Argosy Property

[Waltzing]

dont think  the retail investor drives these comp prop stocks as the vol by the instos sets it price over the longer run...

if the instos dont want them it could take while..

[winner (n)]

ARG chart looks rather sad ...and this before todays ex divie action ...now $1.12

Be same prices as KPG at this rate

You cannot view this attachment.

[Waltzing]

not unless the dividend is reduced... expect KPG to if it plans succeed to slowly climb ...if they execute..

[Basil]

Very soft prices for both KPG and ARG, a bit surprising.

[Waltzing]

expect ARG to hopefully grow there portfolio over the next 10 years... 

[Ferg]

But then a broker says correlation to bond spreads is rubbish these days so no worries

You often graph these things which shows you collect the numbers....have you run a correlation on this and/or the other REITs?  I am also curious why the broker said that and what it was based on....?

[winner (n)]

You often graph these things which shows you collect the numbers....have you run a correlation on this and/or the other REITs?  I am also curious why the broker said that and what it was based on....?

Thinking was triggered when Basil posted thay Salt Funds said gap to bonds had never been wider and share price should be 1.40

But then Craig's did some work on REITs and concluded the LPV Premium (the spread between LPV dividend yields and the five year swap rate) has returned to pre-Covid levels. This suggests the sector is now fairly valued at current price levels, with limited scope for further multiple expansion unless the interest rate outlook improves."

Might have misinterpreted what Salt said - the relationship isn't actually broken so that means I disagree with Salt and agree with Craig's

The only long term I've keep going is KPG and the model of KPG share price v 10 Year Govt comes out that KPG share price should be about 94/96 now. A bit spooky eh

I last did the model with ARG a couple of years ago ....interesting the ARG correlation was stronger than KPG

So it seems the miserable ARG share price today might be what some call 'fair value'

[Waltzing]

Actually over time AI thinks if your high income earner this is as SIR B says.. NZ PIE is the key..its a buy on the higher bond yields - and the price spikes are probably retail investors...

[Waltzing]

Anthropic's  SoftMax Algo Model (AI) - the blurting machine says this...

""Risk-free" is a convention, not a fact. Government bonds carry real risks:

Inflation risk — a 4.71% nominal yield becomes a real loss if inflation runs at 3.1%+, as it currently does in NZ
Fiscal/sovereign risk — governments can default (Argentina, Greece), inflate away debt, or restructure. NZ's total bond issuance program is projected at NZ$135 billion through 2029 — that is a real supply and creditworthiness question
Currency risk — offshore holders of NZ government bonds face NZD depreciation eroding returns
Duration risk — a 10-year bond held to maturity locks in today's yield; if rates rise further, the mark-to-market loss is substantial
Refinancing/rollover risk — governments that must continuously roll debt in a rising yield environment face compounding fiscal pressure

The market convention exists for modelling convenience, not because it reflects reality. The "risk-free rate" is simply the lowest-risk instrument in a given currency — it sets the floor, but the floor itself is not riskless.
The practical implication for ARG:
If you accept that NZ government bonds carry real inflation and fiscal risk, then the 72bps gross spread between ARG equity (5.43%) and government bonds (4.71%) understates ARG's relative attractiveness — because you are not actually giving up safety when you buy ARG instead of government bonds. You are exchanging one set of risks (sovereign, inflation, duration) for a different set (property, vacancy, leverage) — but receiving hard asset backing, rental growth, and PIE tax efficiency in return.
The institutional market prices as if the government bond is genuinely risk-free. That mispricing is part of what creates the structural discount ARG trades at relative to NTA."

[Waltzing]

Ok if that is a bit confusing think of this way..

You bought ARG in covid at 1.25 and you sold at 1.60....

why... well becuase you understood that the ocr was near 0 or under and the Spread to Yield on the dividend was HUGE!!! and the government was paying everyone to stay at home...

money for jam...

10 year was yield was low... boy was a gift..

now your complaining cause the yield is pushing the two together but what your not thinking about is the LOSSES the holders of older 10 bonds are suffering now as the yield gees higher on the 10 year yield...

The price on the 10 year is lower forcing the selling...

YOU can buy the ARG stock at a LOWER price since you sold at 1.60 and .... wait....

and low and behold you now want the SH to close.. oil to spike and a global recession to force OCR up higher until the market crashes and low and behold you kept buying as ARG goes even lower...

Now reserve banks lower the OCR the yields on the 10 year plummet and ..... you got it... YOU SELL when ARG goes up up and away...If the SH dont close and the tankers dont burn... well you get the dividend and wait for another world event that blows everything up...

now i know what your thinking.. that horrible.. well thats how people like Soros and DUNK a Miller think... of course you grew reading Lyres Poker right? who didnt!!!

https://en.wikipedia.org/wiki/Liar%27s_Poker

If you did not have a copy of this book from a second hand book shop.. well lost mine travelling..Dont buy reits unless you understand what instos bond holders buy and sell and when...

[winner (n)]

10 Year Govt still on rise ...now over 4.7%

Maybe ARG share price will fall further today - as some punters won't be wanting to hold over the weekend in case things get really bad

[Waltzing]

should be a dollar soon...bargain...

[Basil]

I'm just going to do a possum in the headlights and see what happens.

[entrep]

Argosy seems most exposed to office space and WFH and AI concerns

[winner (n)]

NZ 10 year rate creeping up again = no joy for ARG/KPG share price