advice for a novice, page-13

Kaiser;

It is not easy to dismiss the premuim to NTA backing. But as a novice may i explain the reasoning to buy at such times.

Safe stocks such as this have a stable income and relatively unchanged portfolio which may not be in vogue at various times. Preffering to capture the best of what the Australian market has to offer.

In a bull market some institutions and private investors abandon such 'safe' stocks preferring to venture to more speculative ones. Incidedntally the SP of Argo will rise as the dividends and earnings on their major holdings increase. The SP rises of the back of earnings and sellers usually sell at a discount in a rush to participate in the bull market. Therfore it is not uncome to find shares trading at a discount to NTA backing during a bull market.

In a bear market, market participants try to place cash in safe hands. Conversly, the weight of ARGO's portfolio and earnings has weakened, however the dividend yield usually remains the same, which is generally above bank interest.
Therfore, short to medium term investors will buy shares at a premium to NTA backing.

Intheblack and Tiger hit the nail on the head with this one stating that buying it regularly over time, and for your 30 year outlook that is the best option.

Growth through earnings and re-investment.

AUI, DUI, CHO and MLT are definatly worth a look. I particularly like ARGO for the fact that soemtimes the ability to pick some up cheaply during market panic apart from the discount at SPP time.