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Near the Bottom?

General discussions about growth strategies which focus primarily on investing for capital growth
Dod101
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Near the Bottom?

#500398

Postby Dod101 » May 14th, 2022, 10:11 am

Merwyn Somerset Webb has a few interesting comments in her article in today's FT. She tells us that according to Tom Slater of Scottish Mortgage, this year has been the worst start to a year for growth shares for 90 years, but she goes on to say that valuations are now beginning to look more realistic not just for growth stocks. Some markets, like the UK, are now at what she calls 'meaningful discounts'. it would be good to think so.

She also mentions that Scottish Mortgage is down 41% on YTD, Netflix is down 70%, Amazon and Tesla both down 40% from their highs. She says that if you are looking for long term value, some is beginning to emerge.

Personally I would have thought she is rather optimistic, what with further interest rate increases expected and the possibility of a recession, but what do I know? As a matter of fact I have just checked my year end values, and I am down well under 1% currently. That would suggest that I have a fairly conservative portfolio, which is what I like at my stage in my investing career.

Dod

CliffEdge
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Re: Near the Bottom?

#500401

Postby CliffEdge » May 14th, 2022, 10:20 am

Who is Mervyn Somerset Webb?

doug2500
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Re: Near the Bottom?

#500405

Postby doug2500 » May 14th, 2022, 10:33 am

CliffEdge wrote:Who is Mervyn Somerset Webb?


One of the better financial journalists IMO

Tends towards common sense most of the time. Also has been (maybe still is) a NED of IT's

Sorry, just noticed it should be Merryn no Mervyn. Which was probably your point!

doug2500
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Re: Near the Bottom?

#500406

Postby doug2500 » May 14th, 2022, 10:42 am

And in response to Dod....

I probably agree that there's value out there now. There's quality companies at multiples that I would consider now which have been too expensive for years previously. But it could also still halve from here so you just have to make a decision. I have dripped a bit of cash in this week but I'm largely fully invested most of the time so we're only talking about small bits and accumulated income. Nice to get some big divis during a dip though.

I think it's easy to forget that while markets can be very short sighted, they do look forward too and most problems right now seem to be of the 'known' variety unlike peak covid when everything was 'unknown'

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Re: Near the Bottom?

#500408

Postby mc2fool » May 14th, 2022, 10:47 am

doug2500 wrote:
CliffEdge wrote:Who is Mervyn Somerset Webb?

One of the better financial journalists IMO

Tends towards common sense most of the time. Also has been (maybe still is) a NED of IT's

Sorry, just noticed it should be Merryn no Mervyn. Which was probably your point!

Or Merwyn, as in the OP. :D

According to her MoneyWeek bio she's on the boards of Baillie Gifford Shin Nippon, BlackRock Throgmorton and Murray Income. https://moneyweek.com/authors/merryn-somerset-webb

NotSure
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Re: Near the Bottom?

#500410

Postby NotSure » May 14th, 2022, 11:04 am

Dod101 wrote:Merwyn Somerset Webb has a few interesting comments in her article in today's FT. She tells us that according to Tom Slater of Scottish Mortgage, this year has been the worst start to a year for growth shares for 90 years, but she goes on to say that valuations are now beginning to look more realistic not just for growth stocks. Some markets, like the UK, are now at what she calls 'meaningful discounts'. it would be good to think so.

She also mentions that Scottish Mortgage is down 41% on YTD, Netflix is down 70%, Amazon and Tesla both down 40% from their highs. She says that if you are looking for long term value, some is beginning to emerge.

Personally I would have thought she is rather optimistic, what with further interest rate increases expected and the possibility of a recession, but what do I know? As a matter of fact I have just checked my year end values, and I am down well under 1% currently. That would suggest that I have a fairly conservative portfolio, which is what I like at my stage in my investing career.

Dod


In the whole, earnings are up and prices are down, a happy state of affairs for someone in accumulation phase. I suspect you and Ms Webb are both correct - there will almost certainly be further losses, but if taking a long-term view, stuff looks almost fair value now.

YTD, I am down more than you but much less than my benchmark (cheap global trackers). Last year I switched to buying 'value' and multi-asset funds (e.g. UK Equity Income) and these have cushioned the fall (I wasn't clever enough to 'rotate into value', as in I never sold anything, just redirected my purchases). However, going forward, I'll be dripping back into more growthier things again (e.g. global trackers which are basically S&P trackers, which are basically FAGAM). I'd still be nervous about the really gung ho stuff though - e.g. SMT . Based on 2000, it was a long, long time before the high flying stocks of the late 90's recovered and of course many vanished without trace. However, those that stuck at it then were eventually very well rewarded.

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Re: Near the Bottom?

#500413

Postby BullDog » May 14th, 2022, 11:20 am

The only thing you can guarantee is that there's a 50% chance she's absolutely right. I am not sure investors in "growth stocks" are yet at the capitulation stage of the cycle where the absolute bear market bottom can usually be found. So there may well be more falls to come. But in the medium term, I do think there's absolutely opportunities arising.

Like Merrin, the chances are I am 50% right too.

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Re: Near the Bottom?

#500415

Postby richfool » May 14th, 2022, 11:22 am

My thoughts, for what they are worth, are that there is further downside to go (with growth stocks). I would think there needs to be a couple more interest rate hikes with resultant market setbacks, before the full downside with growth stocks has shaken out. I am keeping some dry powder after reducing/selling growth and technology (IT's)* late last year, and adding to alternative assets classes and defensives. I am thinking of re-deploying it in the third quarter, assuming my thoughts come to pass.

* I sold out of USA, SMT, Monks, BRGE and even MWY, but held onto BUT (Brunner) and SCIN in the growth sector.
Last edited by richfool on May 14th, 2022, 11:29 am, edited 2 times in total.

NotSure
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Re: Near the Bottom?

#500416

Postby NotSure » May 14th, 2022, 11:22 am

That's four different spellings of Ms Webb's Christian name and counting! :)

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Re: Near the Bottom?

#500424

Postby Wuffle » May 14th, 2022, 11:52 am

NotBrave enough to have a go yourself though!

W.

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Re: Near the Bottom?

#500428

Postby DrFfybes » May 14th, 2022, 11:58 am

I just moved a good chink of Cash ISAs to ii as they were maturing.

However I am holding back on investing them. I put an inheritance into equities in Feb, and since then have seen Berkshire Hathaway grow 10% and fall again, and watched some of the biggest companies in the world fluctuate but double digit percentages day by day, with knock on effects on trackers like VEVE.

Merlin [1] might be right, but given the global tightening of belts and projected drop in discretionary spend I think Netflix, Amazon, etc could have a long way to go before they recover. Tesla is a firm I won't invest in, not because I don't think it has a good future, but because a badly phrased act or treet from Musk can make the share price fluctuate like a cryptocurrency.

Paul

[1] That's five :)

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Re: Near the Bottom?

#500434

Postby AsleepInYorkshire » May 14th, 2022, 12:22 pm

Dod101 wrote:Merwyn Somerset Webb has a few interesting comments in her article in today's FT. She tells us that according to Tom Slater of Scottish Mortgage, this year has been the worst start to a year for growth shares for 90 years, but she goes on to say that valuations are now beginning to look more realistic not just for growth stocks. Some markets, like the UK, are now at what she calls 'meaningful discounts'. it would be good to think so.

She also mentions that Scottish Mortgage is down 41% on YTD, Netflix is down 70%, Amazon and Tesla both down 40% from their highs. She says that if you are looking for long term value, some is beginning to emerge.

Personally I would have thought she is rather optimistic, what with further interest rate increases expected and the possibility of a recession, but what do I know? As a matter of fact I have just checked my year end values, and I am down well under 1% currently. That would suggest that I have a fairly conservative portfolio, which is what I like at my stage in my investing career.

Dod

I've not got a clue where SM is going. The current trend is downwards. I expect that to continue. I feel SM wants to test £6. No science in that feeling though

AiY(D)

swill453
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Re: Near the Bottom?

#500435

Postby swill453 » May 14th, 2022, 12:29 pm

Everything is so volatile at the moment. I reckon yesterday was one of my best days ever on the stock market, but still down on the week...

Scott.

monabri
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Re: Near the Bottom?

#500456

Postby monabri » May 14th, 2022, 2:42 pm

Over on HYP there's a discussion on what to do with the Aviva return: My comment was...

"I was thinking about simply reinvesting back into Aviva but in recent weeks I've wavered about deploying funds into other areas (passing reference: certain "growth "ITs) so I might now reinvest, perhaps, 50% back into perennial under achiever Aviva.

On reflection, I found myself using the words" perennial under achiever".... maybe I need to reflect some more and stop banging my head against the wall as it is quite nice when I stop ! 8-)"



I'm thinking split the returned funds 3 ways, SMT, Baillie Gifford Global Small and ????

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Re: Near the Bottom?

#500461

Postby kempiejon » May 14th, 2022, 3:06 pm

monabri wrote:I'm thinking split the returned funds 3 ways, SMT, Baillie Gifford Global Small and ????


VWRL if you can't think of anything better it gets you into the market and now might be a dip. Of cause it could halve over the next 18 months. I know I don't know.

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Re: Near the Bottom?

#500462

Postby richfool » May 14th, 2022, 3:09 pm

monabri wrote:Over on HYP there's a discussion on what to do with the Aviva return: My comment was...

"I was thinking about simply reinvesting back into Aviva but in recent weeks I've wavered about deploying funds into other areas (passing reference: certain "growth "ITs) so I might now reinvest, perhaps, 50% back into perennial under achiever Aviva.

On reflection, I found myself using the words" perennial under achiever".... maybe I need to reflect some more and stop banging my head against the wall as it is quite nice when I stop ! 8-)"



I'm thinking split the returned funds 3 ways, SMT, Baillie Gifford Global Small and ????

EAT (European Assets) which invests in smaller European companies, is down pretty big (some 31% over the last 6 months) and now yielding 7.11%, so might be worth a look, particularly for those interested in income and growth. (One I held onto!)

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Re: Near the Bottom?

#500464

Postby pje16 » May 14th, 2022, 3:13 pm

BullDog wrote:The only thing you can guarantee is that there's a 50% chance she's absolutely right.
Like Merrin, the chances are I am 50% right too.

I have a loathing of the 50% chance
probably goes back to when I heard a weather forecaster say that today there is a 50% chance of rain
He may as well have said "it might rain and it might not" :lol:

Dod101
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Re: Near the Bottom?

#500468

Postby Dod101 » May 14th, 2022, 3:44 pm

NotSure wrote:
Dod101 wrote:Merwyn Somerset Webb has a few interesting comments in her article in today's FT. She tells us that according to Tom Slater of Scottish Mortgage, this year has been the worst start to a year for growth shares for 90 years, but she goes on to say that valuations are now beginning to look more realistic not just for growth stocks. Some markets, like the UK, are now at what she calls 'meaningful discounts'. it would be good to think so.

She also mentions that Scottish Mortgage is down 41% on YTD, Netflix is down 70%, Amazon and Tesla both down 40% from their highs. She says that if you are looking for long term value, some is beginning to emerge.

Personally I would have thought she is rather optimistic, what with further interest rate increases expected and the possibility of a recession, but what do I know? As a matter of fact I have just checked my year end values, and I am down well under 1% currently. That would suggest that I have a fairly conservative portfolio, which is what I like at my stage in my investing career.

Dod


In the whole, earnings are up and prices are down, a happy state of affairs for someone in accumulation phase. I suspect you and Ms Webb are both correct - there will almost certainly be further losses, but if taking a long-term view, stuff looks almost fair value now.

YTD, I am down more than you but much less than my benchmark (cheap global trackers). Last year I switched to buying 'value' and multi-asset funds (e.g. UK Equity Income) and these have cushioned the fall (I wasn't clever enough to 'rotate into value', as in I never sold anything, just redirected my purchases). However, going forward, I'll be dripping back into more growthier things again (e.g. global trackers which are basically S&P trackers, which are basically FAGAM). I'd still be nervous about the really gung ho stuff though - e.g. SMT . Based on 2000, it was a long, long time before the high flying stocks of the late 90's recovered and of course many vanished without trace. However, those that stuck at it then were eventually very well rewarded.


I am about to put some money into Admiral. I already hold it but it is 'way down to just over £22. They said profits will be down this year but so is the share price, by about 25% from its peak. I do not think profits will be down by that much.

Dod

Dod101
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Re: Near the Bottom?

#500469

Postby Dod101 » May 14th, 2022, 3:49 pm

CliffEdge wrote:Who is Mervyn Somerset Webb?


I have no idea who you are referring to but I spelt the lady's name wrongly. It should be Merryn Somerset Webb. If your question is in the sarcastic mode, it did not quite work since you also managed to get her name wrong.

Dod

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Re: Near the Bottom?

#500822

Postby Charlottesquare » May 16th, 2022, 4:32 pm

richfool wrote:
monabri wrote:Over on HYP there's a discussion on what to do with the Aviva return: My comment was...

"I was thinking about simply reinvesting back into Aviva but in recent weeks I've wavered about deploying funds into other areas (passing reference: certain "growth "ITs) so I might now reinvest, perhaps, 50% back into perennial under achiever Aviva.

On reflection, I found myself using the words" perennial under achiever".... maybe I need to reflect some more and stop banging my head against the wall as it is quite nice when I stop ! 8-)"



I'm thinking split the returned funds 3 ways, SMT, Baillie Gifford Global Small and ????

EAT (European Assets) which invests in smaller European companies, is down pretty big (some 31% over the last 6 months) and now yielding 7.11%, so might be worth a look, particularly for those interested in income and growth. (One I held onto!)


I also have been dribbling dividends received into EAT purchasing some more at 125.12 on 1/2/22 and 111.79 on 1/3/22.

Unless the holdings gets far too big relative to the others I suspect I will keep dripping funds in until either it comes good and the yield drops or it cuts its dividend and I withdraw my trust in it. (overall loss now 3.93% but dividends received already since first investment in 2020 more than cover)


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