Fat Prophets Fat Fund - new float (LIC)

[dutchie]

Hi Guys

Anyone here subscribe to FatProhets ?

Their new IPO could be interesting (especially with the added option).

 

[Jay-684]

Re: Fat Prophets

I saw some info on it in the paper over the weekend, seems like it could be a good way to reap the benefits of their tip sheets without the $695 membership cost, although they dont necessarily have to strictly follow their tip sheets

 

[RichKid]

Re: Fat Prophets

Try these threads and don't forget the search option: https://www.aussiestockforums.com/forums/showthread.php?t=257&highlight=fat+prophets

https://www.aussiestockforums.com/forums/showthread.php?t=253&highlight=fat+prophets

 

[doctorj]

Re: Fat Prophets

I've used Fat Prophets previously and after accepting an offer to receive a few free issues I now regularly receive calls asking me if I'd like to subscribe. Friendly enough but damn annoying.

As for the quality of their tips - I'm probably not the best person to be judging that. I don't believe in tip sheets as such. I think they can help confirm a trend you're already watching but they are far too reactionary in their recommendations, particularly in small-mid caps.

They claim a "chinese wall" will exist between their cash box side and the tip sheet side, with the cash box getting access to the tip sheets at the same time as everyone else. You have to wonder just how well this will work and just how much their own tips will drive their investments.

Really, you only invest in these type of companies if you believe they are better empowered than you are to make investing decisions. Given the reduced liquidity of large holdings and the management fees they are likely to draw, the handicap on such companies is quite large when compared to private investors.

 

[wayneL]

Re: Fat Prophets

Given the reduced liquidity of large holdings and the management fees they are likely to draw, the handicap on such companies is quite large when compared to private investors.

Yes! ....and considering the above, can they do it better than any managed fund or existing ETFs or investment companies.

I doubt it! Looks like a milk job in a bouyant market to me.

 

[doctorj]

Re: Fat Prophets

For those that are interested, the prospectus is downloadable from commsec or etrade. I've tried to upload it here, but it's 781kb is too hefty for this forum.

 

[RichKid]

Re: Fat Prophets

Agree generally about new LIC's etc being floated near top of a bull run, the only people who'll make real money are the managers and promoters imho.

Also, despite the Chinese walls the buy/sell effect of FP tipsheet picks will be magnified if the new fund follows the tips on top of the current subscribers. We'll have to watch via the disclosure anncts once the fund floats.

 

[jrb23]

Re: Fat Prophets

Hi Guys/Gals -- i am very pleased to know this forum --i am a newbie...I have read the Fat Prophet IPO prospectus and looking for other investors to confirm my 'analysis' -- the ones you guys mention on the thread is valid and i think i won't just put my hard earned money on it... i am very new to share investing as well

 

[Fleeta]

Re: Fat Prophets

My 2 Cents....

DON'T INVEST IN FAT PROPHETS!!!

The market is overloaded with LIC's, most of which are trading at a STEEP discount to their NTA's. I haven't looked into Fat Prophets, but my guess is that you are paying $1 per share, and that share gets you 97c of investments.

I currently hold shares in 2 LIC's - Premium Investors (PRV) and Wilson Leaders (WLS). I got these at IPO just over 12 months ago. Now in a year where the stockmarket has gone crazy - up over 20% - these LICs share prices have increased by ABSOLUTELY NOTHING. Why? Because they cost $1 for 97c worth of assets, the market had a great year, and these company's now have NTA of about $1.20 per share, but the market is currently discounting LICs by about 10-20%.

If I calculate correctly, this means that when Fat Prophets list, the share price will fall between 10 and 20%...so stay away, and buy into an LIC that is trading at a discount to NTA and reap the reward of an undervalued share.

How many times do you get an offer to buy $1.20 for $1? If you knew it was that simple, you would buy millions...this is essentially what has happened with these discounted LICs such as PRV and WLS, you can buy $1.20 for just $1.

Bear in mind, if the market drops 20%, then the NTA will fall back below $1 and your in trouble - all i'm saying is that if you buy into an LIC, buy one that is at a discount to its NTA - and you have a much better chance of making money.

Saying that - some LICs deserve to trade at a discount due to their inefficient management fee structures - so read carefully.

Please let me know if you think I am speaking rubbish here.

 

[doctorj]

Re: Fat Prophets

you are paying $1 per share, and that share gets you 97c of investments.

Its well documented that LIC's trade at a discount to their NTAs. What you're saying isn't quite right though. For $1 per share on the IPO, you get $1 of investments (cash + investments) but many of them trade at a discount to their NTA. So you're $1 still has atleast $1 of backing provided their investments don't decrease value, but the market on values the share at 97c on the basis that directly investing that dollar in the market will yield better results because you don't have to pay management/performance fees out of any profits.

 

[Fleeta]

Re: Fat Prophets

Doctor J, not so sure on that, they take out IPO costs such as underwriting, legal, etc. out of the $1 per share and it becomes less depending on how much they raise...the prospectus will tell you, with PRV, I got 97c for $1.

 

[kerosam]

Re: fat fund

Bought some shares/staples in fat fund.... one of the many reasons why i bought it was to try out the stockmarket... i'll still consider myself a rookie.
anyways, does anyone know how these funds actually work besides the company investing your capital? I guess the objective is to improve its captial and receive any dividends. anything else?

I mean, won't i be better off by logging onto their website and follow what they buy? in fact by doing that i would save on MER and performance fees. What are the other companies similar to the fat fund (maybe hunter hall australia value?) How does fat fund compare to them?

And any present or past fat prophets subscriber? i do like them. made a couple of calls to them fto enquire and they are mostly friendly, ready to help and quite patient to explain. what do others think?

 

[bvbfan]

Re: fat fund

Bought some shares/staples in fat fund....

Do you mean Fat Prophets?

anyways, does anyone know how these funds actually work besides the company investing your capital? I guess the objective is to improve its captial and receive any dividends. anything else?

I mean, won't i be better off by logging onto their website and follow what they buy? in fact by doing that i would save on MER and performance fees.

Obviously they want to invest the subscribed funds for capital growth and dividends if they are received. I don't remember they expected to pay out any dividends in the prospectus for a few years so any div's might be reinvested.
I believe they were planning to use the Fat Prophets tips as a guide only and were not going to take every recommendation for the newsletter.
Only reason to invest is to have the ability to diversify your holdings

What are the other companies similar to the fat fund (maybe hunter hall australia value?) How does fat fund compare to them?

Wilson Asset Managers have a few funds, Australian Ethical Investments, IOOF?, Challenger?
Sorry I don't really follow investment funds or Pooled Development Funds (PDF's) much.
If you do a search on ASX or maybe in company profiles with your broker you could dig some others up.

 

[laurie]

Re: Fat Prophets - opinions?

I'm off to their first AGM on friday the 25th! first capital return/dividends will be in April 06

cheers laurie