graham's "orbis vs paperlynx", page-6

Firsova

>I also bought a small holding in PXU a few weeks back despite my core holding being PPX.

Interesting that Graham cannot understand why anyone would hold both PPX and PXU. I can only assume that he and many involved in PIGS initally invested in the hybrids for income only. That would explain why they got so irate why PPX suspended PXU divs. I can only assume they believe income focussed investments are lower risk.

From my own experience, I have come to the conclusion that such investments are often high risk as PXU has turned out. I hold my investments in a DIY super fund (in pension mode) which has no distinction between capital gains and income. Therefore I would treat both PPX and PXU in the same light. Neither currently pay divs, are high risk and both have potential for upside if Paperlynx can be properly sorted out.

You could argue that PIGS has been detrimental to PPX, and even PXU. However I believe the tirades against Orbis in particular probably have firmed their determination to sort PPX out and possibly will result in PPX management making greater efforts to return the company to a firm basis.

I found Cleo's advice on MBA heartening. PIGs action may have scared some of the investment funds off PPX mainly because of the impact on their management's image if PPX is perceived as a dog as well as the conclusion that a PE offer was now less likely. It suggests MBA will not sell down most of the rest of their holding and PPX may bounce when the sell down finished. I noticed a similar thing with TLS which the Future fund bagged and sold out of. It bounced after the Future fund sold out.