Watford - Thanks for the explanation. I agree that the break...

Watford - Thanks for the explanation. I agree that the break even price for TIM when you buy TIMPB is 18 cents. Makes sense to gross up the dividends when doing the sums. I don't think we will be anywhere near there next September.

In any case, my ballpark view and your assessment with the error still point to the same story. As long as Timbercorp stays is business, TIMPB is a good deal right now. I also took a general look at the value of Timbercorp dead, and it still stacks up. I wouldn't want it to have to go that way, but it gives me a bit more surety even in these tumultuous times. So much so, I went out and bought a parcel of TIMPB this morning.

I also like your strategy of going long in TIMPB and short on TIM - more so if it was done back when TIM was trading at loftier levels (and maybe more so if I was on the ball enough to do it too!). The basic mismatch in pricing between the two securities pretty much assures you of a great outcome.

One question though, I didn't notice the timing for the sept 09 dividend in relation to the conversion when I looked at the prospectus yesterday. I would want to check that if you convert that you will also get the dividend. Do you know of the top of your head, or should I drag the prospectus back out?