Below is part of the article by Daryl Wilson of Affluence Funds in yesterday's Livewire. The whole article is well worth a read and focuses on three unloved LIC's - LSF, NSC and ALF:
"So why do we think ALF is a good buy now? Firstly, we don’t believe it will get drastically worse from here. As the vehicle is currently market neutral, it is unlikely to suffer a large drawdown in a market fall. Of course, it could certainly continue to make losses, as its 1 year performance of -4.5% shows. It is also very possible for the discount to NTA to blow out even further. But in our opinion, the larger the discount gets from here, the greater the chance of a shareholder revolt. Given the 5 year returns, pressure is continuing to build for a resolution. Any more losses to shareholders from here, in our opinion, increases the chance of a WMK/WGF type transaction occurring."
I like his take on the subject, although I took a similar view with ALF some months ago and ended up losing on the 50% that I recently sold (!).
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