GTP - Great Southern Plantations

[bunyip]

Re: Great Southern Plantations

Look guys, anybody can say a stock is no good when it's heading south.

Most of you guys are short term orientated and I don't really see the point in continuuing posting if there is no intelligent comments on the stock.

In five years I've gone from zero to a dividend stream of $150,000 to $200,000 a year with a house thrown in so I am not taking lessons from people like you Bunyip.

I wish you all well but I'm off to live in Asia in a couple of months to live off my investments so will not be posting here anymore.

I'm sticking with my philosophy coz it works. Good luck with all your short term buys.

Lets see if you guys can retire at 35 with your philosophy.

Who said anything about being short term orientated? Some stocks trend upward for years on end and I'm happy to stick with them as long as they continue doing so, if I'm fortunate enough to be aboard them.

I'm not trying to give lessons any more than you are. Like you, I'm simply expressing my views, which are that buying downtrending stocks is a recipe for disaster for many investors.
If you've managed to defy the odds by making this strategy work for you, then good on you. But that doesn't alter the fact that uptrending stocks are a better choice than downtrending stocks for most investors.
For every person I've spoken to who claims to have done well by buying downtrending stocks, I've spoken to probably five or six others who readily admit they came unstuck by using this strategy.

You don't see any point in continuing to post here? Good, because I don't see any point in you continuing to post either if the best you can do is get on your high horse and start big noting yourself just because you happen to disagree with someones opinions.
If that's what you offer this forum then we're probably better off without you.

Bunyip

 

[bunyip]

Well said, Bunyip. I highly appreciate your comments.

I also would like to know what good reading materials you would recommend for learning how to recognise uptrending stocks.

Many thanks.

Jackob

Most of the reading material I'd recommend has already been mentioned on this forum at one time or another.
Rather than repeat it here, I'll PM you.

Bunyip

 

[Jackob]

Bunyip,

Thank you for the book list for reading.

The present GTP situation looks really bad. Breaking through the $2.66 support does imply a continuation of the downward trends in the medium term. The huge turnover of 6.5 million shares last Friday indicates possible involvement by institutions... Let's wait and see what would happen tomorrow and next week.

Look luck to every one!

Jackob

 

[Jackob]

GTP is still tumbling and no sign says it will stop soon.

For those still holding GTP shares, I would like to recommend the following post by bunyip 4 days ago.

Cheers. Good luck!

I've been following this thread for months now and reading with amusement all the reasons why GTP is such a good buy. Meanwhile the stock keeps heading south, and yet there are people who keep buying it.
Bloody hell......no wonder so many people get hammered in the stockmarket!

I've brought this up before and it's worth repeating......Once stocks start downtrending they usually go down further than anyone thought they'd go. You get a 'bargain' today but next week or next month you see you've paid too much.
Some of them stop going down only when the company goes broke. Meanwhile, you're tying up your money in a deadbeat stock, money that could be invested in a good performer. The lost opportunity cost is killing you more than most of you ever realise.
Right now there are stocks that are going up solidly. Anyone who can't see the benefit of investing in these stocks, rather than in those that are sinking like the Titanic, must have an aversion to making money.

If you think GTP or any other stock has good prospects in the longer term, then it's prudent to hold off investing in it until it shows signs of confirming your view. There's only one way it can do this.....it must start uptrending.

Buying plunging stocks is not investment, it's GAMBLING.

Bunyip

 

[bunyip]

Those GTP shorts of yours must be showing some fairly decent gains by now eh Jackob?
Lucky you. Well no...not lucky - shorting a downtrending stock like GTP is good management, not good luck.

Bunyip

 

[Jackob]

Hi Bunyip,

I sensed the GTP's MIS business was unsustainable 2 years ago. Regrettably no one believed me. I shorted GTP twice before, one won and the other lost. This time is a third time lucky.

I still regard the whole MIS business is very fragile and GTP is the most vulnerable due to its business model. The unsustainable nature is slowly unfolding.

Happy trading!

 

[3 veiws of a secret]

GTPGB also under the hammer, boy am I glad I sold out!!!

 

[bunyip]

GTPGB also under the hammer, boy am I glad I sold out!!!

GTPGB?

GTP has put in a bit of a rally in the last two days. But in a downtrending stock, rallies tend to be short lived because they're met with increased selling pressure from holders of the stock who are hurting and wishing they bailed out some time ago. They see the rally as an opportunity to sell out for a better price, and it's this selling pressure that causes the rally to end and the downtrend to resume.
I suspect that this is what's about to happen with GTP....further downside to come. No guarantees of course, but that's the most likely probability.
Todays Doji adds some weight to this probablility.

Bunyip.

 

[eddievanhalen]

GTPGB?

Bunyip.

does exist as a convertible note. Generally a "G" after the share code indicates a convertible note.

Cheers,

Ed

 

[bunyip]

does exist as a convertible note. Generally a "G" after the share code indicates a convertible note.

Cheers,

Ed

Righto, thanks Ed.....I've learnt something new.

Bunyip

 

[3 veiws of a secret]

Sorry If I sound smart ,but I'm still glad I'm OUT!,its a case of take your money and run!,my profit somebodies gain? :remybussi

GREAT SOUTHERN PLANTATIONS LIMITED 7.75% PERP.SUB.CONVERTIBLE NTE RESET OCT2010TREES3

 

[michael_selway]

Sorry If I sound smart ,but I'm still glad I'm OUT!,its a case of take your money and run!,my profit somebodies gain? :remybussi

GREAT SOUTHERN PLANTATIONS LIMITED 7.75% PERP.SUB.CONVERTIBLE NTE RESET OCT2010TREES3

Date: 26/7/2006
Author: Philip Hopkins
Source: The Age --- Page: B4

The Australian Government has been investigating managed investment schemes (MIS) in 2006. Although the arrangements for forestry MIS have been extended to 2008, the concerns of Australian Agricultural Minister, Peter McGauran, that horticultural MIS are "market distorting", are being reflected in poor sharemarket performance. Against the mid-2006 performance of the S&P/ASX 200 index, Great Southern Plantations (GSP) and Timbercorp have been especially lacklustre. Between 23 June and 25 July 2006, GSP and Timbercorp have slumped 27 and 23 per cent apiece. On 25 July GSP fell $A0.09 to $A2.41 and Timbercorp dropped $A0.05 to $A3.02

***********************************************************

we are concerned for the MIS industry as a whole as a consequence of the following:

1. The disparity between the returns investors achieve (3-4% post tax return for current forest
projects) against the 8-15% commission rates paid to financial planners who recommend the
product, and the 24% and 38% NPAT margins for the two largest MIS companies, TIM and GTP
respectively;

2. Reliance on tax saving as the, sometimes illogical, driving force of the industry. That is, the tax
incentives have effectively created a “needs based” investment vs. an “allocation based
investment”;

3. Similarly the reliance on unsustainable commissions to financial planners to drive sales. We
expect the MIS industry to self regulate in the next 12-24 months, with a likely targeted
commission cap of 5%;

4. Rising interest rates and their potential to dampen new sales;

5. Similarly, a reduction in personal tax rates may reduce the attractiveness of MIS;

6. The increased sophistication of investors, and the risk they will make more informed comparisons
of returns among various alternative asset classes;

7. The ongoing changes to superannuation, and the increased attractiveness of this to minimise
tax;

8. The proposed legislated first year deductibility cap of $6,500 for forestry projects (versus the
approx. $9,000 cost) will also reduce the attractiveness of MIS;

9. The argued inequality between the tax advantages MIS companies are offered in forestry vs.
farmers and the like, most notably the 12-month prepayment rule;

10. Similarly, the structural advantages MIS companies are afforded in both forestry and horticulture
given the MIS investors achieve close to full tax deductibility due to total costs being expenses
with no capital outlay (investors do not buy the land) while the existing farmers are
disadvantaged given their current position of owning the land;

11. We believe the 12-month rule has encouraged MIS companies to “land grab” to satisfy investor
demand, and is now resulting in some MIS companies investing in very marginal areas unlikely
to generate adequate economic harvest yields (some projects that have matured have only
achieved between 40-60% of their intended yield);

12. As a consequence of this “land grab”, our expectations are that a number of the MIS forestry
sites will not be economic for second rotation. This highlights two negatives for the industry:
firstly, the expected capex holiday equity investors were expecting from the MIS industry may
not be as large as first anticipated; and secondly, after taking into account the likely remediation
costs of some of these sites (i.e. removal of stumps), we suggest the value of a number of sites
could be overstated in the balance sheets of MIS companies;

13. The sustainability of the investor deductions with the ATO, given the inflated cost of
establishment vs. the real world farmer costs. That is, the ATO is currently accepting MIS
investor deductions of $9,000 (the cost of the MIS Timber project) against the true real world
plant-able hectare cost of $2,500 (for forests, or $40K vs. $4K for almonds, although the $40K
includes mgt fees). The difference represents the MIS companies gross margin which allows
them to subsequently invest in excess land banks etc for future sales or investor yield top-ups;

14. The potential glut of these commodities in end markets following undisciplined capacity additions
by MIS companies, and the resultant low price and returns for investors. Related to this is the
low potential pricing power of MIS companies and their investors versus the powerful major
retailers (particularly when the investor is unlikely to have returns of 4-6% reduced further,
while the major two MIS companies of GTP and TIM are reporting material excess returns);

15. The risk of the MIS companies moving into commodities not suitable for large scale harvesting,
such as grain, rice, sugar etc. In fact, TIM’s olive project remains at risk, given Australia is
arguably a broad scale experimental site for irrigated olives. If successful, we may see an
irrigated response from the old world (Europeans) leading to a global olive glut;

16. The general very poor visibility for all participants involved, in particular, investors and in gaining
access in regards to their past, present and likely future returns for existing projects;

17. Last, and importantly, the groundswell of protest amongst the farming and agricultural lobby
groups regarding the speed of the MIS rollout, and the ramifications in rural areas. We believe
the farmers and their communities have the balance of power at the moment, given they are
now threatening the larger portion of Coalition votes.

thx

MS

 

[michael_selway]

http://www.abc.net.au/landline/content/2006/s1706489.htm

Be cautious of schemes: NFF
Reporter: Sally Sara

First Published: 06/08/2006

SALLY SARA: Well, the National Farmers' Federation is urging the government and investors to be cautious about managed investment schemes. The NFF says some schemes are distorting markets and don't always promote sound investment decisions in regional Australia. I spoke earlier with Charles Burke, Vice President of the NFF.

SALLY SARA: Mr Burke, welcome to Landline. Why do managed investment schemes have the potential to be so damaging?

CHARLES BURKE: Well, we believe that they have the potential to be damaging simply because there is really no emphasis on them being sound investment decisions in agriculture in Australia, and in the long term, that bothers us because we are certainly committed to agriculture in the long term in Australia.

SALLY SARA: How widespread are managed investment schemes in Australia?

CHARLES BURKE: They are relatively widespread in the fact that they have a geographic cover right across Australia. They're in most states in Australia and Tasmania as well, and they cross a number of different commodities as well. So they are relatively widespread.

SALLY SARA: In the long term, could investors be put off from genuine investment opportunities in regional Australia?

CHARLES BURKE: Well, as I said, the schemes don't seem to be offering sound investment choices for people who want to invest in agriculture, and that is one of the concerns we have - that in the long term, if these investment schemes are not based on long-term profitability and sustainability, that that may turn people off investing in agriculture, which is vitally important to us.

SALLY SARA: So how are the schemes distorting markets and values?

CHARLES BURKE: Well, it's distorting markets in that some of the investment, I guess, decisions are based more on an upfront input deduction, rather than long-term profitability based on, I guess, yields and price determinations, and that has an ability to, I guess, exacerbate the boom and bust cycles that we are seeing in some of the areas that the MIS have been involved in, and certainly it has created some distortions in the price and availability of prime agricultural land in many parts of Australia.

SALLY SARA: So what sort of distortions are you seeing in set-up costs, say, per hectare?

CHARLES BURKE: Well, some of the information that we see certainly would indicate that some of the set-up costs have been, I guess, not based on actual costs that we can determine to be accurate, and that is a worry again that, as I said, some of these cost structures don't appear to have a solid foundation for long-term profitability and sustainability.

SALLY SARA: Does that mean that people are paying more than they need to set up a hectare of land?

CHARLES BURKE: Well, as I said, you know, it would appear that there are some certain aspects of the investment decisions that aren't based on what we perceive to be normal set-up costs for an agricultural pursuit.

SALLY SARA: So what needs to change?

CHARLES BURKE: Well, we certainly think that we need to be, I guess, more diligent in our investigation of the cost structures and the returns of the MIS, and I think we would be looking for the Government to certainly investigate whether there has been a need to provide some of the incentives that the Government have to MIS structures, because I guess we'd have to ask, "Has there been market failure?" I don't think there has been for these industries to need investment. So, we all believe, as farmers, that agriculture is a sound and solid investment. We don't think that there is market failure there at the moment.

SALLY SARA: Is it frustrating for farmers that there are incentives and investment available for industries which may not be genuine?

CHARLES BURKE: Well, certainly the National Farmers' Federation has always supported targeted incentives and assistance in areas where there is market failure. As I said, I don't believe that there has been market failure for some of these industries to prosper, so I guess there are certain aspects of it that need to be investigated, whether there is the need to continue government-type incentives.

SALLY SARA: How important is it for the Government to take action?

CHARLES BURKE: I think it's very important that we - as well as the Government, and all industry participants - take a good look at this and have a good, robust debate on the necessity of having these MIS structures where it appears that they are distorting the market and, as I said, exacerbating the boom and bust cycle of certain commodities.

SALLY SARA: How seriously is NFF taking the issue?

CHARLES BURKE: Well, the NFF have certainly taken it very seriously. And that is based on a lot of feedback we've had from many of our members, who see a number of the negative impacts that they MIS are having, in both their regions their commodities right around Australia. So we've certainly taken it on board and we've gone through a long process to develop what we believe is a very sound position that we can argue, and it's based on economics, and it's based on data and facts, and we're very sure of our information and also our position and we look forward to creating, as I've already said, a robust debate about the whole issue and let's get it out and let's discuss the implication of all aspects of MIS.

SALLY SARA: But what about the flipside? Are these schemes bringing in jobs for setting up these schemes for fencing, for clearing land, and so on?

CHARLES BURKE: Well, there probably are jobs in it for regional Australia, but what we are greatly concerned about is the long-term sustainability and profitability of all agricultural industries, and those, I guess, jobs and that sort of spending in the regional communities will be there anyway with sound agricultural investments, rather than ones that we believe are distortionary.

SALLY SARA: So is there a bit of a danger that these investment schemes are almost building false hope in regional Australia?

CHARLES BURKE: Well, I guess that is what we talk about exacerbating the boom-bust cycle and people get wildly excited about something, and at the end of the day, it's not based on long-term sustainability, and that's our, I guess, our underpinning premise, is we want all investment in agriculture to be long-term, sustainable, and profitable, and we don't want to create any misconceptions within both agricultural Australia and metropolitan Australia, for that matter.

SALLY SARA: Charles Burke, Vice President of the National Farmers' Federation, thanks very much for joining us on Landline.

CHARLES BURKE: Thank you very much.

http://www.abc.net.au/reslib/200608/r98330_299094.asx

 

[Portfolio]

The MIS industry is fragile but GTP's valuation is moving now very close to NTA which therefore assumes no value in the MIS business going forward.

Timbercorp has a better management than GTP but GTP's strong point is its sales force and its ability to sell product.

 

[CanOz]

An opporuntity exists with GTP as it produced a GAP down. Gaps always get filled so you could expect it to hit 3.05 in the near future. It will be interesting to see.

 

[alankew]

Do you have a chart that illustrates this.Thanks

 

[CanOz]

Sorry I can't cut and paste my charts as i use Power Etrade. The two gaps i speak of occured on the 19/06 (only a small gap), and then again on the 17/07. Any OHLC or candle chart will show you this.

Can anyone else show this chart?

 

[Jackob]

... Gaps always get filled ...

How true is this rule? Anyone has any statistics?

 

[CanOz]

Check out my new Thread on Gaps. Got an reply and good link, it explains it very well. Still wondering if anybody trades this way though. Seems you have to be careful in identifying the type of GAP before entering a position which makes good sense.

 

[Porper]

An opporuntity exists with GTP as it produced a GAP down. Gaps always get filled so you could expect it to hit 3.05 in the near future. It will be interesting to see.

Ok, here is a chart for anybody interested.

Firstly gaps do not always get filled, and there are various types of gaps, I have just started trying to trade these after my daily scan brings up an opportunity.

I would be looking for a selling opportunity after this rally ends