monks investment in Ryanair is opportunistic rather than the prospect of a long and happy relationship with them.

Dod

[scrumpyjack]

Don't get me wrong. I would never invest in any airline, because even in normal times it is either feast or famine. So many moving parts, Quite apart from a high load factor just to break even (although admittedly after that nearly all the subsequent revenue is profit) there is the cost of fuel, often heavily unionised staff and so on.

I suspect that Monks investment in Ryanair is opportunistic rather than the prospect of a long and happy relationship with them.

Dod

I quite agree. The Ryanair holding was only 1.7% of their assets at 31/10

Their website says

"Monks Investment Trust aims for long-term capital growth which takes priority over income. This is pursued through applying a patient approach to investment, principally from a differentiated, actively managed global equity portfolio containing a diversified range of growth stocks.

We are drawn to businesses addressing a particular ‘crisis’ in a novel manner which can help to reduce costs and/or produce a radically improved quality of service."

Presumably the Ryanair holding comes under the second paragraph, but I'm not sure how it fits in with the first paragraph, other than that Ryanair does not pay dividends!

[Dod101]

Should have checked the half yearly Report just published. Inter alia, it says,

''Thirdly, the manager invested in a handful of companies where near-term demand looks bleak........... Monks' position in Ryanair, the low-cost airline, has twice been increased in the period, underpinned by the belief that the company is well placed to take market share whilst others retrench. Its relentless focus on efficiency affords the business a much higher tolerance of challenging operating conditions. Ryanair should emerge from the crisis stronger than it entered it............ ''

I guess that explains their thinking but whether we agree or not is up to the individual investor. I would not bet against the managers. I might even try to find same cash to buy into Monks.

Dod

[richfool]

Somewhat off topic, but this illustrates the point about budget airlines antagonising customers with their "tight-fisted" corner cutting tactics. Note the customers comments after the article:

EasyJet to charge for overhead luggage lockers

https://www.bbc.co.uk/news/business-55156512

[stevensfo]

Somewhat off topic, but this illustrates the point about budget airlines antagonising customers with their "tight-fisted" corner cutting tactics. Note the customers comments after the article:

EasyJet to charge for overhead luggage lockers

https://www.bbc.co.uk/news/business-55156512

I liked the comment: The budget airlines have made flying affordable for many people who couldn't before. It used to be super expensive to go anywhere. If you don't like the service use someone else.

I still remember working in France and getting the bus/ferry/bus to Victoria coach station, then a train up north, before British Rail was privatised. Planes were very expensive! The problem is that these memories fade and now it really is a race to the bottom. People forget how expensive it used to be.

Quite funny, though, that people moan about planes, but I hear very little about train fares in the UK, which must be the most expensive and complicated in the world!


Steve

[Arborbridge]

Somewhat off topic, but this illustrates the point about budget airlines antagonising customers with their "tight-fisted" corner cutting tactics. Note the customers comments after the article:

EasyJet to charge for overhead luggage lockers

https://www.bbc.co.uk/news/business-55156512

I liked the comment: The budget airlines have made flying affordable for many people who couldn't before. It used to be super expensive to go anywhere. If you don't like the service use someone else.

I still remember working in France and getting the bus/ferry/bus to Victoria coach station, then a train up north, before British Rail was privatised. Planes were very expensive! The problem is that these memories fade and now it really is a race to the bottom. People forget how expensive it used to be.

Quite funny, though, that people moan about planes, but I hear very little about train fares in the UK, which must be the most expensive and complicated in the world!


Steve

I remember going to Iceland in 1965, and only one member of our expedition was wealthy enough to fly. The rest went on a mixed cargo/passenger ship from Leith. Got caught in a storm, huge seas, thunder and lightning, the smell of diesel was horrendous and most people were sick.

However, I remember this fondly as an experience - how many airflights do we remember? It's when things are a little tough that we "grow" and cherish those memories. When everything goes smoothly, it just gets forgotten.

Arb.

[Arborbridge]

Monks is only 1.4% of the family portfolio but if it became 18.5% as SMT has done, then yes that might be too concentrated.

Still compared with holding individual shares these trusts are very much wider spread and so lower risk IMO.
The risk must be much much greater with some of the portfolios listed under the HYP where a few Carillions could wreak havoc. At least Arcadia was privately held by Phil and his wife as I understand it!

Quite true - I'm always pointing out that HYP's are quite concentrated and therefore would be classed as high risk. That's quite apart from whether the selection criteria take on more risk. (Let's not discuss!)

Monks has been an excellent holding in my wife's portfolio - but it wasn't always so. It was once a duffer I would have passed over.

Arb.

[Arborbridge]

Should have checked the half yearly Report just published. Inter alia, it says,

''Thirdly, the manager invested in a handful of companies where near-term demand looks bleak........... Monks' position in Ryanair, the low-cost airline, has twice been increased in the period, underpinned by the belief that the company is well placed to take market share whilst others retrench. Its relentless focus on efficiency affords the business a much higher tolerance of challenging operating conditions. Ryanair should emerge from the crisis stronger than it entered it............ ''

I guess that explains their thinking but whether we agree or not is up to the individual investor. I would not bet against the managers. I might even try to find same cash to buy into Monks.

Dod

I might top up my wife's holding too!

Choosing a big IT like Monks is a bit like voting in a general election. You might agree with some of the policies (i.e. share choices), but not all of them. So one has to take an overall view - particularly of the performance, which in Monks case compares well.

Arb.

[Dod101]

Somewhat off topic, but this illustrates the point about budget airlines antagonising customers with their "tight-fisted" corner cutting tactics. Note the customers comments after the article:

EasyJet to charge for overhead luggage lockers

https://www.bbc.co.uk/news/business-55156512

Actually I think the size of bags being allowed as hand luggage was getting ridiculous and I should think that this is a move to streamline things a bit. Easyjet is not an operator I use much but I completely agree with their objectives.

Not a lot to do with Monks as an investment mind you.

Dod