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Scottish Mortgage heading for where

Closed-end funds and OEICs
richfool
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Re: Scottish Mortgage heading for where

#376034

Postby richfool » January 11th, 2021, 8:51 pm

SMT could fall some more tomorrow, as Tesla has carried on falling today, after the UK markets closed, (Tesla currently down c 7% on the day)

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Re: Scottish Mortgage heading for where

#376040

Postby ADrunkenMarcus » January 11th, 2021, 9:17 pm

richfool wrote:SMT could fall some more tomorrow, as Tesla has carried on falling today, after the UK markets closed, (Tesla currently down c 7% on the day)


Last time I looked at Tesla, the forward free cash flow yield was only 0.7% for 2022 - and that was after gargantuan rises forecast for 2020 and 2021. And I expect Tesla went up 50% after that...

I do like Scottish Mortgage but I'm trying to shake that prejudice that the best performing IT of one decade won't do as well in the following one.

Best wishes

Mark.

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Re: Scottish Mortgage heading for where

#376048

Postby Urbandreamer » January 11th, 2021, 9:34 pm

Bouleversee wrote:Very interesting. My grandson is in his first year at Sussex, doing a business degree and owns some SMT in his ISA. I must ask him if he has come across the Prof. mentioned, whose name I couldn't quite catch. I'll forward the link to him. Now he's 18 he needs to learn how to manage his investments.


I suspect that it's this guy.
https://wpcarey.asu.edu/people/profile/2717225

Who your son may not have run into in Sussex

To be honest there ARE opinions upon his work. Some will likely disagree with him.
Personally I am not surprised by what he found, and not one of them.

The strong difficulty is identifying the important things to join or invest in. It's easy in hindsight to say what they were. Though it is VERY informative to learn that a small subset of the available choice made such a difference.

Can I say that the phrase that really pissed me off was "paradigm shift". It was a buzz phrase in the 90's. However to be fair there is a new phrase or word in the sound bites today, "disruption". Oh that's SO different from a "paradigm shift"

That said, then as now it's true.

Tesla is the thing that those of us who talk SMT worry about.

Consider a company called Acorn, who made hobby circuits in the very early 80's. They made a computer for the state (well the BBC), that was widely used in schools. The went on to develop a CPU using a strange idea. You could buy a lump to attach to the school computer. This part was known as Advanced Risc Machines, or ARM. It split off from Acorn. However there was the aspect that they could not invest in was chip manufacture. Actually that worked well.

Almost every mobile phone or chrome book has a ARM designed chip in them. So much for a hobby firm who later supplied schools.

OK, now is Tesla really a car producer?

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Re: Scottish Mortgage heading for where

#376056

Postby unperplex » January 11th, 2021, 9:58 pm

Thanks for the information richfool.
Well, we shall see.
I hope it does not go down too much (Tesla is I think now about 10% of SMT’s portfolio, and, although maths is not my strongest area, a drop of 7% of 10% does not seem too bad).
Even if it goes down a bit further (and it did close lower than my purchase price), I hope it will continue to rise thereafter, as it has done following other dips recently.

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Re: Scottish Mortgage heading for where

#376058

Postby Bouleversee » January 11th, 2021, 10:07 pm

Urbandreamer wrote:
Bouleversee wrote:Very interesting. My grandson is in his first year at Sussex, doing a business degree and owns some SMT in his ISA. I must ask him if he has come across the Prof. mentioned, whose name I couldn't quite catch. I'll forward the link to him. Now he's 18 he needs to learn how to manage his investments.


I suspect that it's this guy.
https://wpcarey.asu.edu/people/profile/2717225

Who your son may not have run into in Sussex

To be honest there ARE opinions upon his work. Some will likely disagree with him.
Personally I am not surprised by what he found, and not one of them.

The strong difficulty is identifying the important things to join or invest in. It's easy in hindsight to say what they were. Though it is VERY informative to learn that a small subset of the available choice made such a difference.

Can I say that the phrase that really pissed me off was "paradigm shift". It was a buzz phrase in the 90's. However to be fair there is a new phrase or word in the sound bites today, "disruption". Oh that's SO different from a "paradigm shift"

That said, then as now it's true.

Tesla is the thing that those of us who talk SMT worry about.

Consider a company called Acorn, who made hobby circuits in the very early 80's. They made a computer for the state (well the BBC), that was widely used in schools. The went on to develop a CPU using a strange idea. You could buy a lump to attach to the school computer. This part was known as Advanced Risc Machines, or ARM. It split off from Acorn. However there was the aspect that they could not invest in was chip manufacture. Actually that worked well.

Almost every mobile phone or chrome book has a ARM designed chip in them. So much for a hobby firm who later supplied schools.

OK, now is Tesla really a car producer?



I thought the Prof. referred to was a woman, actually. I must listen to it all again.

Arm was one of my best investments and I was furious when they were taken over. No objection raised then but a lot of fuss is being made now they have changed hands again. I wasn't happy when the makers of Raspberry Pi were taken over for what seemed too little either.

Musk seems to have fingers in a number of ambitious pies. I read today that he is poised to compete with the government’s Oneweb satellite broadband service, which surprised me. When does he find time to sleep?

I am toying with topping up my SMT holding again. Am a bit nervous about Tesla who do seem overpriced but they will have a much better feel for what to do about that than I could hope to have and it's not a huge proportion of SMT's holdings. Isn't there a question mark over Ali Baba, too, for political reasons? The boss seems to have got into hot water with the Chinese govt. My problem is remembering all I read with avid interest now that my brain is permanently fogged.

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Re: Scottish Mortgage heading for where

#376061

Postby UncleEbenezer » January 11th, 2021, 10:20 pm

unperplex wrote:I bought some more SMT today on a slight dip at 12.50. I have been wanting to top up for a while and they don’t seem to be going down very much for very long. I can’t see them dropping in the near future as financial results are coming up from the likes of Amazon and Netflix at the end of January and I would be surprised if they were bad....


They don't have to be bad. They could be very good, yet still underperform market expectations and drop.

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Re: Scottish Mortgage heading for where

#376068

Postby Urbandreamer » January 11th, 2021, 10:42 pm

Bouleversee wrote:I thought the Prof. referred to was a woman, actually. I must listen to it all again.

Arm was one of my best investments and I was furious when they were taken over. No objection raised then but a lot of fuss is being made now they have changed hands again. I wasn't happy when the makers of Raspberry Pi were taken over for what seemed too little either.

Musk seems to have fingers in a number of ambitious pies. I read today that he is poised to compete with the government’s Oneweb satellite broadband service, which surprised me. When does he find time to sleep?

I am toying with topping up my SMT holding again. Am a bit nervous about Tesla who do seem overpriced but they will have a much better feel for what to do about that than I could hope to have and it's not a huge proportion of SMT's holdings. Isn't there a question mark over Ali Baba, too, for political reasons? The boss seems to have got into hot water with the Chinese govt. My problem is remembering all I read with avid interest now that my brain is permanently fogged.


To be honest, some objection was raised at the time that ARM was sold, but not enough.
Then again Softbank claimed that they would keep a lot/all work in the UK. Nvidia is a US corp. The US has it's faults just like us. It's all too possible that they will kill the goose.

Then again, if you subscribe to certain view points, Nvidia is top dog with the likes of ARM. No, not the phones etc, but the car vision system/driver support. Seriously I'm glad it's Mr Anderson's job. I don't have the time.

Ps, Nvidia do a big bit of automated car driving (Including Tesla) as well as hardware for computer gaming. I'm unsure which will generate most of their forward earnings.

Oh and as to Musk and his sleep pattens, please don't read H G Wells "the sleeper awakes".

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Re: Scottish Mortgage heading for where

#376102

Postby UncleEbenezer » January 12th, 2021, 7:33 am

Urbandreamer wrote:Then again Softbank claimed that they would keep a lot/all work in the UK. Nvidia is a US corp. The US has it's faults just like us. It's all too possible that they will kill the goose.


I certainly wasn't thrilled to lose ARM - though I took the capital gain.

If the sale then had been to NVIDIA - or to any other key licensee - I'd have been a whole lot more unhappy. The greatest single key strength of ARM was its position at the heart of a vast ecosystem in which virtually every developer of tech hardware had a stake. Look at how Microsoft conquered the world (with an altogether inferior product) from a rather similar heart-of-a-dominant-ecosystem in the 1980s/90s. If DOS had been owned by IBM, would all the then-rising clone manufacturers like Compaq and Dell have been so keen to become utterly reliant on their key competitor, or would the world have found an altogether different alternative?

I suspect we will now see a concerted effort from the industry to develop an ARM-free alternative. Probably open-source, as it's hard to see anything else gaining much traction against such a dominant incumbent.

Bouleversee wrote:Musk seems to have fingers in a number of ambitious pies. I read today that he is poised to compete with the government’s Oneweb satellite broadband service, which surprised me. When does he find time to sleep?

"Oneweb" was a failed wannabe. Competing against Oneweb is like Nissan or Honda competing against British Leyland.

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Re: Scottish Mortgage heading for where

#376109

Postby Urbandreamer » January 12th, 2021, 8:16 am

UncleEbenezer wrote:I suspect we will now see a concerted effort from the industry to develop an ARM-free alternative. Probably open-source, as it's hard to see anything else gaining much traction against such a dominant incumbent.


Not so sure about the open source bit. ARM have done a hell of a lot of work. However Apple are already producing their own chips.

The key thing about ARM was that they licensed the design so that people could build systems on a chip. MIPS are a competitor and has been for 15 years. They just didn't manage to do a better job.

We shall just have to see if Nvidia, who now own ARM, kills the goose.

I hope not. As SMT has a Nvidia holding.

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Re: Scottish Mortgage heading for where

#376134

Postby Adamski » January 12th, 2021, 9:18 am

Bouleversee wrote:...there a question mark over Ali Baba, too, for political reasons? The boss seems to have got into hot water with the Chinese govt. My problem is remembering all I read with avid interest now that my brain is permanently fogged.


yes the boss has got in hot water, CEO Jack Ma hasn't been seen since October, but he isn't "missing" just upset the Chinese communist party by criticising them, and told to lay low.

As well as criticising the CCP, there is an issue that Alibaba is too powerful, and the CCP wants to make it down a peg or two. Alibaba set up Alipay, now Ant 33% owned by Baba, which is used for billions of financial transactions on phones in China, making cash obsolete.

The CCP blocked the IPO of the Ant Group, then launched an investigation into Alibaba and ordered the Ant Group revamp its businesses to stop anti competitive behaviour.

I think SMT have a 5% holding on Alibaba, whose share price boomed Mar to Oct, but has dropped back down last 3 months because of this. Arguably it is undervalued, say compared to Amazon, as it dominates eCommerce in China.
Last edited by Adamski on January 12th, 2021, 9:21 am, edited 1 time in total.

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Re: Scottish Mortgage heading for where

#376135

Postby UncleEbenezer » January 12th, 2021, 9:19 am

Urbandreamer wrote:
UncleEbenezer wrote:I suspect we will now see a concerted effort from the industry to develop an ARM-free alternative. Probably open-source, as it's hard to see anything else gaining much traction against such a dominant incumbent.


Not so sure about the open source bit. ARM have done a hell of a lot of work. However Apple are already producing their own chips.


Indeed, but Apple remains an ARM licensee. As of course does Intel, whose chips of course evolved entirely separately and indeed pre-date ARM.

The key thing about ARM was that they licensed the design so that people could build systems on a chip. MIPS are a competitor and has been for 15 years. They just didn't manage to do a better job.


MIPS has been in the business a lot longer than that, but was always rather marginal. Intel is of course the other dominant player in chips, but because they manufacture rather than license widely, their business model is 1980s/90s Apple to ARM's Microsoft of the same era (though of course the relative quality of the respective products is reversed).

We shall just have to see if Nvidia, who now own ARM, kills the goose.


They don't have to. The mere fact of being a competitor to so many ARM licensees is going to be a concern to the rest of the industry.

But then, maybe that's become irrelevant since Trump shat in ARM's ecosystem. If Trump had won a second term, an American owner for ARM might even have been a least-bad damage limitation. [edit to add] Come to think of it, even without Trump there are forces in the US - centred on courts that periodically nuke a non-US company (c.f. what happened to Blackberry-maker RIM) - that could've decimated ARM.

I hope not. As SMT has a Nvidia holding.


NVidia owning ARM may not be good for ARM's ecosystem, but that doesn't hurt NVidia in the short to medium term. Long-term it might in principle, but that's likely to be overtaken by events (who could have foreseen Trump at the time of the Softbank acquisition of ARM?)
Last edited by UncleEbenezer on January 12th, 2021, 9:26 am, edited 1 time in total.

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Re: Scottish Mortgage heading for where

#376138

Postby UncleEbenezer » January 12th, 2021, 9:21 am

Adamski wrote:
Bouleversee wrote:...there a question mark over Ali Baba, too, for political reasons? The boss seems to have got into hot water with the Chinese govt. My problem is remembering all I read with avid interest now that my brain is permanently fogged.


yes the boss has got in hot water, CEO Jack Ma hasn't been seen since October, but he isn't "missing" just upset the Chinese communist party by criticising them, and told to lay low.

As well as criticising the CCP, there is an issue that Alibaba is too powerful, and the CCP wants to make it down a peg or two. Alibaba set up Alipay, now Ant 33% owned by Baba, which is used for billions of financial transactions on phones in China, making cash obsolete.

I haven't been following this closely enough to comment meaningfully, but I wonder if Ma and Alibaba's problems aren't rather similar to the flak that periodically hits the likes of Zuckerberg and Facebook in the US and the West more generally?

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Re: Scottish Mortgage heading for where

#376156

Postby UncleEbenezer » January 12th, 2021, 9:53 am

joey wrote:I offer my apologies to any existing holders. You see, I finally took a position in SMT yesterday. After thinking it was too expensive at £8-ish. Of course, we know where it’s now headed.


Well done. It's falling now.

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Re: Scottish Mortgage heading for where

#376168

Postby Dod101 » January 12th, 2021, 10:17 am

Adamski wrote:
Bouleversee wrote:...there a question mark over Ali Baba, too, for political reasons? The boss seems to have got into hot water with the Chinese govt. My problem is remembering all I read with avid interest now that my brain is permanently fogged.


yes the boss has got in hot water, CEO Jack Ma hasn't been seen since October, but he isn't "missing" just upset the Chinese communist party by criticising them, and told to lay low.

As well as criticising the CCP, there is an issue that Alibaba is too powerful, and the CCP wants to make it down a peg or two. Alibaba set up Alipay, now Ant 33% owned by Baba, which is used for billions of financial transactions on phones in China, making cash obsolete.

The CCP blocked the IPO of the Ant Group, then launched an investigation into Alibaba and ordered the Ant Group revamp its businesses to stop anti competitive behaviour.

I think SMT have a 5% holding on Alibaba, whose share price boomed Mar to Oct, but has dropped back down last 3 months because of this. Arguably it is undervalued, say compared to Amazon, as it dominates eCommerce in China.


Do you have any evidence for the comments on Jack Ma? At 30 September 6.1% of SMT's portfolio was in Alibaba.


Dod

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Re: Scottish Mortgage heading for where

#376222

Postby Bouleversee » January 12th, 2021, 1:05 pm

Dod asked:

"Do you have any evidence for the comments on Jack Ma? At 30 September 6.1% of SMT's portfolio was in Alibaba."
I read about it in The Times: "https://www.thetimes.co.uk/article/mystery-of-chinas-missing-alibaba-tycoon-jack-ma-7nh9vnqhv" Similar articles in FT and elsewhere.

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Re: Scottish Mortgage heading for where

#376229

Postby Dod101 » January 12th, 2021, 1:19 pm

Bouleversee wrote:Dod asked:

"Do you have any evidence for the comments on Jack Ma? At 30 September 6.1% of SMT's portfolio was in Alibaba."
I read about it in The Times: "https://www.thetimes.co.uk/article/mystery-of-chinas-missing-alibaba-tycoon-jack-ma-7nh9vnqhv" Similar articles in FT and elsewhere.


Thanks. I obviously missed that in my paper but Googling the same thing would suggest that no one really knows where he is but judging by what has happened to others it is likely that he has been told to lie low. I am genuinely interested but I am not sure we ought to take these comments as fact, more like informed speculation. A lot rides on the attitude of the CCP; that is why I am interested.

Dod

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Re: Scottish Mortgage heading for where

#376306

Postby UncleEbenezer » January 12th, 2021, 4:33 pm

joey wrote:
UncleEbenezer wrote:Well done. It's falling now.


I noticed :D

Indeed. And you warned us ahead of time, so we've noone but ourselves to blame for failing to take heed. :oops:

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Re: Scottish Mortgage heading for where

#376598

Postby toofast2live » January 13th, 2021, 2:22 pm

Dod101 wrote:
Bouleversee wrote:Dod asked:

"Do you have any evidence for the comments on Jack Ma? At 30 September 6.1% of SMT's portfolio was in Alibaba."
I read about it in The Times: "https://www.thetimes.co.uk/article/mystery-of-chinas-missing-alibaba-tycoon-jack-ma-7nh9vnqhv" Similar articles in FT and elsewhere.


Thanks. I obviously missed that in my paper but Googling the same thing would suggest that no one really knows where he is but judging by what has happened to others it is likely that he has been told to lie low. I am genuinely interested but I am not sure we ought to take these comments as fact, more like informed speculation. A lot rides on the attitude of the CCP; that is why I am interested.

Dod


Rather than lying low I think he will be dead or imprisoned By now.

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Re: Scottish Mortgage heading for where

#376730

Postby bluedonkey » January 13th, 2021, 7:18 pm

MaraMan wrote:Apologies if this has already been posted, but holders of SMT may find this interesting:

https://www.youtube.com/watch?v=rpBESgEo3m8

MM

Finally got round to watching this. Strongly recommend watching if you haven't already. Very different from the usual pseudo-macroeconomic guff most investment managers come out with.

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Re: Scottish Mortgage heading for where

#377811

Postby richfool » January 16th, 2021, 3:02 pm

Scottish Mortgage calls for patience amid China tech crackdown

Fund managers of UK's biggest investment trust play down threat from China’s crackdown on big tech companies in which they are invested but appeal for more time to find out what is going on.

https://citywire.co.uk/wealth-manager/n ... test1-list


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