Tag: Ben Rogoff

AI Tipped for Rapid Adoption by PCT, and Understanding Business Models

It’s summertime and the stock market continues to drift downwards with little share trading. It’s certainly not the time to be trading small cap stocks.  So I decided to catch up on some reading. I always like to read the Annual Report of Polar Capital Technology Trust (PCT) and that’s not just because I hold the shares but because the commentary on the technology market by Ben Rogoff is usually well-informed. This year is no exception but he is betting on AI to be a new growth phase stimulant.

He says: “After decades of unrealised hopes around artificial intelligence, we believe that generative AI is likely to prove the technology’s so-called ‘iphone moment’”, with mass adoption to follow. I am not so sure. There is no doubt that software such as ChatGPT might enhance search engines such as Google and Bing but will they enable lower cost or faster production of products? It might be just another over-hyped technology that will find a place in the market but not cause a revolution.

The latest book I have read is entitled “The Business Model Navigator” by three business school academics Gassman, Frankenberger and Choudury”.

Understanding a company’s business model is very important. I said this in my own book entitled “Business Perspective Investing”: “A company’s business model describes how the organization creates, delivers, and captures value via its adopted business processes. The accounts are only a good pointer to the future if the world, and the markets in which the company operates, are in stasis, i.e. nothing about the market and the company is going to change”.

The Business Model Navigator covers how companies can and have transformed their operations and profitability by adopting new models and includes many examples. It’s full of useful ideas that can be applied to any business.

The book is not light reading so might best be studied by those with an academic bent or business management background but there is certainly good content to fill up your summer holidays.

Roger Lawson (Twitter https://twitter.com/RogerWLawson  )

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Polar Capital Technology Trust AGM and Board Apprentices

I attended the Polar Capital Technology Trust (PCT) Annual General Meeting via the Lumi AGM platform today. This was an exemplary example of how to run a “hybrid” AGM with 8 attendees on-line and 4 shareholders physically present. Questions came from both sources, voting was on-line and there were no technical hitches.

The low attendance was probably because we are in the holiday season I would guess. But it proved a useful meeting anyway with a good presentation from fund manager Ben Rogoff. He is always worth listening to and his video presentation should be available on-line, or you can read the Annual Report of the company where he covers technology trends and there is also a supplement on “Hybrid Work” that covers the WFH impact. If you want to keep up with technology trends, Ben’s annual reports are essential reading.

PCT increased the NAV per share by 45% last year but the share price discount has recently widened so the company has been buying back shares – it’s now on a discount of 7.3%. Technology shares have gone out of favour, or some profit taking has happened.

In response to a question about his own holding in the company, Ben said he had been buying shares recently. So have I as I still think technology shares are good value for the long-term.

An interesting aspect of PCT is that they do have a “board apprentice”. The person appointed is not a formal director but attends all board meetings as an observer. This enables them to learn how boards operate and otherwise gain an education. There is an organisation who can provide candidates for such roles – see https://www.boardapprentice.com/

As I said in a previous blog post, there are better ways to increase diversity than imposing quotas for females or other categories on the board. Education is the key. Appointing board apprentices is certainly a better way of improving diversity which I wholeheartedly support.

Roger Lawson (Twitter: https://twitter.com/RogerWLawson  )

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