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Scottish Mortgage (SMT), Buffett and the Value Tragedy

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  1. #1

    Join Date
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    Scottish Mortgage (SMT), Buffett and the Value Tragedy

    Short article - worth a read if you participate in the value v/s growth debate.

    He said Warren Buffett’s “extraordinary grip” was partly to blame for many investors missing out on the inexorable rise of many of Anderson’s favourite growth stocks. Anderson said a strategy of rebalancing towards value in the hope it would outperform was “an investment tragedy”.

    Anderson added: “As Buffett’s brilliant partner, Charlie Munger, puts it with the clarity of a 96-year-old. Too many investors are ‘like a bunch of cod fishermen after all the cod’s been overfished … that’s what happened to all these value investors. Maybe they should move to where the fish are’.”
    https://www.morningstar.co.uk/uk/new...e-tragedy.aspx

  2. #2

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    SMT has done really well recently.

    However I guess you can argue value remains a long term play....


  3. #3

    Join Date
    May 2019
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    Yeah, good article that one. I shared it in one of the periphery's many (many) threads. Changed my views on investing, something just clicked and it all made sense, which I'd read it much sooner!

    SMT have decent private stakes in both Ant and Transferwise (and am sure some others), so plenty of potential upside to come I'm sure.


  4. #4

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    Morningstar walled up.


  5. #5

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    Quote Originally Posted by jobin:
    Morningstar walled up.
    Free registration opens up most articles.

  6. #6

    Join Date
    May 2019
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    I quite liked the notes at the start of SMT's interim report this year:

    https://www.bailliegifford.com/en/uk...eptember-2020/

    First para:

    Over the long run, stock market returns are driven by a small number of exceptional companies. The progress of suchcompanies is rarely smooth or linear. They have breakthroughs and they have setbacks. Sentiment in the marketexaggerates the peaks and troughs, driving price volatility that is commonly mistaken for risk. When we believe wehave identified an exceptional company that is pursuing a large opportunity, we look beyond this cycle of feast andfamine. With a longer timeframe, such oscillations matter less and the picture of compounding growth becomesclearer. Many, if not most, investments won’t turn out as we hope. However, for the companies that do succeed, thereturns are transformational and they have a disproportionate impact on the portfolio. This is why we approach ourtask with optimism. It is more important to identify the factors that will allow a company to prosper than to enumeratethe potential pitfalls along the way. This approach has driven our long-run returns. Over five years ScottishMortgage’s net asset value per share with debt at fair value (NAV) has increased by 340% versus a 96% increase inthe FTSE All-World index (both in total return terms). Over 10 years it has increased by 674% against 191%. Sixmonths of data is too short a period to infer much that is useful from stock prices. Since the end of March our NAVrose by 76% compared to a 24% increase in the index.
    shri likes this.