There are some fundamental truths about this market we can learn from watching Warren Buffett.

That’s certainly the case when his $770bn investment giant Berkshire Hathaway (NYSE: BRK.B) sells stocks.

And the third-quarter results are in. So let’s dig into what got culled, and what crucial lessons I’ve learned.

Results out

Berkshire Hathaway has boosted its cash pile from $130bn at the start of 2023 to a record $157bn today.

It has heavily cut positions in a series of top US stocks, the company revealed.

Results published in mid November showed the legendary investment firm sold off its last shares in American car stalwart General Motors. That was a position totalling £850m earlier this year. Buffett also trimmed his Amazon holdings and sold 10% of his position in oil giant Chevron.

There’s more. A total £100m stake in consumer goods giant Procter & Gamble and healthcare conglomerate Johnson & Johnson has been a good earner for Buffett. But he also sold these winners to make room for other opportunities, SEC filings show.

These bring the total Berkshire Hathaway sell-offs to $40bn in 2023 alone.

What to learn

Many investors incorrectly sum up Warren Buffett’s philosophy as being: buy and hold forever. Looking at his own moves, that’s patently false.

As chief executive of Berkshire, Warren Buffett has continued to sell shares in publicly traded companies before taking new positions.

That’s because being overinvested is a surefire way to miss opportunities when they arise. Overinvested, in this context, means having all one’s capital tied up in stocks with no extra cash left over.

So if a company an investor likes sees a dip that they think is overdone, the cupboard is bare when they come to take advantage.

Sometimes funding great ideas comes with a painful selling period to find the available cash.

But conviction is important. If I see more upside in one investment than another, I have to trust my gut and my experience. Warren Buffett certainly does.

Between July and the end of September 2023, the Oracle of Omaha sold stakes worth more than $5bn in US and offshore companies.

Pick unloved companies

It’s all very well piling into hot stocks when they make headlines. But I’ve made some of the best gains of my investing career by tracking undervalued companies and swooping in when nobody’s watching.

These businesses should be growing their profits and market share no matter what wider economic conditions look like.

I should look at a company’s balance sheet and scratch my head, thinking: “I don’t understand why this has sold off so much.”

Most new investors get this next part wrong, too. My job is not just to try to pick stocks to outperform the market. Even more important is to protect my capital and not lose money.

I can’t do that if my attention is split, or I’m constantly chasing the shiny new flavour of the month company.

In the dotcom boom, Berkshire Hathaway was ridiculed for ignoring internet stocks. But when the bubble burst and the Nasdaq lost 72% of its value from 2000 to 2002? Berkshire Hathaway increased its value by 80%.

Warren Buffett didn’t make his billions chasing fads. And neither should I.

The post Warren Buffett just sold these stocks appeared first on The Twelfth Magpie.

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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Tom Rodgers has positions in Amazon. The Motley Fool UK has recommended Amazon. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

I’ve long been an advocate of investment trusts. I think they’re a great way for retail investors to gain exposure to a variety of stocks in a simple way. There’s also the bonus of, hopefully, some meaty long-term gains.

There are many trusts available to invest in. And many specialise in different areas. However, right now I have my eye on F&C Investment Trust (LSE: FCIT). Here’s why.

The lowdown

So, what exactly does this trust do? And how has it performed across this difficult year?

F&C invests in over 400 companies in 35 countries with the aim “to secure long-term growth in capital and income through a policy of investing primarily in an internationally diversified portfolio of publicly listed equities, as well as unlisted securities and private equity.”

The trust is run by fund manager Paul Niven, who’s been at the helm since 2014. Overall, it manages around £5bn worth of assets.

It’s been a tough year for the stock as it’s fallen around 9% year to date. This is largely due to the bleak economic environment. And with inflation on the charge across the globe, investor sentiment has been dented. The FTSE 100 is down 3% year to date. And in the US, the S&P 500 has plummeted by 18%.

Why I’d buy

With all of this, why would I buy the trust?

My main attraction is the diversification mentioned above. It holds hundreds of companies, including names like Microsoft, Amazon, and AstraZeneca.

By owning the stock, what I essentially do is offset my risk. This is because with a single investment I own a small slither of all of these companies. In the volatile times we’re experiencing, this is important for me.

What’s also an added bonus is the fact that its investment strategy aligns with mine. By this, I mean it buys for the long term. And as a Fool, I believe this is the best way to invest. While past returns are no indication of future performance, the last decade has seen the trust return 170% to its shareholders.

I also like the stock due to its stable nature. The trust is the oldest in the world, meanings it’s survived multiple crises. On top of this, it has increased its dividend payment for the last 51 years, highlighting its consistency.

The risks

With this said, there are risks with F&C.

They largely exist through its exposure to emerging markets, which make up 7.6% of its asset allocation. While these markets can offer great opportunities, they can also be volatile. And given the current economic conditions, these markets could suffer in the near future.

However, as mentioned above, this short-term volatility is of little concern to me. With a long-term approach, issues should be ironed out. In the long run, I back the trust to discover the opportunities that exist within emerging markets. I also like the diversification it could provide my portfolio with. While I don’t have the spare cash right now, if I did, I’d happily buy its shares today.

The post I’d buy this top investment trust today! appeared first on The Twelfth Magpie.

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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Charlie Keough has no position in any of the shares mentioned. The Motley Fool UK has recommended Amazon and Microsoft. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

This year has been dire for Scottish Mortgage (LSE: SMT) shares. After a modest 4% rise in 2021, 2022 has seen the stock come tumbling down due to inflationary pressures. Year-to-date, Scottish Mortgage fallen 32%. The last 12 months have shaved 36% off its value.

However, the trust’s investors will be delighted with the last month as the stock has risen a solid 13%. Here’s why I’d buy the trust today.

The story so far

2022 has been far from easy for the trust.

The main contributor to the downfall of Scottish Mortgage has been the performance of its top holdings. This includes the likes of Tesla and Amazon. And with these stocks down 28% and 20% year-to-date, respectively, it’s clear to see why Scottish Mortgage has suffered.

The trust has a large focus on growth stocks. And these tend to fare the worst in volatile times as people opt for ‘safer’ alternatives. As interest rates are hiked to combat inflation, investors are able to get better returns on risk-free investments. As a result, these growth stocks miss out.

However, the last month has seen the trust fight back against these pressures. A large driver behind this is the rally its top holding Moderna has made in the last couple of months. With this rise, some may be beginning to regain faith in Scottish Mortgage.

Where next?

So, after a turbulent year, where will the trust head for the rest of the year?

I’m not sure. And to be honest, I’m not that fussed. The reason for this is because I buy for the long hold. Management makes it clear that Scottish Mortgage focuses on returns over a five-year period. While past performance is no indication of future returns, the last five years have seen the stock profit shareholders with a 109% return. This easily trumps the returns of its benchmark FTSE All World Index, showing the strength of the stock.

What I also like about it is the diversity it can provide for my portfolio. Under a single investment, I’m gaining access to over 100 companies. For me, this is perfect. An added bonus is the access I get to unlisted companies, such as the exciting SpaceX. Such holdings make up over half of the trust’s portfolio.

I’m also a fan of management’s ability to pick out stocks ahead of the curve. After all, Scottish Mortgage did buy Tesla back in 2013 for $6. For all I know, it could have the next big thing already in its holdings.

The biggest threat for it is rising interest rates. These are expected to be hiked further as we head towards the end of the year. And this will only continue to dampen the performance of growth stocks.

Yet despite this, I’d still buy today. With a long-term outlook, these short-term issues don’t worry me. The trust has proven its potential over the last five years. And with the diversity it offers my portfolio, I think this fall presents an excellent opportunity to buy.

The post The Scottish Mortgage share price is on the up! Here’s why I’d buy appeared first on The Twelfth Magpie.

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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Charlie Keough has no position in any of the shares mentioned. The Motley Fool UK has recommended Amazon and Tesla. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

The Scottish Mortgage (LSE: SMT) share price is down 45% in 2022. I’ve been a keen advocate of the investment trust in the past. And, despite the fall, I remain one. Here’s why I’d buy Scottish Mortgage today as a long-term addition to my portfolio.

Scottish Mortgage share price history

In a year where many stocks suffered, Scottish Mortgage bucked the trend in 2020 with returns of over 100%. This impressive growth slowed last year, with the stock rising just under 5%. And since the turn of 2022, the trust’s share price has slowly fallen.

The most important reason for the trust’s fall is due to the performance of its top holdings. This includes Moderna, Tencent, and Amazon. And with these stocks down 46%, 16%, and 38% this year, respectively, it’s clear to see why Scottish Mortgage has suffered.

It also has a focus on growth stocks. As global inflation continues to rise, this is having an impact on these firms. This is because interest rates are raised to counteract inflation. And, therefore, the debt these firms have to fund their growth becomes more difficult to pay off. To make matters worse, growth stocks tend to be hit the hardest during these times as investors move their money to ‘safer’ value stocks. For Scottish Mortgage, this is clearly bad news.

Why I’m still buying

Despite these issues, I would still buy the stock today.

Essentially, one of my main attractions to Scottish Mortgage is the diversity it offers my portfolio. The trust invests in a range of companies. And this diversification offsets risk and exposes me to opportunities that I couldn’t attain using my own funds. Scottish Mortgage can also allow me to gain access to unlisted shares, such as SpaceX. Add this to its cheap ongoing charges of 0.34%, and I’m only further attracted to the trust.

I also think the above are short-term concerns. The trust’s management highlight how Scottish Mortgage focuses on returns over a five-year period. And the trust uses the FTSE All-World Index as a benchmark. Over the last five years, it has returned 67% to its loyal shareholders. While past performance is not an indication of future returns, the trust has also navigated some challenging crises over time. An example is the dotcom crash of 2000, and its resilience and ability to bounce back from crises like these is why I like Scottish Mortgage.

Yet, there are risks surrounding Scottish Mortgage. One of these is the large weighting it has in China. This makes it vulnerable to the potential issues surrounding the country and Covid threats. The possibility of future lockdowns could hurt the stock’s price.

That said, the trust has a track record of investing early in high-growth companies. This has played a key role in its success, with an example being buying Tesla back in 2013 when the firm was trading for just $6 a share.

As such, I’d buy the trust today. As a long-term investor, the above issues do not concern me. And Scottish Mortgage’s diversification and proven resilience lead me to believe this fall in price is a great opportunity. With management’s ability to find high-potential growth stocks, I also think investing now could see me make some healthy returns in the long run.

The post The Scottish Mortgage share price is down 45%. Here’s why I’d buy and hold! appeared first on The Twelfth Magpie.

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Charlie Keough has no position in any of the shares mentioned. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool UK has recommended Amazon and Tesla. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Scottish Mortgage attracted many investors in 2020 with its 105% rally amid tough market conditions. And over the past decade, it has been a top performer. Yet this year has seen investors desert the trust as issues such as inflation continue to pressure investor confidence.

However, I think the large decline the trust has seen in recent times actually presents me with an opportunity to add Scottish Mortgage shares to my portfolio. Let’s find out why.

Why is SMT down?

After its solid performance in recent times, why has Scottish Mortgage seen such a drastic fall?

To start, it has a large weighting to growth stocks. The trust has holdings in firms such as Tesla. And with global inflation continuing to spike, it will have a detrimental impact on these firms. This is because to combat rising inflation, interest rates are rising. As such, the high levels of debt these companies have to fuel growth will become more difficult to pay off. On top of this, rising inflation tends to see many investors switching their investments to ‘safer’ value stocks. Combining these two factors, it’s easy to see why the share price is falling.

As well as this, Scottish Mortgage also has a substantial focus on tech stocks. This includes holdings such as Nvidia and Amazon. While tech stocks have surged in price over the past few years, they’ve struggled more recently.

SMT opportunities

Despite this, I still think Scottish Mortgage shares would be a strong addition to my portfolio.

Firstly, the above are short-term issues. Management is keen to note that the trust focuses on returns over a five-year period – using the FTSE All-World Index as a benchmark. And while past performance is no guarantee of future returns, the past five years have seen Scottish Mortgage return 92% to shareholders. The trust is also hardened to challenges, such as the 2008 financial crisis. And while such crises have had an instant impact on shareholder returns, in the long run investor’s patience has paid off.

With this said, the departure of James Anderson from the helm could provide to be an issue. After all, he was key in navigating moves such as the investment in Tesla in 2013 when it was trading for just $6. The loss of his eagle eye could have negative impacts on the Scottish Mortgage share price.

It’s now run by fund manager Tom Slater who also played a part in the trust’s rise over the past years. So, despite Anderson’s departure, I believe the capable hands of Slater will be able to keep the trust heading in the right direction.

Why I’m buying

While Scottish Mortgage may face some immediate issues, the trust has proved that over time it can deliver healthy returns to shareholders. I believe its weighting in growth stocks should pay dividends over the long term. And with cheap ongoing charges of just 0.34%, I deem cut-price Scottish Mortgage shares a solid addition to my portfolio.

The post Here’s why I’d buy Scottish Mortgage shares today! appeared first on The Twelfth Magpie.

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Charlie Keough has no position in any of the shares mentioned. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool UK has recommended Amazon and Tesla. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

But tech shares have had a well-documented rough ride for a while. And with its recent earnings report now missing analyst targets, the Amazon share price is down over 25% since the start of the year.

Do I smell an opportunity to buy?

I’ve been caught by catching the proverbial falling knife once before. Buying what seemed a bargain ended up being an expensive lesson.

So, before I get too excited about the drop in Amazon’s share price, what’s behind it?

First up – that earnings reports. Ok, it missed analyst expectations. But were they fair?

Amazon, along with others, benefitted hugely from the pandemic-driven change in behaviours. So, it seems to me, that expecting it to continue to over-deliver as the world slowly returns to some sort of normality is…..perhaps a little optimistic?

A more realistic view would be to compare like-for-like, i.e. to the same quarter pre-pandemic. And on this basis – Amazon has continued to perform.

Recent media focus has very much been on what’s gone wrong with Amazon. It’s more dramatic & ‘newsworthy’, I guess.

But there’s been far less focus on what’s gone right. Like, say, a huge increase in AWS (Amazon Web Services). Here, first-quarter operating income increased by 57% year-on-year. Hardly panic stations?

There may be trouble ahead…

So, the doom and gloom may be overdone. But I don’t want to ignore legitimate concerns.

E.g., for now, the bulk of Amazon’s income remains via its online sales. And I can see that major global competitors like Alibaba Group and Mercadolibre Inc. are going to potentially limit Amazon’s ability to expand into markets outside the US and Europe.

And there are those well-documented headwinds of cost of living, inflation, the ongoing war, and rising interest rates that are all going to present challenges to growth.

Tech stock of the future?

What I really like about Amazon is its vertical-integrated strategy approach.

Its diversified business model sees it investing all along its value chain. From renewable energy, logistics, cloud computing, the list goes on.

My personal favourite must be its latest exploit, with plans to launch 3,000 satellites over the next five years to build up its space-based internet business.

It may sound far-fetched, but this area of business is estimated to be one of the growth areas of the future. In fact, Morgan Stanley has put out estimates for the overall space industry forecast to be up to $1 trillion by 2040.

And whilst these predictions can be notoriously wide of the mark, it is undoubtedly a growth sector of the future. No wonder they want to compete with Elon Musk’s SpaceX here.

So, is now the right time to buy Amazon?

In my view owning a piece of Amazon is like owning several companies in one – it’s no longer a pure e-commerce play. And that’s something I like a lot.

As a long-term Foolish investor, I want to buy and hold shares of companies I think will play a major part in the future.

So perhaps, with share prices now back where they were two years ago, it might finally be the right time for me to add them to my growth portfolio.

The post Is now the ‘Prime’ time to buy Amazon? appeared first on The Twelfth Magpie.

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Michelle Freeman does not own shares in any of the stocks mentioned. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool UK has recommended Amazon, Apple, and MercadoLibre. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

So, why is it on a downward trajectory? And does this fall represent an opportunity for me to grab some cheap shares? Let’s take a look.

Why is the share price down?

So, why after such a strong performance, during a difficult few years, is the Scottish Mortgage share price now falling?

Firstly, the trust is renowned for its large weighting to growth stocks. Examples of these include Tesla, which SMT invested in back in 2013 when the shares were changing hands for around $6. And smart investments like these have been a big part to the large success seen by the fund. However, with global inflation on the rise, this trend tends to see investors switching their money to ‘safer’ value stocks. As a result, the share price has fallen.

Another reason for the fall is Scottish Mortgage’s tech-heavy focus. As of 31 March, its top holdings included Tesla, Nvidia, and Amazon. While these stocks have performed well in the past, 2022 has seen them suffer. The stocks are down 17%, 35%, and 16% year-to-date, respectively, so it’s no surprise that the Scottish Mortgage share price has followed suit.

Wider outlook

With this said, I think these are short-term concerns.

Management makes it clear that the trust has the “aim of maximising its total return to its shareholders over the long term” – and it uses the FTSE All-World Index as a five-year benchmark. While of course, past performance doesn’t represent future returns, in the last five years SMT has returned nearly 140% to patient shareholders. And on top of this, it survived multiple challenges over the years, such as the dotcom crash of 2000, highlighting its resilience.

There’s a case, however, to argue that the Scottish Mortgage share price may continue to fall. To start, its top holding Moderna (7.1%) is forecast to see profits fall from $12bn in 2021 to $2bn by 2024. And while Tesla has been enjoying big growth, its price-to-earnings ratio would suggest it’s seriously overvalued. A correction to this could see the Scottish Mortgage share price come tumbling down.

Despite this, the trust is in the safe hands of Tom Slater and soon-to-retire James Anderson, who have been at the helm for a long period, playing a key part in its success. I have confidence that their eagle-eyed investment style will allow the trust to continue to thrive in the future.

What I’m doing

So, regardless of short-term concerns, I think the falling Scottish Mortgage share price presents a great opportunity. The trust has proved it can survive difficult periods in the future. And despite its dip, I have faith in the management team to guide it. As such, I would buy the shares today.

The post The Scottish Mortgage share price continues to fall! Here’s what I’m doing appeared first on The Twelfth Magpie.

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• Scottish Mortgage shares are now even cheaper after SpaceX’s amazing stock market debut!
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Charlie Keough has no position in any of the shares mentioned. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool UK has recommended Amazon and Tesla. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

A strong economy

The next US Federal Reserve meeting is expected to mean a 50 basis points hike in the Fed funds rate. This is equivalent of a 0.5% interest rate hike and has sparked fear of a still-bigger stock market correction. The Fed has a history of being too hawkish and spurring recessions, which affects markets globally, including here in the UK. Nonetheless, Moore thinks that the US economy is strong enough to handle multiple rate hikes this year. This is backed by strong employment numbers, heavy assets, and positive earnings results. He also believes inflation is close to reaching its peak. Nonetheless, oil remains the biggest issuing affecting consumer prices. The black gold could spark chaos again if it spikes above $100 per barrel.

Moore sees this year’s stock market correction as being short-lived due to the positive economic data coming in. He expects new market highs to come at some point next year. This should happen once inflation cools down and supply chain bottlenecks ease. Unfortunately, that’s where his bullishness ends. He thinks those new highs could be followed by a potential recession soon after, and into early 2024. This is most likely to happen once ‘stagflation’ (High inflation, but slow or no real economic growth) starts to take effect.

Time is my best friend

Will all that deter me from investing? No. There are four cycles in investing — accumulation, mark-up, distribution, and legacy. This was mentioned by Moore in my interview with him. As a young investor, I’m currently in the accumulation phase. This phase is where I see buying opportunities with attractive valuations during a bear market. Moore sees the current US market correction as a buy-the-dip opportunity for me, as I begin to pick up good discounts on mega-cap companies with healthy balance sheets, attractive margins, and pricing power. The tech-heavy Nasdaq in the US is down over 12% so far this year. That presents plenty of opportunities for me to buy shares in big US-listed tech companies such as Amazon, Alphabet, and Microsoft.

My buy the dip strategy

As Warren Buffett once said: “A diversified portfolio with exposure to different sectors is protection against ignorance.” This same advice was alluded to by Moore in our interview. The main takeaway was for me to invest more in a variety of value and dividend stocks. These can include commodities, insurance, and healthcare.

I was also pleasantly surprised to find out that Moore follows a similar buying strategy to mine. And he continued to encourage me to buy the dip. This means buying when I see around a 5% to 10% decline in a specific stock. When I asked him how much cash I should be leaving on the side to buy those dips, he mentioned 15-20% of my investment portfolio.

Ultimately, my purchases would be dependent on my risk assessment during any market fall, of course. But I will be buying the dip in mega-cap companies with excellent fundamentals for my portfolio.

The post Should I buy the dip in this stock market correction? appeared first on The Twelfth Magpie.

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John Choong owns shares of Alphabet (Class A Shares) at the time of writing. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. The Motley Fool UK has recommended Alphabet (A shares), Alphabet (C shares), Amazon, and Microsoft. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

So the bottom is now in?

Obviously, no one can say for sure whether we’ll see a new low in the Scottish Mortgage Investment Trust share price (or any other stock for that matter). There are simply too many factors to take into account in order to come up with a reliable near-term forecast.

Besides, adopting a Foolish mentality means I’m only really concerned about building a nest egg slowly but surely over the long term. Seen purely from an investment point of view, I don’t need to take the awful conflict in Eastern Europe into account, nor where inflation is going next or any other ‘known unknown’.

However, there are a few things I reckon we can be a little more confident about. 

Reasons to be optimistic

First, SMT’s share price is now almost 25% below where it stood at the start of 2022. Are the stocks it holds in the portfolio 25% worse businesses? I don’t think so. Even the most successful companies can see their valuations yo-yo as the market switches from fear to greed and back again. The question to ask is whether the fundamentals of retail titans like Amazon, pharma firm Moderna, or luxury goods maker Kering have really changed. I just can’t see it.

Second, Scottish Mortgage Investment Trust’s managers clearly know a good company when they see one. That’s why the share price is still up 170% or so since March 2017. This compares favourably to the frankly derisory 2% fall of the FTSE 100. No, past performance can’t guarantee anything. But it is just about the best thing we have with which to judge the performance of those we trust our savings with. 

Third, innovative companies — the sort that SMT’s managers like and invest in — won’t suddenly stop innovating. This is why I simply can’t bring myself to get involved in the rotation to ‘value stocks’ that we’ve seen over recent months. Yes, airlines and banks might enjoy a brief period in the sun. However, their cyclical nature means the returns they generate will likely remain poor by comparison.

Nothing is risk-free

By now, you’ll probably guess that I’m confident the Scottish Mortgage Investment Trust will eventually recover. And then some. As such, I think now is as good a time as any to continue adding to my portfolio here. Bar an absolutely seismic event, I think the bottom has already been seen.

This is not to say that there aren’t drawbacks to investing now. In contrast to the sensational yields on offer elsewhere, the trust pays virtually no income to holders. That’s entirely understandable. SMT owns businesses that are focused on re-investing profits for even bigger returns later down the line. However, it does mean I’m not really being compensated for my patience.

On top of this, it’s inevitable that a certain number of the companies will disappoint and not achieve the growth they once hinted at. Still, the fact that Scottish Mortgage Investment Trust is diversified across a number of sectors helps to protect investors like me from this eventuality.

The post Scottish Mortgage Investment Trust: have we seen the bottom? appeared first on The Twelfth Magpie.

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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Paul Summers owns shares in Scottish Mortgage Investment Trust. The Motley Fool UK has recommended Amazon. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

ITV

Broadcaster ITV (LSE: ITV) is down to publish final results on 3 March. 

Unlike other loosely-labelled ‘value’ stocks, shares in the £4bn cap haven’t really benefited from the rotation away from growth plays in recent weeks. That’s despite Covid-19 restrictions coming to an end and the company making lots of positive noises about a recovery in advertising revenue when it last reported to the market in November. Perhaps traders are concerned that viewing figures will drop as people prioritise getting out more in the months ahead.

The invasion of Ukraine by Russia has shown just how few ‘safe havens’ there are in the stock market. I certainly wouldn’t include ITV in this category given the competition it faces from companies such as Netflix and Amazon. At seven times forecast FY22 earnings, however, I continue to believe that the shares are too lowly rated, especially if dividends are reinstated in the near future. 

The road ahead could still prove bumpy. Even so, I’d be willing to buy at the current level. 

Deliveroo

Also reporting next month is takeaway delivery firm Deliveroo (LSE: ROO). It’s down to release full-year results on 17 March. 

As an investment, I’ll admit to not being the company’s greatest fan. In fact, I stated last December that I’d only consider getting interested in the stock if it fell by another 50%. Since then, it’s tumbled by 45%. 

Now, a lot of this isn’t necessarily down to anything Deliveroo’s done or not done. The aforementioned exodus from highly-valued growth stocks since the beginning of 2022 has been pretty indiscriminate. That said, the company’s lack of profits can’t have helped. With rampant inflation now squeezing discretionary income, I’m wondering if there could be a few nasty surprises to come next month. 

Investors will be looking to see whether the company has managed to hit the 7.5%-7.75% gross profit margin guidance it gave in its last update. If not, I can see the share price being hammered again. Unsurprisingly, I don’t intend to snap up this stock before then.

Ocado

A final FTSE 100 stock I’ll be watching next month is Ocado (LSE: OCDO). An update on Q1 trading is expected on the same day as Deliveroo’s results: 17 March.

As impressive as the company’s automated warehouses are, I’ve long been perplexed by how an unprofitable business like this can occupy a space in the top tier. In fact, recent share price activity suggests more investors are tiring of the company’s ‘jam tomorrow’ strategy. Ocado’s valuation has tumbled 40% in the last year.

Sure, the recent full-year numbers weren’t bad. Revenue for the 12 months to 28 November was 7.2% higher (at £2.5bn) than the previous year. Five high-tech Customer Fulfilment Centres (CFCs) were also opened over the period. However, the big question now is whether trading has been impacted by galloping prices. If it has, Ocado’s downward trajectory could continue in March. 

I’m not going anywhere near the stock until I get some clarity on this. 

The post 3 FTSE 100 stocks I’ll be watching in March appeared first on The Twelfth Magpie.

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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Paul Summers has no position in any of the shares mentioned. The Motley Fool UK has recommended Amazon, Deliveroo Holdings Plc, ITV, and Ocado Group. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.