Remember the wise words "in the short term the market is a...

Remember the wise words "in the short term the market is a voting machine, but in the long term its a weighing machine"...

Whilst published NTAs are interesting, I usually try to derive my own. There are a few ways in which I do that - one is to apply a reduction across the board, and the other is to look at yield, compare yield to the current interest rate spreads and then come up with my own valuation based on these two parameters.

I dont follow GMG - but I have followed GPT closely...
GPT currently has 5bn of borrowings with a chunk of cash in hand - I dont recall precisely, but I think net borrowings are about 4.3b... avg interest on it is a tad over 5% ... so thats about 215m give or take interest payments.

Its going to make about 400m EBIT this year... and thats a bad year... but there is way more than enough fat there to pay interest.

So, factoring that into play, if I were to buy the company debt and all right now using nothing but debt, about $1bn would give me the company, Id pay an extra 50m in interest for my new 1bn loan, Id pay for it out of the $185m PBT, leaving me with 135m in hand for the pleasure of borrowing 1bn... all paid for. Who gives a toss about the NTA :)

But, since the topic is about NTA, one day, it may be next year, nay be in 5 years... those assets will be worth what they are currently written at... in fact likely more. As long as the earnings stream between now and then is strong - and I believe for both GPT and GMG it is - logic and rationality should eventually prevail.