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From the Archives: April 2001

It can be both interesting and instructive to look back at past copies of the newsletter to see what has changed, and perhaps to hunt for lessons from history. Back in April 2001, after the dot-com bust, we were talking about how useful regular monthly savings could be for investing at lower levels without needing to time the market exactly. We feel the same way about this subject now, particular for younger investors who can invest regularly through platform stockbrokers at a low cost.





In April 2001 we focused on the change of manager at Advance UK Trust, known as a ‘vulture’ fund buying into trusts on large discounts and aiming to extract value. James Carthew, now at QuotedData, had just taken the reins, and was discussing the range of opportunities in the sector, much as he still does now as a commentator.


Elsewhere in the newsletter we included a column on warrants, which barely exist any longer – there are just the odd subscription shares in the market now – and we reviewed broker views from Merrill Lynch, HSBC, and Credit Lyonnais Securities Europe, none of which are active in the sector any longer. Much has changed.





Another shift was for the trust Henderson Technology Trust, which became Polar Capital Technology after the managers decided to set up their own management firm. The trust was struggling at the same time to manage the sharp fall in the sector, with equity exposure of just 77% of assets. We reported broker comment on the Amerindo Internet Fund, probably the highest profile trust collapse from the dot-com crisis, another being Framlington NetNet.Inc, where the split capital structure and resultant high gearing for its growth shares decimated the portfolio quickly in the downturn. The lesson here was perhaps about gearing levels and cash management in a crisis, as we know that Polar Capital Technology survived and thrived whereas this other pair did not.




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