open your eyes, it is not too late, page-589

Last week I commented that I was having dinner with a manager of a large wealth fund and I'd ask him if he'd heard of Auz.
Well the dinners been done and I never got the chance to ask him the question. I'll explain why.

Now firstly, I'm not sure why I'm putting this here. It could go in any share thread I guess.
And most old timers could find the info completely useless. But some of the newer guys might just like a bit of insight.

Also note the 6 of us had 11 bottles last night. Some info can be skewed. He he.
Maybe to put a bit of credence behind what he said. He's the Ceo. Employs 500 people. Has worked in the industry for 40 years and runs a 13bil fund.

Firstly I asked him about another share and the effects of consolidation.
Him. Well the share price is going to drop. Get out.
Me. But, but the story is.....
Him. I don't care about the story. Good companies don't consolidate. They do the opposite. They reverse split.

He then gave me an example of a company that reverse split (increased share numbers) because their share price is too high and they wanted to cater to more people. Because a lot of people see $3000 per share as way too much. Reverse split and get to the share price back to $100 and everyone starts buying again.

Me. But a lot of instos won't buy into a company with 2bil shares, they want it down to 100mil.
Him. Complete rubbish. Instos will buy into any great company. Crap companies consolidate so that their minnow 10c stock magically looks appealing because it's now a $2.00 stock. "Look at us, we're a big company. We're a $2.00 stock". Sell it.

We then discussed individual stocks.
He said he couldn't pick a stock to save himself. In his life, he has never, ever, bought an individual stock. I was stunned.
(I never did get the chance to ask how he personally invested his money).

He said, my job is to run a wealth fund. The sharemarket is only one small component of it.
I employ 21 people to run the stock market side of things. All they do all day is have their heads down in stock information.
Only 53% of fund managers have positive years with regards to stock trading.

50% of the shares we buy each year end up completely dead.
20% finish level
20% have their head above water.
And ALL of our money is made within 10% of our share trading.

Now, it would be fair to say he doesn't rate the sharemarket at all.
He just knows it's a necessary evil in regards to his job.

But either way. I found his conviction in what he said to be very sobering.
In the end he said "hit the casino and play blackjack mate. " ha ha

Anyway, that's it. Thought some may find the chat interesting.
Don't come at me over it. I can't defend him.
And remember, 11 bottles of red.