l now hold a very significant investment in MFG and am currently well in the black based on cost.
The riculous crisis that brought the SP down to $16 -$17 was just an opportunity made in heaven to really load up in another "buy the rumour" sell the fact.
I will concede that l sold 25% of my holdings 10 days later at a gain of over 20%. I was in deeper than l ever wanted to be but could not resist the trading opportunity.
Anyone who has followed my posts will know l am in this for the long game. My Capital has been allocated for that purpose.
I got my fingers cut entering at $25 before much of the turmoil was public. That is the nature of bottom fishing, but the lesson is to respond to news as you read it and action that new information as either a buy sell or hold. For me, l would relish a $10 stock price with the same hands steering the ship. New hands, l would not be so confident in.
l believe the company erred in its dividend pay out but knew exactly how it would be received in the short term, so l accepted the the SP manipulation by taking profits selling cum div. Dividends and tax mean little to me in assessment of a business and its underlying value.
So here we are after another bad announcement. This is usually a very bad sign for near term SP performance. That said, the world changed in a week, Magellan didn't.
Most of the world's stock markets have declined 5% or more as in case people may have missed the news, Russia has invaded Ukraine. This detail seems to have been lost to the many here astounded by a $10bn loss of FUM. It will never cease to amaze me how blinkered people now are to their own narrative.
Every manager lost money. Every index suffered in the last 2 weeks. Even crypto holders got belted.
Am l glad to being totally overweight precious metals, REE, oil and gas and my favourite u3o8? Bloody oath l am. Dividends are rare in these underinvestment sectors leaving many a smorgasbord of cheap pickings for years. Yes and my portfolio underperformed 3 or 4 years ago but that was the position l took for a 5 to 10 year investment horizon. 4x in a year or 2, now looks pretty good and l have sold 25% of my holdings to have cash ready, for events like those in early Feb at MFG.
l am not smart, l just follow the advice of smart people whose opinions l must pay for, unlike those on this forum.
Magellan has a big job ahead of it. I am pleased l sold heavily this week, as the ast announcement was much worse than l expected and more importantly, worse for Magellan fund investors who may have believed the portfolios to be be more resilient to shock.
The job of earning back investor trust just got harder and longer.
l am no longer a buyer. I have what l want. I never expect a battle is won or lost in the first encounter. There will be many over the next 18 months or so. Some Mageellan will lose and some they will win, based on how they position their portfolio, which today, cannot possibly be known. I have found new situations to invest in, and will let MFG sort itself out over the next 3 years. I expect they will but am prepared for the possibility the price could fall a further 25% - 35% from here, in a down market.
Needless to say, Magellan holders have a team of 149 very intelligent people working for them to restore value and confidence in the business. That is what they are paid to do.
Naysayers here, mostly non holders, clutching on to their index returns, will in my opinion, be disappointed in that which they so blindly trust. Markets treat every investor the same, but some are dealt unexpected lessons for which they are not prepared are ill prepared. After 40 years of doing this, l have found this outcome to be a common characteristic of every period investor complacency and over confidence. Having been at the wrong end of this behavioural flaw many times, l wish you all well.
After being a long time critic of Cathie Wood's investment myopia that attracted so much investor money at the height of its euphoria, l now find myself strangely drawn to invest in the Ark funds group. Now that l can buy last year's $1 for around 40c.
That is another story that l may ponder later on in the year as the blood is not yet fully spilled from her self confidence and denial of Mr Market's call.
lf you are invested in MFG, try to resist short term results, opinions and thinking. If you can't do that, you should not be here.
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