@sMiRK. Please dont take this personally, but I am amazed at the number of contributors to HC that buy (mostly LICs) on the basis of a discount to NAV. For me, that would have to be one of the last reasons I would buy. I may have an advantage to you And a little more adventurous in that both my wife and I receive Govt pensions, me Army and her from Law enforcement. I tend to take a top down approach and I dont think (gulp !) things are going to go pear shaped in the foreseeable future. I agree that the US market appears to be overheated but WHEN there is a correction, yes, Oz is going to be affected, but judging by interest rates, I think (and hope) that we will bounce back a bit. PE’s are highish.... but not 1987 high, and with electronic trading, bad news tends to travel faster and corrections tend to take place more quickly. Nevertheless, the pain of ANY correction will be felt a ross the boards. Geoff Wilson isa great one to be able to absorb the sentiment of the market and to hold high levels of cash across his funds when he thinks things are getting toppy. Of course with LICs, thats both a good and bad thing, in that the manager does not NEED to sell his holdings if he thinks a correction has been overdone, but that then perhaps leads to a fairly illiquid LIC whose NAV is under the share price for a very good reason. My last 3 LIC purchases have been CVF, LSF, and GC1, for a variety of reasons, but never because the share price was at a discount to NAV. Have a read of their monthly newsletters, presentations and strategies and apart from LSF, who have a long term record of outperformance, but have seemingly erred ( shorting DMP and Elon Musk), the other two will show the thought process behind the managers strategy and an accumen in picking stocks, sometimes contrary to public opinion and sometimes just sooner. CDM which I am behind in, because of bad timing with rights offers etc, picked Macquarie in the early 20 dollars; even though I am behind at the moment, I dont blame the manager and believe that good management will close the gap between my buy price and the current price.
Thats why Im so bitter with ALF, and that apart from a discount to NAV, there dont seem to be ANY redeeming or compensating factors that even indicate that the gap is likely to close. It just seems to be dead in the water with my funds on board, just wallowing with the tide ! I am significantly behind in $ terms and apart from a takeover or of a review or change of management or strategy, i just cant see what the catalyst will be for a turnaround.
Meanwhile, my funds just sit dormant, not even enjoying much of a variation in a rising or falling market. If the longs equal the shorts, where’s the profit going to be IF the market falls ? Signed frustrated Pete .
PS. I’d absolutely love for someone to come along and tell me I’m wrong, and why ?
