Although I only got into CDM when the pandemic hit, I completely...

Although I only got into CDM when the pandemic hit, I completely understand where you are coming from having found out what about that debacle. I do think Karl has learned his lesson and while mistakes may happen again, as they always do for every fund manager, I expect it will be of a different nature.

The cash raised from my sales of CDM is going into NZM and FDV. I already have a substantial position in both them but I want to increase them because the risk/reward proposition is far too compelling not to.

NZM is generating massive free cash flow, will almost be debt free soon and has already reinstated its dividend. It does not have huge capital requirements and is a growing business.

The key basis for investing in NZM is that:
- The NZ Herald is the leading newspaper there, and should succeed in converting its readers to a subscription model. Even if it does not fully succeed in this, I am happy for it to just used as a feeder into...
- OneRoof - which for now you can think of as potentially becoming what Domain was like for Fairfax. A business equal to if not worth more than NZM's radio and media business. For now, OneRoof is still in the early stages of growth, but I expect (or hope), that it can at worst become like the Domain of NZ (i.e. the second largest real estate portal), or at best, the realestate.com,au of NZ.
- The radio business which also commands the largest market share is also a strong income generator that has shown resilience despite the emergence of podcasts etc.

Anyway, in summary, NZM trades on a P/E ratio of about 6.5, and generating a lot of free cashflow. It appears to be priced as a pure old media, cigar butt business, without regard for the fact that both their old media assets have shown resilience, and ignorant of how quickly OneRoof is growing. There are some other catalysts that could potentially be great for NZM but I've gone off-topic enough.

Going back to CDM - CDM's discount to NTA is made up by more than the entire value of its ownership in SOAC (The Metals Group). I keep an eye on the value SOAC trades at which is roughly at face value of $10 - the volume however is not great.

That kind of position makes me nervous. At the end of the day, I realised if I was not confident in that discount to NTA being closed, of the full value of SOAC being ultimately realised by CDM... then I am essentially backing the fund manager and their processes. On that note, I'd prefer to put my money in FOR or PMC to be honest, which is what I have done.

FOR made the Melbourne IT kind of mistake early on, then had an issue with getting into too many illiquid stocks and being too contrarian without enough regard for the catalysts that will let you get out if it does not work out, or if it gives you a middling result but no one still wants to buy it. While improving their approach, Steve Johnson there has finally realised the job of a CIO is not to be focussed on picking stocks, but on portfolio management and he actually seems to be doing a stellar job at it.

If you listen to Karl on his learnings of the Melbourne IT disaster, it appears he has learned the same lessons, except I am not confident he has the people under him as Steve has to do as well.