ALF - Allied Farmers Limited

[Lizard]

The main difference I can see between health and wealth is that health is less transferable - one person getting sicker does not directly make another person healthier.

When it comes to wealth, in large part, one person's loss is someone else's gain. Since most of us on ST are either relatively wealthy (or expect to be), it suits our conscience to believe that those who lose deserve it because it supports the corollary that we deserve our gains.

[Stranger_Danger]

I do deserve my gains.

I also deserve the RSI, the sore back, the fact I'm single, don't have kids and live with cats, the friendships not maximised due to working too much etc etc.

We all make our choices.

We don't just get the upside of our choices - every choice has a downside, even if it is just an opportunity cost.

[Alan3285]

@Lizard,

It is the height of arrogance to think that you know better than the professional analysts.

I recall many conversations with people back in the mid 90s along these lines:



Mr Clever: I can get 14% pa return on first ranking secured debentures at HandItOverMerchants!

Alan: Really? How do you know that?

Mr Clever: Look - it says so here, on page three of the NZ Herald weekend business section!

Alan: Hmmm.. What does that advert say?

Mr Clever: It says I can get 14% pa return on first ranking secured debentures at HandItOverMerchants!

Alan: Hmmm.. What are they REALLY saying?

Mr Clever: Huh?

Alan: Aren't they asking to borrow money from you at an interest rate of 14% pa?

Mr Clever: Huh? What are you on about??

Alan: They are looking to borrow money from you, me, anyone, at 14% pa. Would you borrow money from me at 14% pa?

Mr Clever: No way - Westpac are lending to me at 8%, why would I pay you 14%?

Alan: So why don't HandItOverMerchants borrow from Westpac at 8%?

Mr Clever: Hmmm.. not sure....

Alan: Could it be that they would LOVE to borrow from Westpac at 8% or even 14% and not have to deal with the public (and pay for adverts), but Westpac won't lend to them at that rate because their professional analysts have determined that 14% is not enough return to compensate for such a risky investment?

Mr Clever: Errr..... yeah..., but... I can get 14% pa return on my secured first ranking debentures at HandItOverMerchants!

Alan: So you know better than the professionals at Westpac?

Mr Clever: I'm CLEVERER!

Alan: {Sigh}

[minimoke]

The main difference I can see between health and wealth is that health is less transferable - one person getting sicker does not directly make another person healthier.

Lizard, I think you are assuming the wealth pie is only so big and the slices get redistributed.

But here I think your analogy does work. Health is transferable. Hanover was, argubaly terminally ill with a few contagious diseases like the GFC disease. Rather than confining it and perhaps surgically cutting out the rotten bits, investors decided to flag the operation and send the sick company into ALFs ward. ALF already had a defficient immune system and rather than being given good drugs to make it better it was given the contagoius and very unhealthy Hanover as a ward mate. Hanover proably has Ebola and is unlikely to ever be recognised for what it used to look like. How ALF ends up is anyones guess - but the prognosis probably isn't great for a speedy recovery. In a similar vein fat kids (as an example) are fat because they have parents who won't make the tough calls - they are certainly easily transferring health from one to another

And I don't mind admitting that when I have lost money (there has been the odd occasion!) it was I who totally deserved it. The only person at fault was me. But I've learnt some lessons along the way and the next time I loose money (because thats probably inevitable) I won't be looking for someone else to blame.

[Dr_Who]

@Lizard,

It is the height of arrogance to think that you know better than the professional analysts.

Unfortunately the system let us down this time round.

During the boom days before the finance firm fall out, every man and their dogs can call themselves investment advisor. So you have a bunch of car salesmen and insurance salesmen who cant read a spreadsheet started giving advice to the mum and dads. You would get advice like put all your hard earn savings in finance co, the property never falls, the world will continue to boom... etc.

If your house gets burgled, do you blame the house owner for not having a dog and an alarm and let the thief go free?

A well rounded society and community is one that we take care of the ones that are less fortunate than us.

[Alan3285]

Unfortunately the system let us down this time round.

During the boom days before the finance firm fall out, every man and their dogs can call themselves investment advisor. So you have a bunch of car salesmen and insurance salesmen who cant read a spreadsheet started giving advice to the mum and dads. You would get advice like put all your hard earn savings in finance co, the property never falls, the world will continue to boom... etc.

If your house gets burgled, do you blame the house owner for not having a dog and an alarm and let the thief go free?

A well rounded society and community is one that we take care of the ones that are less fortunate than us.

That's a straw-man argument. I never mentioned 'financial advisers' that is entirely from you.

I said that people I was talking to, who were choosing to lend money via 'first ranking secured debentures', thought they knew more than the analysts at Westpac who spend all day, every day, deciding whether to lend to people or not, and at what rate of interest.

That's up to them of course, but its incredibly arrogant of them, and it looks like they were wrong, and Westpac were right that 14% wasn't sufficient to reward for the risk.

You win some, you lose some, but we shouldn't blame others for our mistakes.

Alan.


PS: ALF now trading at 5c / share. There is quite a lot of support at 5c, but I wouldn't be too surprised if that chunk of 380,000 buys at that price disappears shortly.....

[Lizard]

I don't recall either Hanover or ALF or even United Finance offering 14%, but perhaps I missed something.

Sadly, I don't have the time to continue this debate - perhaps you should come along to the Wgtn ST meeting and we can have a barney and a laugh

[minimoke]

A well rounded society and community is one that we take care of the ones that are less fortunate than us.

Agreed - but if a person is dense enough to put their hard earned money with a used car salesman why should we have sympathy, let alone be asked to put our hands in our pockets to help that person out. Its like those free loaders who buy a house but no insurance and then expect the community to stump up to help them out when the place gets burgled.

[Alan3285]

I don't recall either Hanover or ALF or even United Finance offering 14%, but perhaps I missed something.

Sadly, I don't have the time to continue this debate - perhaps you should come along to the Wgtn ST meeting and we can have a barney and a laugh

I wonder what is left lying around the net in terms of 'ads' from the FCs back in the mid 90s?

On the other, I didn't even know there were ST meetings!

Wellington is a bit far to go, but thank you for the invite.

Alan.

[minimoke]

I wonder what is left lying around the net in terms of 'ads' from the FCs back in the mid 90s?
.

If you take March 1995 interbank cash rates were 9.15% and 90 day bill yields were 9.42%. Business base lending rates were 11.35% and Floating First Mortgage rates were 11%. 14%+ from finance cos seems quite likely.