Tesla & Benny's Scottish Mortgage Trust's prices crash

[FilipinoHibs]

Will this affect his future investments in Hearts:

#tech stock high flyers and funds crash into bear market

While the overall NASDAQ #stockmarket is merely in correction (down 10% from its high) mode, some of the most over priced tech stars are firmly in bear market territory (down over 20% from its all time high).

#tesla the stock which most represents this category of over valuation closed down 34% from its all time high. Funds which are heavily exposed to Tesla have been hard hit as well. #ark ETF has fallen
27% while the Scottish Mortgage Investment Trust has slid 28%.

With Tesla trading on a price earnings ratio of over 100, you are betting on huge earnings growth in the future. But with interest rates rising, particularly longer term rates, the present value of those earnings becomes smaller.

Stocks like Tesla could be classified as having a high duration meaning they are very sensitive to moves in longer term interest rates.

If as many believe the market is still underestimating inflation and the rise in interest rates, then there will be more pain to come for Tesla and the funds which have a large exposure to them.

[660]

No

[bigwheel]

No, James Anderson’s significant amassed personal wealth will not be affected by the fluctuations of one stock and one of the many funds Baillie Gifford operate....


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[FilipinoHibs]

No, James Anderson’s significant amassed personal wealth will not be affected by the fluctuations of one stock and one of the many funds Baillie Gifford operate....


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All equities and equity funds are down, just not as much as Tesla/Scottish Mortgage Investment Trust (SMIT).

Benny's bonus related partly related to performance of SMIT and has some of his wealth invested in it.

On previous meltdown in March 2020, it was reported on here that the then mysterious investor was re-examining his support for various causes and Hearts were down the list of priorities.

[bigwheel]

All equities and equity funds are down, just not as much as Tesla/Scottish Mortgage Investment Trust (SMIT).

Benny's bonus related partly related to performance of SMIT and has some of his wealth invested in it.

On previous meltdown in March 2020, it was reported on here that the then mysterious investor was re-examining his support for various causes and Hearts were down the list of priorities.

Give up this line...think I’ve seen you post this before . He is well into his career, has secured significant personal wealth...if he chooses to reduce his support, it will have nothing to do with a short term investment performance moment


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[The Green Sea]

[QUOTE=bigwheel;6486157]Give up this line...think I’ve seen you post this before . He is well into his career, has secured significant personal wealth...if he chooses to reduce his support, it will have nothing to do with a short term investment performance moment

Correct. His wealth will have some link to the BG funds but the money he will have accumulated over the last many years at BG will mean he is a very wealthy man.

[Since90+2]

The OP seems almost obsessed with this topic. I'm sure there's a forum to discuss financial funds somewhere.

[Eyrie]

The OP is clutching at straws.

I still find it a bizarre decision for a professional investor to gift so much money to a commercial football club each year that he's not known to support and which has a poor track record of delivering any return on his investment. If I had a couple of million to spare each year then I'd be donating it where it would make a real difference such as medical research or environmental protection, not to my lifelong team Hibs. And I'd be expecting the recipients to be able to explain what additional benefits my funding provides.

[hibbysam]

The OP is clutching at straws.

I still find it a bizarre decision for a professional investor to gift so much money to a commercial football club each year that he's not known to support and which has a poor track record of delivering any return on his investment. If I had a couple of million to spare each year then I'd be donating it where it would make a real difference such as medical research or environmental protection, not to my lifelong team Hibs. And I'd be expecting the recipients to be able to explain what additional benefits my funding provides.

My millions would go into Hibs without any hesitation. Football is a risky business and not every decision comes off, although more money generally means more success.

[CropleyWasGod]

The OP is clutching at straws.

I still find it a bizarre decision for a professional investor to gift so much money to a commercial football club each year that he's not known to support and which has a poor track record of delivering any return on his investment. If I had a couple of million to spare each year then I'd be donating it where it would make a real difference such as medical research or environmental protection, not to my lifelong team Hibs. And I'd be expecting the recipients to be able to explain what additional benefits my funding provides.

I don't really find it bizarre. HMFC, like us, are a community asset, which gives "enjoyment" 😏 to a lot of people. If someone wants to help ensure the continued existence of that asset, fair play to them. His "return" is exactly that, community benefit.

[The Spaceman]

I sold out of SMT last month at 1,350p after it became glaringly obvious the Tesla bubble was propping it up and about to burst following lots of hype in the US. James Anderson has my thanks for the performance of that fund - he is a very, very good investor and has made a lot of amateur or novice investors a lot of money! He also stepped in to help Scottish Football last year, so definitely no schadenfreude from me.

[WhileTheChief..]

All the big tech companies saw big falls over the last couple of weeks.

Mostly down to institutional investors realising profits. Expect to see them continue their upwards journey for another couple of years.

[CropleyWasGod]

All the big tech companies saw big falls over the last couple of weeks.

Mostly down to institutional investors realising profits. Expect to see them continue their upwards journey for another couple of years.

Is that partly related to the impending end of the UK financial year?

[WhileTheChief..]

Is that partly related to the impending end of the UK financial year?

Wouldn’t have thought so.

Pension or investment funds sell off and take profits in exactly the same way as you or I would, assuming we’re talking about growth funds here.

They also have to be careful of how much of a stock they hold within their fund. Different funds will have different limits.

For example, last year Baillie Gifford had to sell off a huge chunk of Tesla. Nothing to do with its share price, it was going through the roof. But this meant that the % of Tesla shares that made up their fund exceeded the 10% limit, from memory.

So, they sell down a bug chunk of shares to get below the 10% limit and pocketed in excess of £12B at the same time. Tesla’s share price takes a dip and the press report report that investors are bailing out on them!

Thats just one fund manager with one company.

Imagine how many funds hold Amazon, Netflix, Google, Apple etc. All of these companies have seen huge growth in the last 12 months. Just as the poster above sold out, so too will some fund managers.

[CropleyWasGod]

Wouldn’t have thought so.

Pension or investment funds sell off and take profits in exactly the same way as you or I would, assuming we’re talking about growth funds here.

They also have to be careful of how much of a stock they hold within their fund. Different funds will have different limits.

For example, last year Baillie Gifford had to sell off a huge chunk of Tesla. Nothing to do with its share price, it was going through the roof. But this meant that the % of Tesla shares that made up their fund exceeded the 10% limit, from memory.

So, they sell down a bug chunk of shares to get below the 10% limit and pocketed in excess of £12B at the same time. Tesla’s share price takes a dip and the press report report that investors are bailing out on them!

Thats just one fund manager with one company.

Imagine how many funds hold Amazon, Netflix, Google, Apple etc. All of these companies have seen huge growth in the last 12 months. Just as the poster above sold out, so too will some fund managers.

Cheers thanks.

I suppose I was thinking about the individual investors, using up their CGT allowances.What used to be called "bed and breakfasting", although I think that's not allowed to the same extent now. As you say, that's not an issue for the fund managers.

[Keith_M]

I'm sure Mr Anderson, and Hearts, will be just fine.

[WhileTheChief..]

Cheers thanks.

I suppose I was thinking about the individual investors, using up their CGT allowances.What used to be called "bed and breakfasting", although I think that's not allowed to the same extent now. As you say, that's not an issue for the fund managers.

You still get clients moving from investment funds held in general accounts and into ISAs for this reason or simply rebalancing their portfolios by selling off and taking profits to use up their CGT allowance.