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ARG - Argo Investments

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TjamesX

TjamesX

Joined
15 September 2004
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This is my first ever post on any forum board!!! ever!! so get excited

History....

I arrived here as a result of lurking around Propertyinvesting.com and somersoft and so recognise quite a few names around here, but as I am not interested in property (at the moment) I have decided to start investing in shares. I have just started purchasing in the past month and currently have;

2000 AMC (@ $7.28)
4800 ARG (@ $4.88)
300 NAB (@ $26.40)
517 BHP (given by a great grandmother - had since I was a born)

Also I bought and sold ION for a $300 loss. I am planning to hold all of these for the long term.

My question regarding ARG (Argo Investmnets - Listed Investment Company) is this; Currently ARG as trading around 4.85 - 4.89. On Aug31 they reported that net tangible asset backing was 4.91 (excluding capital gains liabilities). So they are trading a little below NTA. However their largest shareholding Maquarie Bank (MBL) has risen around 13% since Aug31 as well as a number of other large shareholdings and ARG has not moved ?????????? I don't care in the short term because I wish to hold these for a long period, I am just curious

TJ
 
Re: Arg ???

Correction on earlier post.

After looking at the ASX chart of MBL again - it has only moved about 5-6% since Aug31 (my mistake ;) )

Does anyone know any website that provides free charts better than the ASX website?? I can't chage the timeframe - although I have found a tricky way;

www.asx.com.au/asx/research/chartsSearchResult.jsp?asxCode=MBL&TimeFrame=D6&compare=index&indices=XJO

By changing the D6 in the chart window address to D3 or D1 you can get 3month or 1month charts :xyxthumbs

However, I am still curious as to why ARG hasn't moved :confused:

TJ
 
Re: Arg ???

TJ,

Here's a longer term weekly chart for ARG.

If you want, you can download the free FCharts software and free EOD price data from float.com.au and view your own charts.

Cheers,
GP
 

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Re: Arg ???

TjamesX said:
This is my first ever post on any forum board!!! ever!! so get excited
Click to expand...
Wooohooooooo!!!!! Is that excited enough ;-)
History....

I arrived here as a result of lurking around Propertyinvesting.com and somersoft and so recognise quite a few names around here, but as I am not interested in property (at the moment) I have decided to start investing in shares. I have just started purchasing in the past month and currently have;

2000 AMC (@ $7.28)
4800 ARG (@ $4.88)
300 NAB (@ $26.40)
517 BHP (given by a great grandmother - had since I was a born)

Also I bought and sold ION for a $300 loss. I am planning to hold all of these for the long term.
Click to expand...
Why did you sell a stock after less than a month when you bought it for the long term?
My question regarding ARG (Argo Investmnets - Listed Investment Company) is this; Currently ARG as trading around 4.85 - 4.89. On Aug31 they reported that net tangible asset backing was 4.91 (excluding capital gains liabilities). So they are trading a little below NTA. However their largest shareholding Maquarie Bank (MBL) has risen around 13% since Aug31 as well as a number of other large shareholdings and ARG has not moved ?????????? I don't care in the short term because I wish to hold these for a long period, I am just curious
TJ
Click to expand...
Short answer: nobody knows. LiCs have gone out of style? The market is busy chasing MBL too high? The market is riding the MUL whirlwind? The rise in MBL is outweighed by the rest of the portfolio?

Speaking as an investor in another LiC with a similar investment philosophy, I suggest you go back and read Argo's "Owner's Manual" again, then ask yourself what you mean by "long term". From some perspectives, there's no difference between investing in businesses and investing in properties.

Ghoti (halfway through reading "The Intelligent Investor" and increasingly aware of how much I don't know)
 
Re: Arg ???

First of all - Great Pig, thanks on the charting software and data, I've checked it out and am pretty happy with what I see. :)

Ghoti

ghotib said:
Wooohooooooo!!!!! Is that excited enough)
Click to expand...

Yes, maybe could have had a couple more o's ;)

ghotib said:
Why did you sell a stock after less than a month when you bought it for the long term?
Click to expand...

The short story is, I am doing a course at the Securities Institute and one of the lecturers blurted out that he thought ION was oversold. So I looked at the company and did a little research (not Much!) and decided to by for the med term. Then two things happened i n the space of a couple of weeks;

(1) they got rid of the CEO guy Salthouse, who basically built the company buy himself by buying a couple undervalued companies.

(2) a director sold half a million $ worth of shares below market price

These didn't sit entirely well with me (being inexperienced) so I decided not to wait and see what happens and took a loss.

ghotib said:
Speaking as an investor in another LiC with a similar investment philosophy, I suggest you go back and read Argo's "Owner's Manual" again, then ask yourself what you mean by "long term". From some perspectives, there's no difference between investing in businesses and investing in properties.
Click to expand...

Funny you mentioned that, I did read it a couple of nights ago. Can't remember what it said exactly - but I will now twiddle my thumbs and wait for them to outperform the index over the next few years.

I did buy Argo because they have a long track record of doing that (outperforming). And my mum told me a story about when she knew the guys who set it up years ago (Patterson was one, she didn't know them that well), but anyway she said he used to write on the backs of scrap paper rather than wasting new ones - its that kind of penny pinching attitude I like :p
 
Re: Arg ???

Oooh I forgot to mention that as an Adelaidean, I got them because the're a good old Adelaide company that doesn't need to relocate to bloody Sydney just to keep on the pulse in financial markets!

Go Adelaide Go

Oh and bTW for tonight - GO THE POWER, st kilda will go down

Who said buying shares shouldn't be emotional?? :eek:
 
Re: Arg ???

TjamesX said:
This is my first ever post on any forum board!!! ever!! so get excited

History....

I arrived here as a result of lurking around Propertyinvesting.com and somersoft and so recognise quite a few names around here, but as I am not interested in property (at the moment) I have decided to start investing in shares. I have just started purchasing in the past month and currently have;

2000 AMC (@ $7.28)
4800 ARG (@ $4.88)
300 NAB (@ $26.40)
517 BHP (given by a great grandmother - had since I was a born)

TJ
Click to expand...

Hi TjamesX,

some of the stock you have mentioned, i had been holding for the upside,

687 AMC (@ $7.28) exact same price coincidently
NAB - when its been dipping or and technical indicators are showing signs of a blowoff or downtrend have, been successfully buying puts and selling them off very quickly
BHP - sold this morning at 13.50, though the market had opened quickly to my surprise and was unfortunate to move the trailing profit target up in time, though i currently holding BHP15 Oct Calls, lets just hope it can break this $13.60 barrier...

the most stock, im excited about is AMC... could see it go to $9.00 over the medium term, though i see this stock as low risk, but medium to long term views...

Cheers,
sis
 
Re: Arg ???

TjamesX said:
Yes, maybe could have had a couple more o's ;)
Click to expand...
OK: oooooooooooooooooooooo ;)

The short story is, I am doing a course at the Securities Institute and one of the lecturers blurted out that he thought ION was oversold. So I looked at the company and did a little research (not Much!) and decided to by for the med term. Then two things happened in the space of a couple of weeks;

(1) they got rid of the CEO guy Salthouse, who basically built the company buy himself by buying a couple undervalued companies.

(2) a director sold half a million $ worth of shares below market price

These didn't sit entirely well with me (being inexperienced) so I decided not to wait and see what happens and took a loss.
Click to expand...
I'm inexperienced too, so maybe we can learn a bit from each other. For starters, I'm impressed that you were willing to sell when you saw changes to the stock. I think I would have dithered for a while.

I came here from PropertyInvesting too, via the link in SiS's sig (thanks SiS). I looked hard at property for most of last year, and got a lot of practice at assessing yield and risk and keeping my money in the bank. The really good part of that was that it helped me work out an overall investment framework that I'm now trying to build on.

I'm not finding many shares at the moment that fit my framework. I think Argo follows a strategy similar to the one I'm trying to work with, which is based on the thinking of this Benjamin Graham guy I'm reading at the moment and also of Warren Buffet. I don't know enough to talk about this very clearly, but one thing I'm trying really hard to get into my head is that I only buy into any investment vehicle if I have excellent reason to believe I will earn more with it than with cash or bonds. It's going to take me a while to really understand what "excellent reason" means, but it's a lot more than rising share price and /or optimistic forecasts from management and analysts.

Funny you mentioned that, I did read it a couple of nights ago. Can't remember what it said exactly - but I will now twiddle my thumbs and wait for them to outperform the index over the next few years.

I did buy Argo because they have a long track record of doing that (outperforming). And my mum told me a story about when she knew the guys who set it up years ago (Patterson was one, she didn't know them that well), but anyway she said he used to write on the backs of scrap paper rather than wasting new ones - its that kind of penny pinching attitude I like :p
Click to expand...
Fair enough. Just don't expect them to outperform the index (which index?) every day or every year. You can probably learn a lot from their shareholders' reports as well as from what they do with the portfolio.

Cheers

Ghoti
 
Re: ARG?

ARG is offering a few shares to existing holders at $5.79 a share.

Given that the price has only been above this for less than two months, and it's well above the longer term trend line, I'm not so sure it's such a good deal.

I do want to get some more ARG at some point, but I think the chance is reasonable of getting them cheaper than this.

Just my opinion :2twocents

Cheers,
GP
 

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Re: ARG?

I have sold all remaining my ARG shares at 6.00 after they went ex div and my 12 months were up, obviously they will tend to track the over all market, which IMO will be due for a reasonable correction within 12-18 months. They are also trading pretty close to their NTA....
 
Does anyone think these kind of stocks (LIC's) are back in flavour?

Although i don't know much about reading charts i can see that ARG and AFI have had a good run the last couple of months.

How does one find the NTA of a LIC? Does the ASX website or Comsec have this info?

Do people think that LIC's should be held in an investment portfolio for the long term (buy & forget)?

Are these stocks mostly used for growth or income?
 
Transit
There is one reason why the LIC sector is booming - because the whole market is moving upward. The NTA of all LIC's are announced on a monthly basis, about 10 - 15 days after month end. So, if you are using comsec, just go to announcements and review whats listed there.

At the present stage, ARG trades at a premium to both its exclusive and inclusive of deferred tax NTA. For instance, their January NTA was excluding unrealised tax was 7.74, which is a fair way off the the 8.88 trade on Friday. ARG has always had a larger NTA premium than say that of AFI however, because it has been long proven that ARG have a history of bigger returns. To be honest, I always wanted to get myself some ARG shares, but the NTA premium always convinced me not to. However, the gap is even wider now.

Cheers
 
Thanks Reece, i just found the document you talked about under 'announcements' in comsec. It also seems that LIC's are not really good for income given that the current yield is only 2.6%. But i guess you can sell down shares to provide an income if that was the goal.

I'm looking at putting some money into some managed funds with some Aussie stock exposure but these LIC's look more attractive with the lower management fees. I guess the trick with these is to try and buy some when the NTA premium isn't so big.

cheers


reece55 said:
Transit
There is one reason why the LIC sector is booming - because the whole market is moving upward. The NTA of all LIC's are announced on a monthly basis, about 10 - 15 days after month end. So, if you are using comsec, just go to announcements and review whats listed there.

At the present stage, ARG trades at a premium to both its exclusive and inclusive of deferred tax NTA. For instance, their January NTA was excluding unrealised tax was 7.74, which is a fair way off the the 8.88 trade on Friday. ARG has always had a larger NTA premium than say that of AFI however, because it has been long proven that ARG have a history of bigger returns. To be honest, I always wanted to get myself some ARG shares, but the NTA premium always convinced me not to. However, the gap is even wider now.

Cheers
Click to expand...
 
reece55 said:
Transit
There is one reason why the LIC sector is booming - because the whole market is moving upward. The NTA of all LIC's are announced on a monthly basis, about 10 - 15 days after month end. So, if you are using comsec, just go to announcements and review whats listed there.

At the present stage, ARG trades at a premium to both its exclusive and inclusive of deferred tax NTA. For instance, their January NTA was excluding unrealised tax was 7.74, which is a fair way off the the 8.88 trade on Friday. ARG has always had a larger NTA premium than say that of AFI however, because it has been long proven that ARG have a history of bigger returns. To be honest, I always wanted to get myself some ARG shares, but the NTA premium always convinced me not to. However, the gap is even wider now. Cheers
Click to expand...
I hold ARG, AFI and DUI in my smsf as a set and forget. I have problems with DUI because it is so illiquid, there is hardly any volume traded and some days zip. So even though I buy at a premium to NTA when I sell DUI (as I did because I was way overweight with them after a rights issue) I either have to wait days for a sale or take a 10-15% hit on nta. Other respected lics to check are AUI, MLT, CHO, BKI .

If you do decide to put some of your portfolio in LIC spreading them around gives more distinct opportunities to participate in SPP's, Rights etc. These LIC's have quality portfolios and low management expense ratios 0.1 - 0.3%, run by people with respect from an operational business backrounds rathre than just financial backgrounds such as stockbrokers, etc.

If you want to do more research go to www.asx.com.au and use the "search", eg for "LIC ARG". One of the recent links was to http://www.asx.com.au/investor/pdf/lic_nta_report.pdf which will give an analysis of the LIC situation including sp to nta. One other lic that I liked but never got was ALR. It was trading above its nta but now has gone a little flat. It's attraction is a better div than my others. I would also caution against just using sp to nta, look at ELI Emerging Leaders Investments NTA to SP -22.92%, FAT Fat Prophets Australia NTA to SP -23.95% and HIC Huntley Investment -16.33% for example, it is a hefty discount and you would think it is an undiscovered gem, but when it came to sell you would also be selling at a discount to nta.
LICS provide me with an opportunity to pack away about 30-40% of my smsf without worrying to much about investment strategies, set and forget, and allows me to have a bit of fun with stocks such as pdn, bmn, smm, inl, imd, etc, and they are always there in case I kick the castle over with my speccies
 

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Thanks drmb, can you please tell me what SPP stands for? Is this some type of share issue particular to LIC's?

Someone recently mentioned Whitefield (WHF) as another quality LIC to keep an eye on. Looks like they are heavily into the banks. They last closed at $4.68 but have a NTA of $5.20 as of Jan 31st 2007 (10% discount):

http://imagesignal.comsec.com.au/asxdata/20070208/pdf/00691699.pdf


drmb said:
.....

If you do decide to put some of your portfolio in LIC spreading them around gives more distinct opportunities to participate in SPP's, Rights etc. These LIC's have quality portfolios and low management expense ratios 0.1 - 0.3%, run by people with respect from an operational business backrounds rathre than just financial backgrounds such as stockbrokers, etc.

If you want to do more research go to www.asx.com.au and use the "search", eg for "LIC ARG". One of the recent links was to http://www.asx.com.au/investor/pdf/lic_nta_report.pdf which will give an analysis of the LIC situation including sp to nta.
Click to expand...
 
LIC's are usually very conservative and most will tell you that they are medium or long term holds. I think they're great to include in any portfolio.

Personally, I like to read the annual reports of these types of companies as an educational tool (portfolio make-up, recent purchases etc.). A good example is Clime Capital (CAM), whose director, Roger Montgomery, makes a point of keeping investors updated and educated about their methodologies.

They do tend to track the ASX200 though, so I wouldn't expect outstanding gains. Over time you should do well however.

Worth looking in to.

Ty.

Hold AFI, CAM, WAM (all LIC's)
 
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