Ann: BKI Announces Entitlement Offer and General Offer, page-38

Why buy BKI when you can directly buy a good portfolio of stocks that you can readily predict will be earning substantially greater returns in 10 years from now? You can just cherry pick from BKI's list of holdings if you like.

Even if you want exposure to the Banks, if you buy BKI you get stuck with their contingent tax liability on the long standing capital gains they have made on the Banks (and on their other stocks). Those unrealised gains act like a tax anchor on them in terms of selling down those stocks even if they want to.

By holding BKI you are also exposed to the risk that they will take dilutive action, such as they did recently when they raised substantial money from the Market at a discount to NTA causing value dilution for existing shareholders.

In my view the only time BKI is a possible buy is when it is trading at a substantial discount to NTA (after allowing for the tax liability it has on its unrealised gains). For that reason I think URB, another Sol Patts controlled LIC managed by Contact), looks far more attractive at this point in time. URB trades at a substantial discount to NTA, gives you exposure to direct property investments, and has a recently acquired diversified portfolio so you are not paying for long term share price gains which will be subject to CGT when they are realised.