the buying continues, page-42

Melua says

"They "might" come out of it and survive but where's the risk/reward? The potential downside from here is 100% and the upside very limited due to the impending dilution. That to me does not warrant any position whatsover. I'm a value investor, not a mug punter/wild speculator".

I have followed your posts for a very long time and have felt you provide very valuable information and insight. I know that we all want to be seen as the investor who bought at the bottom of the market and sold at the top. Judging by your posts you seemed to have bought close to the bottom and sold close to the top. Possibly your excitment for the stock and then your doom and fear are well founded. Certainly judging from your trades this appears to be the case and well done.

However, I find your statement above particularly curious. You were very happy to buy BBI in the midst of the worst financial crisis seen by the world since 1929. Banks were on there knees falling over in September of last year. There was zero liquidity in the market and anyone who held cash sat tight. Despite a heavy deabt load and little equity you felt a strong conviction for this stock. You must have posted thousands of emails supporting this stock and in particular saying dont get confused by the noise around the stock the assets are world class with highly secure cash flows.

A year later, the assets have only continued to perform well. The GFC is easing and Bernake commented last night he felt that the US was out of recession. Banks are stablising and fear is easing. Transactions globally are again commencing and cornerstone investors are again seeing high value opportunties and investing. CMBS issues are again happening in the debt markets

Management make a decision not to sell the assets at a wholesale level so as not to suffer a permanent dilution and yet announce an anticipated equity placement no different to many other companies on the ASX who have subsequently only prospered

All of the BBI banks are comfortably being paid and amortised through the sweep. A CSI has been identified and is in discussions for a meaningful recap.

Yet your view is that the risks have never been higher, we are on the verge of a VA and its time everyone on mass dumps the stock and moves on to better risk/return plays.

personally I cannot understand the logic of your position. Whilst I acknowledge there remains risk on ths stock, I find it very difficult to see that the risks have gone UP over the last twelve months.

You seem very spooked by the public annoucement made by management. My read was merely management protecting their legal positions. The management obviously dont want to make representations regarding a transaction that may not occur and hence why their statement made it clear that there is no certainty in regards to outcomes.

I guess time will tell the outcomes and certainly there is a lot that has to be sorted out with this stock. However, its a very big call to say the risks have increased.


DYOR