BBI - Babcock & Brown Infrastructure

[jacobkball]

There is very little upside now and a real risk of 100% downside.

Great call before the open yesterday, as it's only gone up 30% - 40% or so since then. Yes, I realise in the longer term, things are looking shaky....... right?

I'm out now, with a decent profit. Glad I didn't panic like many others and jump out at the bottom.

If anyone out there can explain why the price has climbed so much, nearly to the levels it reached after the recent 'almost positive' announcement, I would be most interested to hear it. As far as I can see, nothing has changed from the last announcement.

Bring on the naysayers (you know who you are) - surely it's time for the price to crash again, right?

 

[hardyakka]

Having caught up on the BEPPA thread for the first time in a while I an asking myself what is going on?

Having followed this thread for nearly a year BB gave an open and honest opinion of his view of BBI/BEPPA based upon his research etc. Many disagreed with it, and that is fair enough as that is their call based upon the knowledge of the stock.

A number of persons are, with the benefit of hindsight, are dissecting these views and pointing out errors etc. But isn't everyone 100% right with the benefit of hindsight? So be reasonable folks.

If someone does invest on the basis of an opinion in a forum without doing their own reseacrch they deserve to be eaten alive, and they will get minimal sympathy. To me its the same as investing on the basis of what the guy in the pub said. But, a forum may give you a pointer to a stock that you can do your own research on.

Whether you agree with BB's views or not, don't bag them because at least he had the guts to put the view forward, unlike the Selects of the world.

Cheers

 

[Jez]

Share price jump through today. Was it something to do with the Xstrata coal train deal? Was no announcements, just inside info?

 

[skyQuake]

Well the market did rally 100pts from its lows... and BBI is a fairly volatile stock
Banks led though.

 

[Iggy_Pop]

Have you heard the saying "No news is good news"?

I'm out on deciding, as I have sold all at a loss. Usually when I sell at loss, the price eventually sky rockets! If you are still holding BBI, I hope my selling helps you.

I also sold out at a loss yesterday, and normally the same happens to me. Between the two of us we have most likely "held " the price down.


Look out now !

 

[banska bystrica]

Great call before the open yesterday, as it's only gone up 30% - 40% or so since then.

BBI has gone up 30-40% since the open yesterday? Yeah sure. I also believe in the tooth fairy.........................................

 

[jacobkball]

BBI has gone up 30-40% since the open yesterday? Yeah sure. I also believe in the tooth fairy.........................................

Wait.... how did I get that so wrong? Oh yes, I'm referring of course to BEPPA, which any half-wit can deduce.

Perhaps it's Santa Claus you believe in? He's certainly been bringing everyone lots of presents lately

 

[banska bystrica]

Wait.... how did I get that so wrong? Oh yes, I'm referring of course to BEPPA, which any half-wit can deduce.

If you mean BEPPA, then say BEPPA. This is a BBI thread good buddy and if you want to refer to BEPPA, then write "BEPPA".
There's a great arbitrage play going on with BEPPA/BBI. Short BBI, long BEPPA. That's why you are seeing BEPPA firming and BBI doing very little in comparison. The astute would know this already.

Off to bed for me. I've got a plane to catch in the morning. The MCG awaits BB's arrival.

 

[drsmith]

It is obvious to any reasonable person that jacobkball was referring to BEPPA as it is a subset of BBI.

 

[Jez]

It is obvious that BEPPA is a subset of BBI.

Hang on, I'll ask my bus driver if he knows that!

Seriously, there are many speculators here that know Jack-All about the share market, just wanting to give you an interest free loan, by purchasing the shares you are selling!

 

[banska bystrica]

Great call before the open yesterday, as it's only gone up 30% - 40% or so since then. Yes, I realise in the longer term, things are looking shaky....... right?

I'm out now, with a decent profit. Glad I didn't panic like many others and jump out at the bottom.

If anyone out there can explain why the price has climbed so much, nearly to the levels it reached after the recent 'almost positive' announcement, I would be most interested to hear it. As far as I can see, nothing has changed from the last announcement.

Bring on the naysayers (you know who you are) - surely it's time for the price to crash again, right?

Jacob Ball,
How about you read my Nov 2008 posts on BBI? You obviously haven't been around this forum long enough to realize who the astute contributors are.
Cheers.

 

[persistentone]

Apparently my userid on HotCopper was suspended because I asked why moderation is so severe. Amazing. Can someone tell me how long the suspension is for?

 

[persistentone]

The BBI New Zealand bonds fell in value today, which is not the result I would have expected with a recap pending on BBI. The NZ Bonds on true secured debt and should have been strengthened by rumors of a recap.

Anyone have a theory on that movement?

 

[Tysonboss1]

Beppa has had a big run up latly, it's sitting at 19.4c at the moment with with market depth at 7 buys to 1 sell.

Whats happening here, can this be sustained.

 

[fureien]

day high of 21.5 cents, holding at 20 as i type. wut is going on??

ive been trying to hold out from buying the past few days cause i didnt think it was sustainable.../tilt

 

[fuzzie]

What I learnt today. ( and the last 3 weeks., 3 months, 3 quarter, 3 years...)

I've been on holidays for the last couple of weeks, with only limited internet access.

The big fall happened the week before I flew out and I had to make a hard decision, sell now and retain my initial capital or gamble the house while I wasn't watching. I decided to sell out as I asked myself really how willing was I to lose the money that hasn't already been creamed by those B&B (frandango, frangool, fill in your own f word) directors! A simple question of risk and reward!

I opted to cash out the majority, but I held a relatively smallish number.

Yesterday I checked the share price

Today watching is like picking a scab. I know I shouldn't, but I keep on looking.

What I learnt is that I should have rebalanced the spec portfolio when it jumped to 18c a few weeks ago. I should have sold half my holding when it had doubled and been carrying free. I had read that theory before, but I'd never really LEARNT that lesson personally and painfully.

Today I sold half my remaining holding, so I'm now carrying a small parcel free and whatever happens from here on in is playing with the house's money. I can't read crystal balls, but I think there is still some value left in beppa.

I got here not from either fundamental analysis or outright spec play. I really haven't got the time (or more probably the knowledge) to do the heavy analysis that BB, Hardyakka and Persitentone have done. I'm an original PIF and AGL holder who initially ended up holding BEPPA from that wasteful Ainta, AGL, B&B playoff. PIF and AGL made sense. Cashflows covered distributions, it was the b&b engineering that made distributions appear magically out of negative earnings and valuations go crazy.

I think I've now lost the opportunity to recover those B&B derived losses from 2007 by playing beppa, but I have at least learnt a hell of a lot for how I invest in the future.

Good luck to the rest of you. Fortune favours the brave, and although I can't remember who said it, remember the stock market is also a place for moving assets from the patient to the impatient.

 

[persistentone]

day high of 21.5 cents, holding at 20 as i type. wut is going on??

ive been trying to hold out from buying the past few days cause i didnt think it was sustainable.../tilt

There is supposedly a rumor that a coal company is buying BEPPA shares as part of a plan to secure ownership of BBI. I guess they would take the assets they want and then try to find someone to offload the remainder to. I have not confirmed the rumor, and it's probably just some wacko conspiracy to get shares higher to assist with some other plot.

I originally calculated based on the published cornerstone investor speculation in afr that the best case outcome for BEPPA was 14.9 cents. I further calculated before all the recent write downs that the best case recovery for BEPPA in Administration would be around 22 cents. So I feel it is fully valued at these prices. Had I owned any here, I would have been a seller at 18 cents and higher.

The way I figure it I would be making decisions as if this was a business, based on the objective outcomes I can calculate with the information that I have available. I cannot be a gambler just hanging onto shares forever in the hopes of some miracle happening that I cannot know about in advance or predict.

So anyone selling at these prices is in my opinion not stupid. If it goes to 40 cents based on some miraculous outcome, don't lose sleep about it.

 

[jacobkball]

I currently hold nil BBI and nil BEPPA. I might be prepared to participate in a cap raising at a rock bottom post dilution price. We just need to see what the board decides on.

If anyone is still holding in hope, they only have themselves to blame. There is very little upside now and a real risk of 100% downside.

There's a great arbitrage play going on with BEPPA/BBI. Short BBI, long BEPPA. That's why you are seeing BEPPA firming and BBI doing very little in comparison. The astute would know this already.

Jacob Ball,
How about you read my Nov 2008 posts on BBI? You obviously haven't been around this forum long enough to realize who the astute contributors are.
Cheers.

Yes, I am new to these forums. I did read through the bulk of the posts on BBI and BEPPA within this thread.

BB, I don't doubt that you've done very well out of trading these shares. It certainly looks like you did the research, and in that case, you deserve those rewards when you've put the work in.

If you're including yourself amongst the 'astute' contributors, I'm guessing you wouldn't still be holding NIL BEPPA, as you've pointed out the great arbitrage play going on. Perhaps you missed the boat on this one? Fair enough, no one gets it right 100% of the time. I personally don't believe that you've held NIL BEPPA since that quote, but it's all too hard to prove, isn't it. It's just supposition.

I've learnt some valuable lessons through these trades, and this forum, and that's even after I've made a decent profit (over 30%). Yes, it could have been more. But I've seen the trading halts and the announcements that come through that decimate the price overnight, so I made a call.

One thing I have learnt is don't take advice from people who don't put their money where their mouth is. If they say 'oh the sky is falling, you should sell out now', ask them if they're selling out too. And vice versa, of course.

The problem with these forums is that nothing can be verified. In most cases, it's because the people making the calls aren't even doing them.

So, in short - lesson learnt!

 

[persistentone]

Yes, I am new to these forums. I did read through the bulk of the posts on BBI and BEPPA within this thread.
...
If you're including yourself amongst the 'astute' contributors, I'm guessing you wouldn't still be holding NIL BEPPA, as you've pointed out the great arbitrage play going on. Perhaps you missed the boat on this one? Fair enough, no one gets it right 100% of the time. I personally don't believe that you've held NIL BEPPA since that quote, but it's all too hard to prove, isn't it. It's just supposition.

You are committing a fallacy here, similar in principle to the "might makes right" fallacy. You are assuming from the fact that a share price rises that there was a *knowable reason a priori* why the share price should rise. In this case I think that is clearly false. There was not a reason that BEPPA should have risen to this price based on the facts we had a few weeks ago. The fact that it did rise proves nothing more than sometimes stuff happens that we cannot predict in advance. We will know the real reason soon enough, but it wasn't something we could realistically have calculated.

What changed for BBI after the failure to sell DBCT is that it ran a real chance of 100% capital loss in a short time period. So your risk of loss was 100%, and against that you had to weigh the outcomes. When I calculated all the outcomes from a cornerstone investor and weighted the probabilities against each outcome, I was looking at 11 cents as the average outcome price for BEPPA. So trading at 8 cents, my risk was total capital loss and my expected return was 11 cents. For some people, that would be an acceptable trade, with an expected 37% profit. For others (like me), when I take a risk of total capital loss, I want a higher gain than that.

I don't know BB's expected outcomes based on the original known facts, but I think his logic was something similar. On HotCopper (before they banned me for the simple act of asking a question about their moderation policy!), BB and I were among a handful of posters that made clear our aversion to the shares based on moderate upside against risk of total capital loss. Almost all of the users who were either buying or urging others to hang on were doing so on mood, impulse, and imagination. We had one joker there who actually made the argument that he was investing in BBI because the analyst reports averaged 7 cents. Amazing. There were very few numbers attached to any of it. I don't respect gamblers who can't calculate the gamble they are taking. No one gets my respect for rolling random dice and then bragging after the fact about a lucky toss that they took with disadvantaged odds they could not even calculate. And no one gets my congratulations for taking a 2-to-1 payoff bet on a 1-in-6 dice roll when they win that bet. It was a bad bet to make even though you win it.

All of that is background to saying I don't think anyone who is holding BEPPA now is astute just because they are holding BEPPA now. Show me the post where they calculated 21 cents in advance and the reason for it.

 

[jacobkball]

Hi persistentone,

Great post. I agree almost 100% with what you've said, and you've said it better than I could!

The part I do disagree with is this:

BB and I were among a handful of posters that made clear our aversion to the shares based on moderate upside against risk of total capital loss.

as BB was very clearly bullish on these shares, based on the information at the time, and the research that he'd done. Of course, we know the information and circumstances have changed a lot in a short time, which is why we are seeing the prices today.

I do agree 100% on this:

There was not a reason that BEPPA should have risen to this price based on the facts we had a few weeks ago.

and I am bemused by the 21.5c high of BEPPA today. If anyone looked at it rationally, they'd be right to be very bearish on BBI/BEPPA, in my opinion.

All this means is that given the information available to the public on any given day, people are allowed to be bullish or bearish. It is those who don't actually have any investment in the shares, eg Largesse, who should just be ignored completely when making a buy or sell recommendation. If you're not backing up your call, either way, by actually following through, it's useless. Again, that's just my opinion

I do appreciate the views put forward in this thread, as it improves my understanding of 'how things work'.