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SMT thoughts and advice
Comments
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The stock markets really feel like a bubble right now. I've ridden a decade of increasing markets since I retired and allowed my asset allocation to go from 70% equities to over 85%. Now seems like a good time to take some profits and with interest rates on MMFs at 4% and long bond rates rising I think a few other investors might be thinking the same so I'm rebalancing at DOW 51.5k
And so we beat on, boats against the current, borne back ceaselessly into the past.2 -
A part sale could help restore the 30% private equity cap, with the proceeds then redeployed to greater diversify a highly concentrated portfolio and/or share buy back.
Surely no need to sell anything for the private equity cap. Once SpaceX is listed then it's no longer PE and automatically will massively reduce that chunk of the portfolio without any transactions. Purely moving from one bucket to another but still the same holdings recategorised.
Remember the saying: if it looks too good to be true it almost certainly is.1 -
A very good point I had overlooked, bearing in mind as an 'insider' SMT will essentially have no material lock up period preventing a sizeable disposal should they wish.
One could hope they would take the opportunity to make a substantial part disposal to diversify, but that has not been the manager's messaging.
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I thought the insiders did have material lock up periods? Either 180-day for 'non significant' investors, and 366 for 'significant'.
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This link explained the relaxation in the case of SpaceX insiders.
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Took some profits from US equity on Thursday and I might have heard a faint pop on Friday, or at least a little air escaping the bubble. I'm now at 41% US Equity, 25% non-US Equity, 14% Global Bonds and 20% Cash. Today the NASDAQ was down over 1k pts which is interesting with the SpaceX IPO scheduled for next Friday. Will that be an opportunity for a rally or a "rapid unscheduled disassembly"???
And so we beat on, boats against the current, borne back ceaselessly into the past.0 -
Closed over 4% down, a stupendous 1 day decline and the most significant since the covid decline.
With no particular bad news to justify this 2 day freefall, my take on this is institutional investors taking a sideswipe at the forthcoming SpaceX IPO, and perhaps a show of displeasure at Nasdaq's supine acquiescence in attempting to give the company an unjustifiable leg up in its weightings.
Have to wonder if this declines continues into Monday and contagion spreads beyond the Nasdaq, Musk may need to think seriously of pushing back the launch despite the need for fresh equity. Certainly the underwriting banks will be aggrieved if the IPO flops and they are left literally holding the baby.
As you say, could this be the long awaited popping of the vastly overinflated tech balloon?
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It's just one day and Monday might see a rally. But I think big investors are looking at inflation, rising bond and Fed rates and maybe looking at the actual numbers associated with Elon's businesses and AI and wondering if it's all looking a bit over blown…The DOW has tripled since I retired and stopped rebalancing and I feared getting greedy and that almost 90% equities in a retirement portfolio was a little silly with the World the way it is right now.
And so we beat on, boats against the current, borne back ceaselessly into the past.1 -
Prefacing this with the fact that I'm completely out of my depth on these matters, which is why I value reading other people's discussions, but is it possible some selling off was to liquidate funds for the IPO?
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Yes, I was about to say this. People raising cash for the SpaceX IPO is one theory doing the rounds. After a massive run up, there was disappointment with Broadcom's earnings and this also knocked Micron et al so it could be multiple things.
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