PGC Revs +185%, Ebdta +186%, npat +215%, page-19

I was asked yesterday whether this is like 2008 - I give a quick yes answer and about 10 minutes later I said no its more like early 2009 when we hit the bottom. I know the indices are much higher but I think the companies have far less risk this time the gearing (average) is/ are much lower and in fact the lucky country is indeed lucky for a another reason. We may not be getting top dollar for our resources but we have huge volume increases to offset the lack of exploration - I think we are now getting into the production phase - that should help us as I think that phase is as big as the exploration and expansion phase. The workers wages will drive more money to super and to personal tax. Generally I keep looking for a much worse employment figure and it doesn't get there.

Really we are being pushed into the belief its really bad but we have not gone into recession - the reality is that the governments at all levels have embarked on huge projects that are far too advanced for our small economy. As much as I would like the NDIS and free everything we need to learn from the middle East and Saudi - they all banked on a high oil price. Now they have deficit economies - we need to understand that these types of projects need to be fully funded by Sovereign Funds income.

So I think we are getting close to the realisation that we are now in the low growth world economy until the next wave of innovation comes. The increase is guaranteed super is sucking money into funds and its reduced free cash flow - my view is that the bottom index could be anywhere from 4200 to 4900 but you need to be invested in companies that are not marginal and have growth even if its small. I think that PGC fits all the markers. We had the REIT phase but they are now valued substantially above NAV. The valuation rates are mostly below 8% and dropping. Health care is good but you need to find companies that are not subject to a government move to save money. Too many have listed on the basis of a spend as much as you want - we have growing tax income. They can see that Health spend has to change but want to load up on capital now and liquidate some of their shares now. The CAJ ... Now you get the shift from MRi for everything to co payment and pop the doctor says I cannot justify the expense. Waste has been huge in the gravy train years - now that gravy is needed for the NDIS ...

So what am I saying - I am with you I am looking to put some of my dividends (from the basket of stocks) back into the few shares I trust - PGC is number 1 at the moment.