if you think its going down why dont you just sell and be done with it.
also, i dont know if you understand what an LIC is. its a closed product. they can't raise more money into it. its not a managed fund.
there was an article in the Fin yesterday about century that they tried a buy back but the price was stubborn. i was all in favour of buy backs but if they worked do you reckon that every LIC in discount would be doing it/ have done it?
the SP is what it is. market forces at work buy back or no buy back
The div goes on the NTA as at July 1 2010. Thats not a moving ticket so dont look at July 31 NTA or any other NTAs. It was a buck 20. so 6% of that is 7.2c. Then you can divide that into the current SP and viola you have your running yield. So if todays SP is 90 then is 8%....before franking. And one think I liked for my tax was the franking has historically been 100% not that we can lock that in. still. I expect most should be. You wanna gross that up. 6% pre pre is very big. There was another article in the fin yesterday on how investors are looking for yield in smalls cap stocks by Tony Featherstone. Worth a read at the library if you can get there, maybe a newsagent still has a copy.
So what does a portfolio of micros yield I dont know. Maybe 2-3%??. So yeah, think capital. And i'd prefer they return the coin to me in a dividend than buy it on market at a discount and as soon as they stop guess what...the market reverts to its pre buy back levels. Whats the point of that. Its either sell up the fund altogether or keep the money working for mine.
I bought this stock 2 months ago because I read an announcement and read a post here. A bit of media bought it to my attention. IF we see this persons work translate into increased daily turnover and a narrower spread then we should expect the SP to rise. My concern when I thought microcaps was "can I buy a parcel without moving the price 10 cents?!". And yes I was able to. I havent been able to identify long term volumes but I expect it to rise...cos one day I will sell this and want to be able to get out without moving price down 3 cents.
I reckon a lot of people think this way. Maybe thats contributed to it being at a discount- they call that liquidity.
The other thing is they diluted this with issues over and over. I expect that to stop now, or at least slow. Prom my perspective as a new shareholder this was a steal.
Thats pretty good for new shareholders.
You get 2 returns. The performance of the micros and the share price. I'm quietly confident for 2 years on the market and if they stop diluting i expect most of that to go onto the NTA.
My guess on the money for this person is that it will cost about 0.10% to us for the year. if that persons work moves the share price even 1 cent thats a 10 times return. (crude napkin maths). would we prefer a stock that is getting no coverage attention noise, with no one out flogging it?
Use yourself as a sample for how other shareholders think. You have this as a long term sell but present holder, meaning - if I read this right- you are going to sell in the future not now right. if you were long term sell and NOT a holder then it would mean something else. Does that suggest you are sitting to see what they pull out of a hat?
On that basis how many other shareholders liekwise are saying yeah I'll wait to see what this person does first. and you know what that does? it pulls the sell volume back a bit and pushes the price (provided there is demand to buy on the other side of course). mission accomlished.
You have a good point though. If we are here in a year and nothing has been achieved and they still issue capital at a discount and there is gouging, then come join me and others in a line asking questions.
CTN Price at posting:
90.0¢ Sentiment: Hold Disclosure: Held
(20min delay)
