Decided to get out of RFG, sold out my holdings completely (only a 2+ bagger this time... not happy jan!) because of the ongoing credit crunch.
What concerned me is that because of RFG's high gearing, I believe either a capital raising or debt refinancing might be in the cards in the near future.
Previously I had assumed that Australian financial institutions would not be that heavily affected, but I have reconsidered my position: the situation will probably get worse in the coming months when they disclose and write off more bad debt.
Even though I am convinced its profits would be impressive following the takeover of brumbies and michell's, I decided to opt for companies with no debt in the current climate just to make my portfolio exposed to less debt-related risks. It was a hard decision and I would have held on for much much longer it the credit crunch wasn't getting worse by the day.
Now I'm about 40% cash, getting ready to buying cheap stocks, but the problem is I'm not sure whether the market has hit the bottom yet. The XAO chart looks very bearish and small caps are getting punished heavily (a lot of them are getting hammered badly!)
Good luck to holders, I am still a fan of RFG but for the meantime, I will sit in the sidelines...
CHART:
http://bigcharts.marketwatch.com/int...x=54&draw.y=17
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