Forum Home» Savings & Investments

Scottish Mortgage Trust - Bright Future? - Page 4

New Post Advanced Search

Scottish Mortgage Trust - Bright Future?

edited 30 November -1 at 1:00AM in Savings & Investments
55 replies 7.3K views
1246

Replies

  • MarkCarnageMarkCarnage Forumite
    396 posts
    100 Posts First Anniversary Name Dropper
    ✭✭
    This thread seems to be more about Tesla than SMT. Tesla is currently 4.4% of SMT assets. If the Tesla share price halves, or doubles for that matter, it's significant but not game changing for SMT. It is a stock which Baillie Gifford have had serious internal soul searching about too, hence the exposure was reduced at one point.

    Comparing SMT with Neil Woodford's fund....where does one start? I suggest that the poster has a look at the fact sheets for both funds and will then realise what different beasts they are.
  • cloud_dogcloud_dog Forumite
    5.1K posts
    Part of the Furniture 1,000 Posts Name Dropper Photogenic
    ✭✭✭✭
    What is wrong's with Tesla's execution?
    I think it is generally acknowledged that Tesla is ahead of the pack with regard to their battery IPR/chemistry but are significantly behind in manufacturing design and techniques, which severely impacts on margins. They could be so much more profitable if their manufacturing was up to leading standards.
    Personal Responsibility - Sad but True :D

    Sometimes.... I am like a dog with a bone
  • bowlhead99bowlhead99 Forumite
    11.5K posts
    Part of the Furniture 10,000 Posts Name Dropper Post of the Month
    ✭✭✭✭✭
    Tesla as a car company are quite flashy and impressive and will help people come around to the idea of electric cars. That can only be a good thing for the industry. However the people blazing a trail proving a concept are not always the ones who emerge the winners.

    If I were buying TSLA shares I would not be doing it because they proved they could make an $88,000 car (before options, taxes, and the essential $8000 battery upgrade to get an extra 50 mile range) which has popular appeal in certain affluent and built-up West coast or East coast US cities. I would be looking at the "first mover advantage" in battery tech which they can use to supply other car companies or to supply non-car demand (trucks, buildings). In the old California gold rush it was the people selling picks and shovels and denim workwear that prospered more reliably than mine operators.

    Newbinvestor suggests they are years ahead of the game and they have an excellent and easily available super charger network. Still, if you live in Birmingham and are taking the family North to Glasgow or South to Penzance, you're going to need to plan your journey around stopping at a service station and getting on one of the four supercharger points to recharge while you take a bathroom break. If one's not available, wait until it is, because you can't go to the toilet or someone else will get in the queue ahead of you and grab the charger for half an hour while they fuel their kids with burgers.

    At the moment with only a few thousand Teslas in the UK, there are, relatively, a lot of charger points per person even if they are a pain to drive to and not all super-charger speed, some would say not to worry about the infrastructure as it will keep up. But if the roads had tens of thousands more Teslas bought with an expectation of a cheap supercharger every time you stop at a shop or service station, but you check the app and the next three service stations have bookings... really the fuelling network needs to keep up or people won't be spending their ££££ to buy the dream. It's far from a fait accomplis.

    An expensive car with a 250mile range is fine in San Francisco where they are wealthy and love the environment or DC where they have 10,000 person per square mile population density to encourage lots of charging points. In a Texas county with 0.1 population per square mile and four 'tankfuls' needed to cross the state from one side to the other, it's not as viable. The UK will be somewhere between the two but will likely be more EV friendly than eg France or Spain with longer distances to drive and lower road density.

    Being '5 years ahead of the game' as newbinvestor mentions is something that can bankrupt you while you wait for the game to catch up. There are many failed businesses who lament '... well, in some sense, I guess we were ahead of our time...". Tesla hopes to be far enough ahead to be the first name on everyone's lips while not so far ahead that people see them as just a 'nice idea' expensive concept car.

    Cloud_dog is right that they have potential as an auto maker if they would improve their manufacturing. Getting on top of reliable production is something that could enhance earnings so that the price to earnings ratio wasn't so sky high. But in the meantime the investment value seems to be in the power space rather than the cars which showcase it.

    From SMTs perspective, they have already made money on TSLA and have irons in other fires. Really it is just a case of continuing to get early exposure to blockbusting businesses and getting out at a prudent level before they become ex-growth, while avoiding too many failures. Seems like the holy grail which managers aspire to deliver but most don't make. With a concentrated portfolio, SMT share price could easily see a 50-75% drop in sterling terms during a global stock crash in which GBP appreciates and the share price moves to a discount against NAV.
  • ThrugelmirThrugelmir Forumite
    73K posts
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    ✭✭✭✭✭✭
    Their own super charger network which is now easily available around the UK.

    Only usefull if you can afford a Tesla. Alternative networks are available. All of Tesla's technology is open source. Remember how much better Betamax was. Yet VHS won the battle. Open source was the downfall of Lotus.

    As an aside issue. A comprehensive charging network is as yet a pipe dream. 8 charging points in a motorway service station isn't going to keep the nation on the move.
    “Buy value, not market trends or the economic outlook. Individual stocks determine the market, not vica versa." - Sir John Templeton
  • grnglidegrnglide Forumite
    171 posts
    Open source was the downfall of Lotus.
    I don't think I have come across an open source car before???
  • ThrugelmirThrugelmir Forumite
    73K posts
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    ✭✭✭✭✭✭
    grnglide wrote: »
    I don't think I have come across an open source car before???

    You've never lived then. Europa was my personal favourite.
    “Buy value, not market trends or the economic outlook. Individual stocks determine the market, not vica versa." - Sir John Templeton
  • SystemSystem
    177.8K posts
    10,000 Posts Name Dropper
    ✭✭✭✭✭✭
    Thrugelmir wrote: »
    Only usefull if you can afford a Tesla. Alternative networks are available. All of Tesla's technology is open source. Remember how much better Betamax was. Yet VHS won the battle. Open source was the downfall of Lotus.

    As an aside issue. A comprehensive charging network is as yet a pipe dream. 8 charging points in a motorway service station isn't going to keep the nation on the move.
    Assuming that you are talking about the spreadsheet, I thought that Excel (Microsoft Excel not the Lotus Excel) was the reason for the downfall of Lotus 123.
  • londoninvestorlondoninvestor Forumite
    1.4K posts
    First Anniversary
    ✭✭✭
    economic wrote: »
    Assuming that you are talking about the spreadsheet, I thought that Excel (Microsoft Excel not the Lotus Excel) was the reason for the downfall of Lotus 123.

    Not literally open source, but in the general field concerning the extent to which software intellectual property is protected by law:

    https://en.wikipedia.org/wiki/Lotus_Dev._Corp._v._Borland_Int%27l,_Inc.
    Wikipedia wrote:
    The Lotus decision establishes a distinction in copyright law between the interface of a software product and its implementation. The implementation is subject to copyright. The public interface may also be subject to copyright to the extent that it contains expression (for example, the appearance of an icon). However, the set of available operations and the mechanics of how they are activated are not copyrightable. This standard allows software developers to create competing versions of copyrighted software products without infringing the copyright.

    A victory for Lotus in this case would have cemented its incumbency advantage and given it a substantial moat against competing spreadsheets, because competitors would have had to avoid a resemblance to 123, and so would have been less attractive to existing 123 users.
  • edited 16 July 2019 at 10:59PM
    igladiglad Forumite
    215 posts
    Part of the Furniture 100 Posts
    ✭✭
    edited 16 July 2019 at 10:59PM
    it would appear all the the questioning of SMT has seen a nice spurt in the share price over the 7-8 days or so, which has doubled my return. I'm quite happy to hold for the long term as I can see returns being made. I finally sold my Fidelity China as I was bored with staring at a loss and the money has now gone into LTG & FS, who should give me some steady returns.
  • bowlhead99bowlhead99 Forumite
    11.5K posts
    Part of the Furniture 10,000 Posts Name Dropper Post of the Month
    ✭✭✭✭✭
    iglad wrote: »
    I finally sold my Fidelity China as I was bored with staring at a loss and the money has now gone into LTG & FS, who should give me some steady returns.
    Seems quite a radical solution to move money out of a dedicated China fund into two global funds which each allocate 0% to shares in Chinese companies.

    Although you are right the returns will probably be steadier.

    One solution to being bored of staring at a loss is simply to imagine you had bought at today's price, or some other lower price, so that as of today, it isn't a loss. The fund itself doesn't really know or care what price you bought it at.
Sign In or Register to comment.

Quick links

Essential Money | Who & Where are you? | Work & Benefits | Household and travel | Shopping & Freebies | About MSE | The MoneySavers Arms | Covid-19 & Coronavirus Support