South Canterbury Finance Limited

[Enumerate]

The woman thinks Hubbard is a genius because she had doubled her money with Hubbard over 12 years? ... Hmm ... rule of 72 says thats only about 6.1% compounded. ... Guess that puts me in the genius category too ... Not sure what category she's in.

Your assumption is that the interest has been compounding. Doubling your capital and paying a market interest rate would be a significant achievement.

[minimoke]

Your assumption is that the interest has been compounding. Doubling your capital and paying a market interest rate would be a significant achievement.

I take it she is one of Aorangi's "sophisticated" investors. If she says she has doubled her money she'll know what doubling her money means

But she is a person who seems to be relying on the mental agility of a person who can't add to $20 in her head. Mrs H apparently only had $20 in her purse but bought $23 worth of groceries. Mrs H may have thought she had $23 in her purse (just like she and Alan thought there was $<$100m in Aorangi. But unfortunately looks like she was mistaken on that account as well.

[Alan3285]

http://www.nzherald.co.nz/business/n...ectid=10659911

The woman thinks Hubbard is a genius because she had doubled her money with Hubbard over 12 years? ... Hmm ... rule of 72 says thats only about 6.1% compounded. ... Guess that puts me in the genius category too ... Not sure what category she's in.

Hmmm....

Did she receive any 'income' through the period?

I don't know the answer to that myself, so to be fair and balanced, I'll do two examples - you seem sure that she didn't, hence your 'analysis' I guess:

Option 1)

Invested $100 12 years ago and now worth $200 with no other deposits, withdrawals, or income received.

Return = 6% pa (approx) if we compound annually


Option 2)

Invested $100 12 years ago and now worth $200 with income received of $15 pa.

Return = 18% pa (approx) if we compound annually and assume that income is taken out at the end of each year.

NB: This woud be approx 21% pa if the income were taken at the start of each year.


19% pa would be fantastic.... but then we don't know for sure where that money has been invested through the whole 12 year period - it might be 'average' for the risk, or it might be stellar.


As I said, I don't know what the truth is (possibly it lies somewhere between those two examples), but I think many people here could do with getting some real balance into their thinking.


Alan.

[Balance]

Alan,

No point making assumptions as there is insufficient information.

One thing to further note - are the accounts of Aorangi audited? The final return will depend on the valuation of the assets. If the accounts are audited, that is still of little comfort - note the massive write-downs in SCF books after auditors were changed.

What is coming across very very clearly is that she is no professional or habitual or astute or high net worth investor. She is helping to indict AH on gross breaches of Securities regulations.

[winner69]

Alan,


What is coming across very very clearly is that she is no professional or habitual or astute or high net worth investor. She is helping to indict AH on gross breaches of Securities regulations.

And the irony of it all ... according to Facebook friends .... they are paying the bastards to get Allan .... yes the AFO etc are their employees they say

[Alan3285]

As I said, I don't know what the truth is (possibly it lies somewhere between those two examples), but I think many people here could do with getting some real balance into their thinking.
Alan.

No point making assumptions as there is insufficient information.

Balance,

Speculation is pointless until we know what has actually happened.

Alan.

[minimoke]

Hmmm....

Did she receive any 'income' through the period?

I don't know the answer to that myself, .

I don't know the answer to that either - but we do know AH's standard approach was to accumulate and reinvest. We also know he did have an exception with some elderly people who relied on a regular income.

On the face of it I thinks its fair to assume that 12 years ago this woman started with $100. When she got her statement last month she had $200. Now to be fair I would presume that is $200 net so taxes have been paid on income generated over that period. So AH has returned her 6% net of tax and fees over that 12 years. Thats probably not bad given the average 6 month term deposit rate over that period was 5.86% gross.

There is a slight problem though - the statement will be based on the value of the recoverable value of the investment funds - its not like having money in the bank. So if the Stat Man is right and some loans are impaired and some loans are ranked behind secured first mortgage and some loans are unsecured we need to apply an impairment to her $200. Say we knock 10% off the value of her personal fund she's now worth $180.

We could also assume the 10% impairment is light. It seems that AH was prepared for a 30% impairment - thats why he has put $40m of his "own" money into a $130m fund. After all it is AH who has said he doesn't want to see people loose their money because hes that kind of man. So if we knock 30% off her $200 turning $100 into $140 over 12 years doesn't seem such a "genius" investment.

[peat]

Herald article is funny though

: Investments found to be "at risk".

wow stunning revelations indeed.

[Dubdee]

I assume in the absence of an offer document Alan will be relying on his personal aquaintance with the investors. That is an exemption under the Act

[COLIN]

Well, I have seen enough of the ugly side of human nature, on this thread, to make me never want to come back to view it again. And yet, I suspect I will. Its probably the phenomenon which is known as "The Fascination of the Horrible." I have noticed that here have even been occasions when there have been more viewers on this thread than on the whole of the NZX sector, which never used to be the case.

I get much more satisfaction - and dollar reward - from spending my time in the ASX section. In parting, let me make one final observation: it is surely one of the greatest of ironies that, even if Aorangi investors should finally opbtain less than 100c in the dollar (and I don't believe they will) their combined losses would pale into insignificance when set against the total losses of investors who have placed their millions in companies which have issued Prospectuses / Investment Statements or whatever, and such individuals - sophisticated or otherwise - have had to face the realities of the loss of all, or virtually all, of their investments. And I am talking about companies which have not been found to be in breach of the securities regulations. I speak from practical experience as, unlike the impression a number of others would like to give, I am prepared to admit my mistakes. I maintain a well-spread portfolio, and accept inevitable losses from time to time, just as I appreciate those occasions when I do seem to get it right - and those occasions are increasingly to be found on the ASX.

It will remain a great mystery to me as to why there has been such an outpouring of hostility and bitterness, on this thread, when there are a host of serious loss situations which are far more deserving of investor wrath. Incredibly, the people who are venting most spleen, here, would appear to have not one dollar at stake in any Hubbard connection, if we are to believe their posts.