Recent BG losses, SMT etc. What's up?

aroominyork

adindas said:

People buy the dip and sell the rip and use the money for another trade or put the money into saving account for a while to re-enter later. The assumption that people are naive to sell it at random point just because the price drop without looking other factor such as news, doing their own analysis looking into wallstreet analyst price target is woefully irrational.

The stock market IS woefully irrational and hence so are the people who invest in it. It is larely driven by sentiment which is why psychologists might outperform economists, and while we have forecasts of where the economy is going we have no idea when the next crash will come.

Also, can I suggest you get less agitated about the fact that not everyone agrees with you?

adindas

aroominyork said:

adindas said:

People buy the dip and sell the rip and use the money for another trade or put the money into saving account for a while to re-enter later. The assumption that people are naive to sell it at random point just because the price drop without looking other factor such as news, doing their own analysis looking into wallstreet analyst price target is woefully irrational.

The stock market IS woefully irrational and hence so are the people who invest in it. It is larely driven by sentiment which is why psychologists might outperform economists, and while we have forecasts of where the economy is going we have no idea when the next crash will come.

Also, can I suggest you get less agitated about the fact that not everyone agrees with you?

I did mention it :

NOT EVERYONE, can speculate or want to speculate whether today's price represents a good entry point, or there is further to fall for individual stock. And again I am refering to individual stock or SMT which contain a reasonable number of high growth stocks NOT a very well diversified fund.  Just look at their top 10 holdings and the limited number of stocks in their portfolio. You could easily recognise why SMT stock which contain a lot US high growth stocks was green yesterday and continue to rise today, that is because of the FED meeting yesterday and Jerome Powell said in the press yesterday that will have impact mainly on the pre-market of high growth stocks. The CPI figure will be published today, if the inflation is higher than expected it could send back the high growth stock down again.

For individual stocks apart from influenced by the stock market news as a whole it is also on micro level highly influenced by the individual company in question.

masonic

adindas said:

masonic said:

If you only have the benefit of past performance, then SMT will appear to be at or around its peak at most times since 2008. If you buy the dips and then sell when it returns to 'at and around its peak', you'd have briefly traded in and out of the share a couple of times in 2018-19 (missing the intervening 300% growth), then again for the Covid crash, but would you really have sold above the point it currently stands today? A 25-30% crash followed by a rapid 80% gain would look very much like another peak that should be avoided, yet that would still put you below today's price. And I don't think anyone can speculate whether today's price represents a good entry point, or there is further to fall.

That is not to say I disagree with you that going all-in on a high conviction fund like this after it has more than doubled in value in a short space of time would be highly risky. Building a position over time would be sensible in such a situation if you wanted to hold over the long term. Then allow rebalancing to do the market timing work for you.

My reference here is about timing the market of SMT which contain a reasonable number of high growth stocks, or individual stock NOT a very well diversified fund. Also not to time the market in perfection where you have to get it right 100% at the very bottom.
People buy the dip and sell the rip and use the money for another trade or put the money into saving account for a while to re-enter later. Also I never say you will have to sell it when you believe in the long term prospect of that investment. The assumption that people are naive to sell it at random point just because the price drop without looking other factor such as news, doing their own analysis looking into wallstreet analyst price target is woefully irrational.

Nobody is disagreeing with you in regard to the poor diversification, but that isn't really relevant to the point being made. Whether diversified or not, it is an actively managed fund, meaning that investors are paying handsomely for a manager to invest their money into companies with good long term prospects. If you disagree with the fund manager's assessment of the prospects of the companies selected to be held in the fund, then clearly you have no business investing in the fund. That's a very different argument, however, than making a case to sell it because of what's happening to the share price or what is happening to the rate of inflation etc. We can agree that the time to sell the fund would be when it no longer meets your objectives. However, you won't convince me that economic news you are reading about today is not already reflected in the share price, or can be used to predict what will happen to the share price in the future (from the earliest point you could act on the information, in the case of news breaking while markets are closed).

adindas said:

I correct it NOT EVERYONE, can speculate or want to speculate whether today's price represents a good entry point, or there is further to fall for individual stock. Again I am not refering to a very well diversified fund.

What about the news, catalysts, disruption from activists, missing earning expectation, fail the drug test, not getting approval from authority, new manager a person who get criminal conviction before, many insiders, whales are dumping their stocks, when you know many whales are shorting that particular stock, the FED are reducing their bond buying, higher Inflation than expected, the interest hike higher than expected you name it. When you know something like this and you just jump in buy it immediately just because you have money to invest at that time without investigating further, is a stupidity. It is entirely different if you do not know because you do not read the news before opening or adding new position. That is of course fine for that person as he is investing his own money. 

And in the previous link I have shown almost all hedge fund managers are timing the market when buying individual stock on particular day, not blindly enter at any point on that day. That is where the technical analysis, real time company news, real time stock market news, wallstreet analyst price target, etc are in used. Keep in mind the thing like technical analysis is a probabilistic model it does not have to be 100% right to get a better gain compare to those who do not time the market. In many M&A some people do time the market they withdraw some money from the acquiring company and add new position on the acquired company before the merger is completed. In many SPAC stocks some people do time the market they buy it before the merger if the price below NAV sell it when they are about to merge and re-enter again when they believe in that stock for long term holding after the ticker symbol change.

I'll remind you again that we're referring to an investment trust with a fund manager, and that by the time a private investor reads the news it is already too late to react to events. For the avoidance of doubt, when I wrote "I don't think anyone can speculate whether today's price represents a good entry point, or there is further to fall", I meant that it is not possible for them to speculate accurately. I'll go further than that: the vast majority of people who try to trade in and out of SMT or the wider market over the next a long period of time will have a worse outcome than someone who buys and holds for the whole period. If you believe you'll be one of the lucky few, then good luck to you, but please don't suggest to others that it is easy to time the market.

london21

Thrugelmir said:

london21 said:

I get where you are coming from but if long term investment ride it out and might come out ok or sell now at a loss.

6 weeks is nothing. 

As I often say there's only two prices that matter. The one you buy at and the one you sell at.  Simply relying on long term performance is no guarantee of being highly successful. Too many variables to be factored into account when investing as an individual.

At the current time a lot could happen in 6 weeks. As there's a cloud of uncertainty that needs to clear. 

What would you do if you had invested in Baillie Gifford Managed Fund?

About 10% of my allocation is in Baillie Gifford Managed Fund.

Last few weeks has been red. Now down 11.41%, feels like I bought single shares in a company. 

MarkCarnage

london21 said:

Thrugelmir said:

london21 said:

I get where you are coming from but if long term investment ride it out and might come out ok or sell now at a loss.

6 weeks is nothing. 

As I often say there's only two prices that matter. The one you buy at and the one you sell at.  Simply relying on long term performance is no guarantee of being highly successful. Too many variables to be factored into account when investing as an individual.

At the current time a lot could happen in 6 weeks. As there's a cloud of uncertainty that needs to clear. 

What would you do if you had invested in Baillie Gifford Managed Fund?

About 10% of my allocation is in Baillie Gifford Managed Fund.

Last few weeks has been red. Now down 11.41%, feels like I bought single shares in a company. 

I'd consider it in the context of my whole portfolio, what has the other 90% done? If you have held BG Managed for any reasonable length of time you will have done pretty well. Any period longer than a year, you are still almost certainly showing a gain.

You could also have a look at the fund fact sheet, or read up a bit more about the fund on the BG  website. Decide if it's still for you. 

masonic

london21 said:

Thrugelmir said:

london21 said:

I get where you are coming from but if long term investment ride it out and might come out ok or sell now at a loss.

6 weeks is nothing. 

As I often say there's only two prices that matter. The one you buy at and the one you sell at.  Simply relying on long term performance is no guarantee of being highly successful. Too many variables to be factored into account when investing as an individual.

At the current time a lot could happen in 6 weeks. As there's a cloud of uncertainty that needs to clear. 

What would you do if you had invested in Baillie Gifford Managed Fund?

About 10% of my allocation is in Baillie Gifford Managed Fund.

Last few weeks has been red. Now down 11.41%, feels like I bought single shares in a company.

In the event of an event similar to the dotcom crash, you'd expect a fund like this to fall 50% or more, so don't sweat 11%. If you've discovered this fund does not fit with your objectives and risk tolerance, then sell, otherwise consider this a healthy correction.

Thrugelmir

london21 said:

Thrugelmir said:

london21 said:

I get where you are coming from but if long term investment ride it out and might come out ok or sell now at a loss.

6 weeks is nothing. 

As I often say there's only two prices that matter. The one you buy at and the one you sell at.  Simply relying on long term performance is no guarantee of being highly successful. Too many variables to be factored into account when investing as an individual.

At the current time a lot could happen in 6 weeks. As there's a cloud of uncertainty that needs to clear. 

What would you do if you had invested in Baillie Gifford Managed Fund?

About 10% of my allocation is in Baillie Gifford Managed Fund.

Last few weeks has been red. Now down 11.41%, feels like I bought single shares in a company. 

That’s the nature of some investment vehicles. Concentration of holdings magnifies both the upside and downside risk. The question to be asked is what has caused the fall if it’s out of line with the broader markets. As the answer may well be lie within the individual holdings. Companies aren’t immune from bad news or poor financial results. 

Audaxer

london21 said:

Thrugelmir said:

london21 said:

I get where you are coming from but if long term investment ride it out and might come out ok or sell now at a loss.

6 weeks is nothing. 

As I often say there's only two prices that matter. The one you buy at and the one you sell at.  Simply relying on long term performance is no guarantee of being highly successful. Too many variables to be factored into account when investing as an individual.

At the current time a lot could happen in 6 weeks. As there's a cloud of uncertainty that needs to clear. 

What would you do if you had invested in Baillie Gifford Managed Fund?

About 10% of my allocation is in Baillie Gifford Managed Fund.

Last few weeks has been red. Now down 11.41%, feels like I bought single shares in a company. 

Over the longer term, the fund has still returned over 11% annualised gains over the last 5 and 10 years. 

MarkCarnage

That’s the nature of some investment vehicles. Concentration of holdings magnifies both the upside and downside risk. The question to be asked is what has caused the fall if it’s out of line with the broader markets. As the answer may well be lie within the individual holdings. Companies aren’t immune from bad news or poor financial results. 

The holding concentration isn't as high as it was a year ago.....the nature of the manager philosophy tends to lead to a few fairly large holdings, and quite a number of relatively small ones....of the latter, one or two are expected to become much larger, and some will wither on the vine. 

I don't think in this case it's really individual corporate news that's driving recent performance, but instead two issues; generically, long duration/high growth companies have seen a bit of a hit in relation to rising discount (interest) rates, either actual or expected. If the companies concerned continue to deliver or exceed expectations operationally, that won't be a long term issue. Secondly, the political risk of the relatively high exposure to Chinese listed stocks is high, and has already led to a couple of holdings being sold, in the educational sector after the recent policy changes there. 

It's also worth noting that the manager commented about a year ago that COVID had essentially led to a compression of expected future returns into a much shorter time frame....this was after the stellar performance in 2020/early 2021. So perhaps some reversal of that was to be expected.