IFT - Infratil

[Pmdv77]

What makes you think we do? Is this based on the amazing dividend yield (north of 2%), the outstanding underlying earnings (long term less than 1% - I guess they make their money with revaluation gains and opportunistic sells) or the return of the hype factor?

I guess nobody can predict where hype is driving a stock but really - anybody going for a rapid capital gain would not go for a stock which is at best fairly valued and its growth phase already in the past, would they?

Come back with your cynicism in 3 years time. Most longer term holders sitting on 3 x. Even people who took up the rights offer for Vodafone are 2x.

[kiora]

A tad more than that
"An original investor who participated in Infratil’s initial public offering could have acquired 1,000 shares for $1,000 (500 in March 1994 and 500 in September 1994). That person would now have shares worth nearly $130,790 on 30 September 2022 - 15,462 shares (at $8.65 each).

A post-tax return of 18.6% a year over 29 years. In contrast, the NZX50 delivered a return of 8.3% a year over the same period."
https://infratil.com/for-investors/o...d-performance/

[RGR367]

A tad more than that
"An original investor who participated in Infratil’s initial public offering could have acquired 1,000 shares for $1,000 (500 in March 1994 and 500 in September 1994). That person would now have shares worth nearly $130,790 on 30 September 2022 - 15,462 shares (at $8.65 each).

A post-tax return of 18.6% a year over 29 years. In contrast, the NZX50 delivered a return of 8.3% a year over the same period."
https://infratil.com/for-investors/o...d-performance/

Let's leave BP alone on this as he attacks the stocks he normally doesn't own or when coming to those share celebrations rather late.

[BlackPeter]

Come back with your cynicism in 3 years time. Most longer term holders sitting on 3 x. Even people who took up the rights offer for Vodafone are 2x.

I guess that's the problem with hyped up stocks. While owners do know that past performance is no indicator for future performance and that at some stage markets will come back to fundamentals - ownership bias has a tendency to overwrite this knowledge and the only tool still left to them seems to be linear interpolation of the current trend.

Have a look at previous market darlings who just couldn't do wrong (FPH, RYM, ATM, XRO, Bitcoin, Twitter, Facebook and so many more). They all had an amazing hype driven ascent into regions with very large PE's indeed, and than they came crushing down to reality. Some earlier, some later, but all did.

But sure - this time will be different .

[BlackPeter]

Let's leave BP alone on this as he attacks the stocks he normally doesn't own or when coming to those share celebrations rather late.

Well yes, one could say I put my money where my mouth is. Makes sense, doesn't it?

However there is one thing you got totally wrong: I never attack stocks, but I might warn people to be careful or to dance close to the exit.

If you walk into a swamp and somebody suggests you are careful, does this somebody attack the swamp? Of course not, (s)he is only trying to help you.

You on the other hand are clearly blindfolded by ownership bias and group think. Do some research on these effects, it might save you a lot of money in the long run.

[Snoopy]

A tad more than that
"An original investor who participated in Infratil’s initial public offering could have acquired 1,000 shares for $1,000 (500 in March 1994 and 500 in September 1994). That person would now have shares worth nearly $130,790 on 30 September 2022 - 15,462 shares (at $8.65 each).

A post-tax return of 18.6% a year over 29 years. In contrast, the NZX50 delivered a return of 8.3% a year over the same period."
https://infratil.com/for-investors/o...d-performance/

That may be the truth, but Infratil have left one chapter out of their story. When Infratil were formed in the mid 1990s, there were actually three Infratils. There was the Infratil we know now that was called 'Infratil New Zealand' back then. There was also 'Infratil Australia' and 'Infratil International'. What happened to the other two? They were not as successful as the 'home' Infratil. My memory is a little vague on their fate. But I have a recollection of 'Infratil Australia' being taken over by some Australian managed fund, and 'Infratil International' being taken over by 'Infratil New Zealand', which then became renamed simply 'Infratil.' I recall the 'Infratil Australia' takeover happening after a few years of index under-performance, while 'Infratil International' departed the bourse at, I think, below issue price. IOW IPO investors in 'Infratil Australia' and 'Infratil International' had quite poor returns.

What Infratil have done in their 'investment return claims' is similar to what other fund managers do who start several funds but only keep the one that is the most successful and close the others down. Their return claims may be accurate. But the real question you need to ask is, if you were in at the beginning, how did you know to put your funds into 'Infratil New Zealand' and not the other two? We only know that investing in Infratil New Zealand was the better thing to do with hindsight.

The way I see it, if you really want to track 'Infratil' returns since inception, you would have to split your initial capital into three, and track the return of all three Infratils with your funds equally distributed. Looked at this way, the returns since inception that 'Infratil' today are so proud to quote, while accurate, have been skewed upwards by survivorship bias.

SNOOPY

[Bjauck]

...
The way I see it, if you really want to track 'Infratil' returns since inception, you would have to split your initial capital into three, and track the return of all three Infratils with your funds equally distributed. Looked at this way, the returns since inception that 'Infratil' today are so proud to quote, while accurate, have been skewed upwards by survivorship bias.

SNOOPY

Were all three Infratils of equal size when initially floated and listed on the NZX?

[Snoopy]

Were all three Infratils of equal size when initially floated and listed on the NZX?

Very good question. I can't remember. I guess what you are hinting at is that if the three Infratils were not of equal size, then as a measuring stick you should invest your 'initial capital' in proportion to their size? I think that is a fair point to raise. It is all so long ago now. I think by the turn of the century (yikes 22 years ago!) there was only one Infratil left standing. But I don't recall the 'other two' Infratils ever being shell company minnows.

I have never invested in any of the Infratils myself. That wasn't because I thought they were poor investments. Infratil New Zealand I have always categorised as a slow grinding star. My issue in those early days was that their three principal investments were Trustpower and Port of Tauranga and Wellington Airport. The first two of those were separately listed. So why buy into Infratil when you could just buy Trustpower and Port of Tauranga shares outright, without any 'management fees' being siphoned off between you and your return? One reason would be if you wanted exposure to Wellington Airport, or pre-Sharsies, if you wanted diversification with a modest amount of capital. But that argument wasn't enough to win me over. And although Infratil New Zealand was successful in those early days, Trustpower and the Port of Tauranga as stand alone investments did better.

I am not trying to diss Infratil as an investment by the way. I guess I have a somewhat 'biased aversion' to putting a manager between myself and my investments, when I am used to doing investing 'hands on' by myself. But I understand that for others, something like Infratil may be the way to go. And the Infratil of today has changed. It isn't possible to replicate their investment portfolio today on a 'do it yourself' basis.

SNOOPY

[Bjauck]

...
I am not trying to diss Infratil as an investment by the way. I guess I have a somewhat 'biased aversion' to putting a manager between myself and my investments, when I am used to doing investing 'hands on' by myself. But I understand that for others, something like Infratil may be the way to go. And the Infratil of today has changed. It isn't possible to replicate their investment portfolio today on a 'do it yourself' basis.

SNOOPY

Yes I was thinking of the relative sizes of the three - and country of listing. Were they all listed on the NZX? Wasn't the Australian one bought out in about 2000 by an Australian suitor. I remember there was a bit of a kerfuffle.

Your aversion was a reason for my investment in its early days. I do like to directly invest too, especially these days. I am an unsophisticated investor with limited analytical skills. So I plonked down my small amount for the managers to decide what to do with ( and added to it at several propitious times.)

Its share price has not always been boring - although not to the extent of the white knuckle share performance of ATM or PEB. For example as with many listed investment funds around the World, IFT was dumped to a discount after the GFC.

[Snoopy]

Yes I was thinking of the relative sizes of the three - and country of listing. Were they all listed on the NZX? Wasn't the Australian one bought out in about 2000 by an Australian suitor. I remember there was a bit of a kerfuffle.

Yes they were all listed in NZ.

I have found this reference to a 'Shoeshine' column from 22 years ago that outlined what happened

http://www.sharechat.co.nz/article/b...-stumbles.html

Infratil Australia (IFA) held shares in Perth Airport, Northern Territory airports, the Victorian port of Portland and an interest in Southern Hydro power. Total asset base reported to be worth $A298m at the time of this takeover controversy.

"From a shareholder's point of view, even IFA's assessment of a 12% gain is better than a decline, which has been the trend for IFA shares. After floating in 1997 at $1.30 a share, they lost nearly half their value by mid-1998 before recovering to $1.15 in early 1999."

"Since then, there has been a steady decline to a low of 75c last month. At the recent price of 95c, the shares are still down 27% on their float price."

So it looks like it was 'go to whoa' in just three years for Infratil Australia!

Your aversion was a reason for my investment in its early days. I do like to directly invest too, especially these days. I am an unsophisticated investor with limited analytical skills. So I plonked down my small amount for the managers to decide what to do with ( and added to it at several propitious times.)

Its share price has not always been boring - although not to the extent of the white knuckle share performance of ATM or PEB. For example as with many listed investment funds around the World, IFT was dumped to a discount after the GFC.

It sounds like Infratil NZ 'did the job' for you Bjauck. And if you managed to add a few just after the GFC, then so much the better!

SNOOPY