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Jimbo69
Posted: 14 March 2023 13:16:05(UTC)
#954

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Big boy;260674 wrote:
Jimbo69;260523 wrote:
I'm watching this too - personally i think that £18- £18.50 is reasonable entrypoint as it hits a 2% yield. The SP dropped to £15ish in the immediate aftermath of covid but seem to hover in the £18 range for the remainder of 2020.


If markets fell say 20% would your limits still stand. I always prefer discount limits as many don’t seem to realise limits IMO should be relative to others. So many only look at SPs and sell not realising that the NAV
may have performed relatively well. Also we see investors piling in at near NAV and are in most are in till a few start the slide …RCP now has net sellers who are making the SP more attractive to willing buyers …we need to appreciate these sellers and understand why do you sell at say 20% to Global values to-day.

Edit looks like you are a buyer on about 24-26% discount. Buy backs don’t seem to be winning and not sure what happens when it reaches say 10% of stock bought back and all those underlying stocks have been sold. DCM is not always the answer so we may see high discounts for some time especially as a controlled Trust.


I see this as a long term opportunity (held in SIPP) and have been buying on this weakness where it hits a 2% dividend yield / 25% discount. I have been following the trust for a long time but would not pay par or a premium for it. I would look to trim and reallocate as and when we get nearer to NAV.

Granted, its PE and VC holdings (either direct or via funds) are a slight concern and could push this down further as they get valued properly but i would be prepared to continue to buy on the way down to build the position to my target % of AUM.

Agreed on the buybacks - i'm not too fussed about this strategy and to be honest i would much prefer the excess capital put into trade ideas but i accept that these have been a bit harder to come by over the past year!
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4 users thanked Jimbo69 for this post.
dlp6666 on 14/03/2023(UTC), Big boy on 14/03/2023(UTC), Logic Prophets on 14/03/2023(UTC), Auric on 18/03/2023(UTC)
Mostly Rational
Posted: 14 March 2023 14:02:45(UTC)
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Big boy;260674 wrote:
Buy backs don’t seem to be winning and not sure what happens when it reaches say 10% of stock bought back and all those underlying stocks have been sold.


If they buy back 10% at a 20% discount what happens is, regardless of the effect on the SP, the NAV/share increases by 2.2% obviously. The only people who have an interest in arguing against buybacks are managers because it shrinks the IT.
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Guest on 14/03/2023(UTC)
Big boy
Posted: 14 March 2023 14:28:38(UTC)
#952

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Mostly Rational;260714 wrote:
Big boy;260674 wrote:
Buy backs don’t seem to be winning and not sure what happens when it reaches say 10% of stock bought back and all those underlying stocks have been sold.


If they buy back 10% at a 20% discount what happens is, regardless of the effect on the SP, the NAV/share increases by 2.2% obviously. The only people who have an interest in arguing against buybacks are managers because it shrinks the IT.


I agree with the principle but what effect does it have on the SPs of stocks held which are liquidated to pay for buybacks and the subsequent underperformance. Quite often DCM operates in a falling market and SPs can suffer where marketability is difficult in underlying stocks. Quite often Managers are liquidating similar stocks for Funds which also move towards redemptions. They are all happy when the pyramid is being built …
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Strangways on 14/03/2023(UTC), Auric on 18/03/2023(UTC)
Mostly Rational
Posted: 14 March 2023 14:31:20(UTC)
#963

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If you think it's a house of cards, don't invest.
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Big boy on 14/03/2023(UTC)
Big boy
Posted: 14 March 2023 16:11:47(UTC)
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Mostly Rational;260717 wrote:
If you think it's a house of cards, don't invest.


Thank you....just trying to help others understand DCM/M&A ETC. but clearly no interest...
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PH . on 14/03/2023(UTC), Strangways on 14/03/2023(UTC)
Strangways
Posted: 14 March 2023 18:58:07(UTC)
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Big boy;260716 wrote:
Mostly Rational;260714 wrote:
Big boy;260674 wrote:
Buy backs don’t seem to be winning and not sure what happens when it reaches say 10% of stock bought back and all those underlying stocks have been sold.


If they buy back 10% at a 20% discount what happens is, regardless of the effect on the SP, the NAV/share increases by 2.2% obviously. The only people who have an interest in arguing against buybacks are managers because it shrinks the IT.


I agree with the principle but what effect does it have on the SPs of stocks held which are liquidated to pay for buybacks and the subsequent underperformance. Quite often DCM operates in a falling market and SPs can suffer where marketability is difficult in underlying stocks. Quite often Managers are liquidating similar stocks for Funds which also move towards redemptions. They are all happy when the pyramid is being built …

Good point. But also, RCP isn't the ideal IT to run a DCM - it has large holdings of fairly illiquid assets. Some of these will be the ones dragging the SP down. Will RCP be selling the liquid quoted equity part of the portfolio to fund buy backs, or does this limit the amount of buybacks it can do?
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1 user thanked Strangways for this post.
Thrugelmir on 14/03/2023(UTC)
Robin
Posted: 18 March 2023 09:47:54(UTC)
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Not an ideal headline... no schadenfreude intended at all, and I hope for those holding things do improve.

https://www.investmentwe...rency-issues-vc-exposure
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5 users thanked Robin for this post.
Aminatidi on 18/03/2023(UTC), Mr GL on 18/03/2023(UTC), Phil 2 on 18/03/2023(UTC), dlp6666 on 18/03/2023(UTC), Logic Prophets on 19/03/2023(UTC)
Aminatidi
Posted: 18 March 2023 09:59:43(UTC)
#966

Joined: 29/01/2018(UTC)
Posts: 5,866
Well I'm sure that will help matters no end.
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SoBo65
Posted: 18 March 2023 10:37:34(UTC)
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I agree with the point on trust liquidity, I am seeing RNS's regularly now for CGT and PNL buying back years to control the discount as part of a formal DCM, virtually unheard of over the last 2 or 3 years.
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Mr GL on 18/03/2023(UTC)
Strangways
Posted: 18 March 2023 10:45:09(UTC)
#968

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Prominent coverage in today’s Times:

https://www.thetimes.co....-over-payouts-cd7bc5v6q

What is troubling from a long-term investor’s perspective in that there is no substantive response to the criticism of the fee structure or of the trust’s performance, which gives credibility to the criticisms.

[I hold both RCP and Caledonian]
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12 users thanked Strangways for this post.
Robin on 18/03/2023(UTC), Sheerman on 18/03/2023(UTC), Phil 2 on 18/03/2023(UTC), Aminatidi on 18/03/2023(UTC), Levi Lama on 18/03/2023(UTC), Mr GL on 18/03/2023(UTC), LondonYank84 on 18/03/2023(UTC), Low Returns on 18/03/2023(UTC), ALAN P on 18/03/2023(UTC), dlp6666 on 18/03/2023(UTC), Auric on 18/03/2023(UTC), Logic Prophets on 19/03/2023(UTC)
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