Share this page:
Stay connected:
Welcome to the Citywire Money Forums, where members share investment ideas and discuss everything to do with their money.

You'll need to log in or set up an account to start new discussions or reply to existing ones. See you inside!

Notification

Icon
Error

SMT and Tesla
Ludditeme
Posted: 27 October 2017 12:36:49(UTC)
#1

Joined: 14/11/2016(UTC)
Posts: 59

Thanks: 57 times
Was thanked: 50 time(s) in 23 post(s)
Hi,

I have a significant investment in this trust and value it's approach; conviction; and low annual fee. I do look at their (approaching 7%) Tesla holding with worry though. It looks to me like it is completely unable to ramp up production to anywhere near the level to justify the high valuation. Their current (no joke!) advantage with the charging network is not a sufficient moat, as there will be a massive increase of capacity soon - Shell are already stepping into this area and obviously have a huge network of locations to exploit.

Am I missing something here, or is this stock vulnerable?

Cheers



2 users thanked Ludditeme for this post.
Mickey on 27/10/2017(UTC), Will Morris on 28/10/2017(UTC)
Keith Cobby
Posted: 27 October 2017 12:44:57(UTC)
#2

Joined: 07/03/2012(UTC)
Posts: 394

Thanks: 213 times
Was thanked: 576 time(s) in 244 post(s)
SMT is my largest holding @ 20%. I agree that Tesla is a large holding of the trust and that there are increasing threats which make the valuation vulnerable. However, James Anderson owns 1% of SMT (£50-60m) and I respect his judgement.

He is on record as saying that an investment can only go to zero whilst the upside is unlimited. If the worst happens I will lose 7% of 20%, ie 1.4%.
7 users thanked Keith Cobby for this post.
Guest on 27/10/2017(UTC), Jeff Liddiard on 27/10/2017(UTC), Ludditeme on 27/10/2017(UTC), Mickey on 27/10/2017(UTC), dlp6666 on 30/10/2017(UTC), The Spanish Inquisition on 31/10/2017(UTC), satish mittal on 01/11/2017(UTC)
LeveragedLarry
Posted: 27 October 2017 12:52:29(UTC)
#4

Joined: 23/05/2016(UTC)
Posts: 1

@ Keith Cobby - it will likely be more than that given the premium will switch into a discount as investor sentiment will turn sour!
Micawber
Posted: 27 October 2017 13:48:23(UTC)
#5

Joined: 27/01/2013(UTC)
Posts: 1,713

Thanks: 736 times
Was thanked: 2472 time(s) in 954 post(s)
Yes, I don't like the Tesla holding, nor Ferrari. I don't hold SMT, though I keep looking at it going up.....
5 users thanked Micawber for this post.
Ludditeme on 27/10/2017(UTC), halfinchnut on 27/10/2017(UTC), Will Morris on 28/10/2017(UTC), dlp6666 on 30/10/2017(UTC), Hugh M on 31/10/2017(UTC)
King Lodos
Posted: 27 October 2017 13:53:05(UTC)
#7

Joined: 05/01/2016(UTC)
Posts: 1,931

Thanks: 342 times
Was thanked: 2620 time(s) in 1065 post(s)
You can have a look at it here:
https://www.gurufocus.com/stock/TSLA

I used to call it a billionaire's vanity project .. There's no business yet – you're buying a company that eats money while not building an unbeatable competitive edge.

Insider trades are mostly sells .. Hedge fund guys don't seem to hold it much longer than 3-6 months .. So I don't think many are seeing it as a great long-term investment yet .. I'd be interested to know Anderson's thinking .. I'm an SMT cynic – I think it's a good Tech index (i.e. it includes Amazon .. which I insist is a tech company) with leverage

3 users thanked King Lodos for this post.
Tim D on 27/10/2017(UTC), Ludditeme on 27/10/2017(UTC), satish mittal on 01/11/2017(UTC)
Tim D
Posted: 27 October 2017 14:05:44(UTC)
#3

Joined: 07/06/2017(UTC)
Posts: 226

Thanks: 836 times
Was thanked: 293 time(s) in 137 post(s)
Keith Cobby;52490 wrote:
If the worst happens I will lose 7% of 20%, ie 1.4%.


I find it hard to imagine any circumstances in which Tesla might go to zero while the rest of SMT's disruption-tastic portfolio escapes completely unscathed. I'd be more worried about 100% of your 20% dropping 80%. But I think it's safe to say today is not that day :^)

Keith Cobby
Posted: 27 October 2017 14:18:06(UTC)
#8

Joined: 07/03/2012(UTC)
Posts: 394

Thanks: 213 times
Was thanked: 576 time(s) in 244 post(s)
If you don't have conviction and spread your money too thinly you are just tracking the market. A few years ago SMT was heavy on mining and resources and then they moved onto tech and pharma. I haven't sold down any of my holding (and have topped up from time to time) so it has been left to grow.
2 users thanked Keith Cobby for this post.
Mickey on 27/10/2017(UTC), martin hargan on 28/10/2017(UTC)
Ludditeme
Posted: 27 October 2017 14:25:01(UTC)
#9

Joined: 14/11/2016(UTC)
Posts: 59

Thanks: 57 times
Was thanked: 50 time(s) in 23 post(s)
As concerned as I am, there is no denying that SMT still marches on. I was thinking about selling and holding the proceeds in cash for a dip, but don't want to start second guessing future events. I also keep thinking about the re-positioned MNL portfolio (10% discount), but can't quite get round to a purchase. Best stop worrying!
2 users thanked Ludditeme for this post.
Mickey on 27/10/2017(UTC), dlp6666 on 30/10/2017(UTC)
jvl
Posted: 27 October 2017 15:32:46(UTC)
#11

Joined: 01/04/2016(UTC)
Posts: 328

Thanks: 189 times
Was thanked: 376 time(s) in 166 post(s)
I've got both SMT and MNL. Wish I'd bought more. The original idea was to buy more SMT every 3-4 months but after a while I resented the premium too much, preferring MNL.

The secret seems to be out on MNL, up over 3% today - at least as much if not more than SMT, PCT and ATT.

It has some SMT and PCT in it and a greater percentage of Amazon, Facebook and Alphabet than most. More big tech, no direct Tesla, I think.
3 users thanked jvl for this post.
Mickey on 27/10/2017(UTC), Ludditeme on 27/10/2017(UTC), dlp6666 on 30/10/2017(UTC)
Tug Boat
Posted: 27 October 2017 18:57:37(UTC)
#12

Joined: 16/12/2014(UTC)
Posts: 120

Thanks: 1 times
Was thanked: 148 time(s) in 65 post(s)
Think Tesla is the modern day DeLorian, which is looking for a real life flux capacitor.

It has no better technology than Toyota, VW or the other big car firms.

The electric or hydrogen fuel cell commercial product will not come from a debt ridden company such as this, nor the likes of Google. It will be from a company that can make things in millions in cooperation with its suppliers.

I suspect HKMC or Renault-Nissan could be the leaders with the first big volumes.

I would like a Tesla as a run around for Mrs Boat though, they look spiffing.
3 users thanked Tug Boat for this post.
Captain Slugwash on 27/10/2017(UTC), Ludditeme on 28/10/2017(UTC), North Star on 29/10/2017(UTC)
Chris Ould
Posted: 27 October 2017 19:31:48(UTC)
#14

Joined: 13/01/2014(UTC)
Posts: 68

Thanks: 35 times
Was thanked: 30 time(s) in 18 post(s)
3 users thanked Chris Ould for this post.
King Lodos on 27/10/2017(UTC), Tim D on 27/10/2017(UTC), Mickey on 27/10/2017(UTC)
halfinchnut
Posted: 27 October 2017 19:36:42(UTC)
#6

Joined: 06/06/2017(UTC)
Posts: 3

Thanks: 13 times
Was thanked: 3 time(s) in 2 post(s)
Micawber;52493 wrote:
Yes, I don't like the Tesla holding, nor Ferrari. I don't hold SMT, though I keep looking at it going up.....


It just keeps climbing, the best investment I have ever owned, it simply defies gravity, one day it will fall very sharply.

I have a shed load of cash to buy as many as I can when the price falls, which is probably the biggest mistake I can make, I should buy now, but keep thinking it can't keep going up, but it does, it just keeps on bloody rising.


2 users thanked halfinchnut for this post.
dlp6666 on 30/10/2017(UTC), Guest on 05/11/2017(UTC)
halfinchnut
Posted: 27 October 2017 19:45:30(UTC)
#10

Joined: 06/06/2017(UTC)
Posts: 3

Thanks: 13 times
Was thanked: 3 time(s) in 2 post(s)
Ludditeme;52501 wrote:
As concerned as I am, there is no denying that SMT still marches on. I was thinking about selling and holding the proceeds in cash for a dip, but don't want to start second guessing future events. I also keep thinking about the re-positioned MNL portfolio (10% discount), but can't quite get round to a purchase. Best stop worrying!


I top sliced a few at £3.58, put the proceeds into WPCT. Every morning I wake up I hit myself in the head with a hardwood mallet to remind myself never to do anything that stupid again.
King Lodos
Posted: 27 October 2017 20:53:53(UTC)
#15

Joined: 05/01/2016(UTC)
Posts: 1,931

Thanks: 342 times
Was thanked: 2620 time(s) in 1065 post(s)
"Elon Musk is remarkable for a number of reasons. He created a lot of wealth through being one of the founders of PayPal. That business was sold to eBay, it made him a very rich man and instead of taking the money and going off into the sunset, he chose to reinvest all of it into an electric car company and space exploration company."


Sounds a bit like when a Russian oligarch wants to buy a football team .. There's nothing about Musk that tells me he can run this type of business .. I'm happy to be proved wrong, but I've always seen Toyota, BMW, Audi, etc. as being in the perfect position to roll this technology out when the market's ready for it, and with centuries of combined experience selling cars
5 users thanked King Lodos for this post.
Captain Slugwash on 27/10/2017(UTC), Micawber on 28/10/2017(UTC), Ludditeme on 28/10/2017(UTC), North Star on 29/10/2017(UTC), Guest on 18/11/2017(UTC)
Alan Selwood
Posted: 27 October 2017 22:59:23(UTC)
#16

Joined: 17/12/2011(UTC)
Posts: 2,445

Thanks: 465 times
Was thanked: 3706 time(s) in 1421 post(s)
The most disconcerting comment I read recently was that Tesla had a huge backlog of orders, but its rate of production would not get many of the orders completed for a very long time. If you spend a lot on R & D, have the good ideas, but don't quickly turn them into profitable revenue, you are setting yourself up to lose face as a company and lose all your cash before you can get a decent return on your investment. I'd feel happier buying Ricardo, AB Dynamics and similar. As has been said many times, nobody ever made a durable profit out of building airliners, railways and by analogy cars.
5 users thanked Alan Selwood for this post.
King Lodos on 28/10/2017(UTC), Ludditeme on 28/10/2017(UTC), Micawber on 28/10/2017(UTC), North Star on 29/10/2017(UTC), satish mittal on 01/11/2017(UTC)
Alex Peard
Posted: 27 October 2017 23:01:02(UTC)
#17

Joined: 05/05/2012(UTC)
Posts: 31

Thanks: 141 times
Was thanked: 33 time(s) in 14 post(s)
I agree the Tesla holding (and some others) appear fully or over valued. However, my experience is to trust the managers. I have held SMT for many years both directly, in a SIPP and in my children's Baillie Gifford savings plans.

A few years ago when they moved to a premium to NRV I sold half my SIPP holding and reinvested in another IT. The 50% holding left in SMT is now double the value of 50% reinvested elsewhere.

I also hold Monks and Shin Nippon. In recent years if I had invested more through Baillie Gifford and less in trying to construct a portfolio of direct holdings in companies I thought were solid & reliable dividend payers (Pearson, Provident and Carillion being the worst examples) I would be much richer!

11 users thanked Alex Peard for this post.
Keith Cobby on 27/10/2017(UTC), Kenpen2 on 28/10/2017(UTC), Mickey on 28/10/2017(UTC), Freddy4Skin on 29/10/2017(UTC), Jeff Liddiard on 29/10/2017(UTC), North Star on 29/10/2017(UTC), dlp6666 on 30/10/2017(UTC), Guest on 30/10/2017(UTC), The Spanish Inquisition on 31/10/2017(UTC), c brown on 01/11/2017(UTC), satish mittal on 01/11/2017(UTC)
Micawber
Posted: 28 October 2017 07:07:46(UTC)
#20

Joined: 27/01/2013(UTC)
Posts: 1,713

Thanks: 736 times
Was thanked: 2472 time(s) in 954 post(s)
This probably reflects sectoral choice rather than magical managers, and the comparison to make with SMT is some other trusts that focus on big tech in US and China.
Mat1
Posted: 28 October 2017 09:39:07(UTC)
#18

Joined: 03/05/2017(UTC)
Posts: 7

Was thanked: 5 time(s) in 2 post(s)
Alex Peard;52520 wrote:

I also hold Monks and Shin Nippon. In recent years if I had invested more through Baillie Gifford and less in trying to construct a portfolio of direct holdings in companies I thought were solid & reliable dividend payers (Pearson, Provident and Carillion being the worst examples) I would be much richer!



I'm 60% SMT, 20% MNKS, 10% Shin Nippon, 10% Japan Trust. Happy so far!
4 users thanked Mat1 for this post.
Mickey on 28/10/2017(UTC), Alex Peard on 28/10/2017(UTC), Keith Cobby on 28/10/2017(UTC), dlp6666 on 30/10/2017(UTC)
Freefall Junkie
Posted: 28 October 2017 13:14:45(UTC)
#21

Joined: 09/06/2014(UTC)
Posts: 6

Was thanked: 8 time(s) in 5 post(s)
Interesting discussion - it seems I am in the same boat as a few people above. SMT is my biggest holding at around 20%, also my most successful investment having more than doubled in the 4 years or so I have head it. The Tesla holding does concern me though. Tesla is ridiculously overvalued and I am not at all convinced it can really take on the established players like VAG in the long run. However I do have a high regard for James Anderson's investment approach - no doubt if he didn't think there was further upside in Tesla at least in the medium term he would sell.
2 users thanked Freefall Junkie for this post.
Mickey on 28/10/2017(UTC), Alex Peard on 28/10/2017(UTC)
Keith Cobby
Posted: 28 October 2017 14:55:15(UTC)
#19

Joined: 07/03/2012(UTC)
Posts: 394

Thanks: 213 times
Was thanked: 576 time(s) in 244 post(s)
Mat1;52529 wrote:
Alex Peard;52520 wrote:

I also hold Monks and Shin Nippon. In recent years if I had invested more through Baillie Gifford and less in trying to construct a portfolio of direct holdings in companies I thought were solid & reliable dividend payers (Pearson, Provident and Carillion being the worst examples) I would be much richer!



I'm 60% SMT, 20% MNKS, 10% Shin Nippon, 10% Japan Trust. Happy so far!


I hold all BG trusts except Japan, although my son also has this in his children's plan.

I think BG have been the most successful investment trust manager over the last decade.
7 users thanked Keith Cobby for this post.
Mickey on 28/10/2017(UTC), martin hargan on 28/10/2017(UTC), Alex Peard on 28/10/2017(UTC), Freddy4Skin on 29/10/2017(UTC), dlp6666 on 30/10/2017(UTC), Guest on 31/10/2017(UTC), satish mittal on 01/11/2017(UTC)
7 Pages123Next page»
+ Reply to discussion

Markets

Other markets