Ann: Updated Presentation to Macquarie Australia Conference-AUB.AX, page-2

I'll probably end up speaking to myself here, but for the very few followers of what I think is a very well-run business, Slide 8 in today's presentation (titled: "The Change Environment") is a useful summary of just how to run a cyclical business.

The external environment has been awful for these guys over the past two years, yet they have still been able to grow EPS during the steep cycle downturn (and DPS has gone from 31cps to 40cps, although a DRP has been activated... much to my chagrin) by simply managing very well the things they can, and by strategically targeting the right lines of businesses. Importantly, they have not resorted to any "bet-the-farm" acquisitions to which a great many boards - had they been faced with the sort of external business environment that AUB has - would have succumbed.

Not the world's greatest business model (due to the propensity for ebbs and flows in competitiveness), but it is a business whose intrinsic value rises over the course of each business cycle.

So if you are happy to ignore "the cycle" (as I am) and are happy to buy the stock when "the cycle" is in the dumps (as I do), then it is a wealth creating company, especially on a risk-adjusted [*] basis.

[*] Note: By risk, I am not referring at all to short- to medium-term share price risk; I am referring to business performance risk. Short-term share price risk is very high (the stock is highly illiquid), but business performance risk is demonstrably low.