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SMT at a discount - good time to buy?
dyfed
Posted: 29 March 2018 14:31:54(UTC)
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Topped up yesterday when trading at a discount, as I only have a small holding that I bought years back and unfortunately decided to top slice when it started trading at a premium
King Lodos
Posted: 29 March 2018 14:57:55(UTC)
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Digging up flowers to plant weeds.

If I ever want to top-slice, like I did with Harbourvest a year or so back, I'd use a trailing stop-loss .. So you identify the trading range (the normal volatility in the current trend), then set a stop loss just below it, to reduce the position.

That way, if it keeps rising, you stay invested .. It's by no means an exact science, but it's kept me in trades that I might otherwise have talked myself out of .. And when you get a real winner – like an Amazon, that rises 5,000% – the neurotic practice of top-slicing will destroy your returns .. It's the main reason index funds are hard to beat (they never take profits)
4 users thanked King Lodos for this post.
Guest on 29/03/2018(UTC), Tim D on 29/03/2018(UTC), halfinchnut on 29/03/2018(UTC), Peter59 on 29/04/2018(UTC)
alex lee
Posted: 02 April 2018 10:27:08(UTC)
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[quote=Sara G;59358

As to whether SMT is a good choice right now, it's hard to say. There is a lot of hype around this fund and plenty of scope for the managers to disappoint. Plus it is (I think) the biggest IT among retail investors so potentially vulnerable to significant panic-selling at some point, which may throw up a better opportunity.

[/quote]


Is there not an equal if not greater risk when there is a strong institutions' holdings? Institutions may may want to liquidate their vast holdings all of a sudden if they want to take their investment inhouse or to take advantage of better investment alternatives. Is this increase risk not the reason why UT/Oeic class some of their funds as professional or insititutional?
Alan Selwood
Posted: 02 April 2018 10:39:58(UTC)
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"Is this increase risk not the reason why UT/Oeic class some of their funds as professional or institutional?"

Most of the distinction is due to difference in management fee levels, where the manager is prepared to reduce the annual fee on large holdings, because of the reduced admin per £ of assets under management.

For example, Fundsmith has the I class for very large investors (and since platforms tend to be very large investors, despite the platform splitting the holding across pooled holdings for thousands of small investors, they usually get the chance to buy I class units), the T class for the typical direct investor, and an expensive R class for use by retail investors via an intermediary.

Some investments are classed as only suitable for 'experienced and professional investors' because of the exotic levels of complication that the man/woman in the street could not realistically be expected to understand, since the risks involved may be orders of magntude greater than most people would expect. This may be because they use derivatives, are based in badly-regulated markets or are themselves individual shares that are not part of an approved market [a private equity firm based in Cambodia, and not listed on any Far East exchange might be an example of this type of 'institutional-only' holding - a real 'caveat emptor' type of investment!]
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alex lee on 02/04/2018(UTC)
Jim S
Posted: 02 April 2018 10:43:11(UTC)
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Now is a good time to buy SMT if looking just at the discount

I was checking out BG's funds yesterday, they actually have 3-4 interesting global funds. If the possibility of the SMT discount widening in future makes you nervous, you could look at Baillie Gifford Long Term Global Growth as an alternative.
Aminatidi
Posted: 18 April 2018 16:07:17(UTC)
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I find myself very unsure around SMT simply because it appears volatile and I don't know if I like that so much.

Debating selling off my chunk in it and levelling up on Fundsmith on Buffettology as those (along with Lindsell Train Global Equity) are what I've decided I want to focus on as my "core" equities.
DJLW
Posted: 18 April 2018 16:42:30(UTC)
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Aminatidi;60822 wrote:
I find myself very unsure around SMT simply because it appears volatile and I don't know if I like that so much.

Debating selling off my chunk in it and levelling up on Fundsmith on Buffettology as those (along with Lindsell Train Global Equity) are what I've decided I want to focus on as my "core" equities.


I hold SMT alongside Fundsmith and Lindsell Train and feel they complement each other quite nicely, not sure it has to be an either or but that said you should remove some volatility if you take SMT out of the mix.
2 users thanked DJLW for this post.
Jim S on 18/04/2018(UTC), J Thomas on 18/04/2018(UTC)
Jim S
Posted: 18 April 2018 17:12:47(UTC)
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Agree with DJLW, SMT does complement the rest, maybe worth keeping unless you have a good reason to sell? James Anderson & his team have proved they know their onions.

Also, volatility can be quite handy for top-slicing or accumulating. If you hold something, even a snall position, it can help you get a feel for whether something seems a bit over-valued or under-valued.



Aminatidi
Posted: 29 April 2018 07:47:53(UTC)
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Still debating with myself on this.

I like that it shows conviction and I like that James Anderson has a ton of his own money in there, both of which are reasons that pushed me towards the trio of Fundsmith, Lindsell Train, and Buffettology.

Considering 3 choices:

  1. Stick with the trio above split equally
  2. Stick with the trio above and keep SMT and split equally
  3. Stick with the trio above and lose SMT and add MWY and split equally

I have Keith Ashword-Lord's book on the table next to me to read later, and I think what it will tell me is that with any of those choices I have more than enough diversity.

MWY is something I'm drawn to because it does seem more themed on quality than SMT.

And of course I'm overthinking because worrying how "safe" Amazon and Tesla are then they're 5-10% of 25% is a bit daft, plus changing approach is as simple as hitting "sell" assuming the price is in the black :)
Freddy4Skin
Posted: 29 April 2018 08:37:12(UTC)
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Aminatidi;61429 wrote:

And of course I'm overthinking because worrying how "safe" Amazon and Tesla are then they're 5-10% of 25% is a bit daft, plus changing approach is as simple as hitting "sell" assuming the price is in the black :)


Worrying about Tesla is understandable but about Amazon, why?
Aminatidi
Posted: 29 April 2018 08:43:15(UTC)
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Freddy4Skin;61430 wrote:
Aminatidi;61429 wrote:

And of course I'm overthinking because worrying how "safe" Amazon and Tesla are then they're 5-10% of 25% is a bit daft, plus changing approach is as simple as hitting "sell" assuming the price is in the black :)


Worrying about Tesla is understandable but about Amazon, why?


Random example, point being SMT is a little more about the "unknowns" perhaps..
Tom Bards
Posted: 29 April 2018 10:52:23(UTC)
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Can't see any reason at all to swap SMT for MWY.


When you say themed on quality, what exactly do you mean?
philip gosling
Posted: 29 April 2018 12:38:44(UTC)
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Alan Selwood;59394 wrote:
The main issues seem to be:
a) How volatile is SMT?
(on past evidence, pretty volatile, e.g. halving from a previous peak)
b) How much volatility really matters if you diversify?
(if you have fortunate enough to have a £500,000 portfolio that is 5% cash, 10% short-dated gilts, 10% property, 5% gold and 70% equities consisting of [say] 20% Fundsmith, 10% SMT, 10% PAC, 20% CTY and/or FGT, 10% UK smaller companies, then the SMT volatility is based on a 10% holding (= £50,000).

If SMT halves in a bad period but then rebounds to 50% more than it was before the drop, the movements in SMT are:
Start £50,000
Max drawdown value £25,000
Final value £75,000

The only question then is:
Can you live with that?

If not, you need to de-risk.
If you can, go for it!



At Baillie Gifford Forum SMT showed their top 10 highest performers all of then had gone up many times their original worth and then they showed how far these same companies had fallen at some stage that they had been held and all had fallen 50% + but SMT stuck with them and over long term had been well rewarded. Their message was SMT may well fall 50% in a market crash as has happened before but stick with it over more than 5 years and they believe they will come through much stronger and higher priced in the future as they did in the past.You need access to investment money to take advantage of falls.
Aminatidi
Posted: 30 April 2018 07:17:24(UTC)
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Tom Bards;61439 wrote:
Can't see any reason at all to swap SMT for MWY.


When you say themed on quality, what exactly do you mean?


For example Unilever v Tesla or Diageo v Alibaba.

Established v "who knows how they'll do?".
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