SMT Investment

hoofy

Sue58 said:

I bought in at 950 today 

Well done. For the moment you'll have a big smile on your face with a 10% jump since you bought.

MarkCarnage

SMT has been a long term holding of mine. Well over 10 years. It has had periods of significant volatility before and will do again. 
I reduced it twice, last year and early this year as it had become a disproportionate part of my portfolio. I considered doing so again about a month ago at £13ish but didn't. The need wasn't as compelling as it wasn't such a significant holding as it had been, and it's a bit less significant now, but still one of my larger holdings.  I still have faith in the manager and their philosophy and process, however, a combination of events had driven it to levels that weren't short term sustainable. Firstly, the compression of earnings forward due to COVID in some holdings has been well telegraphed, secondly, the shares had moved to a small premium to NAV and thirdly long bond yields (as a proxy discount rate) had moved to levels that have driven so many 'growth' stocks forward. Momentum and herd instinct have exacerbated this.
Who knows whether buying shares in it today will be cheaper than tomorrow, or next week, or next month, or even next year? But I think that there is a very strong probability that buying in now will be a good idea on a 5 year plus view. 

Thrugelmir

MarkCarnage said:

SMT has been a long term holding of mine. Well over 10 years. It has had periods of significant volatility before and will do again. 

Any more tips? SMT didn't buy it's holding in Tesla until 2012. I need your crystal ball. 

MDMD

SMT bought back another 1.5m shares today in an attempt to reduce the discount to NAV

https://www.londonstockexchange.com/news-article/SMT/transaction-in-own-shares/14892052

Thrugelmir

MDMD said:

SMT bought back another 1.5m shares today in an attempt to reduce the discount to NAV

https://www.londonstockexchange.com/news-article/SMT/transaction-in-own-shares/14892052

SMT may well be selling down some of the holdings. With no better use of the money identified. Buying back the stock offers the best return to stock holders. 

DireEmblem

SMT may well be selling down some of the holdings. With no better use of the money identified. Buying back the stock offers the best return to stock holders. 

I half suspect the buyback is a combination of reducing shares available in the market to help drive back up the SP, and the fact it is trading at a discount of about 10-11% of its NAV or underlying holdings.

Its a great entry point for anyone who has confidence in its (imo) diverse tech portfolio as a long term hold.

That being said a number of Investment Trusts have fallen out of fashion and consistently trade at a discount but this to date hasn’t proved one of them.

BuildTheWall

coastline said:

There's something not right in the way all these tech-growth stocks have burst into life early 2020 and soared. 

Not offering advice but surely a companies fortunes can't change that much in a year ? 

Something must’ve happened in early 2020. Does anyone know?

Sarcasm aside, fundamental driver of a stock price is not past data, but the discounted value of future earnings. 

If you work for a big company or run a big business, it shouldn’t be surprising how much is being invested in technology since COVID. 

Also this is why a stock price shoots up when a political or regulatory event happens, though nothing has changed at ground level. 

Having said that, herd behaviour implies people tend to invest in what has gone up (think housing) rather than gone down, which leads to bubbles. 

BuildTheWall

DireEmblem said:

Its a great entry point for anyone who has confidence in its (imo) diverse tech portfolio as a long term hold.

I find it funny how people tend to tag some companies as “tech”. 

If VW sells more electric cars than Tesla, would you call VW a tech company?
If Disney managed to earn more from streaming than Netflix, would you call Disney a tech company?

Thrugelmir

BuildTheWall said:

DireEmblem said:

Its a great entry point for anyone who has confidence in its (imo) diverse tech portfolio as a long term hold.

If Disney managed to earn more from streaming than Netflix, would you call Disney a tech company?

Disney has the content. Ownership of the Star War and Marvel franchises for example was a shrewd investment. Adds adult product to the huge children's back catalogue. Enables a premium price to be charged for subscriptions.  

Thrugelmir

BuildTheWall said:

coastline said:

There's something not right in the way all these tech-growth stocks have burst into life early 2020 and soared. 

Not offering advice but surely a companies fortunes can't change that much in a year ? 

Something must’ve happened in early 2020. Does anyone know?

Sarcasm aside, fundamental driver of a stock price is not past data, but the discounted value of future earnings. 

If you work for a big company or run a big business, it shouldn’t be surprising how much is being invested in technology since COVID. 

Also this is why a stock price shoots up when a political or regulatory event happens, though nothing has changed at ground level. 

Having said that, herd behaviour implies people tend to invest in what has gone up (think housing) rather than gone down, which leads to bubbles. 

A meaningless question. The bubble was forming over 2 years ago in some stocks. Yet the fact that some share prices continued to grow for no rational reason, blowing the bubble even bigger, drawing yet more stocks into it. Has no actual explanation.  Other than it reflects human behaviour. With more people joining the party having seen the "returns" on offer. 

I would add the caveat that other stocks and markets do exist. Long term investors with diversified portfolios will ride the waves.