Hi Cocky5,I wish the current NTA was $3.48, but its only around...

Hi Cocky5,

I wish the current NTA was $3.48, but its only around $2.80, they had already added
that midyear valuation update into the mix to get the $2.63 NTA you mentioned, this
latest valuation only adds just under $7mill to that or around 17cps to bring it to $2.80
so my calculation of a discount to NTA of 35% is pretty spot on

Lots of asset managers trade at discounts to NTA at times, and other times trade at premiums
It is sometimes a great way to make money, by playing this NTA discount and when things turn
around the NTA discount closes, so you win by the turn around and also the closing of the discount
I will use LSF as an example, before listing LSF, L1 capital had a few very good years in their
unlisted fund they were the flavour of the month, they then listed LSF and took all the $$ that
were thrown at them, well over a billion dollars from memory, unfortunately from that $2 listing
price the SP went downhill fast, holders were losing faith in the investment model, even when
they started to turn things around the discount to NTA grew bigger, it got to around 35% from
memory, at one stage in march 2020 the shareprice was in the 60c range and reported NTA
was over $1, people here on HC were calling for exactly what you said, basically a winding up
of LSF and handing back the money, I voiced an alternate opinion and stated that L1 had no
control of this discount to NTA, that it was the market talking. I had bought heaps of LSF and bought
them at an average of over 30% discount to NTA....L1 got their mojo back and as their performance
improved the the discount slowly evaporated, in a year or so they went from mid 60cto nearly $3

I bought AACo at an average of $1.08, because it was trading at what I estimated to be a
45% discount to NTA it was out of favour, roll on 18 months and I basically doubled my money,
It went from a 45% discount to assets, to probably pretty close to even stevens


I think Duxton have done a half decent job since listing, they had a couple of years of bad drought
straight after listing, they took a big risk buying the farm in South Aust, but it paid off in spades,
and paid the win back to holders with a 6.2c divvy. If you believe the valuations they have nearly
doubled the NTA per share, yeah this is not reflected in the SP, but again this is not all the fault
of management, yes I do get your point that the management fees are the cause of this discount,
but its not just that, management fees are only .85%, so 40 years of management fees are baked
into that discount...NAH I dont think so, it might have a bit to do with it but not a lot
I personally think that investors understand that farm prices have had a good decade or so of
price rises and especially with the now low returns on these high prices, something will have to give


I actually think like Duxton, and think that we may see meat, grain and other soft commodity prices
jump up a level or two (which they have already) and stay at these elevated level forever, thats my
thinking and I want to be part of that, you Cocky5 by the sounds of it, already have exposure
to this way of thinking or asset class

So I am happy to buy my exposure to this thinking at a 35% off sale

I am not keen on them winding up DBF (yet) and handing back the discount, I suppose thats why
I hold and you dont