Ann: Response to Media Speculation, page-27

My reasons for following:

1.  Your learn more from mistakes than success.

2.  I am curious if they can turn it around.   I have held in the past, might again, if they change management and increase disclosure and prove that they are actually profitable and not a fraud.   Strategically Australian investors are light on alternative investments and Blue Sky is supposed to be one group that can provide those investments.   Leonards was a disaster from the beginning, but the childcare play wasn't a bad idea at the time.   Its their execution and arguably manipulation of valuations to overstate their profit so that certain individuals can profit at the expense of the market - that is a problem.

3.  I am offended as an Australian that such a corporate debacle is allowed to play out on the ASX300 and even more so that more people like you are not offended.

4.  If somebody reads this forum and decides to have a closer look at the financial before investing and tries to make a more informed decision.   Then my time has been well spent.

I followed NWH down from $2 to 5 cents, got in a bit early, circa 30cents, and rode it to $1.70 today.

For full disclosure, I'm also watching RFG, QTG, YBR, MOC and until recently GFY.   I'm probably more vocal on here, because BLA has more interesting goings on.   Its been in the news at least once a week with new and interesting revelations.

Watch this space, the next 6 to 8 weeks will be the most critical.

In all seriousness you should be asking yourself why are you still a holder.   All of my predictions regarding the price of this monster have come true and all along the way you have disagreed.   The price movements have not been isolated to low volume trading (ie market manipulations).   My commenting on this forum are not moving the price, the price is moving of its own accord because of the actions of Blue Sky.

In 6 months time there are only 4 possible outcomes here:
1.  The share price is higher.
2.  The share price is the same
3.  The share price is lower again
4.  The share has stopped trading / wound up.

Ask yourself what needs to happen for option 1 to be achieved?   The market to fall in love with them?   Not gonna happen with the current market updates / disclosure strategy.   Blue Sky to be miraculously profitable?  Not gonna happen, Blue Sky has never been profitable since it listed without the unrealised / overstated performance fees.

No more likely outcome is that in 6 months time, 2 to 4 are the outcomes.   2 is on the basis that Blue Sky doesn't release more bad news and it will in August....

Seriously if people don't realize that there is something wrong when they respond in the following way to questions, wake up:

AFR - There are concerns that Blue Sky's involvement in water trading has artificially inflated the market so that it could be operating like a ponzi scheme.

Blue Sky - response - our investors have achieved 17% per annum returns since 2012, we possess about 2% of total water rights, but are responsible for 10 to 25% of the recorded transactions.   And an independent valuer signs off on it every month.

AFR - thanks but, you didn't actually answer our question...

This paragraph in the closing of the AFR article is the most telling:

As for the footnote, a significant proportion of irrigators in the Murray-Darling Basin share water entitlements on one bulk deed and then trade their percentage of it. None of their trading volume is public, and so that's the (material) part of the market Blue Sky, which counted it last week, has suddenly decided to exclude from its latest portrayal of itself this week. Any argument that Blue Sky's Water Fund isn't the creator and looming victim of a price bubble in the limited types of water rights it buys (but, again, by its own admission, never sells), is specious, given their cantilevered value since the Eagle Street brigade entered that market, especially with First State Super's mandate from June 2015. It's no coincidence they're now spouting data from 2012.


FYI - my future prediction is as follows:

As we get closer to the annual report, depending on the announcements I can see this floating down to $1.   Then depending on their cash position at the annual report the shares will respond (anywhere between 50 cents and $2,50).   My concern here is that without knowing the current / future burn rate, this stock is too risky to hold.

THIS IS NOT ADVICE, JUST MY OWN PERSONAL OPINION, DO YOUR OWN RESEARCH