Barramundi ( BRM )

[BIRMANBOY]

Your theoretical "form" isn't returning anything for me Percy...whereas BRM for the last 4 years has returned for me an annual net return of 10.39% (after tax). That's a mistake I don't mind repeating. Theory is nowhere near as crucial as "skin in the game".
Exactly."Those who do not know history's mistakes are doomed to repeat them."
My history is easy to check.Aussie sharetrader competition 2012 2nd,2013 10th,2014 so far 4th. I have form!
BRM history is very poor [could say a history of mistakes].No reason to believe it will improve.

[winner69]

Don't tell anyone but I used to really enjoy Carmel's Sunday Star Times column.Always gave good advice.Pity her staff did not appear to have read it,or follow it?!!! lol.

You can read them all again Percy - save you getting the scrapbook out

http://www.fisherfunds.co.nz/carmel-fisher-sunday-star-times

[percy]

Your theoretical "form" isn't returning anything for me Percy...whereas BRM for the last 4 years has returned for me an annual net return of 10.39% (after tax). That's a mistake I don't mind repeating. Theory is nowhere near as crucial as "skin in the game".

I have always invested in stocks I have picked,both Aussie and NZ.
This year 2014 Aussie + 36.24%
2013 Aussie +59.59%
2012 Aussie +141.82%
Average 79.21%.
You can now understand why neither you or Carmel impress me.!

[percy]

You can read them all again Percy - save you getting the scrapbook out

http://www.fisherfunds.co.nz/carmel-fisher-sunday-star-times

Thanks for the link.

[BIRMANBOY]

Very impressive ..with those sorts of returns I'm surprised you have time to rubbish a stock you don't have in your portfolio. I must admit I am crushed that I don't impress you since after all that is surely the absolute gold standard we should be comparing ourselves too. You win. My meagre dribble is dwarfed by your veritable torrent.
I have always invested in stocks I have picked,both Aussie and NZ.
This year 2014 Aussie + 36.24%
2013 Aussie +59.59%
2012 Aussie +141.82%
Average 79.21%.
You can now understand why neither you or Carmel impress me.!

[Joshuatree]

Since i bought in April and including the div announced today I'm up re 13%, very happy;...thankyou:)

[zigzag]

Meanwhile, over at Marlin, up 28% for the year. Nice one Carmel and team!

[percy]

Joshuatree and zigzag.
Fantastic news.!!!!!!!!!!!!!!!!!!! ??????????

[zigzag]

Unfortunately,or fortunately some of us have a fair idea about what will happen.!!
Although BRM managed to lose money this year in Aussie,it is worth noting my Aussie picks in the Aussie competition are up 47.03% and I am only fourth.!!

Nice going Percy, but you are not playing with real money, and you are working in Australian currency. BRM is in NZ dollars, which does change the dynamics.

[percy]

Nice going Percy, but you are not playing with real money, and you are working in Australian currency. BRM is in NZ dollars, which does change the dynamics.

I have always invested in stocks I have picked.
Three year average of 79.21% should have covered a bit of currency fluctuations.?
Now I think of it, that 79.21% average may not include any dividends!!!!

[zigzag]

I have always invested in stocks I have picked.
Three year average of 79.21% should have covered a bit of currency fluctuations.?
Now I think of it, that 79.21% average may not include any dividends!!!!

Well. Shut my mouth! There's no way I can beat that. That's an excellent achievement Percy.

[nextbigthing]

I thought a ponzi scheme was where they used capital to pay 'dividends'.

[zigzag]

I thought a ponzi scheme was where they used capital to pay 'dividends'.

No. A ponzi scheme is where new investors deposits are used to pay preceding contributors. As for BRM, I can't see anything inherently wrong with the way they are doing this, as long as people buying into the fund understand what is happening, and how it works. Just for the record, I only own MLN, not BRM.

[winner69]

Fund seems on fire ...NAV over 72 cents

Good stock selection ......but probably just the weaker NZD

Discount still pretty high still

[percy]

Fund seems on fire ...NAV over 72 cents

Good stock selection ......but probably just the weaker NZD

Discount still pretty high still

Do they have a Diversity Policy?
And if so ,is this proof that one works?

[winner69]

You guys not closing that discount to NAV

I see Ramsay Health in their Top 5

Retail Food Group and CSG dropped out the last two weeks.

They selling down some of these?

[Winston001]

I attended a Fisher Funds roadshow in Invercargill this morning and have to say it was very entertaining. Carmel Fisher wore spiked heels and a cloak/dress so short Mary Quant would have blushed. She had a staff member Alysse dressed in a micro-skirt and walking confidently on six inch transparent heels. Talk about sex on a stick. :D

I have no idea what they talked about


NO Wait -


LOL ok the whole show was very well done. They did an "Its In The Bag" presentation which worked very well. I've never met Carmel before and must say she was refreshingly normal, almost like the girl in the local corner shop. Quite different to the sober serious presentations we normally see.

I'm not convinced that Fisher Funds are living up to their early promises but I give them credit for sincerity. And entertainment.

[winner69]

I attended a Fisher Funds roadshow in Invercargill this morning and have to say it was very entertaining. Carmel Fisher wore spiked heels and a cloak/dress so short Mary Quant would have blushed. She had a staff member Alysse dressed in a micro-skirt and walking confidently on six inch transparent heels. Talk about sex on a stick. :D

I have no idea what they talked about


NO Wait -


LOL ok the whole show was very well done. They did an "Its In The Bag" presentation which worked very well. I've never met Carmel before and must say she was refreshingly normal, almost like the girl in the local corner shop. Quite different to the sober serious presentations we normally see.

I'm not convinced that Fisher Funds are living up to their early promises but I give them credit for sincerity. And entertainment.

C'mon Winston ....you meant to invest with your brain, not other parts of your anatomy

Did you sleep soundly that night?

You can see why Balance is attracted to her eh ......that along with the champagne.

[see weed]

They put on a nice buffet lunch at the agm.

[Beagle]

They put on a nice buffet lunch at the agm.

Its good they did something well.

[winner69]

Its good they did something well.

ASM presentation slide

I take it that the 8.2% is the overall total return (not an annual number like pa since 2006)

And that the fiddled NAV after assuming all dividends reinvested

Surely more than 8.2% total return in 8 years

[Beagle]

I assume so W69. They started at $1.00.

Interesting that they under-performed the small company index by more than 10% in the year to 30 June 2014. No wonder they felt they had to give a decent lunch, the poor shareholders buggers gotta get something out of it don't they !! They deserve some sort of award for consistently getting it SO WRONG. Wooden spoon award perhaps...

[nextbigthing]

ASM presentation slide

I take it that the 8.2% is the overall total return (not an annual number like pa since 2006)

And that the fiddled NAV after assuming all dividends reinvested

Surely more than 8.2% total return in 8 years

But you don't get it Winner. They've been paid a 10% dividend every year. That's a great return for doing nothing, just watching the payments rolling in. How dare you question it. You're probably just down ramping so you can buy in.

[Joshuatree]

Remember the ASX is down re 8% this year esp the last some weeks. NTA of BRM has dropped re 7.5% since 4th sept. So looking at something in particular point of time one can play with figs ; AND the div keeps coming as the buyback does too:)

[PennyPicker]

The fund website has this graphic which helps visualize returns over time.

6384

The link is on this Performance page; http://www.barramundi.co.nz/barramundi-performance/.

[winner69]

You guys are doing well, Carmel will be proud of you all.

Well done with current share price discount to NAV the lowest its been for a long time

Keep trying, Carmel really wants a premium

[BIRMANBOY]

Sorry what were you saying...I was distracted by having to count all my money.
http://photos-ak.sparkpeople.com/nw/2/1/l216257370.jpg

You guys are doing well, Carmel will be proud of you all.

Well done with current share price discount to NAV the lowest its been for a long time

Keep trying, Carmel really wants a premium

[winner69]

Nice one cat. I gave up counting my money years ago, it just became too tedious

I have no idea how much money i have even if I felt inclined to count it.

You feeling insecure you feel the need to regularly count your money, I hope not?

Any way back to BRM .... you will have heaps more to count soon with their timely buying of WOW shares in recent times

[Joshuatree]

mmmh ; hallooo to the haters:). BRM issuing 1 for 4 warrants exercise 68c by may 2016. Ive done well with my 62c entry plus divs so don't shoot the messenger ok:eek2::D

[see weed]

mmmh ; hallooo to the haters:). BRM issuing 1 for 4 warrants exercise 68c by may 2016. Ive done well with my 62c entry plus divs so don't shoot the messenger ok:eek2::D

Have to agree with you Joshuatree. My holding bought October last year is up 9.52% plus divs. pluss buffet lunch:) And the MLN shares bought in Nov. last year are up 6.59% plus divs. Looking forward to the next annual lunch, might even take some a2 milk:t_up:

[BIRMANBOY]

I suppose there may be some buyers but a patient watcher would have had a number of better buying opportunities in the last several years...still gotta give them credit for a cheeky offer.. Reminds me of a previous employer of mine who said he was doing all of the employees a favour by discontinuing our company paid med. insurance. Ya gotta sell it with conviction and believability. LOL. Wish I could sell my warrants..any offers?

[Fisherking]

I suppose there may be some buyers but a patient watcher would have had a number of better buying opportunities in the last several years...still gotta give them credit for a cheeky offer.. Reminds me of a previous employer of mine who said he was doing all of the employees a favour by discontinuing our company paid med. insurance. Ya gotta sell it with conviction and believability. LOL. Wish I could sell my warrants..any offers?

Yes agree, but there does seem to have been a turnaround in the performance (NTA) of this stock in recent months. I'd like to hope the end of the 60 - 69c range is behind us, time will tell.
Purely speculation on my part, but from what i can make out the turnaround in performance has happened at approximately the same time Manual G returned to managing this portfolio.

[BIRMANBOY]

So is he on automatic or four speed.....its Manuel.... Meester Fawlty...not hand operated.. Purely co-incidental ..it goes up it goes down regardless of managers from what I see. However I'm sure he agrees with you as well as your choice of avatar name.
Yes agree, but there does seem to have been a turnaround in the performance (NTA) of this stock in recent months. I'd like to hope the end of the 60 - 69c range is behind us, time will tell.
Purely speculation on my part, but from what i can make out the turnaround in performance has happened at approximately the same time Manual G returned to managing this portfolio.

[Fisherking]

So is he on automatic or four speed.....its Manuel.... Meester Fawlty...not hand operated.. Purely co-incidental ..it goes up it goes down regardless of managers from what I see. However I'm sure he agrees with you as well as your choice of avatar name.

So is your point that the fund manager has nothing to do with the performance of a fund?

Really?

I don't want to open up the whole managed v index tracker debate because thats entirely another topic and of course funds go up and down, thats what markets do, but claiming the manager has nothing to do with the overall performance is laughable.

[winner69]

So is he on automatic or four speed.....its Manuel.... Meester Fawlty...not hand operated.. Purely co-incidental ..it goes up it goes down regardless of managers from what I see. However I'm sure he agrees with you as well as your choice of avatar name.

Maybe this Manuel G you talking about is Fisherking himself

Pure speculation and no offence intended to either Fisherking or Manuel

[Joshuatree]

[QUOTE=BIRMANBOY;Wish I could sell my warrants..any offers?[/QUOTE]

They closed at 3c yest,re 250,000 traded.

Thanks Carmel baby, envelope me in you furs and pearls and curls. Errr sorry balance:)

[BIRMANBOY]

Just sold mine for 3.5....money for nothing and thanks to whomever purchased them.....holding at quite a bit lower than warrants offer so why would you bother.
They closed at 3c yest,re 250,000 traded.

Thanks Carmel baby, envelope me in you furs and pearls and curls. Errr sorry balance:)

[777]

Probably me Birman.

Remember that the exercise price is adjusted downwards for the dividends paid out over the next year. Same as KFL.

[BIRMANBOY]

Hah...see everybody happy.
Probably me Birman.

Remember that the exercise price is adjusted downwards for the dividends paid out over the next year. Same as KFL.

[Joshuatree]

http://www.fisherfunds.co.nz/images/banners/Fisher-Funds-2015-Annual-Roadshow-Registration.jpg (http://www.fisherfunds.co.nz/roadshow/)
Step into the Dragons' Den!

The Fisher Funds 2015 investment roadshow is heading your way. This year you will have the opportunity to 'be the Dragon' as our investment professionals pitch some of their best investment ideas from the past year for inclusion in the Fisher Funds portfolio. Along with an overview of the past year, you will have the opportunity to hear some specific investment 'pitches' and decide whether you would have given the idea the green light.
Please join us for what we promise will be an entertaining and informative occasion.
Light refreshments will be served before the presentation begins. As seats are limited, we ask that you RSVP at your earliest convenience.
If you are unable to make it along, highlights of the roadshow will be available online after the conclusion of the roadshow.
We look forward to seeing you in September.
Kind regards
http://www.fisherfunds.co.nz/images/newsletter/Carmel-Fishers-signature.pngCarmel Fisher| Managing Director

So who's going; you Franko? Get up close and personal with pearls and curls Carmel:p

[arc]

average price 65c
(WP) warrant price 68c
(WT) warrant trading price 3.5c
current divs %8.55


price * divs : 65 * .0855 = 5.55c
(WP) warrant minus divs: 68 - 5.55 = 62.45
(WP)-divs + 3.5c/(WT) : 62.45 + 3.5= 65.95

To my untrained eye either the price needs to jump considerably , permanently, to make it worth it, or the warrant trading price needs to fall to .001 or the offer is not what it seems.??

[Not too Flash]

Warrant exercise price 62 cents - current market price 64 cents . NTA 69 cents.

Is there life in this old dog (fish?) yet

[Big Blind]

63 cents now. Not much of a deal, but love that yield

[Not too Flash]

NTA still 69 cents

Exercising warrants @ 62 cents still worth a go I reckon - any thoughts ?

[BIRMANBOY]

Not really..glad I cashed these out earlier. As an aside anytime you can buy these at 61 or below historically is good buying..doesn't hit this level very often and usually not for long.
NTA still 69 cents

Exercising warrants @ 62 cents still worth a go I reckon - any thoughts ?

[Beagle]

NTA still 69 cents

Exercising warrants @ 62 cents still worth a go I reckon - any thoughts ?

Reasonable discount to asset backing but once some of the warrants are exercised this will diminish. Please forgive me being a bit flippant but I think your user name sums up Barramundi very well.

[Not too Flash]

Reasonable discount to asset backing but once some of the warrants are exercised this will diminish. Please forgive me being a bit flippant but I think your user name sums up Barramundi very well.

Roger

As a newbie to contributing I have really enjoyed you comments over the years and take it as a compliment that you have made a comment about me !!

Have joined the Scales and ATM sailings and even a little on the NZ airline .....

Thanks

[BIRMANBOY]

If you read back over the thread you will see where Rogers comments are coming from (think disgruntled shareholder)...he hasn't moved on. Oh well. Buy at the right time and manage this share and it can do good things. I am a holder for five years and very happy with returns and position. See its all about the details..one buys at the 'right time" and one doesn't...is it skill? No.....is it luck? probably....completely different views. So each and every share purchase or sale creates a lasting impression. Problem of course is that this is relevant only for a particular set of circumstances and at another time and in different circumstances could be totally different result. People making pronouncements about the relative "worth" of an investment always have accompanying baggage. (which is usually never detailed). Good to remind oneself about that occasionally.
Roger

As a newbie to contributing I have really enjoyed you comments over the years and take it as a compliment that you have made a comment about me !!

Have joined the Scales and ATM sailings and even a little on the NZ airline .....

Thanks

[777]

I have had $19500 of dividends off BRM over the last 4 and a half years along with a $2500 capital loss. Hope for a recovery in the Aussie market but it has been a long time coming.

[winner69]

For these types of funds part (most of) the discount to NTA is the present value of future management fees.

[see weed]

NTA still 69 cents

Exercising warrants @ 62 cents still worth a go I reckon - any thoughts ?
I'm going to let my warrants lapse at 62c. If sp was at 69 to 70c then would exercise them:t_down:.

[Beagle]

I have had $19500 of dividends off BRM over the last 4 and a half years along with a $2500 capital loss. Hope for a recovery in the Aussie market but it has been a long time coming.

Which underscores a few comments on this thread that they're effectively paying dividends out of capital. Need I remind anyone that these shares were originally issued for $1 a VERY long time ago.

Birmaboy - I see they have now taken on board some of the criticisms of a number of posters like myself and now have a far more widely diversified portfolio of stocks. Some would say that they might even be starting to understand what people actually expect in a managed fund - diversification....took them long enough...

I prefer to catch my own fish.

[Joshuatree]

Not really..glad I cashed these out earlier. As an aside anytime you can buy these at 61 or below historically is good buying..doesn't hit this level very often and usually not for long.

Yes my last buy was at 61c. What great place to park some funds in my Baramundi bank with a WAY better yield until i decide what to do with it.

[waikare]

I'm going to let my warrants lapse at 62c. If sp was at 69 to 70c then would exercise them:t_down:.

I am also considering my options and not taking up my options, using the same funds and buying in at $0.61 or lower.

[BigBob]

I am also considering my options and not taking up my options, using the same funds and buying in at $0.61 or lower.

You are assuming it will go lower then - I think it is hugging 0.62 because of the warrants, and that when they are out of the way SP should climb...

I am undecided on whether to convert, but when there is not much in it I have a preference to give money to a company for investment or growth rather than to a anonymous trader on the other side of a deal...

[winner69]

Believe it not there are advisors/managers throughout the world who analyse investment trusts/funds like Barrimundi and use mathematical wizardry to workout if they are 'cheap' or not

One thing use is a Z score (not Mr Altmans Z score) which basically works out how far away the current discount to NAV is away from the average discount taking into account stand deviations and all that sort of stuff.

BRM current Z score is -0.62 which is 'cheap' but not that 'cheap' ......and it has been getting 'cheaper' over the last few months. General rule of thumb these gurus use seems to be to look for trusts/funds with a score of -2 and tout those as a good/screaming buy - that is BRM around 58 cents

Interesting eh - all that mathematical stuff when your guts came to the same conclusion.

Footnote: But then again thats all based on historical performance and all about discounts to NAV. When the inevitable market collapse happens and BRM is at 40 cents say and at 15% discount to NAV it will still ve a screaming buy

[nextbigthing]

Interesting stuff Winner. Have you ever tried using this method yourself and if so, any success? Given the diversification of the portfolios, I imagine it would be a reasonably risk free strategy.

[winner69]

Interesting stuff Winner. Have you ever tried using this method yourself and if so, any success? Given the diversification of the portfolios, I imagine it would be a reasonably risk free strategy.

No, rather pick my own stocks and put them in to the WINNER FUND (Code WIN)

That way i dont have to sell things to pay myself a dividend .....and management/performance fees are cheap as

[BIRMANBOY]

So is this WIN fund available to other investors or is it closed to new entrants:) Management fees are generally tied to performance so are you telling us your current manager is crap?;) David Ware may be available..he's a smart guy..I remember talking to him when CNU was at its lowest and he told me he had just loaded up on it. That was a smart/brave move and he certainly knows the Telco market.
No, rather pick my own stocks and put them in to the WINNER FUND (Code WIN)

That way i dont have to sell things to pay myself a dividend .....and management/performance fees are cheap as

[winner69]

So is this WIN fund available to other investors or is it closed to new entrants:) Management fees are generally tied to performance so are you telling us your current manager is crap?;) .

Didnt realise cats could be smart arses - birmans are usually sweet as

Provide the expertise and skills for free as a ontribution to society - saves the investors at least 10% the way the fund is outperforming

[BIRMANBOY]

The society for the protection of unwed Birman mothers has yet to see a cent (or smell a scent) yet so remain unconvinced.
http://zoonarea.com/wp-content/uploads/2016/02/how-much-are-birman-cats-worth-7.jpg

Didnt realise cats could be smart arses - birmans are usually sweet as

Provide the expertise and skills for free as a ontribution to society - saves the investors at least 10% the way the fund is outperforming

[Joshuatree]

Roger

As a newbie to contributing I have really enjoyed you comments over the years and take it as a compliment that you have made a comment about me !!
Have joined the Scales and ATM sailings and even a little on the NZ airline .....

Thanks

`Please don't feed the ,want to be Gurus on share trader;they will actually start believing they are qualified Investment advisors and then take it upon themselves to start advising people what to do with their hard earned ; especially a trap for newbies.

[Bjauck]

`Please don't feed the ,want to be Gurus on share trader;they will actually start believing they are qualified Investment advisors and then take it upon themselves to start advising people what to do with their hard earned ; especially a trap for newbies.
I assume every post has the qualification "Do Your Own Research" & get independent adivice. Every Chat forum should be treated likewise.

[Not too Flash]

Interesting the buy-back %age down to 8%. At NTA of 69.7c - could buy back at up to 64c.

Will be interesting to see if this occurs .....

[777]

Roger remember KFL BRM and MLN are all PIE's so 28c/$.

As a large holder in all 3, BRM has performed the worse. This is simply the failure of the Australian market to perform overall and to some extent poor selection of stocks by BRM.

Paying out dividends from capital gains is fine with me. Australian unit trusts are required to pay out these, realised, every year as distributions. This make them a good choice under the current FIF regime as they usually in excess of the 5%.

If BRM was a unit trust then buying in or selling would be at it's NTA. The fact the market operation creates a discount gives opportunity in itself for buying or selling as well as a buffer for the holder if the company was ever to be would up.

The warrants can also be another play. BRM not so good this round but KFL was great. Sold out head shares after the final div in the calculation at 133 and paid 123 plus warrant price, in my case about 4cent average.

As an investor in the sharemarket for over 40 years it is part of my diversification to use others to invest with and give a wider exposure so along with Fishers have money with PIE Funds and Platinum Funds.

A happy chappy.

[Not too Flash]

NTA Up to 71.62.

Think I will take up my current Warrants @ 62 cents.

Maybe even buy a few more.....

[Joshuatree]

Yes ive taken up mine , with no commission to brokers.

[Not too Flash]

Interestingly company buying back at 64c.

Possibly a bit more comfort in exercising at 62c

[Not too Flash]

Have taken up warrants

Looking to buy some more at .5 +62 payment = 62.5
NTA over 70
With company buying shares at 64c as a backstop

What are real risks - other than Aussie stock crashing ?

[Balance]

http://www.bloomberg.com/news/articles/2016-05-01/buffett-hits-hedge-funds-while-they-re-down-faulting-high-fees

Warren Buffett’s biggest investment tip: Be wary of fees.

Consultants, he added, have steered pension funds and others to high-fee managers who, as a group, underperform what you could get “sitting on your rear end” in index funds. The arrangements “eat up capital like crazy,” he said.

[Joshuatree]

Great little" bank" to earn great "interest" on ,in the mean time.

[Balance]

Great little" bank" to earn great "interest" on ,in the mean time.

Heads they win, tails you lose.

Great 'BIG' bank actually - but for whom?

[Balance]

http://blogs.wsj.com/moneybeat/2016/05/02/warren-buffetts-epic-rant-against-wall-street/#:WJtF9R7fi5V5dA

“There’s been far, far, far more money made by people in Wall Street through salesmanship abilities than through investment abilities,” he said. “There are a few people out there that are going to have an outstanding investment record. But very few of them. And the people you pay to help identify them don’t know how to identify them. They do know how to sell you.”

As true as it is ever going to get - BRM, KFL and MLN are all about salesmanship, not about performances.

The salesmanship is about getting brokers, consultants, planners and small time investors to believe in the myth of diversifying with 'experienced' and 'specialist' investment managers - not about the fact that the performance of BRM sucks like a rotten lemon laying on manure. And it certainly is not about the lopsided management fee structure - heads they win, tails you lose.

[Joshuatree]

You have lost only if you were unfortunate to buy in at the beginning,Around current prices or below has worked for me, treating it like a bank but with FREE interest at junk bond rates without that risk..

[Balance]

You have lost only if you were unfortunate to buy in at the beginning,Around current prices or below has worked for me, treating it like a bank but with FREE interest at junk bond rates without that risk..

Haha - tell it to the majority of those who bought anytime in the last 6 years. BRM has done nothing compared to the NZX which has gone from strength to strength.

[Joshuatree]

I agree. But i use it like an on call bank deposit:)

[777]

Haha - tell it to the majority of those who bought anytime in the last 6 years. BRM has done nothing compared to the NZX which has gone from strength to strength.

Numerous purchases in past 4.5 years and averaging about 8% /year. High cash flow from dividends to reinvest where I wish.
Not as good as KFL though which is running at around 14%.

Haha to you

[Not too Flash]

Interestingly Warrants still trading - notice said

3. You can sell or transfer your warrants on the NZX until 5pm Friday 29


April 2016. This allows for the transactions to be settled by 6 May 2016.





Bought a few at .001 yesterday ??

[winner69]

Believe it not there are advisors/managers throughout the world who analyse investment trusts/funds like Barrimundi and use mathematical wizardry to workout if they are 'cheap' or not

One thing use is a Z score (not Mr Altmans Z score) which basically works out how far away the current discount to NAV is away from the average discount taking into account stand deviations and all that sort of stuff.

BRM current Z score is -0.62 which is 'cheap' but not that 'cheap' ......and it has been getting 'cheaper' over the last few months. General rule of thumb these gurus use seems to be to look for trusts/funds with a score of -2 and tout those as a good/screaming buy - that is BRM around 58 cents

Interesting eh - all that mathematical stuff when your guts came to the same conclusion.



That Z stat score is now just over zero implying that BRM is not a buy yet

Not surprising as trading at a 8.5% discount to NAV - much the same as the historical average

Discount been around that mark for a while - seems a pretty fair discount as it really is the present value of future management fees. Suppose $9m or so to Carmel over the next few years is fair enough reward to keep the fund chugging along

[Balance]

http://www.nzherald.co.nz/business/n...ectid=11723746

Excerpt : "Other examples of the worship of false gods abound: the NZX listed investment companies run by Fisher Funds long ago instituted a policy whereby each quarter the funds give shareholders back some of their capital.

Directors label this return of capital a dividend thereby giving investors the warm fuzzies. You can however see from the accounts of the Marlin Global Fund, for example, that most of the dividends are actually a return of capital.

For example Marlin Global pays a dividend of 6.88 cents per share which on a share price of 79 cents is a dividend yield of 8.7 per cent.

This of course looks fabulous to the naive yield crazed investor but the reality is that all of this "dividend" is actually a return of the capital of shareholders.

According to the Marlin profit and loss account for the year ended 30 June 2016 dividend and interest income of $966,000 doesn't even cover operating expenses of $1.65 million.

This latter figure is made up of a management fee of $880,000 and various other operating costs.

There is no actual earnings, in the conventional sense of the term, available to fund a dividend. One could take this capital distribution model to its ultimate conclusion by paying out all of the company's capital to shareholders thereby delivering a fabulous yield of 100 per cent."

FOOLS AND THEIR MONIES ARE ALWAYS PARTED.

[PJK]

While I have agreement that the dividend stat is artificially pumped up by capital cannibalism ... BRM has NOT been a loser for holders in the last four years.
And simple reinvestment of the tax-paid dividends has proved valuable.

My specific example :
I purchased 50,000 at 75 cents 4 years ago ($37,500) ... reinvested distributions and now have 86,066 at 61 cents. ($52500)
Despite the price drop (reflecting capital erosion) .. that IS a 40% return over those four years.

Not stellar I grant you - but a positive return above most retail investment options - and not deserving the scorn that it gets.

[percy]

Your timing must be fantastic as Google finance show the share price as follows.;
1 year minus 4.69%
5 year minus 3.17%
10 year minus 44.55%.

[Balance]

While I have agreement that the dividend stat is artificially pumped up by capital cannibalism ... BRM has NOT been a loser for holders in the last four years.
And simple reinvestment of the tax-paid dividends has proved valuable.

My specific example :
I purchased 50,000 at 75 cents 4 years ago ($37,500) ... reinvested distributions and now have 86,066 at 61 cents. ($52500)
Despite the price drop (reflecting capital erosion) .. that IS a 40% return over those four years.

Not stellar I grant you - but a positive return above most retail investment options - and not deserving the scorn that it gets.

Mathematical impossibility that you got that kind of return.

http://www.barramundi.co.nz/investor-centre/portfolio-performance/

BRM's own calculations show total shareholder return of 21.8% over the last 4 years, allowing for all dividends to be reinvested into shares and for all warrants to be exercised.

Simple sanity check shows :

According to NZX records, BRM distributed 22.98c of dividends in the last 4 years.

On original 50,000 shares, that's $11,490 worth of dividends.

Original investment has dropped $7,000 in value (75c less 61c) so net return = $4,490 or 12.8% on original investment of $35,000.

HUGE DIFFERENCE BETWEEN 12.8% vs BRM's own calculations of 21.8% vs your 40% return.

[JoeGrogan]

Mathematical impossibility that you got that kind of return.

http://www.barramundi.co.nz/investor-centre/portfolio-performance/

BRM's own calculations show total shareholder return of 21.8% over the last 4 years, allowing for all dividends to be reinvested into shares and for all warrants to be exercised.

Simple sanity check shows :

According to NZX records, BRM distributed 22.98c of dividends in the last 4 years.

On original 50,000 shares, that's $11,490 worth of dividends.

Original investment has dropped $7,000 in value (75c less 61c) so net return = $4,490 or 12.8% on original investment of $35,000.

HUGE DIFFERENCE BETWEEN 12.8% vs BRM's own calculations of 21.8% vs your 40% return.

That calculation doesn't take into account the increase in shares from reinvesting each dividend?

[Balance]

That calculation doesn't take into account the increase in shares from reinvesting each dividend?

No - as stated, a simple sanity check. BRM itself has already calculated absolutely best case scenario of 21.8% return over the last 4 years, based upon full dividend reinvestment and throwing more money in via exercising 'in the money' warrants.

[hardt]

No - as stated, a simple sanity check. BRM itself has already calculated absolutely best case scenario of 21.8% return over the last 4 years, based upon full dividend reinvestment and throwing more money in via exercising 'in the money' warrants.

The TSR combines the share price performance, the warrant price performance (when warrants are on issue), the net value of converting warrants into shares and dividends paid to shareholders.


Total shareholder return assumes:


all dividends paid are reinvested in the company’s dividend reinvestment plan at the discounted reinvestment price and exclude imputation credits.
all shareholders that have received warrants (for free), have subsequently exercised their warrants at the warrant expiry date and bought shares (if they were in the money).

[Balance]

The TSR combines the share price performance, the warrant price performance (when warrants are on issue), the net value of converting warrants into shares and dividends paid to shareholders.


Total shareholder return assumes:


all dividends paid are reinvested in the company’s dividend reinvestment plan at the discounted reinvestment price and exclude imputation credits.
all shareholders that have received warrants (for free), have subsequently exercised their warrants at the warrant expiry date and bought shares (if they were in the money).

Yup - can be seen why it is a Mathematical impossibility to achieve the so-calculated 40% stated by PJK.

More like between 12.8% - 21.8% as calculated by BRM itself over the last 4 years.

[Balance]

https://www.forbes.com/sites/laureng.../#317d23d9286b

Warren Buffett has said it before and he'll say it again: Don't try and beat the market with pricey, actively-managed funds. You're better off with a boring, low-cost index fund.

[PJK]

I purchased 50,000 at 75 cents 4 years ago ($37,500) ... reinvested distributions and now have 86,066 at 61 cents. ($52500)

Gents,

Given the refutations above I checked - and you are right about the dates - I was wrong - the purchase was not FOUR years ago. it was almost SIX years ago.
The CMS online system was not showing transactions back past four years - so it was only showing the dividend re-investments - I had just scanned the earliest date.

So I checked the original broker transaction logs - 4 purchases for a total of $37500 bought 50,000 shares in May/June 2011
Today with dividend reinvestment alone (no warrants) the holding has 86,066 shares worth 61 cents = $52500 or a 40% return in just under SIX years.

Apologies for inaccurate dates - I have some work to do inputing the broker logs into my spreadsheet.
But my main point stays - there have been a lot worse retail investments than BRM - which IS returning some value.

[Balance]

[/I][/COLOR]Gents,

Given the refutations above I checked - and you are right about the dates - I was wrong - the purchase was not FOUR years ago. it was almost SIX years ago.
The CMS online system was not showing transactions back past four years - so it was only showing the dividend re-investments - I had just scanned the earliest date.

So I checked the original broker transaction logs - 4 purchases for a total of $37500 bought 50,000 shares in May/June 2011
Today with dividend reinvestment alone (no warrants) the holding has 86,066 shares worth 61 cents = $52500 or a 40% return in just under SIX years.

Apologies for inaccurate dates - I have some work to do inputing the broker logs into my spreadsheet.
But my main point stays - there have been a lot worse retail investments than BRM - which IS returning some value.

Good of you to check and correct.

5.75% pa it works out at.

Actually most retail investments have done well as sharemarkets have been strong to very strong over the last 6 years, post GFC recovery.

NZX for eg put on 108% over the same period.

[Beagle]

So "just" a 68% relative underperformance to the NZX50 then. Hmmm...if that doesn't stop and give people pause for thought then I suspect nothing will.

[hardt]

So "just" a 68% relative underperformance to the NZX50 then. Hmmm...if that doesn't stop and give people pause for thought then I suspect nothing will.

When comparing the performance of an Australian growth fund, at least compare it to the ASX:XJO which is up around 35% in the last 5 years...

Our market was set to grow at a fast enough rate for people to see a managed fund as a way to capitalize on the rise, A lot of people don't actually understand that you can just buy an index fund...

[Big Blind]

I note that the share price is at a 5yr low of 59 cents. Oh dear

[winner69]

I note that the share price is at a 5yr low of 59 cents. Oh dear


...but punters have collected HUGE dividends along the way

[Balance]

Carmel Fisher and her yesmen on the Board are no doubt distressed at the low share price - while they tuck into the caviar and gently sip Cristal champagne on the balcony overlooking Takapuna Beach.

[hardt]

Carmel Fisher and her yesmen on the Board are no doubt distressed at the low share price - while they tuck into the caviar and gently sip Cristal champagne on the balcony overlooking Takapuna Beach.

She is actually a really down to earth and genuine person who does care about those who invested in her.

The NAV is solid, fund managers have no control over the discount the market applies...

Remember, some people still buy into an eternal dividend distribution, this one is likely to be 7-8% P/A net... nothing to shrug your shoulders at.

[Lewylewylewy]

How this scam works:

Set up investing company.
Buy stocks.
Sell shares in company at a price close to the value of the shares (small loss made).
Charge a management fee (profit made). Typically fees are very high on good times 9% and low in bad times 0.5%, so punters feel like that's a small price to pay for large success and fair if not going well.
Next, sell assets to give back a high dividend to ensure they can charge success fees and draw in unaware buyers who think the dividends are great and they're getting a bargain on the nav.

One might value these at the nav, minus some value to represent the effect of the management fee. Personally I would consider the management fee as causing each share to be less profitable and change the value based on lesser growth on each share (lower PE required). Result = overpriced!

Alternative one might measure the past success as being the price of the share plus the dividend, relative to the success of the shares the company owns, plus some value for the benefit of hands off management of the portfolio (if any based on the success rate).

Bad investment imo. Better off buying an index, which I also think is a bad investment. IMO, you have to have a concern / interest in your investments, otherwise you're a fool waiting to be parted with your money.

[bull....]

she done well got out on top of her game with many millions

[Joshuatree]

She is actually a really down to earth and genuine person who does care about those who invested in her.

The NAV is solid, fund managers have no control over the discount the market applies...

Remember, some people still buy into an eternal dividend distribution, this one is likely to be 7-8% P/A net... nothing to shrug your shoulders at.

Yes I've had great yield play here as long as you buy at/near the lows you are getting a great return for your buck. No need to worry about earlier ; the past is the past.

[Balance]

She is actually a really down to earth and genuine person who does care about those who invested in her.

The NAV is solid, fund managers have no control over the discount the market applies...

Remember, some people still buy into an eternal dividend distribution, this one is likely to be 7-8% P/A net... nothing to shrug your shoulders at.

Haha - tell it to those who paid $1.00 into BRM and are still out of pockets.

It is all about the fees, nothing more and nothing less.

Heck, people thought Madoff was a great guy and a great philanthropist!

[winner69]

Haha - tell it to those who paid $1.00 into BRM and are still out of pockets.

It is all about the fees, nothing more and nothing less.

Heck, people thought Madoff was a great guy and a great philanthropist!

Discount to NAV still about 6% - that's about $8m - about right as the present value of future management fees.

Where do those management fees go?

[Balance]

Discount to NAV still about 6% - that's about $8m - about right as the present value of future management fees.

Where do those management fees go?

It's heads, Fisher Fund wins.

It's tails, Fisher Fund wins even bigger as a proportion of investors' losses.

Warren Buffett warned against investing in index-hugging poor performing fund managers decades ago and in recent times. We actually have posters here encouraging investing in poor performing fund managers!

[Joshuatree]

Haha - tell it to those who paid $1.00 into BRM and are still out of pockets.

It is all about the fees, nothing more and nothing less.

Heck, people thought Madoff was a great guy and a great philanthropist!

Come on Balance; i can't and won't take responsibility for other peoples investments decisions here previously or if Carmel turned you down for a date in previous life:).Get with the present. BRM is like an on call bank account paying a great yield if one buys at the lows. IMO DYOR

[Balance]

Come on Balance; i can't and won't take responsibility for other peoples investments decisions here previously or if Carmel turned you down for a date in previous life:).Get with the present. BRM is like an on call bank account paying a great yield if one buys at the lows. IMO DYOR

You have actually been encouraging others to trade an illiquid supposedly for passive-investors' type fund.

[Balance]

Yes I've had great yield play here as long as you buy at/near the lows you are getting a great return for your buck. No need to worry about earlier ; the past is the past.

Nothing clearer in what you are doing.

[Joshuatree]

Im foiling to your gybes :). Im not encouraging anyone to do anything except providing rebuttal and what has worked for me having a smallish exposure to BRM has given me income that the banks can't provide albeit with a little more risk.

[Balance]

Yes my last buy was at 61c. What great place to park some funds in my Baramundi bank with a WAY better yield until i decide what to do with it.

So in one year, down 3.3% on capital with BRM BANK?

[Snoopy]

BRM is like an on call bank account paying a great yield if one buys at the lows. IMO DYOR

I can show you a way to get a much better yield from your bank term deposit.

1/ Invest $10,000 at 2% pa
2/ At the end of the year you have $200 in interest due (yay).
3/ Pull out $1,000 of your capital and just reinvest $9,000 for the next year.
4/ The yield on your $10,000 one year investment becomes:

($1,000 + $200) / $10,000 = 12% !!!!!!

Absolutely fantastic, and here is the rub. BANK STAFF WILL NEVER TELL YOU THAT YOU CAN DO THIS! I call it 'Doing a Carmel'

SNOOPY

[Joshuatree]

Thanks Balance, have had a look at chart and announcements.I agree the chart has stopped going sideways and has dropped away in March after Carmel Fisher announced her intention to retire:eek2: but its only in the last month thats it gone from 62c to 58c ,59c atm. Will watch for a possible top up.

[Joshuatree]

Yes i know whats going on Snoops , but i didn't buy away back then at what was it , I'm guessing $1.20?

[percy]

I can show you a way to get a much better yield from your bank term deposit.

1/ Invest $10,000 at 2% pa
2/ At the end of the year you have $200 in interest due (yay).
3/ Pull out $1,000 of your capital and just reinvest $9,000 for the next year.
4/ The yield on your $10,000 one year investment becomes:

($1,000 + $200) / $10,000 = 12% !!!!!!

Absolutely fantastic, and here is the rub. BANK STAFF WILL NEVER TELL YOU THAT YOU CAN DO THIS! I cal it 'Doing a Carmel'

snoopy

You would be a lot better off doing a "percy," and not only receiving a good divie,but enjoying a huge growth in your capital
Combined ,over 60% in the past year.
Always better to own the bank,than having money in the bank,when the bank is Heartland.
ps Figures used are from Yahoo finnance.

[Joshuatree]

I agree ; no comparison; hold heaps of Heartland.

[percy]

I agree ; no comparison; hold heaps of Heartland.

Therefore you are "well positioned."

[Balance]

I can show you a way to get a much better yield from your bank term deposit.

1/ Invest $10,000 at 2% pa
2/ At the end of the year you have $200 in interest due (yay).
3/ Pull out $1,000 of your capital and just reinvest $9,000 for the next year.
4/ The yield on your $10,000 one year investment becomes:

($1,000 + $200) / $10,000 = 12% !!!!!!

Absolutely fantastic, and here is the rub. BANK STAFF WILL NEVER TELL YOU THAT YOU CAN DO THIS! I call it 'Doing a Carmel'

SNOOPY

http://www.ebusinesspacific.com/index.php?option=com_content&view=article&id=2979:brian-gaynor-marlin-battle-raises-clear-investor-issues&catid=66:new-zealand-business-updates&Itemid=345

Fisher Funds could have done the decent thing and gave unit-holders their money back at NAV to reinvest elsewhere.

Of course there was NO way Fisher was/is going to do that and miss out on the juicy fees for mismanaging the fund with negative returns.

So much for 'really caring about her investors'.

[Bob]

Now have Xero in their stable a good share for newcomers to investing currently 28 Aussie companies well diversified earning you 9% four dividends per year with DRIP operating, no risk with this one at current prices

[Beagle]

I can show you a way to get a much better yield from your bank term deposit.

1/ Invest $10,000 at 2% pa
2/ At the end of the year you have $200 in interest due (yay).
3/ Pull out $1,000 of your capital and just reinvest $9,000 for the next year.
4/ The yield on your $10,000 one year investment becomes:

($1,000 + $200) / $10,000 = 12% !!!!!!

Absolutely fantastic, and here is the rub. BANK STAFF WILL NEVER TELL YOU THAT YOU CAN DO THIS! I call it 'Doing a Carmel'

SNOOPY


Now have Xero in their stable a good share for newcomers to investing currently 28 Aussie companies well diversified earning you 9% four dividends per year with DRIP operating, no risk with this one at current prices
Great a company that's not making money bought right at the peak XRO. They also have NAB as a much larger holding currently under the pump.
There is no evidence that this fund manager has added any value to unitholders. The SP of BRM has more or less been in steady decline for the last 5 years. I suggest anyone contemplating this company should bring up a five year share price chart and have a good long look. A picture speaks a thousand words ! 71 cents 5 years ago, now 59 cents. What Snoopy and Balance have suggested is how it really is. The dividend yield is artificially propped up through repayment of capital.
This will always trade at a LARGE discount to asset backing because it has incompetent heavily overpaid management who have dug themselves into an intransigent position from which shareholders can't extricate themselves without selling on market.

[Joshuatree]

Now have Xero in their stable a good share for newcomers to investing currently 28 Aussie companies well diversified earning you 9% four dividends per year with DRIP operating, no risk with this one at current prices

Certainly at THIS price its great yield play as are MLN marlin and kingfish KFL, take your pick. Xero has recovered Roger and looks to be on another up cycle, NAB will recover as the big 4 always do.

[winner69]

Interesting BRM hasn't traded at its current discount to NAV for zonks

Currently discount is 15% v the long term average of 8.8%

Believe it or not gurus who trade these sort of funds have a thing called a z-stat to see who valuations are going ....and on that measure BRM is a SCREAMING BUY at the moment

Historical chart below

Discount to NAV generally represents the NPV of future management fees. With BRM excessive fees say 6% to 7% discount seems fair ....which means that the market seldom rewards BRM a premium (over this) for their superior stock pricking skills

Then again this time it may be different ...a SCREAMING BUY .....pick up the difference to NAV and what it may go up by as well as the divie and maybe a few bonuses

[Beagle]

I would argue that if one looks at their fees of 1.25% per annum, (going off memory) and capitalize that by 10 then a discount to NAV should be 12.5% if you think they can match the Australian indices, more if you think they can't. I would therefore argue this is not a buy and feel sorry for investors silly enough to be duped into thinking the dividend yield is sustainable without ongoing capital erosion.
This is a classic value trap in my opinion.

[Balance]

I would argue that if one looks at their fees of 1.25% per annum, (going off memory) and capitalize that by 10 then a discount to NAV should be 12.5% if you think they can match the Australian indices, more if you think they can't. I would therefore argue this is not a buy and feel sorry for investors silly enough to be duped into thinking the dividend yield is sustainable without ongoing capital erosion.
This is a classic value trap in my opinion.

BRM underperformed (to put it mildly) the Oz market by 18.25% in the last 2 years.

In the last two years, S&P/ASX 200 up 14.2% (5351 to 6110), while BRM is down 19% (73c to 59c) & total dividends paid totalled 10.77 over the 2 years (14.75%).

Let's not go back to 2006 when BRM was issued for $1.00!

Only mugs invest in this kind of fund.

[Beagle]

BRM underperformed (to put it mildly) the Oz market by 18.25% in the last 2 years.

In the last two years, S&P/ASX 200 up 14.2% (5351 to 6110), while BRM is down 19% (73c to 59c) & total dividends paid totalled 10.77 over the 2 years (14.75%).

Let's not go back to 2006 when BRM was issued for $1.00!

Only mugs invest in this kind of fund.

That's absolutely shocking isn't it ! Woefully consistent underperformance.

[777]

Funny that all this negativity posted has caused the share price to rise. Keep it going will you?

[winner69]

Funny that all this negativity posted has caused the share price to rise. Keep it going will you?

Must be that z-stat alert .......SCREAMING BUY

[winner69]

One of BRM charts they use

The TSR line looks pretty good

[Balance]

Excellent - sp moving up gives those who see the light the opportunity to get out at a better price.

Put the $$$ into something which can put on 100%.

[Balance]

Excellent - sp moving up gives those who see the light the opportunity to get out at a better price.

Put the $$$ into something which can put on 100%.

Instead of feeding the unethical fee guzzling fat cats masquerading as fund managers.

[waikare]

BRM underperformed (to put it mildly) the Oz market by 18.25% in the last 2 years.

In the last two years, S&P/ASX 200 up 14.2% (5351 to 6110), while BRM is down 19% (73c to 59c) & total dividends paid totalled 10.77 over the 2 years (14.75%).

Let's not go back to 2006 when BRM was issued for $1.00!

Only mugs invest in this kind of fund.

I guess I must fit into this category of mug investor, (in the particular investment) brought in in at $0.62 April 2016, today closed at $0.60, for some time I have been waiting for the opportunity to sell up.

[Joshuatree]

You will have got some great divs waikare, how do they stack up over that time, what 8% div for an 0.3% loss on the share price atpit? Its like a bond but much better.

[Beagle]

Instead of feeding the unethical fee guzzling fat cats masquerading as fund managers.

Exactly. If one takes a medium term 5 year view the SP has declined from 71 cents to 60 cents so investors have suffered a capital loss of 15.5% or 3.1% per year.
Take that off their 8% per annum in dividends and the real dividend return is just 4.9% per annum.
If people are happy with that then all I can say is they're easily pleased.

[Joshuatree]

One thing for sure it aint an investment grade stock.

[JayRiggs]

I've invested in BRM a few times over the years.
Mid 2014, I bought at 61c. In 1 year, collected 5.55c of dividends, reinvested in the DRP. Sold mid 2015 at 70c.
About a 25%pa return after brokerage, so not too bad!

I was a bit lucky with the timing. You can certainly do much worse elsewhere.

[Not too Flash]

BRM underperformed (to put it mildly) the Oz market by 18.25% in the last 2 years.

In the last two years, S&P/ASX 200 up 14.2% (5351 to 6110), while BRM is down 19% (73c to 59c) & total dividends paid totalled 10.77 over the 2 years (14.75%).

Let's not go back to 2006 when BRM was issued for $1.00!

Only mugs invest in this kind of fund.

What a pity you can't give a "balanced" view - not sure how you got the price of 73c 2 years ago
Try recalculating your figures ....

[Balance]

What a pity you can't give a "balanced" view - not sure how you got the price of 73c 2 years ago
Try recalculating your figures ....

I use Yahoo price chart.

No need to recalculate my figures.

[Balance]

I can show you a way to get a much better yield from your bank term deposit.

1/ Invest $10,000 at 2% pa
2/ At the end of the year you have $200 in interest due (yay).
3/ Pull out $1,000 of your capital and just reinvest $9,000 for the next year.
4/ The yield on your $10,000 one year investment becomes:

($1,000 + $200) / $10,000 = 12% !!!!!!

Absolutely fantastic, and here is the rub. BANK STAFF WILL NEVER TELL YOU THAT YOU CAN DO THIS! I call it 'Doing a Carmel'

SNOOPY

Worth reposting for those who want to know the Fisher Fund trick.

The listed Fisher funds are a disgrace to the industry and an affront to basic human decency - they are all about farming fees, locking in unitholders with little option but to keep paying fees despite bad performances - in one word, GREED.

[777]

I knew it was Autumn. The Carmel hater has come out of hibernation.

[Balance]

I knew it was Autumn. The Carmel hater has come out of hibernation.

And the cheerleader has come out to suck in yet more victims.

[Balance]

https://www.reuters.com/article/us-berkshire-hatha-buffett-indexfunds/warren-buffett-rails-against-fee-hungry-wall-street-managers-idUSKBN1640F1

“There’s been far, far, far more money made by people in Wall Street through salesmanship abilities than through investment abilities,” he said. “There are a few people out there that are going to have an outstanding investment record. But very few of them. And the people you pay to help identify them don’t know how to identify them. They do know how to sell you.”

As true as it is ever going to get - BRM, KFL and MLN are all about salesmanship, not about performances.

The salesmanship is about getting brokers, consultants, planners and small time investors to believe in the myth of diversifying with 'experienced' and 'specialist' investment managers - not about the fact that the performance of BRM sucks like a rotten lemon laying on manure. And it certainly is not about the lopsided management fee structure - heads they win, tails you lose.

[Beagle]

https://www.barramundi.co.nz/investor-centre/portfolio-performance/

They've been doing better lately and performance over the last year has exceeded the relevant benchmark so the above comments from Balance last year have proved to be incorrect.
Big jump in NTA in the last week of more than 3.3%. Warrants look very cheap to me given their exercise price adjusted for dividends paid since issue and NTA of over 70 cents per share. Disclosure: Own the warrants exercisable on 25 October 2019. Warrants are so cheap they effectively give you 5 months option to exercise which could be quite valuable if the market does well. Disc: On the bid for some more at 1.5 cents per warrant, (please wait till I have finished acquiring some more before trumping my bid).

[mfd]

https://www.barramundi.co.nz/investor-centre/portfolio-performance/

They've been doing better lately and performance over the last year has exceeded the relevant benchmark so the above comments from Balance last year have proved to be incorrect.
Big jump in NTA in the last week of more than 3.3%. Warrants look very cheap to me given their exercise price adjusted for dividends paid since issue and NTA of over 70 cents per share. Disclosure: Own the warrants exercisable on 25 October 2019. Warrants are so cheap they effectively give you 5 months option to exercise which could be quite valuable if the market does well. Disc: On the bid for some more at 1.5 cents per warrant, (please wait till I have finished acquiring some more before trumping my bid).

If the warrant holders get a bargain, who pays for it? The regular unit holders? Often the same people of course, but it must be exciting to see which version of them wins.

[777]

The holders that take the hit are those that sell the warrants and those that don't sell and also don't take them up.

A lot of holders have small number of warrants and the cost of brokerage does not make it worth while selling them and they don't want them so let them lapse.

In theory the head share should adjust down for the issue of new shares. Whether that is noticeable remains to be seen.

[SilverBack]

I sold out of BRM at 62c a year ago after buying in at the same price 6 years previously. Today they sold between 62c and 63c. Zilch increase over 7 years in other words. Of course the dividends were good and my overall gain with dividends over the 6 years was 44%. The actual annual return was OK but not wonderful but only when compared to a term deposit. I have not bought in again, preferring to invest in the ASX directly and obtain a capital gain along with a few dividends. One of my ASX stocks has a yield of 7.3% and has produced a capital gain of 7.9% over the past 18 months. Not a wonderful gain but it is a defensive stock. Another blue chip ASX company gives me a yield of 6.0% and has provided a capital gain of 28.9% over 15 months.
In summary, if you do not want to actively invest in ASX then BRM is OK as a fund and gives a reasonable return (for a stock market fund) but if you are an active investor then you can do better. I think there is a place for BRM in terms of diversification, even if you are an active investor, especially if you are not active on the ASX. Nevertheless, keep in mind that you are exposed to a capital loss if the overall ASX market has a downturn.

[Beagle]

Appreciate your post. My calculations show if one invested in $100,000 of Barramundi now at 63 cents with an NTA of 70 cents per share, (buying at a 10% discount to NTA) and the NTA stayed exactly at that level for 6 years and Barramundi paid their 8% PIE tax free dividend per annum quarterly and the investor took shares in lieu of dividend at the 3% discount each quarter and compounded this four times a year for 6 years then at the end they would hold $172,000 worth of BRM shares, all without tax implications and all this assumes the fund achieves enough return each year just to pay the management fees and the dividends. ASX returns have been poor over the last five years for sure.

[Joshuatree]

I'm normally not a fan of companies that pay divs out of capital. However, as I argued some time ago on the MLN thread, in this case I find it quite useful (I hold MLN, not BRM).

I don't consider BRM or MLN as a share in itself, but as a managed fund. In my view, managed funds are a shortcut for the bits of your portfolio you don't want to spend a lot of time on and are willing to pay someone else to spend the time. For those that invest in managed funds via some kind of platform or adviser, using MLN may be no more efficient than any of the other funds available. However, for those who don't want to pay for an adviser or platform on top of their management fee, MLN (and BRM/KFL) is easy to buy and sell on-line and offers the tax advantages of a PIE structure. Furthermore, for the large proportion of investors that draw down against their portfolio, a regular, reliable high dividend yield is ideal. Yes, it may come out of capital to some extent when annual returns are below the 8% returned but this SHOULD over time become income-smoothing rather than depleting - having listed at the peak doesn't help.

Try keeping a semi-consistent income while having your share portfolio tied up in the usual selection of low/no dividend funds and you would have to make quarterly sales of small parcels to get the same cashflow - a move which is probably both time consuming, impractical and possibly expensive.

Overall, I think there is a niche for this model. I'll be disappointed if Fisher Funds are ever influenced by the critics to drop the dividend policy in exchange for a lower or more fluctuating model. If you don't need the dividend for income, take the DRP and get the re-investment growth in your holding that way.

The one set of complaints I can relate to is whether their share-picking ability is any better than average. Though in the short term, enough discount to NAV can cover a few mistakes...

Just refreshing lizards usual commonsense post. Have held BRM for sometime for the above reasons.

[Beagle]

Just refreshing lizards usual commonsense post. Have held BRM for sometime for the above reasons.
Thanks for reposting. A lot of high quality posters have been lost to ST over the years for a range of reasons which is a real shame.

[Beagle]

Warrant exercise date is approaching and I have backed up the truck. NTA is 72.3 cps as at last Thursday.
Warrant holders buying at 3 cps pay an exercise price of 59 cps on 25/10/19 are effectively buying a well diversified portfolio of Australia equities for 62 cps with an NTA of 72.3cps, a 14.25% discount to NTA.

Recent estimates I have read have the Australia market on a forward PE of just over 17 v N.Z. at around 29 so there's more value in their market.

Net divvies going forward at 8% (PIE so tax free), will be boosted by the discount to NTA one is getting 8 / 0.8575 = 9.33% net. For taxpayers on a 33% tax rate this represents an effective gross yield of 9.33 / 0.67 = 13.93%. Those electing to get their dividends through reinvestment in further units enjoy a 3% discount so its possible to crank this yield up by another 3% to 13.93 / 0.97 = 14.36% Gross effective yield.

Apart from this exceptional effective running yield the average discount these trade at has been about 9% according to the Kingfish group so there's a quick delta of about 5% for those looking for a fast buck.

I am happy to settle in for the long haul getting a 14.36% effective gross yield...I might retire sooner.

Those that took the trouble to come along to our Auckland gettogether Sunday week ago got a headstart on this tip just over a week ago.

[Joshuatree]

Where do you get 59c from Beagle:confused:

Barramundi Limited 25/10/2019 $0.64 Warrants

[Joshuatree]

Ok found it. thanks for that, it would have passed me by.

Barramundi Limited wishes to advise all Barramundi Warrant Holders (BRMWE)
that the final exercise price of the Barramundi warrants is $0.59.

[Beagle]

Where do you get 59c from Beagle:confused:

Barramundi Limited 25/10/2019 $0.64 Warrants



As you've discovered, the Warrant exercise price is adjusted for dividends paid on the ordinary shares during the tenure of the warrants.
Pretty cool yield don't you think ?
NB Australian market as a whole is up ~ 1% since NTA was last calculated at close of business last Wednesday so numbers are slightly better than I posted but I acknowledge NTA will be affected to some extent by warrant exercise itself. One warrant for every 4 shares and nobody knows what percentage of warrant holders will exercise them or not so its impossible to accurately calculate the extent of the minor NTA dilution through warrant exercise. My best guess is half warrant holders exercise them reducing NTA about 1.6 cps.

[Beagle]

Warrant exercise date is approaching and I have backed up the truck. NTA is 72.3 cps as at last Thursday.
Warrant holders buying at 3 cps pay an exercise price of 59 cps on 25/10/19 are effectively buying a well diversified portfolio of Australia equities for 62 cps with an NTA of 72.3cps, a 14.25% discount to NTA.

Recent estimates I have read have the Australia market on a forward PE of just over 17 v N.Z. at around 29 so there's more value in their market.

Net divvies going forward at 8% (PIE so tax free), will be boosted by the discount to NTA one is getting 8 / 0.8575 = 9.33% net. For taxpayers on a 33% tax rate this represents an effective gross yield of 9.33 / 0.67 = 13.93%. Those electing to get their dividends through reinvestment in further units enjoy a 3% discount so its possible to crank this yield up by another 3% to 13.93 / 0.97 = 14.36% Gross effective yield.

Apart from this remarkable effective running yield the average discount these trade at has been about 9% according to the Kingfish group so there's a quick delta of about 5% for those looking for a fast buck.

I am happy to settle in for the long haul getting a 14.36% effective gross yield...I might retire sooner.

Those that took the trouble to come along to our Auckland gettogether Sunday week ago got a headstart on this tip just over a week ago.

Just adding a couple more thoughts to this.
Been over 2 years since TSB Community Trust took ownership of the Kingfish group and appointed new investment managers for each of the divisions, Barrmundi, Marlin and Kingfish.
All offer the same PIE and exceptional yield structure so apart from the great yield how have they performed relative to each other, ? (easy enough to compare performance to the market with their monthly results announcements)
Last 2 years Kingfish yield plus 7.9% capital appreciation, (total capital appreciation not percent per annum)
Marlin, same yield plus 9.4% share price accretion
Barramundi 13% share price appreciation plus yield.

Forward PE's for the respective markets based on various articles I have read appear to be approximately
N.Z. approx. 29
USA approx. 18
Australia approx. 17.

Current discount to NTA as at last Thursday
Kingfish 5%
Marlin 8%
Barramundi 13% (Based on a share price of 63 cents valuing the warrants at 4 cents).

Of the three sister companies I think the best value and prospects lie with Barramundi at present.

[stones]

Just adding a couple more thoughts to this.
Been over 2 years since TSB Community Trust took ownership of the Kingfish group and appointed new investment managers for each of the divisions, Barrmundi, Marlin and Kingfish.
All offer the same PIE and exceptional yield structure so apart from the great yield how have they performed relative to each other, ? (easy enough to compare performance to the market with their monthly results announcements)
Last 2 years Kingfish yield plus 7.9% capital appreciation, (total capital appreciation not percent per annum)
Marlin, same yield plus 9.4% share price accretion
Barramundi 13% share price appreciation plus yield.

Forward PE's for the respective markets based on various articles I have read appear to be approximately
N.Z. approx. 29
USA approx. 18
Australia approx. 17.

Current discount to NTA as at last Thursday
Kingfish 5%
Marlin 8%
Barramundi 13% (Based on a share price of 63 cents valuing the warrants at 4 cents).

Of the three sister companies I think the best value and prospects lie with Barramundi at present.


Thanks for that. Certainly appreciate your professional insight

[mshierlaw]

Net divvies going forward at 8% (PIE so tax free), will be boosted by the discount to NTA one is getting 8 / 0.8575 = 9.33% net. For taxpayers on a 33% tax rate this represents an effective gross yield of 9.33 / 0.67 = 13.93%.



You have lost me here. How does a PIE fund make for a tax free dividend?

I'm getting my first dividend statement shortly, so hoping you are correct.

[Beagle]

You have lost me here. How does a PIE fund make for a tax free dividend?

I'm getting my first dividend statement shortly, so hoping you are correct.

https://barramundi.co.nz/investor-centre/capital-management-strategies/

From their website -
Barramundi has a clear advantage over many other listed entities through their Portfolio Investment Entity (PIE) tax status. As a listed PIE, Barramundi dividends will be tax-free to New Zealand resident shareholders. Refer to ‘What does PIE mean?’ under the FAQ section of the website for further information.

PIE Regime
Barramundi is a registered Portfolio Investment Entity (PIE) for tax purposes. The PIE regime has significant advantages for shareholders:
· New Zealand tax resident investors:
Natural person Shareholders or Trustees do not have to include dividend income from Barramundi in their tax return (although they can elect to include such dividends, which may be a benefit if the taxpayer is on a marginal tax rate that is lower than 28% and wants to claim imputation credits attached at the higher rate of 28%).
Other shareholders only have to include fully imputed dividends as assessable income, in which case the imputation credits should usually fully offset any tax liability. To the extent that the dividend is not fully imputed, the dividend should be treated as excluded income (i.e. not taxable).
No Resident Withholding Tax is withheld on distributions to New Zealand resident investors.
· Non-resident investors:
To the extent that a non-resident investor receives a dividend that is not fully imputed, the dividend should not have Non Resident Withholding Tax (NRWT) deducted in New Zealand.
NRWT may be withheld on fully imputed dividends (unless an applicable double tax treaty provides otherwise). Where this is the case, the investor will receive an additional supplementary dividend. This should compensate the investor for the amount of NRWT withheld on the dividend.
The above refers to New Zealand tax only, the tax position of each investor will need to also be considered in their relevant jurisdiction.
· Imputation credits will be attached to dividends to the fullest extent possible.
· There is no tax on the distribution of capital gains to shareholders.
"Emphasis added"

Plenty more information at www.barramundi.co.nz
Enjoy your dividend :)

Barramundi is also liable for tax under the FIF regime (Foreign Investor Fund regime) but as I understand it a large part of their portfolio is exempt under the exclusions for Australian companies incorporated within the rules. N.Z. shareholders do not have to worry about the partial application of FIF rules with this company, all that is taken care of by the company.

[tim23]

Thanks for that. Certainly appreciate your professional insight

Interesting MLN should trade closest to NTA as they have such tiny shareholdings in huge companies so if selling blocks can sell at market price whereas KFL selling large block of NZ shares may have to discount them.

[mshierlaw]

https://barramundi.co.nz/investor-centre/capital-management-strategies/

From their website -
Barramundi has a clear advantage over many other listed entities through their Portfolio Investment Entity (PIE) tax status. As a listed PIE, Barramundi dividends will be tax-free to New Zealand resident shareholders. Refer to ‘What does PIE mean?’ under the FAQ section of the website for further information.

PIE Regime
Barramundi is a registered Portfolio Investment Entity (PIE) for tax purposes. The PIE regime has significant advantages for shareholders:
· New Zealand tax resident investors:
Natural person Shareholders or Trustees do not have to include dividend income from Barramundi in their tax return (although they can elect to include such dividends, which may be a benefit if the taxpayer is on a marginal tax rate that is lower than 28% and wants to claim imputation credits attached at the higher rate of 28%).
Other shareholders only have to include fully imputed dividends as assessable income, in which case the imputation credits should usually fully offset any tax liability. To the extent that the dividend is not fully imputed, the dividend should be treated as excluded income (i.e. not taxable).
No Resident Withholding Tax is withheld on distributions to New Zealand resident investors.
· Non-resident investors:
To the extent that a non-resident investor receives a dividend that is not fully imputed, the dividend should not have Non Resident Withholding Tax (NRWT) deducted in New Zealand.
NRWT may be withheld on fully imputed dividends (unless an applicable double tax treaty provides otherwise). Where this is the case, the investor will receive an additional supplementary dividend. This should compensate the investor for the amount of NRWT withheld on the dividend.
The above refers to New Zealand tax only, the tax position of each investor will need to also be considered in their relevant jurisdiction.
· Imputation credits will be attached to dividends to the fullest extent possible.
· There is no tax on the distribution of capital gains to shareholders.
"Emphasis added"

Plenty more information at www.barramundi.co.nz (http://www.barramundi.co.nz)
Enjoy your dividend :)

Barramundi is also liable for tax under the FIF regime (Foreign Investor Fund regime) but as I understand it a large part of their portfolio is exempt under the exclusions for Australian companies incorporated within the rules. N.Z. shareholders do not have to worry about the partial application of FIF rules with this company, all that is taken care of by the company.

Many thanks Beagle.

I have learnt something today. BUY more ......... then get some tax advise.

[Beagle]

LOL I prefer to think about the tax situation before investing. Beagle's don't like sharing their dividend food with anyone, especially the Government :)

[Beagle]

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/BRM/342504/309524.pdf
Annual meeting presentation from Friday. I attended and was satisfied with the presentation. Fund performance more or less matched the index last year. FY20 has started well for the company with the first quarter's return at about 7.6% from memory well over double the market return for the quarter ended 30 September of about 3.3%.
Chief investment officer is confident they are, (to quote an overused phrase), well positioned for the year ahead. They put on a nice lunch afterwards.

[Beagle]

Couta is proud of me because I "did a Couta" with these when I exercised my warrants today.:t_up:

[Cricketfan]

Great a company that's not making money bought right at the peak XRO. They also have NAB as a much larger holding currently under the pump.
There is no evidence that this fund manager has added any value to unitholders. The SP of BRM has more or less been in steady decline for the last 5 years. I suggest anyone contemplating this company should bring up a five year share price chart and have a good long look. A picture speaks a thousand words ! 71 cents 5 years ago, now 59 cents. What Snoopy and Balance have suggested is how it really is. The dividend yield is artificially propped up through repayment of capital.
This will always trade at a LARGE discount to asset backing because it has incompetent heavily overpaid management who have dug themselves into an intransigent position from which shareholders can't extricate themselves without selling on market.

I was reading some older posts on BRM after you mentioned it on the Power Shares thread. Has the business really improved a lot since the above comments from last year?

[Beagle]

A lot has changed since that post of nearly 18 months ago and yes the new investment team is performing very satisfactorily, see here https://www.barramundi.co.nz/assets/Investor-Centre/Barramundi-Newsletter-September-2019.pdf
At the time of the post you referenced, May 2018, their chief investment officer was Frank Jasper, see here https://www.barramundi.co.nz/assets/Investor-Centre/Barramundi-Newsletter-March-2018.pdf He was a very poor performer.
I am sure you will have noticed my subsequent comments about the effective gross yield.

[Cricketfan]

A lot has changed since that post of nearly 18 months ago and yes the new investment team is performing very satisfactorily, see here https://www.barramundi.co.nz/assets/Investor-Centre/Barramundi-Newsletter-September-2019.pdf
At the time of the post you referenced, May 2018, their chief investment officer was Frank Jasper, see here https://www.barramundi.co.nz/assets/Investor-Centre/Barramundi-Newsletter-March-2018.pdf He was a very poor performer.
I am sure you will have noticed my subsequent comments about the effective gross yield.

Thanks for that. 18 months seems like a very short timeframe to judge investment performance though, especially after many years of poor performance. I guess time will tell whether they can sustain that.

[Beagle]

Thanks for that. 18 months seems like a very short timeframe to judge investment performance though, especially after many years of poor performance. I guess time will tell whether they can sustain that.

Fair comment but their performance has been good and most recent performance (Sept quarter) they significantly outperformed the Australian market. I have seen data suggesting the forward PE of the Australian market is just 17 vs the NZX of about 28. Barramundi adds a lot of diversity to my NZX centric portfolio. Well worth noting that ownership of the Kingfish group changed hands just under 3 years ago too. Like all things about the future, time will tell.

[Beagle]

Another big week for the Barramundi portfolio with NTA up 1.7% despite the big jump of the Kiwi dollar against the Aussie dollar yesterday, (caused by the surprise RNBN decision). If it weren't for that the large currency change yesterday, (which may not be enduring), their portfolio would have jumped about 3% in $Kiwi term last week.

Discounts to NTA at present
BRM 6%
MLN 4%
KFL 2%

Best bang for buck of the Kingfish group remains Barramundi at present. All funds pay out 2% per quarter tax free as they are a PIE (based on NTA).
Next quarterly dividend, late December.

Disc: Large holding in Barramundi and signed up to the dividend reinvestment scheme which gives you shares in lieu of dividend at a 3% discount to market value.
Also hold Marlin Warrants for exercise 6 November 2020.

[stones]

Another big week for the Barramundi portfolio with NTA up 1.7% despite the big jump of the Kiwi dollar against the Aussie dollar yesterday, (caused by the surprise RNBN decision). If it weren't for that the large currency change yesterday, (which may not be enduring), their portfolio would have jumped about 3% in $Kiwi term last week.

Discounts to NTA at present
BRM 6%
MLN 4%
KFL 2%

Best bang for buck of the Kingfish group remains Barramundi at present. All funds pay out 2% per quarter tax free as they are a PIE (based on NTA).
Next quarterly dividend, late December.

Disc: Large holding in Barramundi and signed up to the dividend reinvestment scheme which gives you shares in lieu of dividend at a 3% discount to market value.
Also hold Marlin Warrants for exercise 6 November 2020.
Well done and no doubt you aren't finished yet. Have skin in all three as well and loving every moment of the ride.

[Beagle]

Thanks and yes I am on the prowl for more Marlin warrants.

[winner69]

Another big week for the Barramundi portfolio with NTA up 1.7% despite the big jump of the Kiwi dollar against the Aussie dollar yesterday, (caused by the surprise RNBN decision). If it weren't for that the large currency change yesterday, (which may not be enduring), their portfolio would have jumped about 3% in $Kiwi term last week.

Discounts to NTA at present
BRM 6%
MLN 4%
KFL 2%

Best bang for buck of the Kingfish group remains Barramundi at present. All funds pay out 2% per quarter tax free as they are a PIE (based on NTA).
Next quarterly dividend, late December.

Disc: Large holding in Barramundi and signed up to the dividend reinvestment scheme which gives you shares in lieu of dividend at a 3% discount to market value.
Also hold Marlin Warrants for exercise 6 November 2020.

KFL at 2% discount to NAV

Has KFL been this ‘expensive’ before

[Beagle]

Had a quick look at the last 3 years at this time of year. Announcement 9/11/16 they were just 1% discount to NTA. Probably traded at par at some stage and I know Barramundi has too but you are quite right to observe that KFL's current discount to NTA is well below average meaning on a relative basis it offers slightly inferior value to others in the group. This group one of just a few that pay a handsome dividend right around Christmas time. Maybe that has something to do with the lower than normal discount ?

[winner69]

Had a quick look at the last 3 years at this time of year. Announcement 9/11/16 they were just 1% discount to NTA. Probably traded at par at some stage and I know Barramundi has too but you are quite right to observe that KFL's current discount to NTA is well below average meaning on a relative basis it offers slightly inferior value to others in the group. This group one of just a few that pay a handsome dividend right around Christmas time. Maybe that has something to do with the lower than normal discount ?

As long as it’s not you and others on this site buying up big time.:):ohmy::cool::t_up:

[Beagle]

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/BRM/344528/312140.pdf
Latest monthly newsletter is out. I note that BRM have significantly exceeded the benchmark Australian index for the last month, 3 months and year :t_up: and exceeded it for the last 3 years as well, only some of which the current manager has been on board. The current manager who came on board in early 2018 has been doing extremely well.

Happy holder and I have a large position which I intend to hold long term for tax free PIE dividend income. Final dividend for the year has been declared yesterday and is increased to 1.44 cps payable on 19 December just in time for Christmas...although I have fully subscribed to the dividend reinvestment program, (very good 3% discount to 5 day average ex divvy VWAP), so will make do with my HLG divvy covering my Xmas needs :)

Share price at a multi year high at 69 cents and fully deserves to be there in my opinion. Those that followed this dog who clearly articulated the value of buying the warrants and exercising them are up 11-12%, (depending upon what price was paid for the warrants) in less than 3 weeks. Not too shabby for buying into a well diversified managed fund !

[Joshuatree]

Been good to me for many years at a 62c entry, once again thanks to Lizard.:)

[justakiwi]

Just bought my first BRM today. Completes my little trio (KFL, MLN and BRM). Very happy with KFL so hoping the other two do as well for me. Now I just need to win lotto so I can buy many, many more shares in all three (dreams are free) :)

[Beagle]

Welcome on board justakiwi.
I topped up with even more Marlin warrants today and took a deep breath and bought back some Kingfish shares so have embraced the winning trifecta myself :D

[stones]

Welcome on board justakiwi.
I topped up with even more Marlin warrants today and took a deep breath and bought back some Kingfish shares so have embraced the winning trifecta myself :D


Well done join the club. Since Ive disposed of all other shares these three are stress free in comparison and you have an all-round interest in a sense.

[Beagle]

Well done join the club. Since Ive disposed of all other shares these three are stress free in comparison and you have an all-round interest in a sense.

Thanks. Yes, as I approach retirement the stress free, extremely well diversified nature of these is noted, as is the fantastic PIE, tax free yield.

[mshierlaw]

With share price at 69c what are your thoughts on DRP participation this round, too pricey atm?

[justakiwi]

I’m no expert but DRP share price will be 3% discount to market price so a great opportunity to acquire additional shares cheaper than you otherwise could. Guess it depends on how many shares you have and whether you have a specific reason/need to take the divi in cash instead.


With share price at 69c what are your thoughts on DRP participation this round, too pricey atm?

[Beagle]

Last reported NTA is 72.73 cents so at 69 the shares are currently trading at just over a 5.1% discount to last Wednesday's asset backing.
DRP is based on a 3% discount to 5 day weighted average VWAP so that indicates a 8.1% discount to NTA at this stage.
I am more than happy with that and am fully subscribed to the DRIP but it is possibly worth noting that the next dividend is payable on 19 December so its perfectly understandable that some people will want to enjoy their cash dividend for Christmas and holiday spending:)

[Beagle]

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/BRM/346076/314083.pdf
Going very well indeed. Adjusted Net asset value (NAV), the most important measure of financial performance for shareholders has beaten the relevant index by any measure you care to use, (the last month, 3 months,year, three years or five years).

Very pleased to see they have exited their Aristocrat position for ESG reasons, something shareholders were very vocal about at the recent annual meeting. Good that the investment manager heard shareholders message and acted upon it.

Investment team is now performing so well no discount to NTA is warranted. Very happy holder.

[Beagle]

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/BRM/347409/315574.pdf

BRM reports gross performance for the year of a fantastic 36%, a whopping 13% higher than the Australian benchmark index of 23%
What a cracker result !! I was very impressed with their lead investment manager when I attended the Annual meeting in October 2019.

I expect current NTA to be announced tomorrow to be slightly north of 75 cents and see no valid reason why the shares should trade at any discount to NTA i.e. the investment team are well and truly earning their fair and reasonable fees.

Disc: Happy holder ~ 20% portfolio allocation.

[justakiwi]

KFL’s was similarly good :)


http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/BRM/347409/315574.pdf

BRM reports gross performance for the year of a fantastic 36%, a whopping 13% higher than the Australian benchmark index of 23%
What a cracker result !! I was very impressed with their lead investment manager when I attended the Annual meeting in October 2019.

I expect current NTA to be announced tomorrow to be slightly north of 75 cents and see no valid reason why the shares should trade at any discount to NTA i.e. the investment team are well and truly earning their fair and reasonable fees.

[Beagle]

KFL’s was similarly good :)

Yes 8% above market performance ! Honestly for the extra and quite significant portfolio diversification I get from Barramundi, Kingfish and Marlin and the great structure of these companies with regular warrant issues, and 8% tax free PIE distributions, for the fair and modest fees they charge I am a very very happy camper and more than happy to let them take the strain of managing part of my portfolio for me. If they keep going well I might let them manage up to 50% of my portfolio, buy a boat again and go fishing for real Kingfish and Marlin :)

[Joshuatree]

Thanks , so ​Eaasy​ a stock to set and forget about atpit for me.

[TideMan]

What effect will the bushfires have on this stock?
I notice the SP has levelled off over the last few weeks.

[Beagle]

Good question and something I have been pondering at quite some length. There will unquestionably be some temporary effect on retail and tourism (sectors BRM is not really exposed too in any major way).
As the rebuild gets underway with the expenditure of billions of dollars on new construction I expect the effect to reverse.
I note significant rain last weekend and more forecast for the coming weekend. Well worth noting that the average forward PE for the Aust market is more than 10 lower than for N.Z. The trade deal is a very good thing for economic growth and China is a large importer of Australian base resources.

Worth noting that the Australian market is currently trading 2% higher than it was last Wednesday when last NTA was calculated at 74.4 cents so I expect tomorrow's announcement of NTA as at close of business today to be about 76 cents per share. Even at 73 cents as at the time of this updated post it trades at about a ~ 4% discount to my estimated current NTA. Going off performance in the last couple of years I see no valid reason for any discount at all !

All things considered I am happy to maintain my significant ~ 20% portfolio allocation to BRM for the foreseeable future.
For what its worth this is my largest single share portfolio allocation, albeit into a fund that's very well diversified across various sectors in Australia and performing exceptionally well.

I don't have the time or inclination to bother with individual share picking in Australia and why would you bother when these guys do all the hard work and outperform the index by a whopping 13% !
Even though I'm usually very happy to back myself to beat the NZX50, I wouldn't back myself to beat the Australian index by 13%.

[peat]

surprised to see these guys doing this

we increased our weightings in the Australian banks, ANZ, CBA, NAB and Westpac in the middle of March

[Snow Leopard]

Looking clearly through the impenetrable mists of future time and playing the long game.

Disc: them, not me!

[Beagle]

surprised to see these guys doing this

we increased our weightings in the Australian banks, ANZ, CBA, NAB and Westpac in the middle of March

Banks don't do well in a recession but I guess the question is whether a full blown recession is already priced in ?

[Grimy]

If they bought in mid-March, it could have been at a great price (in the long term scheme of things). And Governments certainly seem keen to support the banks, so could be an astute purchase.

[44wishlists]

Banks don't do well in a recession but I guess the question is whether a full blown recession is already priced in ?

I think when ANZ reports next week, we will have a clear picture of the financial sector in ASX. But I m not too optimisic abut it.

[SPC]

Looks like BRMs fund manager jumped the gun... they'll (we holders) will be annoyed about this!. Shouldn't he loading up anything in this market. Twits

[justakiwi]

Why not? Everyone else is. I have faith in the management team and see no reason for that to change currently.


Looks like BRMs fund manager jumped the gun... they'll (we holders) will be annoyed about this!. Shouldn't he loading up anything in this market. Twits

[SPC]

Well my friend I know BRM and it's two siblings VERY well. Bought BRM at IPO in 2006...14 yrs ago at $1. Current nta around 57c...and about to fall further in a week?..I recall you joined the BRM team last Nov. To keep ahead you've had exercise multiple issues of diluting warrants and reinvest all the divvies to give effect to the famous TSR.
But not quite. Skipping the DRP last dec I took the usual 'capital return' aka divy and bought them at 46c a week or two back. You'll get wise in time too.

[PennyPicker]

For a bit more on this, see an interview with Robbie Urquhart who manages the Australian share portfolios (https://fisherfunds.co.nz/newsroom/fisher-funds/appointment-of-australian-portfolio-manager), posted 7 April (Banks, property & Australia - chatting to Australian Portfolio Manager Robbie Urquhart (https://www.youtube.com/watch?v=pzzicOAu_54))

The interviewer (Frank Jasper, Fisher Funds CIO) specifically asks about the increased position in AU banks at the 5:00 minute mark.

They also talk about an increase in REA at the 10:00 minute mark.

[macduffy]

Thanks, PP, an interesting interview. I have taken the liberty of referring your post to readers of the Bank Stocks thread.

:)

[peat]

yes it was a good interview

looking at all the banks charts there is great similarity with the falls occurring during March but not reaching the bottom (so far?) until later in the month.
So if they bought Mid march then they will still be underwater on those. So they did jump the gun a bit probably. He explained their reasoning in the video and it was acceptable.
Very young but spoke well
Did anyone notice he was very very recently appointed to the role. It would appear having faith in management at this point is true faith.

I'm tempted to start off with Barramundi with my Aussie portfolio (starting soon) but that would kind of defeat the purpose of building a portfolio. I guess I could use it to smooth out my returns and keep me close to the index.
But that said if Aussie dollar keeps going up I may decide to bring it all back!

[SPC]

BRM under Jasper in the early days put it's focus on small cap growth punts. It didn't work out so more recent gurus have gone main stream on cos that make money. Like banks. But this is not without risks. Ive owned ANZ of and on for years. Bailed at $29 3 yrs ago. In recent times ANZ share price has sagged after each divy announcement, pre xdiv and never recovered. Theoretically it should be cheaper soon based on history?. Hence my observation.

[SPC]

Oh and just a point on Pennypickers appraisal of fund manager vids..maybe also worth watching Jonathan Windust of Milford explaining why they OFF loaded Au banks in March. Believe what makes you feel good I guess.
I don't hold Milford but have often thought I should.

[Beagle]

yes it was a good interview

looking at all the banks charts there is great similarity with the falls occurring during March but not reaching the bottom (so far?) until later in the month.
So if they bought Mid march then they will still be underwater on those. So they did jump the gun a bit probably. He explained their reasoning in the video and it was acceptable.
Very young but spoke well
Did anyone notice he was very very recently appointed to the role. It would appear having faith in management at this point is true faith.

I'm tempted to start off with Barramundi with my Aussie portfolio (starting soon) but that would kind of defeat the purpose of building a portfolio. I guess I could use it to smooth out my returns and keep me close to the index.
But that said if Aussie dollar keeps going up I may decide to bring it all back!

He spoke quite well at the BRM annual meeting last year mate. I think adding banks is a "brave" call and I am not sure its the right one. For what its worth the ASX has not bounced anywhere near as hard off its March 2020 lows as our one and I think it represents much better value and more correctly prices the Covid 19 risks than the NZX. That said I continue to be extremely cautious with how the markets per se are currently pricing the economic fallout of Covid 19.

The thing to be careful about with these funds, (including Marlin and Kingfish), which was explained at the last annual meeting, is they have no mandate to make calls on holding significant level's of cash and they will be more or less fully invested at all times. They made it clear they leave the decision on what cash holdings investors should have in their portfolio to individual investors.

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12328577

https://www.marketwatch.com/story/dont-be-fooled-a-40-drop-could-hit-by-next-year-after-this-bear-market-rally-fades-veteran-economist-warns-2020-04-30?mod=home-page&utm_source=ST&utm_medium=email&utm_campaign=ShareTrader+AM+Update+for+Friday+1+Ma y+2020

[dabsman]

He spoke quite well at the BRM annual meeting last year mate. I think adding banks is a "brave" call and I am not sure its the right one. For what its worth the ASX has not bounced anywhere near as hard off its March 2020 lows as our one and I think it represents much better value and more correctly prices the Covid 19 risks than the NZX. That said I continue to be extremely cautious with how the markets per se are currently pricing the economic fallout of Covid 19.

The thing to be careful about with these funds, (including Marlin and Kingfish), which was explained at the last annual meeting, is they have no mandate to make calls on holding significant level's of cash and they will be more or less fully invested at all times. They made it clear they leave the decision on what cash holdings investors should have in their portfolio to individual investors.

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12328577

https://www.marketwatch.com/story/dont-be-fooled-a-40-drop-could-hit-by-next-year-after-this-bear-market-rally-fades-veteran-economist-warns-2020-04-30?mod=home-page&utm_source=ST&utm_medium=email&utm_campaign=ShareTrader+AM+Update+for+Friday+1+Ma y+2020

Looks like they got the call right with the Aussie banks - not priced into the BRM share price yet thou I'd say. Look forward to the weekly update on this 😊

[Beagle]

Looks like they got the call right with the Aussie banks - not priced into the BRM share price yet thou I'd say. Look forward to the weekly update on this ��

Funny you bring this up. I bought some this morning as a reliable dividend payer. I think they will do a warrant issue in the next few months.

[dabsman]

I bought more too - divvy date coming

[Beagle]

Funny you bring this up. I bought some this morning as a reliable dividend payer. I think they will do a warrant issue in the next few months.

As predicted. http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/BRM/358734/329381.pdf

[FatTed]

As predicted. http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/BRM/358734/329381.pdf

Mr Beagle could you tell me what is the last date that share holders will be offered Warrants? is it 2nd October?

[Beagle]

Yeap that's the one mate.

[dabsman]

As predicted. http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/BRM/358734/329381.pdf

Like clockwork. Happy to have jumped into these March thru April

[Beagle]

Now trading at a significant premium to NTA, closed at 75 cents and NTA ex divvy is just under 70 cents. https://www.barramundi.co.nz/ 7.6% premium to NTA. Hmmm

[dabsman]

Now trading at a significant premium to NTA, closed at 75 cents and NTA ex divvy is just under 70 cents. https://www.barramundi.co.nz/ 7.6% premium to NTA. Hmmm
Getting in for the warrants

[Beagle]

Getting in for the warrants

With the warrant exercise price at 70 cents and the current NTA of 69.7 cents, I see fair value for the warrants of not more than 4 cents and seeing as its a 1:4 warrant issue that explains about a 1 cent premium to NTA, not the 5.3 cents. I think the market is currently not pricing BRM correctly.

[dabsman]

I cant find quoting for the warrants yet? Are they allocated today and listed tomoorow or similar?

[Beagle]

I cant find quoting for the warrants yet? Are they allocated today and listed tomoorow or similar?

That's my understanding of the situation.

[tim23]

With the warrant exercise price at 70 cents and the current NTA of 69.7 cents, I see fair value for the warrants of not more than 4 cents and seeing as its a 1:4 warrant issue that explains about a 1 cent premium to NTA, not the 5.3 cents. I think the market is currently not pricing BRM correctly.

You have to deduct any dividends so the exercise price will be about 65c so you may have to revise your estimates.

[Beagle]

You have to deduct any dividends so the exercise price will be about 65c so you may have to revise your estimates.

Yeah I mucked that up. I will have another look at assessing fair value for the warrants in due course.

[Beagle]

Reworked everything up to yesterday based on estimated current NTA of BRM @72.6 cps, (last reported NTA last week adjusted for movement in the ASX index since then as a proxy for how their underlying NTA might have moved since the last NTA was announced). Assuming BRM shares perform in the year to late October 2021 at a rate of 8%, enough so their NTA stays static and they pay out 5.76 cps in dividends the exercise price of the warrants with be 64 cents. On a straight arithmetic basis this suggests the warrants have a fair value of 72.6 c - 64 cents = 8.6 cents.

It should be noted that upon exercise the NTA will be slightly diluted and also noted that the optionality of the warrants has some value, i.e. one doesn't have to exercise them if the market performs very poorly between now and late October 2021 but contemporaneously one has exposure to unlimited upside in the Australian portfolio BRM has.

All things considered I see fair value of the warrants at 9 cents.
Disc: I bought some yesterday and am on the bid for more.

[FatTed]

Reworked everything up to yesterday based on estimated current NTA of BRM @72.6 cps, (last reported NTA last week adjusted for movement in the ASX index since then as a proxy for how their underlying NTA might have moved since the last NTA was announced). Assuming BRM shares perform in the year to late October 2021 at a rate of 8%, enough so their NTA stays static and they pay out 5.76 cps in dividends the exercise price of the warrants with be 64 cents. On a straight arithmetic basis this suggests the warrants have a fair value of 72.6 c - 64 cents = 8.6 cents.

It should be noted that upon exercise the NTA will be slightly diluted and also noted that the optionality of the warrants has some value, i.e. one doesn't have to exercise them if the market performs very poorly between now and late October 2021 but contemporaneously one has exposure to unlimited upside in the Australian portfolio BRM has.

All things considered I see fair value of the warrants at 9 cents.
Disc: I bought some yesterday and am on the bid for more.

Mr B how do you buy more warrants?

[Beagle]

Mr B how do you buy more warrants?

BRMWF is the ticker code.

[Beagle]

Updated valuation as of close of business Friday based on last reported NTA of 73.44 cents on 8/10/20 and adjusted for estimated NTA as at close on Friday, index up by ~ 1.4% since then, estimated NTA is thus ~74.5 cps. Estimated exercise price of warrants on 29/10/21 is assumed to be 64 cents, fair value is this thus 10.5 cps.

I like these warrants because they give good diversification to the Australian market with a good spread of interesting companies in their portfolio. It gives all the potential upside on about 74.5 cps of share value but only on an outlay of around 9 cents so your downside is limited. I think we should (in theory at least) have a better handle on the vaccine situation and recovery prospects by the end of October next year. Barramundi have been significantly outperforming the ASX in recent years as you can see here https://www.barramundi.co.nz/investor-centre/portfolio-performance/

More on their current portfolio holdings here https://www.barramundi.co.nz/investor-centre/portfolio-holdings/

I think there's real value in the optionality these warrants confer, (and also real value to me that they comprehensively beat the index so I don't have to invest truck loads of time doing analysis on Australian companies), so I bought a significant number in this, their first week of being listed.

[TideMan]

Estimated exercise price of warrants on 29/10/21 is assumed to be 64 cents, fair value is this thus 10.5 cps.


But the email from Barramundi says:

$0.70 NZD per Warrant adjusted down for cash dividends declared on shares with a record date during the period commencing on the date of allotment of the warrants and ending on the last business day before the announcement of the final exercise price.


I've read that sentence several times, but I cannot for the life of me figure out what it means. Presumably, that's the 6c difference between their 70c and your 64c.
Can you explain to an amateur investor how this works?

[Beagle]

In a nutshell, BRM will pay 4 quarterly dividends of 2% of the NTA of the shares during the life of these warrants. With their NTA currently at around 73 cents 4 x 2% x 74 cents = 5.92 cents so my expectation is that the final exercise price of the warrants will be adjusted down for the 4 dividends paid on the shares totaling about 6 cents so my estimate of the final warrant exercise price is 64 cents.

A very simple way to value the warrants is to take the current share price 78 cents less the expected future exercise price of 64 cents and you get 14 cents but this is too simplistic as the current share price exceeds NTA. Why would the shares trade above NTA one might ask ?

Three possible explanations are apparent.
1. The fund has beaten the index so comprehensively in recent years shareholders are prepared to pay a premium over NTA to get the shares. In this case this suggests if this remains then the warrants are indeed worth 14 cents.
2. The market is yield starved and absolutely loves the 8% tax free PIE yield of these shares = (12% gross for people on a 33% tax rate) and is therefore prepared to pay a premium over NTA to get this yield. If this remains then again, the warrants present as being worth more than 10.5 cps.
3. Kiwi shareholders are really keen to get some decent and easy diversification into the Australian market.

I prefer the NTA approach which suggests fair value of 10.5 cents but there is a case to be made that the warrants are worth 14 cents.

[Beagle]

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/BRM/361876/333422.pdf

Since coming on board as the senior portfolio manager a few years ago Robbie and his team have absolutely nailed it and really thrashed the ASX index in terms of BRM's relatively MUCH stronger performance.

I will be attending he annual meeting tomorrow and will make a point of thanking him for his outstanding performance over the years.
Its clear to me this guy and his team have real skills in the Australian market I don't have so I am more than comfortable relying on their expertise.
Disc: Shareholder and I hold a significant number of Barramundi warrants (BRMWF).

[Beagle]

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/BRM/361972/333485.pdf

I attended the annual meeting today and was very impressed with their presentation and especially impressed with their performance for the year ended 30 June 2020 in which their fund outperformed the ASX index by an incredible 19% ! Had a good chat with their chief investment office Robbie Urquhart afterwards. Nice guy and I think he and his team are right on top of their game. Very happy investor and enjoyed a nice lunch they put on after the meeting too.
I'm planning on accumulating more warrants from time to time and increasing my stake in Barramundi over the course of the next year or so.

[tango]

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/BRM/361972/333485.pdf

I attended the annual meeting today and was very impressed with their presentation and especially impressed with their performance for the year ended 30 June 2020 in which their fund outperformed the ASX index by an incredible 19% ! Had a good chat with their chief investment office Robbie Urquhart afterwards. Nice guy and I think he and his team are right on top of their game. Very happy investor and enjoyed a nice lunch they put on after the meeting too.
I'm planning on accumulating more warrants from time to time and increasing my stake in Barramundi over the course of the next year or so.

Fisher funds do a good job although I’m not so sure on ANZ! I used to own kingfish marlin and barramundi

What’s the advantage of warrants? Dead cost if you don’t exercise them. I must be missing something??? Can you please explain the logic behind warrants rather than purchasing shares directly

[Beagle]

Fisher funds do a good job although I’m not so sure on ANZ! I used to own kingfish marlin and barramundi

What’s the advantage of warrants? Dead cost if you don’t exercise them. I must be missing something??? Can you please explain the logic behind warrants rather than purchasing shares directly

https://www.barramundi.co.nz/assets/Investor-Centre/Barramundi-Warrant-Terms-2020.pdf Warrant terms and conditions.

Note - The future exercise price will be adjusted for the dividends paid in the next year. Yesterday at the annual meeting the possibility of the exercise price in late October 2021 being 64 cents was discussed. Buying warrants now at say 11 cents plus 64 cents a year from now converts to shares and at a total cost of 75 cents this is considerably cheaper than buying the shares now at 82 cents.

There are other benefits such as leverage and risk management.
Outlaying just 11 cents now you benefit from all the upside potential in a share worth 82 cents over the next year, (leverage) but if the world goes to hell in a handbasket the most you can lose is 11 cents, (risk management).

I really like the diversification this brings to my portfolio. I also really like the risk management aspect warrants bring to my portfolio especially in these uncertain times.

[teabag]

What’s the advantage of warrants? Dead cost if you don’t exercise them. I must be missing something??? Can you please explain the logic behind warrants rather than purchasing shares directly

If you think the SP is going to do well over the life time of the warrant, then they effectively allow you to leverage what dosh you have - the downside as you point out, is that if they don't, you lose

[sampson]

https://www.barramundi.co.nz/assets/Investor-Centre/Barramundi-Warrant-Terms-2020.pdf Warrant terms and conditions.

Note - The future exercise price will be adjusted for the dividends paid in the next year. Yesterday at the annual meeting the possibility of the exercise price in late October 2021 being 64 cents was discussed. Buying warrants now at say 11 cents plus 64 cents a year from now converts to shares and at a total cost of 75 cents this is considerably cheaper than buying the shares now at 82 cents.

There are other benefits such as leverage and risk management.
Outlaying just 11 cents now you benefit from all the upside potential in a share worth 82 cents over the next year, (leverage) but if the world goes to hell in a handbasket the most you can lose is 11 cents, (risk management).

I really like the diversification this brings to my portfolio. I also really like the risk management aspect warrants bring to my portfolio especially in these uncertain times.

These warrants will certainly do well if things continue to tick along nicely. A quick question though - what are the tax implications on any capital gains given that dividends are not received before the exercise day?

[tango]

https://www.barramundi.co.nz/assets/Investor-Centre/Barramundi-Warrant-Terms-2020.pdf Warrant terms and conditions.

Note - The future exercise price will be adjusted for the dividends paid in the next year. Yesterday at the annual meeting the possibility of the exercise price in late October 2021 being 64 cents was discussed. Buying warrants now at say 11 cents plus 64 cents a year from now converts to shares and at a total cost of 75 cents this is considerably cheaper than buying the shares now at 82 cents.

There are other benefits such as leverage and risk management.
Outlaying just 11 cents now you benefit from all the upside potential in a share worth 82 cents over the next year, (leverage) but if the world goes to hell in a handbasket the most you can lose is 11 cents, (risk management).

I really like the diversification this brings to my portfolio. I also really like the risk management aspect warrants bring to my portfolio especially in these uncertain times.

Thank you for explaining!
The current market makes no sense so I have no idea what will happen. Logically a crash. But there’s no logic to the market... so warrants could be a good option. Putting it on my Watchlist...

[777]

Take a look at Kingfish warrants due 12/3/21 and Marlin warrants due in less than 2 weeks.

MLNWD can be bought for 23 cents and 86 cents to pay on 6/11/20. That is 109 cents for a share trading at 116 cents. Another div due by Christmas.

[Beagle]

These warrants will certainly do well if things continue to tick along nicely. A quick question though - what are the tax implications on any capital gains given that dividends are not received before the exercise day?

There are so many possible different scenario's that I can't give specific tax advice and am loathe to do so on this forum but that said for people who are buying the warrants with the specific intention of selling them for a gain before maturity, any gain would normally be taxable, (bought with the intention of resale). For shareholders buying warrants with the intention of exercising their warrants in due course to get Barramundi shares, provided those shares are held long term a strong argument could be made that any value accretion through the process of owning the warrants is tax free as the payment for the warrant ostensibly amounts to a down payment on the shares.

[Beagle]

Take a look at Kingfish warrants due 12/3/21 and Marlin warrants due in less than 2 weeks.

MLNWD can be bought for 23 cents and 86 cents to pay on 6/11/20. That is 109 cents for a share trading at 116 cents. Another div due by Christmas.

Yes as I pointed out at post #409 here https://www.sharetrader.co.nz/showthread.php?3048-KFL-discount-to-diluted-NAV/page21&highlight=KFL just 9 days ago there was quite an opportunity with KFL warrants at 16.5 cps, closed Friday at 19 cents, a pretty tidy gain of 15% in 9 days for anyone that took advantage of that opportunity. I updated my valuation on those warrants yesterday and got 23.4 cps so there's still plenty of value on the table. I have a lot already otherwise I would have bought more at 16.5 cps.

The Marlin situation is less clear as the shares are trading ~ 4 cents higher than the NAV and the warrants are exercisable right around the time when the US markets could be in a state of potential turmoil with an uncertain election outcome . I think a bit of caution might be appropriate there but I agree 100% that the warrants of Marlin make more sense than the shares at present. One also needs to keep in mind that the exercise of warrants at 86 cents will dilute the NTA of Marlin. Based on my calculations the Marlin warrants are worth about 22 cps taking into account the dilutionary effect, slightly less than the closing price yesterday.

[tango]

BRM and KFL could be on sale today!
I personally will be waiting for a market correction before investing in either

[seadog]

Hi Beagle thanks for making Options all a bit clearer. I have been invested with FF since they started up. It's taken a while for BRM options to be a good investment but happy to see FF fundamental process of investing come to fruition. My primary reason for investing in FF is the transparency. With regard to this process of adjusting the exercise price for Dividends, is this new? I have exercised Marlin in the past and am pretty sure this did not happen?

[777]

Seadog they have always done it the same way in all three companies.

[SPC]

No it's was changed a year or two back. Previously the exercise price was fixed. More recently they now deduct dividends paid to calculate the exercise price. I've owned all three funds since each listed...very large holding has accumulated over time.

[777]

No it's was changed a year or two back. Previously the exercise price was fixed. More recently they now deduct dividends paid to calculate the exercise price. I've owned all three funds since each listed...very large holding has accumulated over time.

On looking back at the early issues you are correct. The WA and WB were issued at a price that reflected the dividend payments to come. The WC, and after, quoted the adjustment in price for dividends paid during the period. There was one lot that were not in the money at exercise day if I remember correctly.

[SPC]

Yes on a one or two occasions the fixed warrant price exceeded the market price on the exercise date and so most warrants weren't exercised..ie no additional funds were pulled in. They've sharpened the offering now and so far so good...new shares at at a discount.

[Beagle]

There was a really positive atmosphere at last weeks annual meeting quite probably partly because they have outperformed the ASX by an incredible 19% in the last year.
I had a good chat with Robbie after the meeting and was very impressed by him. I think he and his team have done a stellar job since coming on board a few years ago.
With that sort of performance there is no need for me to work myself to the bone researching and analyzing Australian companies and I am happy to leave all my offshore investing to the team at Barramundi and Marlin.
https://www.youtube.com/embed/QfE6Ti0-_ck?rel=0

[SPC]

With BRM KFL MLN holdings you have a portfolio of approx 100 stocks across the globe in a whole range of sectors. Diversified to the max and all paid for in NZ dollars. Buy or sell anytime on nxz.
Tax efficient. Professional manager. Quarterly divs. Been in from the start. Rocky start on two but they're 9n the way now Add a local property fund and set and forget.

[seadog]

No it's was changed a year or two back. Previously the exercise price was fixed. More recently they now deduct dividends paid to calculate the exercise price. I've owned all three funds since each listed...very large holding has accumulated over time.

Thanks SPC so anyone know the reason for the change? Makes a bit of a sense as I guess the Warrants immediately become more attractive.

[SPC]

Hi Seadog yes the change more or lease endured the actual exercise price on the date was most likely to be less than the trading price at that date, otherwise holders wouldn't be inclined to exercise them. No advantage. I've held warrants that weren't worth exercising as the set price exceeded the market price..ie worthless. In the end what the manager wants us more investment cash for growth. Warrants are method used here.

[seadog]

Hi Seadog yes the change more or lease endured the actual exercise price on the date was most likely to be less than the trading price at that date, otherwise holders wouldn't be inclined to exercise them. No advantage. I've held warrants that weren't worth exercising as the set price exceeded the market price..ie worthless. In the end what the manager wants us more investment cash for growth. Warrants are method used here.

Cheers SPC

[teabag]

Any reason why the current SP (0.85) is trading so much over NTA (0.7575)? A 12% premium seems too much, even for an excellent manager. I've been waiting to accumulate more, but just can't bring myself to do so at those prices.

[Beagle]

Hmmm...does seem a bit much but the whole group are now trading at a premium to NTA of varying degrees. People at the annual meeting were astonished and pleased to note BRM has beaten the index by a whopping 19% in the last year. I asked the CIO whether he had ever done this before and he said no so its probably best to take a 3 year view.

The question one must ask oneself is this. How much of a premium, (if anything) am I prepared to pay to NTA to have my money invested with this team, Marlin or Kingfish given on an NTA to NTA basis, (so after fees, managers expenses and performance fees), they have beaten their respective benchmark indices on average per annum over the last 3 years by :- (source Sept 2020 quarterly reports)
BRM 8.9% http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/BRM/361876/333422.pdf
MLN 9.7% http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MLN/361879/333424.pdf
KFL 2.5% http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/KFL/361873/333416.pdf

I can't answer that question, each person has to decode this situation and decide for themselves but I have a few thoughts to share.
With the mangers performance I think the days of people expecting to buy any of these funds at a discount...well, they'll be lucky, I'll put it that way.
Could it be with so many companies deferring or cancelling dividends this year with Covid and with interest rates at 100 year lows, that retired folks are flocking to the 8% tax free PIE dividends of this group as a way to increase their income. Classic set and forget and get 2% tax free dividend every quarter is extremely attractive !
Maybe people need to be considering the warrants as the only way into these excellent funds without paying a premium ?

Believe me I would LOVE to buy some BRM and MLN at a discount to NTA or even at NTA.

[JeffW]

Could it be with so many companies deferring or cancelling dividends this year with Covid and with interest rates at 100 year lows, that retired folks are flocking to the 8% tax free PIE dividends of this group as a way to increase their income. Classic set and forget and get 2% tax free dividend every quarter is extremely attractive !

Don't disagree with your general synopsis, but Í believe the 8% dividend is a bit misleading - Where the income earned by the company is less than 8%, then the dividend in my view is a partial repayment of capital

[SPC]

Agreed. Analysis of the PIE income statements will make that fairly obvious...' excluded income '...
Just be cautious that you're not paying for your future dividends up front...
You need to be careful what you pay to build these portfolios and when to buy in...

[Beagle]

Don't disagree with your general synopsis, but Í believe the 8% dividend is a bit misleading - Where the income earned by the company is less than 8%, then the dividend in my view is a partial repayment of capital

I agree with your post and the subsequent one immediately above BUT some people will look at the 14% net return average over the last 3 years and accept that while there will be some variability around returns in the future, on average they have reasonable grounds to expect that such a situation will be temporary and therefore of no consequence to them.

That said I would not pay 85 cents for the shares with warrants on issue (future NTA dilution expected exercise price 64 cents) and the ~ 10 cent premium to NTA....but I can understand why someone who is say 80 and needs to supplement their income in the years ahead might. Will they get a better opportunity in the future to buy at a lower premium to NTA, highly likely !
On the other hand if they wait they won't get a nice big juicy dividend this Christmas to buy their grandkids presents... I guess it all depends upon people's need for income and with elderly folks being offered less than 1% on term deposit before tax and inflation some are probably asking what better alternative is there ? I don't have any other theory on why the share price is at such a premium to NTA.

[SPC]

It comes down to hunt for yield..folks getting desperate for yield. It might look good at first glance but not all yields are equal. The yield has to come from somewhere.

[Beagle]

It comes down to hunt for yield..folks getting desperate for yield. It might look good at first glance but not all yields are equal. The yield has to come from somewhere.
I think that's a huge part of this but another aspect people may be thinking about is the managers astonishing ability to consistently outperform the market.
There was certainly a very happy and contented atmosphere at the annual meeting as people enjoyed a nice lunch reflecting on the astonishing 19% market outperformance last year. Possibly worth noting that the premium to NTA has grown considerably since the annual meeting.

What sized premium to NTA, (if any) will prove to be durable into 2021 ? What do you folks think ? Some food for thought, an old article but nonetheless perhaps a starting point for consideration. https://monevator.com/why-do-investment-trusts-trade-at-a-discount-or-a-premium/
He concludes with I wouldn't quibble over paying a 1-2 % premium to NTA for a good listed fund. I wouldn't either but maybe a little bit higher premium given their remarkably consistent and high outperformance is warranted ? (Same question applies to Marlin and to a lesser extent Kingfish). What premium if any is warranted ?

I'm not sure how to answer that question for myself. I would probably pay 3% for BRM or MLN for their overseas expertise and the diversification and yield that brings to my portfolio but I wouldn't pay the current ~ 13%. Regarding Kingfish I'm happy to back myself to outperform the NZX consistently more than the average KFL has done in the last 3 years (2.5% per annum) so I would be reluctant to pay any premium for KFL units, (but its worth noting that others are).

I'll just throw this out there as a possibility. Maybe a premium to NTA as a percentage is justified based on the average long run outperformance of a fund after managers fees, performance fees and operating costs relative to the index ? Since these three investment teams have been appointed for just over 3 years we have to use the 3 year figure (as opposed to the 5 year average which incorporates a lot of time with the previous fund managers)
Looking at the last 3 years on average the funds have outperformed the index after all costs on an NTA to NTA basis as follows
BRM 8.9%
MLN 9.7%
KFL 2.5%
Maybe premiums to NTA at these respective levels for these funds is warranted ?

[alokdhir]

As a long term holder of KFL and having first hand experience of at least last 3 warrants issues ...I must say I am most surprised at what's happening at the moment Agree people maybe looking for safe and convenient , regular dividends etc etc but paying 12% over the last reported NAV is not a sensible thing to do . Similarly buying MLN in the market for 1.20 where as One could have got it at 1.08 via warrants on offer at 22 cents plus 86 cents exercise price is just too much over exuberance . Paying so much premium for convenience ...not seen before . Also shows the lack of depth and real understanding of stock markets ...so much arbitrage on offer ...in efficient markets wont happen !!
Just last year in July when KFL exercised its last warrants @ 1.25 ...market price of KFL was around 1.43 ...NAV around 1.65 ...warrant around 15 cents ...took KFL 4 months to close the NAV to market price gap .
Will wait to see what happens when recently minted MLN coming to market coming Wednesday bought at maximum 1.08 ...if still people ready to buy MLN at 1.20 then hunt for yield will become the most obvious reason for this new phenomenon seen for the first time in Fisher Fund managed listed PIEs
IMHO there are other options like ETF of smart shares like NZG with just 0.2% fund charges offering regular dividends without having to resort to excluded income return of own capital as dividends .
For healthy markets we all need to better understand its ways ...knowing its pitfalls ...whether created or occurring naturally due to in efficiencies in the system
A burnt investor never returns to market for a long time . Hopefully people know what they doing ...
Rising tide raises everything so easy to get away with silly mistakes in Bull markets ...but still mistake is a mistake especially if u make it due to lack of knowledge or not doing proper homework ...lol

[SPC]

Some good analysis in the last two posts. Actually I think the current market price is driven by newer entrants..the 'sharesies' buyers?. It may even be a case of forward loading the buy price to see how high it would need to rise to reduce the yield to a bank equivalent.?..not a good idea.
As a holder of all 3 listed Fisher funds since day one there is no way I'd be buying at these premiums.
As that irritating young lady who fronts a consumer loans shop on tele reminds us .."there are times to borrow and times to save...you know" (she clearly doesn't).
So there are times to buy shares and time to sell shares.

[Beagle]

Thanks for your thoughts and I remember the KFL warrant exercise arbitrage very well.

To my mind (at least and I accept others will have a different view) the BRM and MLN situations are different to KFL.
KFL's outperformance on average of 2.5% per annum is not especially notable or material and I would back myself to do better than that, (and have consistently done so over the years), so the benefits KFL brings to me include :-
1. Diversification of my N.Z. portfolio
2.Tax free yield.
3. Regular warrant issues which I back myself to value and take advantage of opportunities to acquire on advantageous terms when they occur.
4. Shares in lieu of dividend at a 3% discount which further boost my effective yield.
5. Expert fund manager that is beating the market after fees and costs.

On the other hand BRM and MLN's average outperformance is far more notable.
Benefits to me are far greater and include :-
1.Much greater diversification to my portfolio, both funds have a much wider spread of shares than KFL
2. Both are investing in markets that I don't invest in directly and don't have the time for the research involved
3. Substantially higher outperformance compared to their benchmark's than KFL
4. They take care of all the FIF tax hassles which would be very time consuming for me if I was to try and handle overseas investments myself
5. Tax Free PIE yield.
6. Regular warrant issues which I back myself to value and take advantage of opportunities to acquire on advantageous terms when they occur.
7. Shares in lieu of dividend at a 3% discount which further boost my effective yield.

To me the benefits of BRM and MLN are clearly greater than with KFL. Would I pay the current unprecedented premium to NTA with MLN and BRM ? No.
Would I pay some more modest premium reflecting the advantages to me of these funds in these unprecedented times of extraordinarily low interest rates ? Yes.
What is the size of the premium to NTA I would pay ? I don't know, I am trying to work that out.

[alokdhir]

Some good analysis in the last two posts. Actually I think the current market price is driven by newer entrants..the 'sharesies' buyers?. It may even be a case of forward loading the buy price to see how high it would need to rise to reduce the yield to a bank equivalent.?..not a good idea.
As a holder of all 3 listed Fisher funds since day one there is no way I'd be buying at these premiums.
As that irritating young lady who fronts a consumer loans shop on tele reminds us .."there are times to borrow and times to save...you know" (she clearly doesn't).
So there are times to buy shares and time to sell shares.

Appreciate your judgement and seasoned opinion that U wont be a buyer at these levels ...fully agree ...

Warren Buffett says ...buy when all selling and sell when all buying ...soon markets will find its true bearing .

But markets can be illogical far longer then we can be solvent ...another popular saying ...lol

Cant be out of market in these times when every central bank is trying to print its way out of trouble ...

So challenging times for not only the one looking to invest but also for the one already invested and seeing crazy and tempting prices ...hehe

[Beagle]

Some good analysis in the last two posts. Actually I think the current market price is driven by newer entrants..the 'sharesies' buyers?. It may even be a case of forward loading the buy price to see how high it would need to rise to reduce the yield to a bank equivalent.?..not a good idea.
As a holder of all 3 listed Fisher funds since day one there is no way I'd be buying at these premiums.
As that irritating young lady who fronts a consumer loans shop on tele reminds us .."there are times to borrow and times to save...you know" (she clearly doesn't).
So there are times to buy shares and time to sell shares.

Really irritating, perhaps that was the idea. (Sometimes really irritating marketing is the most effective)
Thanks for your post which is the kind of feedback I was looking for.
You'll remember when these were trading at a deep discount to NTA, (If I remember correctly it was as much as 20% at one point many years ago).

Three questions for you.
1. Given clear outperformance of the investment teams appointed, (from memory about 3.5 years ago) is so different to the performance before that under the previous teams is some premium to NTA warranted now and would you pay any premium and if so how much ? Would your answer be different if you had a very large term deposit come up for maturity and were offered 0.9% per annum to reinvest it ? (This situation, as I am sure you can appreciate, is exactly what's occurring for many investors)
2. They have a capital management strategy as you know that buys shares back when they are over a 8% discount to NTA so do you think as a further capital management policy they need a new strategy that sells shares when they are at more than an 8% premium to NTA ?
(A new policy like this would enhance overall returns for remaining shareholders).