no credibility but some shareholders knew, page-6

the main think to remember is that AEZ has an NTA of $0.88 and gearing of around 60%.

so lets assume the worst case scenario and the property prices fall 20%, remeber they were revalued in December 2007. So a 20% fall in value will reduce equity by $0.33. So if the prices accross the whole portfolio fell 20% then the NTA would be $0.55.

this might cause a few things to happen.

1. debt covanents are triggered, ie gearing above 65%.
2. forced to sell a few properties
3. cut the div again.

so even if the properties fall by 20% and the NTA falls to $0.55 and even if they dont pay divs (interest coverage the last time i checked was 3x) you are buying an asset at around 40% of its value.

while i am upset with the performance of the managers you cant help but think that this is one of those buy and hold strategies that comes along once in a while that you can comfortably say that you could probably double your money over the next 2-3 yrs without to much trouble and probably collect a nice div as well.