LSF Dividend

LSF's next dividend should be declared in a few weeks. The accounts show good profit and franking credit balances, and directors with large holdings will benefit from unlocking the franking credits, so it seems likely that the next dividend will be similar to the previous one.

LSF has transitioned from being a stock with high hopes of capital appreciation and no dividends, to being a reliable dividend payer with franking credits and an NTA that seems to have stopped growing. It offers a competitive yield compared with term deposits, which should look even better when the predicted RBA interest rate cuts eventually kick in. There is still the possibility of capital appreciation but, unless LSF revises its investment strategies or unless there is a major market disruption, then the NTA seems likely to keep moving generally sideways.

It is up to LSF to figure out how best to modify its investment strategies. I would suggest shifting some weight from logical value investing to realistic market sentiment investing. For example, perhaps less shorting of things that are similar to Tesla, Bitcoin and CBA (if these types of investment are indeed in LSF's invisible portfolio of shorts). With currently historically high valuations, these types of investment may well eventually fall back to true value, which in the case of Bitcoin is probably zero, but it could take years and in the meantime trying to swim against the tide could be ruinous. A better strategy may be to short these types of investments only after a correction appears to have begun, maybe resulting in less potential profits but avoiding losses while watching prices continue to rise while waiting indefinitely for a correction.

As if in anticipation of the NTA remaining moribund, the SP-NTA premium that had been in place for more than six months recently turned into a significant discount. I have bought back in because of the discount and because of the prospect of upcoming franking credits.