And another comment to 1Bacchus' question.I would not be...

And another comment to 1Bacchus' question.

I would not be inclined to buy ARG at the moment and here is why.

ARG ( and comparables such as AFI, MLT ), have inherently less volatility than the market. If their major investments ( such as the banks and BHP etc ) are going up and down by say , 30 %, then ARG is going to go up and down by say 20%. In technical terms they have fairly low beta.

There's a couple of reasons for this. The first reason is the inherent diversity of ARG's portfolio. The second reason is the tendency of the sort of people inclined to invest in ARG. The third reason is, the valuation of ARG can be considered by looking either at the relativity of the ARG shareprice to the portfolio NTA per share, or by looking at the value of ARG's divididends. The dividend stream from major companies is inherent somewhat less volatile than their share prices.

Since ARG has less volatility than other shares, if you assume for a moment we are at a market bottom, then it probably has less potential upside than other major shares, indeed less than the components of its own portfolios. In other words, if the major banks go up 30% over some timeframe ( whether it is 3 months or 3 years from now ), ARG may only go up 20% over the same timeframe.


On the other hand, if ARG falls 10% because of some panic selling or margin call selling to well below its "trend" values, then by all means buy some on that day.