If something is only worth what someone will pay for it, then the discount to NTA is what the market values that bundle of shares. That is your challenge. That discount may never 'recover' and can very well deepen. If the gap doesn't close then that bundle is worth what what market says.
The perceived negatives of the LIC structure are now creating a drag on the NTA. The outcome is resulting in repricing with the discount to NTA.
Desirability needs to rise in order for the price to rise.
Outside of the discount to NTA, what is the overwhelming benefit an investor has to buy a LIC vs a broad ETF ? That's the rub. Desirability isn't rising.
LICs are broadly on the nose with no alpha in owing it vs a near zero cost ETF like A200.asx 0.04% MER. How does the LIC manager generate desirability with sustainable, replicable performance.
And every youtube fin-influencer is promoting ETFs - worse is the pushing of specialised ETFs. New investors think an ETF is safe vs understanding the ETF is just the packaging and not the contents.
Anyways; I hold Argo but will not be adding to my stash. May be one day ARG & AFI will have their day in the sun again. But today isn't that day.
ARG Price at posting:
$8.89 Sentiment: Hold Disclosure: Held
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