This one is looking oversold at present. If the credit crunch does not get worse (and I know that is a big IF) it will head north, especially if the Hedgies start shifting out of commodities and back into the financials. I bought in near its lows and realise that I may have to hold for a while, but looks a solid bet IMO.
They didn't say they can't continue it They said they would substantially reduce origination of new residential mortgages, but would continue to provide full service to existing customers. I don't know where you got the idea that they are having trouble funding or is that just more conjecture.
I can tell you with 100% accuracy that Macquarie closed their origination for mortgage due to the funding issues - CBA & Society Generale closed the warehouse facilities so Macquarie had little choice, due mainly to 2 reasons:I said IF mate, if they have to take it on balance sheet...... I say this because funding loans via normal securitisation methods in Australia or indeed the world are basically dead.......
Do you have any friends in banking who are actually trying to fund paper at the moment? Cause I do and they basically say it's impossible. Everyone is being forced take it back on balance sheet because they can't fund it externally...... This is why I mention the risks.....
In addition to this, the basis for management fees from the seperately listed funds generally include a revaluation of assets as well, so the negative cashflow takes an extra hit by way of fees to the parent entity.Last year the Macquarie Infrastructure Group fund covered only 68% of its payout to shareholders from the cash it received from underlying operations; the Macquarie Airports fund covered 75%. This strategy can persist only with a rising value of the assets, and the cashflows derived from them.
Macquarie says this has happened. But in yet another cause for concern, the entity valuing the assets is Macquarie itself.
In addition to this, the basis for management fees from the seperately listed funds generally include a revaluation of assets as well, so the negative cashflow takes an extra hit by way of fees to the parent entity.
Scary stuff but if they can get away with it...
My son just lobbed his savings, $120,000 onto this mob at $59... no diversification... nothing... butt the b....er has jumped on so many at their lows recwntly that I am starting to take notce,,,, by the way he heard that it was a good bye.. oops.. buy.. on the radio as he was driving around Perth in his courier job....
Has me worried..
A Y day today??/ Yep.. :drink:
Cheers
............Kauri
Good to see reece55 and Mofra are seeing the light.
Seeing the light?????
I think I have been shining my halogen down every ASF members eye sockets since I joined this forum, have a look through the thread!!!!!!!!!!
Cheers
Owning public infrastructure is unprofitable - taking management fees from the infrastructure and selling the risk onto "sophisticated investors" appears, on the surface, to be a working model.These forums are full of generalisations, so I will have a crack at one myself. Historically, public infrasture has proved to be unprofitable (eg private railroads). Yet the millionaires factory has been able to turn this investment class upside down and make it highly profitable (creative accounting)? I beleive if Macquarie is to last long term, its model will rely heavily on inflation across the board.
Kauri, sleep easy. Your son has made a sound choice, although he should not put all his investment into ANY one stock. At the end of the year with MQG at around $80 he will turn a nice $40 odd k profit before tax. There will be a few ups & downs along the way, but unless the general markets head south big time it will do OK. Reece55 and the other nay sayers will continue to hate the Mac model, with some justification, but it continues to deliver. There were plenty of traders shorting Mac and other stocks that rely on lending and some of their short plays (Centro and other LPT's) paid off big time, but the Mac model is different. Mac has shown that its sp reacts with greater swings to news (+ve and -ve) about financial issues, so it is a higher risk/reward play then most. I would feel safe buying at this level, but would be more cautious above $70.
Kauri, sleep easy. Your son has made a sound choice, although he should not put all his investment into ANY one stock. At the end of the year with MQG at around $80 he will turn a nice $40 odd k profit before tax. There will be a few ups & downs along the way, but unless the general markets head south big time it will do OK. Reece55 and the other nay sayers will continue to hate the Mac model, with some justification, but it continues to deliver. There were plenty of traders shorting Mac and other stocks that rely on lending and some of their short plays (Centro and other LPT's) paid off big time, but the Mac model is different. Mac has shown that its sp reacts with greater swings to news (+ve and -ve) about financial issues, so it is a higher risk/reward play then most. I would feel safe buying at this level, but would be more cautious above $70.
Owning public infrastructure is unprofitable - taking management fees from the infrastructure and selling the risk onto "sophisticated investors" appears, on the surface, to be a working model.
The model will stop working when, logically, the management start taking out more cashflow than is generated, especially if this is done via a revaluation of assets & the management fees are drawn from borrowings (and as reece pointed out, Mac revalue the assets themselves). I wouldn't be expecting the parent entity to crumble anytime soon, however the price may take a battering if (when?) one of their major seperately listed funds is forced into administration - the loss of management fees will hurt fundamentally, however the loss of confidence & prestige alone will hurt their ability to raise cash for further activity (again hurting fundamentals) whilst that wonderful commodity, sentiment, will take a ripe old beating.
Owning public infrastructure is unprofitable - taking management fees from the infrastructure and selling the risk onto "sophisticated investors" appears, on the surface, to be a working model.
The model will stop working when, logically, the management start taking out more cashflow than is generated, especially if this is done via a revaluation of assets & the management fees are drawn from borrowings (and as reece pointed out, Mac revalue the assets themselves). I wouldn't be expecting the parent entity to crumble anytime soon, however the price may take a battering if (when?) one of their major seperately listed funds is forced into administration - the loss of management fees will hurt fundamentally, however the loss of confidence & prestige alone will hurt their ability to raise cash for further activity (again hurting fundamentals) whilst that wonderful commodity, sentiment, will take a ripe old beating.
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