YourWealthWatch Blogs - Dave Press

Change, Holidays and a New Start

Thu, 08 Mar 2012 00:04:00 GMT

Some say change is like a holiday, however given my last 18 months or so, I can comfortably say a good long holiday will bring about just as much change. Having spent 6 months backpacking and skiing the alps of Western and Eastern Europe, then settling back into life in London and a job in one of the worlds largest and most infamous investment banks, I'm now back to sunny old Australia and a very different life/career indeed.

Thankfully my passion for investment hasn't changed in any way, meaning it was only a matter of time until I started sharing my views on this site again. An awful lot has happened in the time I was away, with the companies I follow having their up's and down's, as we have come to expect post the GFC. Highlights include some very strong profits on Maverick Drilling (MAD) which we have held for some time now (although we have now exited), strong performance from Hansen Technologies (HSN) and the continued strong operational performance of the Nick Scali Group of furniture stores (NCK). The downsides include the continued poor performance of Carbine Resources (CRB) and Strike Energy (STX), both of which continue to show some bright glimmers of hope in the near term. Clarius Group (CND) was one of my long term cyclical investments which hasn't shown the strength I'd expected but remains a hold/cyclical buy at the moment. Photo Group (PGA) has almost completed it's transformation and looks cheap on most valuations. It remains to be seen whether in it's new structure and much smaller size, it can generate strong cash flows for investors in the future.

Having taken some profits on MAD, I've moved a portion of them into Oilex Ltd (OEX listed on ASX and AIM), which was at recent lows after issues during the milling of their Cambay unconventional oil/gas well in India. Having recently announced that the removal of the stuck tools was a success, the shareprice has added around 20% and should appreciate strongly on anticipation of successful well completion (final milling) and testing susbsequent to that. OEX believe there are some very large reserves in this region and with success, will prove that the new technology being used in unconventional oil and gas drilling can be replicated around the world. At current prices I feel there is some very serious upside to any success. It appears the company's management team are also quite confident given their desire to push forward with further wells to develop this possibly very large energy field in the near term.

Nido Petroleum (NDO) is again on my radar after the previous management team was replaced with what I feel is a far more competant leader(ship). I'm hoping to buy on any pullbacks to the low 4c region and feel that the cashflows of Galoc alone make this a no-brainer. Any success on their undeveloped fields will push the shareprice north in multiples I feel. Risk/Reward appears heavily in favour of the buyer at the moment.

Well that was a quick whirlwind entry that turned into a ranting update, but it's good to be home and I look forward to adding my views on a far more regular basis. It is almost worth keeping an eye out for some big changes in the way our users can interact on this site in the near term. Social networking is coming to YourWealthWatch soon!

As always, Do Your Own Research and be aware of the many disclaimers regarding the general information nature of this website and any content on it!

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Tags: oil,gas,shale gas,investment,nido petroleum,Strike Energy

Hansen Technologies Ltd Full Year Profit Upgrade

Thu, 02 Jun 2011 13:38:00 GMT

Hansen Technologies Ltd's (HSN-ASX) management team announced significant profit upgrades for the 2011 financial year earlier this week, which has prompted me to update my analysis of the company which should make for some interesting reading.

Hansen this week revealed internal expectations for full year EBITDA of approximately $19.5m on revenues of around $57m, and an EBIT of approximately $17m. Based on an estimated tax rate of around 22% (a little conservative and may come in slightly lower), I'm anticipating a NPAT somewhere in the $13m region, a very impressive 20% increase on last years results.

As I wrote in my last blog on Hansen Technologies, the company's revenues have been hit by the persistently high value of the Australian dollar, mostly due to the increasing push for business in the US. However, the restructuring of costs and emphasis on efficiencies has resulted in some fantastic operating results, as costs have reduced by a greater amount than revenues. The improvements in operating efficiencies, the company's position in high growth industries (smart meter software and cloud computing services are just two that spring to mind), should put HSN in a fantastic position for continued growth as markets recover and businesses begin to spend more on IT services and infrastructure.

Financially the company appears in fantastic shape. The balance sheet is strong with no debt and approximately $20m cash at hand. My anticipated NPAT of $13.26m would result in an impressive Return on Equity (ROE) of over 25%, an earnings per share figure of 8.5cps and an expected full year dividend payout of 6cps (I anticipate the final dividend to match the half year payout of 3cps).

Based on these figures, a market cap of $140.557m (90cps) and an estimate cash on hand of $20m, I have calculated the following ratios.

EV = $120.557m

EV/EBITDA = 6.2

EV/EBIT = 7.1

Price Earnings Ratio = 10.58

Dividend Yield = 6.67%

Intrinsic Value (slightly conservative 25% ROE and expected rate of return of 12%) = 89cps

Having analysed the above figures, I feel that at current prices (currently slightly above 90cps) the market has Hansen at conservatively fair value, erring towards the cheap side. However, due to the company's position in high growth markets, a strong balance sheet and capable management team, I feel that the company should continue it's trend in growing profits and returns for shareholders. As such I feel that the company remains a great company to hold and I continue to look to add to my holdings on any dips in the share price.

Given the volatility overall weakness in markets of late, driven by Euro region debt issues and continued mixed results out of the US, I feel that we will almost certainly be handed a number of opportunities to again pick HSN shares up for bargain prices. After the recent disastrous quakes in Japan and the subsequent market jitters, HSN shares were briefly available in the 70-80cps price range. Opportunities such as these mean HSN should be on every value investor's watch list.

Disclaimer: I am an indirect holder of HSN shares. I am not a professional investment advisor and as such, no investment decision should be made on the basis of my blogs/articles. Always seek professional advice before making any investment decision.

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Tags: value,smart grid,cloud services,ROE,earnings

Is the Market Creating a Social Media Bubble?

Fri, 20 May 2011 12:12:00 GMT

Having eagerly followed LinkedIn's IPO and first trading day, I can't seem to shake that strange feeling of deja vu. LinkedIn shares traded as high as $122.70, closing at $94.25, a whopping 109% premium to the company's listing price of $45 per share on the NYSE. It's certainly not the first time a company's first trading day has created a frenzy and pushed shares significantly higher...but the thing that worries me are the all too familiar parallels to the late 1990's early 2000's dotcom boom and bust.

According to Bloomberg, at the close, LinkedIn was valued at $8.91 billion dollars, some 24 times 2011 revenue (annualised from first quarter revenue figures). Should common sense prevail, I feel there may very well be some punters walking away from LinkedIn a little lighter in the pockets in the not too distant future. What worries me more however, is the possibility that the share price won't drop to more realistic representations of the company's value, and that in a parallel to the dotcom boom and bust, the share prices may continue north resulting in the disappointment of profits never actually growing at the rate punters are anticipating. Subsequently, the disappointment turns to much much larger losses to those caught up in the hype.

I'm certainly not suggesting that LinkedIn is just another dotcom bust waiting to wreak havoc on investors in the future, I am simply stating that I feel that the market hype surrounding Social Media and the associated businesses may be creating a dangerous bubble ripe for the pin prick. LinkedIn is without doubt a dotcom business creating real revenues and no doubt profits, now or in the future, of a size worthy of investment. However the question remains as to whether LinkedIn, Facebook or any other big name Social Media businesses and start-ups can produce lasting growth and returns to shareholders, to warrant such extreme valuations. Personally based on LinkedIn's current valuation and a comparative valuation of Facebook (using the same multiples of revenue, Facebook would be valued at around $95 billion, according to Bloomberg) I would think not.

Being a little more biased towards value investing, and the hunt for disliked and shunned quality businesses, I've got to be honest and say that I will be endeavouring to steer myself clear of the market hype surrounding recent and upcoming IPO's of Social Media start ups. Something about picking up quality business's below their intrinsic value makes a lot more sense to me than paying extreme premiums for an unknown growth potential.

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Tags: IPO,Social Media,value,Returns,NYSE,bubble,dotcom

QBE Offers Investor Value Over the Medium to Long Term

Tue, 05 Apr 2011 12:26:00 GMT

Having read QBE's (QBE-ASX) AGM presentation today, I have to say that I feel pretty comfortable with my decision to hold and buy more of this stock in the last 12 months or so. Despite the fact the share price has underperformed significantly compared to the overall market, the underlying performance of the insurance business has been quite strong, giving me the feeling that at current share prices, this company ticks the boxes of a quality value investment.

To understand why I think QBE offers good value, you need to understand the business and how they derive a profit. To put it simply, QBE derives income from two main sources. The first is the insurance profit they make on writing insurance, that is, the difference between insurance premiums received and insurance claims paid out. The second and at times very lucrative income source, is the investment income derived by cash reserves or “float” the company holds for future claims. The beauty of this lies in the fact that the insurance company receives the premiums up front, but doesn't payout until an claimable event. In the meantime, the insurance company invests those funds in liquid assets and normally makes a tidy profit in doing so. Essentially they are making profit on other people's funds. Warren Buffet identified the benefits of this key idea very early on in his investment career and formed a large part of the Berkshire Hathaway business around it.

For the 2010 financial year, QBE posted a drop in net profit of 17%, to $1.28b, however the company's underwriting profit was up some 19% to $1.17b. The main cause of the drop in the net profit figure was due to the poor investment returns on their float. The GFC resulted in drastic drops in yields from cash and fixed income investments, in which QBE is heavily invested. QBE's average yield on their investment funds/float was just 2.9%, down from 4.5% in 2009.

It is from the above financial results that I find the basis of my opinion that the medium to long term prospects for QBE are quite rosy. The underlying business is performing outstandingly, with QBE's reputation for well priced and quality acquisitions being further strengthened in 2010. The management team now believe that underwriting profit before tax could grow by around 30% in 2011 due to better than expected performance by the company's recent acquisitions. The investment performance is also looking positive in the medium term, that is if you are a believer in the recovery in worldwide markets.

QBE's management make note that given the short term liquid investments they are positioned in, any increases in interest rates in Europe, UK and the US (some 57% of their investments are held in these currencies) will result in increased investment returns. With inflation creeping up at an almost alarming rate in the Euro zone and the UK, I would think it won't be too long until we see rate rises by each of their central banks. The US on the other hand is probably a little further away in terms of rate rises, however with the employment market looking up (albeit slowly) and other key indicators pointing to a recovery, the chances of more quantitative easing is less likely. In the medium to long term, the prospect of inflation in the US and the subsequent rate rises that normally follow could result in significant increases in the investment performance of QBE. Management predict an increase in yields to between 3.3% and 3.5% for 2011.

Value investors look to invest in companies that are priced below the company's intrinsic value, normally at times where the rest of the market are shunning the company. In my opinion, QBE offers investors a chance to buy a very well managed company, with a long term reputation for quality returns, at a time where short term market factors have pushed many investors away.

The management team at QBE are exceptional performers, with a history of very well priced acquisitions as well as creating a profitable and low risk culture among underwriters. QBE's management have often been touted as a source of competitive advantage for the company, and I have to say I would agree with the idea. The efforts of the management team has resulted in superior returns on shareholder equity over the long term, yet another key aspect to many a value investor. Assuming you believe in a recovery in world markets, it would appear that those returns on equity will return to the high levels of recent years and should add significant upside pressure to the share price.

In terms of valuations of the company, I have a conservative short to medium term valuation of $19b-$22b (market cap) which equates to a share prices in the $19-$22 per share range. In the longer term, given the growth in written premiums (which is likely to continue given the management team's indication that they are still looking at potential acquisitions) and increases in yields on their cash investments, we could see significant upside valuations. I'm not one to predict the longer term market gyrations, especially in times like these, however given the enormous sums of money pumped into world economies, I am of the opinion that inflationary pressures should result in a return to normalised interest rates and yields on fixed income and cash investments. This should result in significant increases in QBE's profit results.

In recent months QBE's share price has traded down in to the $16 per share range on a number of occasions and has traded for extended periods in the $17 per share range. I am of the opinion that such prices offer a cheap entry point into a very strong and well run company. Value investors should be very interested at the prospect of buying such a high quality business at a significant discount to it's intrinsic value. I for one am definitely keeping a close eye on the market movements in the hope of picking up more cheap stock should the opportunity arise.

Disclaimer: I am a holder of QBE shares. I am not a professional advisor and as such, no investment decisions should be made on the basis of my work. Always seek advice from a licensed professional advisor before making any investment decision.

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Tags: QBE,insurance,investment,ROE,agm,float,underwriting,Competitive Advantage

Institutional Investors Throw a Spanner in the Works at RHG

Thu, 31 Mar 2011 09:27:00 GMT

It would appear that for the second time in recent years, institutional investors are looking to make board changes at RHG (previously Rams Home Loans-pre GFC). Steve Johnson and members of the Intelligent Investor group failed in a similar attempt 18 months ago, only to have a group of institutional investors (holding 8.4% of the company) led by Karl Siegling and Geoff Wilson make a second attempt as announced today.

Today's announcement (attached to a substantial holding disclosure) stated that the group intends to requisition the removal of two existing directors (Greg Jones and John McGuigan) and replace them with three new directors (Malcolm McComas, Gabriel Radzyminski and Paul Jensen). Additionally, the announcement details the group's intent to ensure the company remains a listed entity and to distribute surplus cash as dividends (franked wherever possible). The existing share buy-back proposal will remain intact, leaving existing holders with the option of either accepting the buy back with it's potentially beneficial franking credits and associated capital loss (read our blog on BHP's buy back for a similar example), or remaining a shareholder and reaping gains in distributions over coming years.

Steve Johnson has voiced his opinion (via his blog) on the RHG fiasco for quite some time and is well worth a read in my opinion. As the lead chief investment officer of The Intelligent Investor Fund, he has been very much a shareholder activist on the matter.

With today's announcement and the apparent large holdings behind the move, I would say there are a few more twists and turns around the corner for all invested in the RHG Group. Definitely one to watch.

Disclaimer: I am not a professional advisor and as such no investment decisions should be made on the basis of anything published on this blog. Always obtain advice from a licensed professional advisor before making any investment decision.

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Tags: dividends,buy back,investors,SMSF,tax,franking credits,BHP,capital loss,RHG,Directors,shareholder activism

Nido Petroleum - Upcoming Gindara Drill Offers Opportunity

Mon, 28 Mar 2011 14:18:00 GMT

Nido Petroleum (NDO-ASX) today announced the approval from the Philippines DOE for their upcoming drilling target, Gindara-1. I've noted Gindara as a possible company making prospect a number of times and I now feel that at current prices, Nido may be offering traders and opportunity for a buy early, sell before spud play, and for longer term speculators, an opportunity for serious share price gains on the back of a successful oil find.

Nido and JV partners, Shell and Kairiki are targeting a possible 1 billion barrels of oil at Gindara, with the drill date around May 2011. Having attained approval for the well, as well as securing the “Atwood Falcon” rig, Nido are finalising the required third party logistics and planning and suggest the rig should arrive on site around mid May.

The company has had a string of poor results which I've covered recently, however at current prices, I feel a short term trade, with an exit before spud, could result in some solid gains with minimal downside risk. Speculation regarding the well results leading into the spud date should put some upward pressure on the share price, especially given the potential this well is offering (1 billion barrels of oil in place is nothing to be sneezed at!) With recent lows in the 9c range after the failings at Tindalo and a capital raising, downside should be limited. Gindara-1 will no doubt be on the radar of traders given the performance of the company's share price leading into and immediately after the Tindalo-1 spud. As such, the potential for serious speculative share price action leads me to believe the company is offering a solid buy early sell before spud play.

For longer term speculators, should Gindara-1 prove successful, Nido's value and corresponding share price should rocket. Targeting such a large possible reserve, success will drastically increase the company's reserves and cash flows. No doubt it is for this reason that Shell chose to farm in to the well (I discussed the deal briefly here). I have no doubt that many investors are gun shy on Nido following the poor performance of the Tindalo-1 well, however with a Shell drilling engineer involved this time around (the engineer has experience on the “Atwood Falcon” as well), fears of another failure can be somewhat reduced. Having said this, the working relationship between Nido as operators and the Shell drilling engineer are not known, as such it is hard to gauge the impact having a Shell engineering involvement will have.

I'm currently not holding, but should the share price remain around the 10c mark or below, I may very well take a short term trading position leading into the spud date. I think despite the failings of Nido Petroleum's management team in recent years, the company's prospects are certainly looking bright. Opportunities are certainly there for speculators and I feel Nido should definitely be on your watch list.

Disclaimer: I am not a professional advisor. As such, no investment decision should be made based on the above information. Always seek the advice of a licensed professional advisor before making any investment decision.

( PJ36F5JSTV5G )

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Tags: nido petroleum,oil,philippines,shell,trade,speculative

Strike Increase Interest in Louise Gas/Condensate Field and Eaglewood Joint Venture

Tue, 22 Mar 2011 08:21:00 GMT

Strike Energy (STX-ASX) announced late last week that they have increased the company's interest in the Louise gas/condensate field and the Eaglewood JV. Strike have spent US$3.75m on increasing their interest in the Louise fields to 40% (from 30%), increasing net production for Strike to 2MMcfe/day (revenue of approximately $350 000 per month at current prices). The deal also increases the interest in the Eaglewood JV, giving strike a 40% interest in future discoveries.

Having recently sold it's Rayburn and Mesquite assets (blog here), STX are flush with cash (around $20m before the deal) and are embarking on a multiple target drilling campaign in the US through it's Eaglewood JV. I blogged about the disappointing results from their Steindorf well recently, but with Sadie-1 nearing it's target depth, there is plenty to look out for on the Strike Energy front. Sadie is targeting up to 20bcf of gas and is nearby and of similar formation as previous successful finds for the JV. Success here will not only increase revenue and development of reserves, but should result in some positive share price action.

In recent announcements, management of Strike have indicated they are looking to evaluate new joint ventures in the US and leads me to believe they may be on the lookout for possible shale oil/gas/condensate plays. Given the market hype and recent success being achieved by other small and mid cap oil companies on the ASX, I won't be surprised if we see some interest shown by STX management in unconventional oil and gas plays.

All in all, Strike has continued to frustrate myself and no doubt a number of fellow share holders, however I remain a believer in the management team and hope they can deliver on the promise Strike has shown over recent years. Plenty still to look out for and may offer a chance to enter cheaply if Sadie-1 is a duster.

Disclaimer: As always, I am not a professional advisor and as such the above blog should not be considered financial advice. Always seek the advice of a professional advisor before making any investment decision. I am a holder of Strike Energy shares.

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Tags: Strike Energy,oil,gas,condensate,shale gas,interest,joint venture

How to Calculate Gross Returns From Dividend Payments

Wed, 16 Mar 2011 04:25:00 GMT

Australia's dividend imputation system is in place to prevent double taxation of company earnings and has been applauded by Australian investors since it's implementation in the 1980's. However it does mean that investor's need to perform a simple calculation in order to obtain the real return of their dividends when considering the franking credits applied. My recent blog on BHP's share buy back has resulted in a number of questions from fellow investors on how to calculate the real return from dividend payments, so I thought I'd post up a quick blog explaining it in simple terms.

The reasoning behind calculating the 'grossed' or 'franked' up returns (I actually prefer these terms given 'real return' actually requires inflation to be taken into account), all stems from the varying nature of each individuals taxation position. By calculating the gross return from your dividends, you can apply your own tax rate and calculate your own after tax return, using a tax rate other than the 30% flat rate applied to companies. The end result is that many low tax or non-tax paying individuals or SMSF end up with some handy tax refunds at the end of the financial year due to paying a lower tax rate than the 30% already paid by the company.

I find these calculations best shown by example. The franking percentage is an important factor, but for this example we will assume that like most dividends paid by Australian listed companies, the dividend will be fully franked.

XYZ Pty Ltd pays a dividend of $7 per share fully franked. Given the company tax rate is 30% and fully franked dividends are paid out after the company has paid tax, we can assume in most cases that the company has also paid at least $3 per share to the tax office. On the dividend confirmation paperwork, there will be a column stating the actual cash dividend paid, and another stating the franking credits applicable. The combination of the two figures is the gross return before individual taxation is applied. Now lets assume a tax rate of 15% (applicable to low income earners and SMSF in accumulation phase). The franked up total dividend is $10 per share, and the real return after tax is $8.50 ($10 - $1.50 taxation).

From the above example we can see that the cash dividend paid and quoted by the company was only $7 per share. However, after calculating the benefits of the franking credits, the pre tax return was actually $10 per share. Given the low individual tax rate, the real return after tax was in fact $8.50, significantly more than the quoted $7 per share. Now we can see why calculating the real return is important when considering your choice of investments, particularly for yield chasing investors.

The above works well for existing shareholders, however many of us want to know the franked up return before we make an investment decision. This means we can't rely on a dividend confirmation letter with all the details on paper for us. Luckily there is a simple calculation we can apply to the quoted fully franked dividend, in order to work out the franked up return.

Cash Dividend Quoted x 100/70 = Franked Up or Grossed Up Dividend.

Eg : $7 x 100/70 = $10.

Alternatively if one wishes to know the franking credit totals on their own, we simply change the equation slightly.

Cash Dividend Quoted x 30/70 = Imputation or Franking Credits.

Eg : $7 x 30/70 = $3.

I hope the above will prove helpful and aid you in any investment analysis you may be performing. It is absolutely crucial to ensure that when comparing investment options, that your returns are calculated in 'real' terms to ensure you are comparing apples with apples. Using the above formulae, you can now ensure you are calculating the returns applicable to your circumstances and make far better informed investment decisions.

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Tags: dividends,SMSF,tax,franking credits,Returns

BHP's Gift to Low/Non Tax Paying Investors

Fri, 11 Mar 2011 03:33:00 GMT

In coming days, Australian investors in BHP (BHP-ASX) will be receiving paperwork detailing the company's recently announced, off-market share buy back. With so many 'Mum and Dad' investors holding BHP, and the technical nature of the buy back being a little difficult to understand, I thought it might be helpful to outline the details as simply as possible for anyone struggling to get their head around it and make their decision a little easier.

In short, investors can opt to sell their shares (or a portion of them) back to BHP. The offer will be at a discount to the trading price of shares on the market, which begs the question, why would you sell? Quite simply, it is in the make up of the payment that you find the answer. A very small proportion of the payment will be considered 'capital', and the rest considered a fully franked dividend. If you are a low or no tax paying individual, or the shares are held in a Self Managed Super Fund (SMSF), the tax benefits of accepting the share buy back can be significant. Those of us paying a significant tax rate (30-46.5%) will find the buy back far less attractive.

The first benefit comes in the way of fully franked dividends. It is times like these that you really thank the Australian government for bringing in the imputation credits system to the investment landscape. Once the payment is 'franked up', that is, adjusted for the real return when considering the franking credits applicable, the actual payment received should exceed the on-market share price. This alone makes the share buy back a pretty attractive option for anyone paying minimal or no tax at all. If you still want to hold BHP shares, there is nothing stopping you buying straight back in after accepting the buy back. It's a simple play and could result in some of the easiest returns you ever likely to come by.

The second significant benefit lies in the fact that very little of the payment is considered 'capital'. This in simple terms means you are accepting a tiny amount of money for you 'share', but are taking a large amount as profit in the way of a whopping big dividend. This results in a large capital loss (despite the likely hood that the real return is likely to exceed the market price), and can be used as a capital gain offset should you be selling other shares at a profit. The tax benefit is harder to estimate in this case, but is absolutely a big benefit to those who accept the share buy back.

Consider the following example (this is not the actualy make up of the buy back prices, but simply an indication of how the above principles work). Assume the share price on-market is $45 per share, and the discount offered in the buy back is 14%, resulting in a payment of $38.70 per share in the buy back. Lets say the capital component is only 38c and the fully franked dividend component is $38.32. For a SMSF in pension phase and paying no tax, or a non-tax paying individual, the following would be the real returns (lets also assume the shares were originally purchased at $30 per share).

The capital component offers the shareholder a capital loss of $29.62 per share.

The dividend component offers a return of $38.32 + $16.42 (franking credits) = $54.74

The real return to a non-tax paying individual or SMSF would be $55.12 + a capital loss of $29.62 which can be used in the future to offset a capital gain should it be required.

Considering the above, the shareholder is receiving a premium of over 22% to the on-market price of their BHP shares, along with a handy capital loss which could be used in the future should it be required. Not a bad return in anybody's book. Returns are slightly lower, but still significant for those paying a 15% tax rate (low income earners and SMSF in accumulation phase). Anybody in a low or no taxation position should be considering the share buy back very carefully. For those of us who are not, you can still accept the buy back, but given the maths applied, I can't see much value in doing so.

I hope this will prove helpful to some. I must stress that the above should not be considered advice. Anyone considering participating in the share buy back (or not for that matter) should definitely be seeking advice from a professional advisor on the matter before making any investment decision.

Please Note: For the above calculations regarding the potential capital loss event, I have used the simple calculation using the 38c capital buy back. It is important to note that in most cases, the ATO will make a ruling and attribute a tax value for calculation of the capital loss. This figure used to calculate the capital return is likely to be much higher, however a large capital loss is still almost a certainty. Keep an eye out for a tax ruling or speak to your advisor regarding what the accurate calculation of capital losses will be.

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Tags: dividends,buy back,investors,SMSF,tax,franking credits,BHP,capital loss

How Roger Montgomery Avoids Investing in Bad Businesses

Tue, 08 Mar 2011 09:33:00 GMT

I've been spending some time watching investment based video's and thought it might be an idea to hop on here from time to time and share my favourite videos in the hope you all might enjoy the viewing and hopefully learn something from them.

My first is by author and fund manager, Roger Montgomery. I've discussed his book in my blog before and rate his book Value Able very highly. He has a number of web video's that I think is well worth viewing for everyone, but this one in particular is one I think any budding value investor should view. Avoiding bad businesses and disasters is key to building wealth and his method is simple and absolutely makes sense to any intelligent investor. I hope you all like it.

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