Manchester & London Inve... Share Discussion Threads

[iminterested] 15/3/2024 10:37

Re
Imintested, I can assess and manage the risks, and it sounds like this is fine for you - but what if a number think the concentration too high and we are simply too much beta for their needs. We ironically become less popular and are a marginal holding.

The same argument was used on psh where the nav traded at -40% this year now-25. The managers tried numerous ways to narrow it Share buybacks can work However their belief is that it is fund performance that is the most beneficial way Also it should be noted that after strong performance many potential investors wonder whether it is achievable in consecutive years

[iminterested] 15/3/2024 10:34

Against MNP? Am I missing something what is mnp pllease

[takeiteasy] 15/3/2024 09:42

Imintested, I can assess and manage the risks, and it sounds like this is fine for you - but what if a number think the concentration too high and we are simply too much beta for their needs. We ironically become less popular and are a marginal holding.

My hope like yours is that over time ITs that provide decent and consistent alpha against the market are recognised and rewarded with a narrowing discount and I benchmark us against MNP for instance in this respect.

dyor etc

[iminterested] 15/3/2024 08:34

hxxps://www.grahamvalue.com/blog/warren-buffett-and-diversification

Also consider this re your points on
Dyor!
You are absolutely right
However
When I buy Mnl
I buy a concentrated fund w approximately
I reckon 28% equally invested in msft and nvidia
Mnl have done their research
I have looked at their half year report
I know the stock weighting has changed since the January newsletter
I have done my own research as you do

Therefore I know what I AM buying
As do you

It is up to others as you always say to
Dyor

[iminterested] 15/3/2024 08:30

The Intelligent Investor
Buffett also wrote the preface to Benjamin Graham's book — The Intelligent Investor — and called it "by far the best book about investing ever written."

"There should be adequate though not excessive diversification."
Benjamin Graham, Chapter 5: The Defensive Investor and Common Stocks, The Intelligent Investor

[iminterested] 15/3/2024 08:28

TIE
Yesterday was a clear case of flight to quality, you are right to mention the 10 year.
Questions
How many fund managers have you heard of voluntarily doing degrees in their own private time, in their industry after their 20s do not include MBAs because that is a salary enhancer, for them not their clients.
That differentiates MNL from all other funds globally. My best performing funds with my high highest allocations is when owners are managers ie sheppard
As for the discount Would you prefer to buy a fund trading at a premium or discount to nav. That’s a rhetorical question.
Re management fees I can buy w the discount nvidia and msft for 84p in the £ , if the fund becomes better known and like in the past nav trades at parity I receive a 20% gain FOC.
Happy to chat privately if u like
Can discuss this and more

Re concentration risk Buffet had huge bets on individual stocks in the early days Berkshire Hathaway would never have become what it is without his research and concentration risk !!!!!!

[takeiteasy] 15/3/2024 06:00

Get the point on Microsoft.

Having about 40% of the portfolio in business and networks software (e.g. non chips and chip software) does seem to provide some diversification vs. chip sector volatility whilst Nvidia and AMD go through a period of drawdowns (e.g. AMD has just dropped 15%).

So in addition to Microsoft, Arista Networks, Alphabet and Oracle were also up yesterday on a down day for Nasdaq.

So my estimate is our discount remains around 15%.

This is why I prefer for MNL to oversee the portfolio than me trying to finesse a bespoke portfolio around chip based ETFs eg SOXX and a direct holding of say Microsoft. Each to his own, but there is certainly no fund out there with the combination of holdings/concentrations we have not least as there are 10% holding limits on most collective funds.


Chap on CNBC last night was speaking of an ongoing flight to quality while 10 year bond rates remain high and quoted ARKK /Small cap russell 2000 under performance this year as evidence of this.e.g.

Dyor and no advice etc

[iminterested] 14/3/2024 18:10

Typo I have sold 96% and still have over £100000, consider if I had not sold at all!!

[iminterested] 14/3/2024 18:09

Regarding the managers taking profits in their 2 largest holdings. Consider msft and Nvda
I bought Microsoft in 2005 for 13 usd I sold most between 87-110. Today is the first time I have sold any since then.i have 96% of my original position.

Also consider the moats both stocks sit behind, I am invested in MNL because they’re 100% ai not because they are tech like they used to be.That is why I have been buying from 380 -770

[iminterested] 14/3/2024 17:45

Sorry
That is 20,000 shares offered @ 672
A seller

[takeiteasy] 14/3/2024 17:27

What is that trade - buy or sell

hxxps://uk.investing.com/news/stock-market-news/nvidia-stock-target-lifted-at-wedbush-as-ai-products-remains-robust-432SI-3382631
hxxps://www.msn.com/en-gb/video/money/would-be-a-crucial-mistake-to-ever-sell-nvidia-stock-ross-gerber/vi-BB1jO6Lh?t=17

I am starting to think that our managers need to take profits and manage these overweight positions and I read somewhat oddly that a certain professional trader is advising the opposite - indeed to keep nvidia for ever. We live in very strange times is all I can say!

dyor and no advice

[iminterested] 14/3/2024 14:45

20000@ 673

[iminterested] 14/3/2024 14:33

Microsoft AllTime High 426.68 USD

[takeiteasy] 14/3/2024 10:36

Near doubling of exposure as explained in 2023 annual accounts...

Information Technology
Material positive contributors to the portfolio’s performance from this sector were ASML Holding NV and Nvidia Corp. Material negative contributors were Microsoft Corp, Paypal Holdings Inc and Adobe Inc. The portfolio’s delta-adjusted exposure to this sector at the period end was around 91.9 per cent of net assets
which is a material increase from 48.7 per cent when we reported last year’s Interims. This increase corresponds to our strategy of shifting from “Soft Technology” to “Hard Technology” as articulated in the last Annual Report and in the factsheets and newsletters since.

[takeiteasy] 14/3/2024 10:17

Chaps here goes - one line summary it is the conncentration risk over two stocks and moving >90% of the portfolio into a specific subset of the tech market defined by the firm as "hard tech" infrastructure firms - covering chips, networks and software.

2017 - Microsoft and Nvidia combined holding <10%

2019 - Microsoft and Nvidia combined holding 20%

2021 - Microsoft 20% Nvidia 0% and other AI "hard tech" companies 6% ASML

2022 - Microsoft and Nvidia combined 34% and other AI "hard tech" companies 34% (ASML, Cadence, Synopsys)

2023 - Microsoft and Nvidia combined 51% and other AI "hard tech" companies >40% (ASML, Cadence, Synopsys, Arista networks, broadcom)

So since 2021 where we had effectively a minority of the portfolio linked to "hard tech" plays supporting AI infrastructure i.e. 26% we now have >91% of the portfolio supporting AI infrastructure.

So what was in 2021 that is no longer - a ton of consumer discretionary companies like amazon, netflix , tencent and some software plays like Adobe. These are not categorised by the firm as AI hard tech plays. We also had 21% in Google.

It is night and day for me a switch of 21% to over 90% - i.e. not tech stocks per se but those in a narrowly defined subset of the IT market defined by our firm as "hard tech" AI infrastructure...dyor and no advice

[scottishfield] 14/3/2024 09:55

It's the 'concentration of investment' I think takeiteasy is referring to (re strategy)? Just imo

[takeiteasy] 14/3/2024 09:52

Some thoughts after reading and reflecting on the report in more detail

"It should be noted that the average discount for the Company for the last 5 years sits at ~10.8 per cent (Source: Bloomberg) which, considering the free float of the Company is less than £150m, could be argued as ‘in line’ with expectations (if not ideal)
...The concentration of investment in the two largest holdings is material and all shareholders should consider whether they are comfortable with this concentration risk when deciding whether to continue to invest in the Company".

Why - we have had terrific returns here now well ahead of benchmark, why force investors to leave due to extreme positioning as a permanent strategy. This will reinforce a high discount imvho which is now nearly 17% and rising and this has simply not been acknowledged in the report. There are a number of large cap stocks to consider and there is no harm in reallocating holdings better to remove large overweights.

If the managers read this thread - can you please have a serious think about the link between very low investor interest, high spreads, a stubbornly high discount and managing position sizes more sensibly.

imvho, dyor and no advice

[northstar88] 14/3/2024 09:51

No offence Takeiteasy, but you keep stating that since MNL "changed their strategy" they have started performing better and their research is now coming to fruition.
I'm not sure if this change of strategy is something you have identified, or whether this is somethign MNL themselves are tryig to re-write as I don;t always read their newsletters anymore.
I've been a holder here for about 5 years and in my view there has been no change in strategy at all. For the last 5 or so years, the trust has been focused purely on big data / AI, just look at the holdings.
The only major deviation in strategy is that he exited china a little clumsily and seemingly on a whim when Russia attacked Ukraine.

[takeiteasy] 14/3/2024 07:49

HY results out yesterday

[takeiteasy] 13/3/2024 14:17

NAV 796 - discount 16%, NAV up from 603 at start of year so 32% uplift 2024 YTD...dyor etc

[takeiteasy] 13/3/2024 10:45

hxxps://siliconangle.com/2024/03/12/meta-unveils-two-new-24k-gpu-clusters-using-develop-advanced-generative-ai/

[takeiteasy] 13/3/2024 06:54

hxxps://www.msn.com/en-us/lifestyle/shopping/ai-focused-tech-giants-are-entering-a-virtuous-cycle-of-spending-that-will-see-their-profits-explode-bofa-says/ar-BB1jMgMb

Bank of America recently put together a list of 164 buy-rated stocks across industries that are tied to AI. The firm also highlighted a trio of exchange-traded funds (ETFs) for those looking for diversify exposure while investing in the technology: the Global X Robotics and Artificial Intelligence ETF (BOTZ), the Global X Artificial Intelligence & Technology ETF (AIQ), and the iShares US Tech Breakthrough Multisector ETF (TECB).



Someone else who does not seem to have us on the recommended list as we are not an ETF - lols :)

For full disclosure, MNL does not compare at all well on a 5 year comparative basis (prior life before AI repositioning)

dyor and no advice

[takeiteasy] 12/3/2024 13:58

Nvidia (NASDAQ:NVDA) – Nvidia shares are up 1.7% in Tuesday’s pre-market, driven by Oracle‘s (NYSE:ORCL) emphasis on its importance in the artificial intelligence market. After Monday’s close, Oracle announced a new cloud computing infrastructure deal with Nvidia. Nvidia shares closed lower on Monday, but Oracle CEO Safra Catz indicated a promising collaboration in an earnings call. The statements suggested a continued demand for AI chips, potentially alleviating concerns about Nvidia’s chip shortage dyor etc

[takeiteasy] 12/3/2024 05:31

"NVIDIA will be hosting its GTC conference March 18th-21st, the first 'live' conference in 5yrs

Biggest event of the year if you are an Nvidia "groupie" - some details in this link. I will try to view what I can of the available events :)

hxxps://uk.investing.com/news/stock-market-news/cantor-fitzgerald-raises-nvidia-target-ceo-huang-the-soothsayer-of-santa-clara-432SI-3375127

From AMD conference earlier CEO speaking on AI on a PC as the future trends - quite interesting :)


Key quotes from video; "AI is still at the beginnings of what we can do with technology...." and "as AI technology gets better I am sure everyone is going to want an AI PC" :)

dyor etc