@Bluey with that level of investment in AUZ I can fully understand your angst - I bought into AUZ well before SKI and at the height of the SKI rise I was sitting a little below that level of investment but did sell a few - I am well in the red based on the "SKI value" I retained but fortunately not so much on my original investment - in hindsight I should have sold the lot but I didn't so a missed opportunity on the AUZ shares I still hold
In this end of the resources market as you say there are a lot of cowboys but you can do very well - diversity in your portfolio and accepting there will be non performers and you will inevitably take some losses or be stuck in the red in stocks going nowhere is in my experience part of investing in this market segment. I have a rare earth stock sitting around a 800% capital gain at the moment and other resources stocks between 400 & 600 % up but I have others in the red - I run stop losses on most of my investments but regrettably given my average and the LGE offtake at the time I disregarded my normal inclination to exit AUZ as I have for a few of stocks I am in the red in at the moment.
I have owned a few investment properties over the years - mostly farms and done reasonably well but nowadays I prefer the liquidity of the stock market and lower holding costs i,e, no agents commissions (excepting broker fees), no huge stamp duty, no council rates, no land tax, no auction or sales campaign and waiting around to sell, etc etc. I do any property investment today via listed property trusts. That said, I do accept investing in the market rather than property places a higher risk on your capital i.e. a market drop can see a sudden and significant loss of value in many stocks whereas property historically doesn't experience as significant falls in value as do many shares in a recession and subsequent market correction e.g. GFC. Against that the gain on shares can be very significant and over a short period well over what you might experience with a property.
I could be totally wrong but I think we are in for a period of stagnation in the property market - residential property has risen in the last 20 years IMO as a result of the increased incidence of double income families, rising incomes, lower interest rates, and high immigration to name a few factors. I do not at the moment see a lot of drivers for increases in property prices.
I have taken the view with ANZ that I will await the outcome of the LGE/AUZ situation given the current share price. If LGE commit further then the increase from the current SP will likely be significant - if they depart there will be a hit no doubt to the share price but AUZ has other projects and cash from the CR and will not go into receivership or liquidation immediately if LGE exit. The decision then will be whether to stay invested based on AUZ's revised strategy or go for the tax loss.
At the end of the day each of us has to make our own decisions on any investments we make and live with the results of those decisions.
We probably do not have long before we will have the next chapter on AUZ unveiled for us.
AUZ Price at posting:
4.1¢ Sentiment: Hold Disclosure: Held
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