Fisher Funds stocks

[777]

Total waste of time and money. It should have been a couple of A4 pages to comply with the requirement to carry it out.

Who is going to read it anyway?

[Basil]

Even marked as a price sensitive announcement FFS.

[snapiti]

Some have made that argument in the past and it's an argument that's not without some merit.
I think the starting point for any consideration around that is that if you want to invest in a PIE or managed stock picking fund that picks stocks, (rather than an index tracking fund), there are always going to be costs that go with that.  Discovery fund for example has a 1.2% annual base management fee plus a 20% performance fee for performance over the index, which seems egregiously high, but I have put serious money there based on the obvious skill level of the fund managers and their performance to date.

Yes you certainly can replicate their holdings quite easily, absolutely no argument with that whatsoever but that presupposes you have the patience and internal discipline to not want to engage in manipulating their stocks picks at least to some degree and also to hold each and every one of their picks over the long term.

Here's how I look at it.  I have done a deep dive 120 point monthly 10 year statistical analysis on Barramundi which shows an average level of discount of only 0.5%, and that minor discount figure may be somewhat overstated due to the shares frequently carrying slightly dilutionary warrants on a regular basis, so I am just going to go with its normal for them to trade at NAV.

I see this group as income investments.  The 8% tax free PIE distributions are extremely attractive and appear to be sustainable.  If you crop out the dramatic loss initially incurred by BRM just after they launched before the GFC, all these share prices of this group have at least held their capital value.

Buying at a large discount, (I will stick with the 12% on offer at present with KFL for the sake of this comment but also note attractive discounts on offer with Barramundi and Marlin at present), confers not only the higher chance the level of discount will normalize over time leading to outsized capital gains but also confers, while holding, an outsized dividend return.
Dividends are paid based on 2% per quarter of average NTA not the share price so 8% if bought at a 12% discount becomes an effective net yield of 8 / 0.88 = 9.09%.  That can be further enhanced by the 3% dividend reinvestment discount to become 9.37% net (9.09% / 0.97)

For taxpayers on a 33% marginal tax rate 9.37 % net is worth 13.99% gross, (9.37 / 0.67) let's call it 14% gross.
For those on a 39% tax rate its worth 15.36% gross.  These are extremely lucrative gross effective yields in anyone's language.

Sure, there's other ways to skin a cat but those gross yields are extremely attractive, especially in a falling interest rate environment and especially also in conjunction with the prospects of outsized gains with the level of share price discount normalizing over time.

You also get a very good feed at the annual meeting, for what that's worth but I enjoy it and catching up with some people there.  (Yeah I know shareholders are in effect paying for it and there's no such thing as a free lunch, but I still enjoy it whenever I have the spare time to attend.)

The other thing I noticed in my 10 year deep dive analysis on Barramundi share price relative to NTA is that interest rates are very low, the shares are more likely to trade either at a premium to NTA or at least at par.  We're headed towards are much lower interest rate environment over the next 2 years in my opinion.

Look, to be fair, I do acknowledge that this group traded at an unprecedented premium to NTA within that 10 year analysis I did when interest rates dropped to unprecedented level's.  Retired investors confronted with 1% term deposit rates at banks were in effect forced to consider alternatives and that's possibly what drove that period of premium.  That highly unusual event may never recur so I guess you could argue my ten-year analysis encapsulating that timeframe somewhat understates the level of normal discount.  Maybe excluding that highly unusual "premium" period a 3-4% discount is normal and about right.  That's how I see it and my 2 cents worth.

thanks Basil I really appreciate you bothering to share your wisdom

[BlackPeter]

All this extra meaningless compliance bumpf is unfortunately a deterrent to listing small and medium sized companies on the NZX.

With all due respect, but I was under the illusion that people realise that climate reporting is part of the Paris agreements, which have been signed and ratified by 194 countries (including New Zealand) - basically by all countries but Iran, Yemen and Lybia.

If we want to play with the reminder of countries, we better oblige, or they won't play with us anymore.

Ignoring our international treaties would run us pretty fast into the economic abyss. Climate reporting is just one of the costs to stay in business. Anybody who wants to stay in business needs to do it.

What might be true is that so far not everybody has grasped how an effective and useful climate report would look like.

What companies basically have to do is:
1) Measure how much carbon pollution is caused by the activities of their organisation and
2) Define a plan to bring this pollution down to net Zero within the agreed time frame.

Does not sound that hard, isn't it - but I have to admit that it seems to be easier to find verbose but pointless plans than good ones.

However - is this really a discussion for the Fisher Fund thread?

[Waltzing]

yes off topic.... oopps but

international what?

there is no international order anymore ....

i bet if they did not produce these reports trade would go on as usual ....


does trade stop with china if all there companies dont conform?


not sure the blow back will be that big as russia china, iran ect dont care.. and will all of africa and middle east stop trading with NZ

dont think so...

[Basil]

Fishers are fund managers, not a listed company that can have any effect over emissions.
They should be exempt from compliance with this ESG crap.

[Untamed]

Fishers are fund managers, not a listed company that can have any effect over emissions.
They should be exempt from compliance with this ESG crap.

One would think so.

[Basil]

thanks Basil I really appreciate you bothering to share your wisdom

You're most welcome mate. Hopefully a few others also backed up the truck on KFL at under $1.20
By doing so it was almost analogous to time travel.  You could buy a stake in NZX shares through KFL at prices prevailing before the rally, several days after the rally had commenced.

[BlackPeter]

yes off topic.... oopps but

international what?

there is no international order anymore ....

i bet if they did not produce these reports trade would go on as usual ....


does trade stop with china if all there companies dont conform?


not sure the blow back will be that big as russia china, iran ect dont care.. and will all of africa and middle east stop trading with NZ

dont think so...

Sure, we certainly will be able to continue our amazing trade relationship with North Korea, Iraq, Iran (but probably not both, we would need to choose) and Russia (as long as it is run by Putler) if we don't care about our climate obligations, but I doubt that it will be as easy to continue trading with e.g. the European Union - or even the US if we ignore our commitments.

I invite you to read some of our more important trade agreements (e.g. with the EU) - they all refer to our obligations on climate change, and no doubt our competitors in these countries would notice if we try to wiggle out.

Here is one example:
https://policy.trade.ec.europa.eu/eu-trade-relationships-country-and-region/countries-and-regions/new-zealand/eu-new-zealand-agreement/factsheet-eu-new-zealand-trade-agreement-trade-and-sustainable-development_en#:~:text=Benefits%20of%20the%20EU%2DNew%20Zealand%20Free%20Trade%20Agreement&text=Includes%20binding%20and%20enforceable%20commitments,principles%20and%20rights%20at%20work.

But sure, the decision is easy - if we believe that Russia, North Korea and Iran will set the future economic agenda and that neither EU nor the US will matter anymore, than by all means - lets ignore our climate commitments.

Not sure though I would recommend that. Would you?

The more sensible decision would be to improve on our climate reporting. We don't need huge reports with meaningless content, but we do need companies and organisations which contribute in a meaningful way to the reduction of our carbon pollution.

[Waltzing]

off topic... really should not be on this thread .. short answer
 
RIGHT LETS TICK THE BOX ....

do you have anything to declare .... NO *** !!!!  .... off you bureaucratic  bastar s  **** 

one box , one tick ...

[Basil]

Kingfish annual meeting tomorrow at the usual place at 10.30.  I expect a nice lunch afterwards as usual.
I'm hoping to have the time to attend.

[Dolcile]

The part I can't wrap my head around, is how to think about inflation. For example the KFL share price has moved from 0.92 to 1.17 over the last 20 years. If you inflation adjusted the 0.92, it would be 1.52 - so there is a loss in value there, which is part of the trade off for the 8% i guess.

[Untamed]

The part I can't wrap my head around, is how to think about inflation. For example the KFL share price has moved from 0.92 to 1.17 over the last 20 years. If you inflation adjusted the 0.92, it would be 1.52 - so there is a loss in value there, which is part of the trade off for the 8% i guess.

It was a lot higher than that at various times during that 20 years. I paid $1.69 in July 2020. It was around $1.37 when I first bought in, back in 2016. I sold a few for $1.94 at one point, in 2021.

Seems like we will never see those prices again.

[Waltzing]

funds and there standings

https://www.interest.co.nz/investing/129098/kiwisaver-funds-under-management-reached-1108-billion-june-quarter-according-new

[BlackPeter]

The part I can't wrap my head around, is how to think about inflation. For example the KFL share price has moved from 0.92 to 1.17 over the last 20 years. If you inflation adjusted the 0.92, it would be 1.52 - so there is a loss in value there, which is part of the trade off for the 8% i guess.

Just look at them as you would at a bond paying 8%. You put 100% nominal in and you get 100% nominal out (plus interest and yes, there will be some jitter on the principle depending on how the annual interest relates to the OCR.

If you want capital conservation and / or appreciation you better pick shares without or with less dividends.

I guess at the end of the day a reasonable investment pays you on a long term average (several decades) roughly 8% pa (including inflation). Your choice whether you want the 8% in capital appreciation or in dividends or as a mix between both.

Of course - everybody will tell you about these amazing deals they had on a short term basis (and yes, some did, but this is not investment, but speculation plus luck) and forget to talk about the many flops they had concurrently averaging their gains out.

So - yes, if you want your 8% in dividends, than this could be one of your low maintenance investment choices.