Investment help, page-92

I'll bet an LIC can remain trading above NTA longer than you can remain solvent ! But seriously, the premium to NTA will obviously fluctuate, but, as long as the manager continues to perform above the index, but more importantly, as long as investors THINK the manager will continue to manage the fund to obtain above average returns, then I believe that an LIC CAN continue to trade at above NTA. Have a look at MFF as an example. A share price and the share market in general doesnt rise and fall so much on what is happening at the moment, but what investors think will happen or occur in the future. As long as investors THINK that the manager will outperform, and that the stocks in the portfolio are good quality and their earnings are reliable, then share price can continue to exceed the NTA. If investors THINK that the manager will under-perform and that the stocks held in the portfolio have high PEs or are risky in nature, then investors will sell off, there will be more sellers than buyers, and the share price will fall. Im not saying that the share price will ALWAYS exceed NTA, but it can continue to do so for a good while yet.