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Many investors will see. Tesla Buying shares as a no-brainer. But the risk of buying a stock at a price-to-earnings (P/E) multiple of 100 scares me. That’s partly why I bought it. Scottish mortgage (LSE: SMT) shares.
The investment trust owns shares in Tesla. But it also distinguishes many other technology-based growth stocks. Many of them have fallen in price recently, as tech-heavy Nasdaq The index hit a bear market.
My timing is usually terrible. But this time I was lucky to buy at the 2022 low. Well, the lowest point so far.
When Scottish mortgage share prices started to climb again, I thought he might have missed an opportunity to buy more at a lower price. But it was rejected again in relation to the Nasdaq. And that means sneaking up on my shopping list one more time.
Holdings
Some of the properties seem cheap to me, incl Modern. Stockpiles increased during the outbreak. But it has fallen back nicely over the past 12 months, and now looks like an attractive long-term buy for me.
Do I want more shares in Moderna’s 8.3% cash investment trust? I think I will.
Buying Scottish mortgage shares also gives me some room. ASMLSemiconductor technology expert. ASML shares have been on a slide for almost a year now. Would I be happy owning an industry segment with strong long-term growth characteristics? Well, yes.
I could go on, and see. Illumina, Amazonand all other growth shares held by Scottish mortgage investment trusts.
Tracking
But in some ways, the trust is similar to tracking the Nasdaq index. I therefore consider a general assessment of the index to be the best way to get a sense of the value of mortgages in Scotland.
In the year On August 31, the Nasdaq was at a P/E of approximately 25. And I find that an index containing some of the world’s largest growth companies is undesirable.
The current valuation is slightly below the five-year average. And the Nasdaq in 2010 It is below the five-year highs reached in 2017 when it peaked at a P/E of over 60.
Discount
If the tech stock index is worth buying now, why pick Scottish loan stocks for a taste? I see another addition to the current share price decline.
When prices fall, investment trust shares often move at a discount to the value of the assets. Currently, the Scottish mortgage discount is up to 11% again. So not only do I get some growth stocks at great valuations, I pay 11% less than market value for them.
If Nasdaq weakness continues, that discount could widen and Scottish mortgages could fall further. And the Nasdaq P/E dropped to 16 in early 2020. So there is risk, for sure.
On balance though, I’d definitely like to buy more Scottish Loans shares over the next decade.