Ann: Weekly NTA Update, page-3

Hi nails

I’m not surprised.

Liquidity and low rates and quality stocks.

With all these people in ETFs, given the outsized returns of the last FY and that they compulsorily distribute in toto, 2 things are gonna potentially happen.

People might realise that they’re gonna be giving up up to half of these high returns in tax and so when that disappears perhaps they may appreciate from their own experiences the benefit of alternatively investing in LICs!

Secondly, where’s all this new money going to go? Not so appealing after being accustomed to such money making to go put it in the bank and commit to no profitability. So back into shares (or perhaps buy something on AMZN) - a virtuous circle/wealth effect for VG1!

In terms of investing, most stocks are up, even the LICs are up! So less options to invest in (and less LICs available now). Even the ones WAR was looking for looked to be at closer to 5-10% discount than 20% (and WAR itself already at a 5-10% premium).

So still looks positive enough overall (and for VG1 at these levels) IMO. I’m also aware though that if I’m bullish myself, being a novice, then that of itself could portend that this is in fact an unsustainable bubble

Although I’m not an advocate of technical analysis, I do look at it, but I rarely act on it, just as with shares in general. Most of my holdings are precisely that - holdings. Compounding along for years. Apart from January last year when I sold some large holdings and later last year with I sold out of VGI Master Fund, I haven’t made any big changes.

I look for opportunities continuously and consider tinkering with things but usually decide against doing so on the balance of factors.

Although I have ridiculed TA before, I do believe there’s information in there (including a hell of a lot of false positives) that both reflects sentiment as much as the tone of the news or the presence of share market interest/awareness in the community/those usually not occupied by the share market or the % of shorts or the bull/bear ratio. It’s just not the prime contributor, at least consciously, to my decision making.

I watch the news and think a lot but don’t act that often, as with TA. As for TA, I’m a believer that the market tries its best to have you believe it will do the opposite of what it will. Otherwise, everybody would get it right and it would probably just keep going up only. Hence the observation that it climbs the wall of worry. I like that. That then sets it up to have sudden shake-outs that appear to be confirmation that the rise was falsely justified and is instead a sign of the overdue market crash. Then when, having risen slowly 10% followed by a sudden fall of 5, it catches the suckers out again as it becomes evident either slowly or rapidly that a new lower low is in place.

As we all know, stock movements aren’t regular. Last time I looked, AMZN looked to be in a consolidation, which appears positive for a continuation of upward movement. Liquidity and low rates. The market/Amazon/VG1 may correct or fall over but my usual response outlining the problems of selling applies. I’m always cautious and I sometimes take action, but it doesn’t feel euphoric yet given the current circumstances. If the market goes higher, I would consider selling something in a more ebullient climate - perhaps that’s near ahead.

Without even referring to the AMZN chart, which I haven’t peeped at for several weeks, as it’s not necessary to, AMZN could break out then it might retest the high several times then move up or it might move up rapidly to a new level then consolidate again or it might start a new steady uptrend channel or it might be a false break out then crash from here. I’m glad VG1 continues to hold a large amount as it’s long term thesis appears intact and it appears a wise choice to hold out of the FAANG basket in terms of quality and knowable risks, so Management have done well both in buying this low and in holding this long and in a large amount IMO.

As for ASX:VG1, it’s put in an all time low, then gone straight towards ATH, so it’s looking bullish IMO. It’s in a strong uptrend channel approaching ATH (as it deserves to be IMO, so I’m unsurprised about that either). Clearly at these levels it may encounter increased volatility and SP risk.

I’d be expecting selling, including some big sellers, as we approach ATH resistance and with the market rising at the moment. Mind you, we also have the buyback continuing.

It’s pretty obvious to say but it’s probably going to either fall back down or move around for a while or burst through to new ATHs +/- having bounced around for a while first or fallen down first then bounced back up again.

I’m hopeful that it either breaks through to new higher levels or takes some of the other detours mentioned before moving higher. My expected destination is a stop at NTA followed by 10-20% beyond NTA and ultimately I expect that final target to be far from here because I believe the NTA is a moving target and because I believe the movement will be net positive and also because of the advancement of time which I predict will be overall positive for the companies owned and prove VG1 right!

You have to aim for something It’s fruitless to map out a journey if you don’t know where to.

I have almost no cash right now, having just put some funds into a new investment. Even though on the one hand I think things could be artificially too bullish, possibly, I’m not too concerned though. Many of the things I own I wouldn’t sell even if there were to be an up to about 15-20% market downtown and if that were to occur it could be from a higher watermark than here and there’s always the option to sell something that’s pulled back less in order to buy something else that’s become even cheaper relatively.

I can’t prepare for a general market pullback larger than 20%, not at this stage. I’d have to hold on and look for possible switching opportunities between stocks.