will this rally hold, page-14

was giving thought today while i did,nt have access to a trading platform,in that other boring thing that allows time for thought---it goes like this the banking fraternity are going to introduce an upgrade to their rules of operationn from basal 1 to basal 2 which means little to me except for the discussion i heard emphasising that under basal 2 the role model afg bnb macq etc have used would be unacceptable to the basal 2,which i guess would go some way toward explaining the current change of direction.


further to this discussion i gave consideration to the probable broad mode of operation,particularly in respect of bnb,basically it goes like this


suppose you built a platform of assets that provided strong
regular cashflow and you used that to assist in procuring other assets with similar potential ie. growth in demand and potential for capital growth.

to attract investors you promoted a high rate of return underwritten purely by a strong balance sheet supported by underlying assets.

the method of operation would be to pay a return using debt to security holders, however over the longer term you sold mature assets that had hopefully realised a real rate of return above the payment to security holders and after all operational costs,this model might continue to function even in poor times,if thorough analysis showed a real rate of return over time, (THIS CONCEPT WOULD REVOLVE AROUND THE TIME VALUE OF MONEY)THE VERY LARGE OUTLAYS WOULD RELY ON VERY SMALL AVERAGE PERCENTILE RETURNS.


i am beginning to wonder if BNB and AFG are operating under similar models,the thought of selling mature quality assets to continue funding and growing this model is interesting,and bar an unexplained calamity, perhaps like the one the world has at present which probably has more to do with a petro and emerging economies crisis than these actual company or in fact their role model.

any thoughts