EOS Deal, page-6

I decided to give some thought to your comment before replying:

Yes I am very loyal but more importantly loyal to something that isn't broken. When the Carlisle unlock value and unwind the BKW SOL interconnection it was clear that that was a very short term look. Between November 1992 and today the All Share index is up 377% , BKW is up 536%, SOL is up 1407% and SFC is up 2024%. Few here will know what SFC does - or maybe better put they are still evolving.

I have invested for some 40 years and each time I have to temper greed with the real value of an accumulation. Like Berkshire Hathaway the real growth is never selling so never crystalizing a capital gain. What has shocked me though is that the growth in SOL value and BKW has trended towards similar results over the 5 year and 10 year horizon but SFC has outperformed them over each of those periods. What is stark reality is that over 5 years the all share has in fact only increased by 15% whereas SOL and BKW are between 56 and 66%.. Just to be even handed SFC is up 97%. I could take APT and they would outperform all of those but I don't invest in revenue based models.

Why this analysis:

I understand your principle anger. The NHC convertible note listed in Hong Kong was a bad idea and then the partial sell off of NHC added to that. However I have to raise the fact that Mitsubishi sold out of NHC @$1.86 approximately and that Mitsui sold out of Bengalla at a very low value as well. They sold for $215 million probably around 15 months profit for 10% stake it had. I am not sure that any of us understood what the price of coal could go to.

I don't think the issue is with Todd Barlow - he is a professional manager - my opinion. I am a bit of a socialist and don't like family influenced structures. I sold out of BKI - I don't like that stock. Over 5 years it has gone up 0% and yet the XAO is up 15%.. Over 10 years BKI is up 30% but XAO is up 52%. Not a great investment. So yes I am concerned about the next generation of investment managers. However I was impressed with the presentation from the ex Milton's manager.

So what am I saying? I may be loyal but only loyal to things that work. This structure and BKW work. I personally think BKW may become a much bigger player in USA - a fragmented market and thus something they can grow. The investments they have can add value and pay the dividends and thus make Brickyards less cyclical.

SOL has a great mix - I am not against TPG - in fact right now I think Optus is the one that must be losing credibility. I certainly would swap my account out to Vodafone if they accessed Telstra network. The NHC asset is a winner as you noted. Then there are the other things. to me EOS is just noise.