LIC & LIT Whitefield Limited SPP

Flavour of the day:

A touch of hubris with a dash of bile.

 

Spectacularly good point, though the NTA gap is a present disincentive to have a flash at some more!

 

He he. For many years investors were whinging about WHF's NTA, both pre and post tax being below NTA, and now....

There's just no pleasing anyone it seems.

 

Oh for that opportunity.

 

True, though some don't worry too much about this,just looking long term with the idea of collecting more for increasing income or else checking other Lic's trading at a discount or buying index funds.

 

The comments in bold I agree with, the rest not so much.

 

Yep, it was certainly a loooong night if the wording of the above is any indication. An increase in coffee infusion required.

 

When all else is confusing , there's always coffee .

 

Love your work there.

One thing to look at with NTA announcements from LICs. Cash. Over some months it can be steady around 2%, then gradually increase towards 10% or more.

 

Okay, so when cash is increased to around say 10% , would this then mean that the apparent larger discount to NTA is just that ie. 'apparent', due to increased cash holdings?

 

It can. Depends on what the the market is doing. I don't recall NTA announcements actually stating if the LIC was buying, selling or sitting pat. Or it can also mean the LIC is building up its cash depending the managers view at the time. Much akin to what a number of investors may do; increasing cash holdings before DCA or placing a lump sum.

If it's shortly after an SPP, it should show a % increase in cash held.

Thing about SPPs now is they seemed to be capped on the number of shares to be issued at a max price. WHF only has a small number of shareholders but multiply that number by $30k and it would be well over the cap WHF announced. Same with the MIR SPP I took up.

I've had talks with a couple of LICs on this and the view I got is the cap is based on suggestions by the investment committee and what investments they are considering. They don't seem to like having too much cash for a long period as it can be a drag.

And yet, the only restriction ASIC places is the max amount an investor apply for. And the terms and conditions of an SPP are essentially a cut and paste from an instrument issued by ASIC. I'd be mean and it'd result in a one page SPP advice with a link to the ASIC regulation. Go suffer Luddites.

Oh for the days when an SPP was a standing offer and you could apply for up to certain dollar amount ($2k I think) in any 12 month period directly from the company. That arrangement ceased around the turn of the century.

 

Thanks for this reply @SatayKing but I'm still not sure what you meant by this:
(One thing to look at with NTA announcements from LICs. Cash. Over some months it can be steady around 2%, then gradually increase towards 10% or more).
Apologies if I appear overly 'thick' only 1 coffee today & too early for wine .

 

After a litre of mountain dew I'm similarly confused - I would've considered NTA a sum of parts of cash + equities. The cash drag effect should only factor into performance relative to benchmark?

I'm taking the current nta premium as partly a factor of the dividend holding up last year when all others were cutting theirs. Likely to remain stable for a bit moving forward that would mean current purchases are locking in a 3.8% yield (on DSSP). It'll grow given sufficient horizon but there is a river of mountain dew between now and then. Dividend to NTA is over 4%, or circa an 8% relative difference.

 

... and none of this assists my quest to be in the top 1.72% of shareholders.... *sigh*

 

It is what it is despite me preferring it to be lower.

 

Bloody odd number too!

 

The price can be as odd as it likes, I ain't got any control over that. Holdings, however, need to end with an ,000. It complies with my CDO.

 

I don't know why some buyers have pushed the price to where it presently is but I wish they'd stop. Makes my objective in respect of natural yield most unhappy.

Where is that share market Armageddon when you need it?

 

Getting close to the price of chicken breast per kg as well

 

What?! The price of chicken breast has dropped to under six bucks? It's shopping time.