Scottish Mortgage Invest... Share Discussion Threads

[lord loads of lolly] 27/3/2024 11:08

septblues - whilst Elliott's 5% holding is significant, it's insufficient to force SMT's managers into any major U-turns. They could, of course, increase it (they held almost 20% of Alliance Trust back in the day). But I don't see that happening here - for now at least.

Not sure where you get the idea Alliance was only tracking its benchmark index during the period Elliott was involved. I suggest you look up its historical prices on FT.com between 2011 & 2017 which show this is simply not the case.

Interesting what que passa reported about today's SMT webinar. I've not listened to it yet, but the fact they sounded "much more upbeat, relaxed and confident than for a long time", saying "they have had constructive discussions with Elliot and that their interests are aligned" is encouraging. Though admittedly, they could be spitting feathers behind the scenes & just putting a brave face on things.

[septblues] 27/3/2024 09:48

If Alliance is only tracking its index it might as well become an ETF and release cost savings to investors

Elliott technology fund has only delivered c 5% pa growth long term. Jesse Cohn an Elliott senior technology investor's background appears to be in tech companies past their sell by dates. Typical approach of selling bits, use company cash to buy back shares (a strategy which can be theoretically challenged on investment terms), cost cutting and so on.

Florida investors can be like the Glazers at Man Utd, take the cash and let the asset wither.

SMT is a closed end company. all actions should be in the interest of the company and not a minority shareholder.

[quepassa] 26/3/2024 19:40

1.

An excellent webinar today with ScoMo's two fund managers who were sounding much more upbeat, relaxed and confident than for a long time.

It is worth listening to today's webinar when uploaded to the ScoMo website.

2.

Several shareholder questions had been submitted about Elliott.

The answers from the Presenters were notably tight-lipped and uncharacteristically short as well as predictably vague,nebulous and non-committal.

The answers given however were to the effect that they have had constructive discussions with Elliot and that their interests are aligned....

3.

Everyone can form their own opinion as to whether the implementation of a massive Share Buy Back Program and the arrival of Elliott are linked or are coincidental. Either way, the very rapid narrowing of the discount-to-NAV is most welcome. Good news for shareholders.

4.

With Baillie Gifford sister funds, Edinburgh Worlwide and US Growth Trust, now both languishing far behind ScoMo at c. 15% discount-to-NAV, let's hope that Elliott take a stake and/or Baillie Gifford announce a major Share BuyBack Program for those Investment Trusts as well.


all imo. dyor.
qp

[caternia] 26/3/2024 18:21

Well they are off the naughty step as the worse performing investment trust in my portfolio.

[livewireplus] 26/3/2024 17:55

Will US activist Elliott revive Scottish Mortgage shares?https://www.thisismoney.co.uk/money/markets/article-13237493/Under-siege-activist-help-revive-Scottish-Mortgage-investment-trust.html

[septblues] 26/3/2024 10:13

SMT was outperforming Allianz and Polar until the opening up trades met Covid closing down trades met some part of the AI Gartner Hype Cycle met Fed interest rate changes met China sanctions met Ukraine war met rotations etc

Most of those Elliott could not have forecasted accurately or mostly generally otherwise it would have boarded SMT mid 2022 or early 2023. It's come on board late and missed some value accretion. As it is SMT has tracked Alliance over 1 year.

[quepassa] 26/3/2024 09:20

Historically trading at a Discount-to-NAV of some 10-20%, the current Discount on dual-quoted Canadian General Investments has ballooned to around 40%.

LSE:CGI
TSX:CGI


Top holding Nvidia 7.4%
Other top-ten holdings include:- Descartes 3.4%, Apple 3%, Amazon 2.6%.

some may consider this exceptional value, with a discount likely ripe for rapid compression.


all imo., dyor.
qp

[septblues] 26/3/2024 09:19

better comparison are Allianz, Polar etc.
a steeple chaser doesn't need a point to point jockey on its back

[jeffian] 25/3/2024 15:58

I was already a holder but I must admit I bought some more purely on the unscientific reasoning that an "activist investor" is likely to cause some activity and, whilst their involvement may not directly cause a strong upward movement, it is unlikely to be down!

[lord loads of lolly] 25/3/2024 14:53

faz - some buybacks produce long term benefits, others don't.

What's perhaps more relevant here is Elliott's involvement (which probably kickstarted SMT's new buyback scheme in the first place).

As I've posted previously, it's worth reading up on Alliance Trust's "run in" with Elliott. In 2017, Elliott finally sold its holding in AT, saying:

"When Elliott became a shareholder over five years ago Alliance Trust had poor corporate governance and its shares traded at more than a 15% discount to net asset value. Since then, corporate governance has improved, an external asset manager has been proposed and the discount has narrowed to less than 5%."

You can read the full article via the link below. Whilst Elliott's relationship with AT was certainly fractious, the end result was largely positive:

www.citywire.com/new-model-adviser/news/elliott-ends-war-with-alliance-trust/a987878

[faz] 25/3/2024 11:15

we'll have to wait and see re Elliott, but the share buy back alone should keep the share price bubbling for a bit

[septblues] 25/3/2024 10:29

I agree you "can’t see any real context or relevance in those stats"

[septblues] 25/3/2024 08:15

LLL - I'm a holder

[lord loads of lolly] 25/3/2024 08:05

septblues - can’t see any real context or relevance in those stats.

But assuming you’re an SMT holder, if you don’t see any opportunity I suggest you simply sell & move on.

I still believe Elliott’s involvement will be beneficial to SMT’s short-medium term performance. And by that I mean over the next 2-3 years. Longer term, who knows what’ll happen to ANY share.

[septblues] 25/3/2024 07:34

to put it into context

SMT market cap £12bn

market cap of Nvidia $2trn
Microsoft $3trn
Apple $3trn
Amazon $2trn
NYSE $22 trn
NASDAQ $25 trn
US stock markets $49 trn
Global Stock Markets $110 trn
Magnificent 7 market cap $13 trn
Non Magnificent 7 market cap $97 trn
Global GDP $85 trn
unquoted ?

some are overvalued, some are undervalued, some are income, some are growth

unquoted

cant see opportunity?
use of cash ?

Elliott are short term value
SMT is long term growth

[septblues] 24/3/2024 11:00

LLL - I haven't looked at Alliance over two different time periods so I'll take your word for it.

[hazl] 24/3/2024 09:00

Ah a bit in the Sunday Times about Elliot and Scottish Mortgage Trust.

Even they have used the word 'feared'.

I believe that SMT's stance was that they kept Nvidia and the high flying companies like it, because they couldn't see a better use for their cash, should they sell some.

Again, some say that if they continue ro be lieve in Nvidia going forward....and I support in theory, some of Nvidia's own mantra , to some extent, in that they are just at the start of this game changer, as an industry, they are in.

Perhaps SMT fear they might not be able to buy back cheaper in the future,as it goes from strength to strength?
Whilst some are predicting an eventual drop in the share price,who knows?
Some of the biggest names in the tech have just kept going up.

If it is carried out, will the cash lose value, as cash always does, if they cannot see anything better to invest in, as I seem to remember them claiming?

I could be wrong on that...I would have to see if those were just my thoughts.

Finally Space X!

I do hope they don't sell too much of that!
Is it just another way of attacking Musk?
Whatever, I m just a small person in the big scheme of these things.
I have admired SMT's choices of shares over the years, their advisors have been spot on.
The only reason I haven't jumped in for more recently, is because of the general market climate.
Elliot might know what they're doing but as I say I fear short termism and as a major shareholder they can over ride some of SMT's managements decisions....which I personally think is a shame.

I see space as a growing area, for investors.

IMO

[lord loads of lolly] 23/3/2024 16:16

Septblues - you’re missing my point. I’m not comparing SMT to Alliance in any way.

I’m simply pointing out that Alliance’s performance over the decade preceding Elliott’s intervention was WAY lower than the eight years following it. You can look up Alliance’s share chart quite easily to prove this.

I’m not saying the improvement was all down to Elliott, but it’s highly likely at least part of it was. Given the timing, it also wouldn’t be too much of a stretch to believe that the catalyst for SMT’s turbocharged buyback programme was Elliott’s increased intervention & holding. And the short term benefits of that are already clear for all to see - 14 March SMT closing price = 781p, 22 March = 879p.

[hazl] 23/3/2024 09:59

It seems an American activist known for mounting aggressive campaigns

has become the largest shareholder.

[hazl] 23/3/2024 09:54

I have just seen these posts and will look at the article.
Thank you faz.


My initial reaction was dismay about Elliot being involved.

These days everything is so shortermism in effect.
However will read the article and see what they have to say.

[faz] 23/3/2024 09:49

Written up in the Times today hxxps://www.thetimes.co.uk/article/us-activist-swoops-on-scottish-mortgage-jmgtvh3nk might be a pay-wall.

[arja] 22/3/2024 20:43

small discount to NAV now and much wider when I last followed this stock and traded it

[septblues] 22/3/2024 18:20

LLL - don't know about the pre Elliott involvement Alliance performance. Alliance has to deliver c 2% + dividend yield whereas SMT doesn't. Alliance is also a broader based Investment Trust with a different benchmark. But I do see that SMT has underperformed Alliance over 3 years and therefore noticeable to Elliott, whereas SMT has out performed Alliance over 10 years without Elliott. Alliance tracks its benchmark very closely, whereas SMT outperforms its benchmark. Alliance also outsources its stock picking since Elliott involvement so comparisons may not be like for like.

[lord loads of lolly] 22/3/2024 14:10

septblues - can't say I agree with you that "there's no evidence that (Elliott) are good at predicting the future."

Since their 2015 intervention in Alliance Trust, its share price has gone up from around 500p to 1225p. And it has way outperformed its benchmark over the last 5 years:
www.trustnet.com/factsheets/T/id56/alliance-trust-plc/

Contrast that with the 10 years prior to Elliott's involvement, when Alliance Trust rose less than 70%. Admittedly this earlier period includes the 2007/8 financial crisis, but even so.

In any case, I'd argue their 5% holding indicates a pretty firm conviction. Though of course, that doesn't necessarily mean they're right!

[septblues] 22/3/2024 12:50

There is no evidence that Elliott are technology investors or growth investors. They are value investors. Alliance is a value, income and general growth trust. It's a very different trust from SMT. Other than cutting costs (EU regulations distorted that), eliminating investments, there's no evidence that they are good at predicting the future. And if they want SMT to jump on to the AI theme, one can argue that the AI investment train has left the station (for now). Elliott are the wrong kind of investor for SMT. Active investor involvement in Witan or F&C was largely ineffective from an investment basis where allocation to sector specialists was historical and picked the wrong sectors and wrong specialists.