Ann: Full Year Results - Investor Presentation, page-51

You sound quite fired up Madamswear. - While you have clearly passed some basic investing courses, you are missing the crucial understanding which enables you to make money. It is incremental (and future ) returns which drive share prices, not historical and especially not current returns! “Go where the puck is going, not where it has been”! - Buyback is VALUE accretive when shares are purchased at a discount to a company’s underlying intrinsic value. The irony in your focus on earnings is that earnings are such poor predictors of value for cyclical companies....you are using the wrong mental model when looking at BOL. How much value was created via BHP and RIO when they repurchased stocks when their earnings were at peak levels and it was “ EPS accretive” lol. Cyclical stocks are counterintuitive, you want to buy on super high PE’s or when they are loss making but momentum is improving. - Based on the company’s recent announcement, their gearing at February will like be around 2 -2.5x ND/EBITDA. Arguably too low at the bottom of the cycle particularly given BOL’s asset backing. Once under 2.5x, BOL is permitted to buyback stock which they will likely commence in February if the share price hasn’t already doubled. - Reversing previous impairments doesn’t create tax liabilities. What matters is the tax base of the asset, not the accounting base. Did the ATO decide to give them tax credits because their accountants impaired its asset base? No. Deferred tax assets were created due to operating losses, not asset impairments. Regardless, the point was to highlight that market value is > current accounting value (and BOL’s current share price) and you’ve completely missed that. - You are looking at the down part of the cycle.....and looking at it historically. The market is forward looking. Also worth noting that BOL increased its depreciation policy at FY17 results. You have a reasonable grasp of theory. The problem is so do all of your competitors in the market......second level or higher thinking is required in this game.