o/s brokers and ubs, page-4

i went to the investor forum earlier this year,the difficulty getting finance due to the now well covered gfc was real,the management team responded quickly,as for all the rhetoric regarding gearing large reits were long considered boring unassailable behemoths and gearing was the tool used by all i chose mof on price at the time and that it was sector specific,unlike others,thinking it might provide a better medium term play than other stocks.the entry price at
an average of 14.4c with a huge potential yield led me on the path of more research,below i will cover what i believe are significant aspects of mof.

o/s interests are generally covered by non recourse debt and debt that is raised within the specific country where assets are held, a member of the management team is a qualified surveyor of the large buildings mof specialise in.

i was impressed with the openess of the management team while we enjoyed nibbles after and they confirmed some observations of the world scene.

anyway to move on it is my belief that many of the usa assets are held largely with debt so that even in a sale below cost it would have only a relatively minor effect on nta as opposed to prevailing sp. leaving plenty of head room

at the time of the meltdown the margin spread on rates was enormous and i believe in a worst case scenario as confidence and the flow of credit resumes that the overall rate is unlikely to increase.

at present i am noticing an increasing level of good vibe media regarding the usa,that would be the giant pr machine rebuilding confidence and while the world is reeling from the massive usa stimulus package there is if you recall the manner and terms and conditions under which it was issued to corporations and the like,well the point is its like a massive future fund on which the us government in time will
most likely make an enormous profit,manufacturing might even be well and truly rekindled and the new technologys which the good old usa are so good at producing in their open creative positive thinking environment could well emerge reducing energy dependency which in turn will recreate their petro fuelled economy.

i hope mof are able to retain core usa holdings and other holdings but i guess the possibility of splitting it off as another fund as prosperity returns in the usa and using the funds to pay down aus reit debt or expand the aus portfolio
might create a long term reit winner with excellent long term dividends.

so from where i sit now having turned a disastrous foray into the asx into something with a future i am now seriously contemplating retaining my current holding as a cornerstone investment,with no debt and modest cash flow i could still have a retirement future or at least stress free
asset backing.

i use afi as an index benched against startup capital and even after considerable expenses for an ordinary joe like me,and paying down a significant amount of debt liquidating
approx 26%y holding last week my current holding at 29c will still buy 10% more units of afi than the index start.

as for sp. if it is low when they pay a dividend then i get more units through apra regulations,if the sp moves up comensurate with improvements in the world economies and large reit holdings become more attractive for investment,and lets face it no one is rushing to build in these areas at present so at some point in time one would assume location,location,location will once againg reign supreme and mof appear well placed in this area.

the sp should rise for the present above 34 would be a good look ,however a significant premium, given the currently heavily discounted valuations and strong likelihood of further debt reductions would in my most humble opinion be a
more palatable outcome and hopefully the market will move to price this in over the ensuing 12-18months which could easily make this stock a multi bagger outstripping the big miners and banks and wait for it with a dividend that could in time grow considerably,afterall our finance markets meaning the asx etc are the cornerstones of the developed world.

am i excited yes,yes,yes what would be more exciting a merger with other macq funds which are all stand alone funds just like mof.

i apologise for the length of this post but i am one happy person through this investment,afterall it looks better than money in the bank and every week i have the option of adding to the core holding as a saving plan what could be better