Ok - closed for Christmas now - $21.21Last Monday was a brutal...

Ok - closed for Christmas now - $21.21

Last Monday was a brutal brutal day...... and even though the sp settled for the rest of the week there are thousands of us battered and bruised - right on Christmas. Thanks very much.

The two extreme views on Magellan right now are :

1.It’s in terminal decline - sell and take your losses

2. It’s an over the top market belting and a buy opportunity - back up the truck.

I’m somewhere in the middle - a hold on MFG ......I’m not prepared to liquidate at low 20’s because I don’t think anything that happened should’ve sent it below $25.....yet I’m wary enough of the damage to the Magellan brand to be unwilling to back up the truck.

It’s still brave buying at these current prices - no doubt about it - yet fortune favours the brave (sometimes)

On balance I think it’s undervalued at $21 because this represents an overly pessimistic view of future FUM and also attributes little value to the non funds management side of MFG.

I’ve read very few of the posts this past week. What little I did read was the predictable pile on from non holders ....sharing their wisdom in hindsight......but interestingly also lots of new bottom feeder posters talking smack on the upside ....not surprising I guess since the markets have become one big smack talking gamblers den since March 2020. There’s also a handful of out and oiut Hamish Haters who have unfortunately stepped up their repetitive and tiresome output.

I’m hoping that Barrenjoey, GYG and Finclear are sufficiently independent of all of this carnage to keep powering ahead and keep MFG viable despite the potential short term decimation of the funds management business.
This is fundamentally why I’m a hold on MFG.

There aren’t many long term seasoned investors that haven’t experienced something like this. You have to chalk them up as lessons learnt and move forward. From my perspective here are some of the lessons learnt.

1.Beware the tall poppy syndrome. When you have a charismatic and successful and extremely wealthy leader there are always a great many that are ready to take him or her down when things go wrong. The attack on Hamish has been merciless.....the AFR in particular....only a very big fish could attract such vitriol....so maybe Hamish can console himself by reflecting on the classic Oscar Wilde quote - “there is only one thing in life worse than being talked about .....and that is not being talked about”

2. Funds Management is increasingly a fickle business. The markets are full of investors with short term mindsets. It seems all of a sudden any fund manager is only as good as their last few quarters.

3.The market is always better informed than you. I should’ve learnt from past experience on this one (I mean you have to wonder about the increased shorting on MFG and the big late trades just prior to the trading halt)

There are many ex holders who lost their nerve over last weekend and sold last Monday - some below $20......but for every seller there was an opportunistic buyer. Only time will tell who the ‘smart’ ones were.

Holding and hoping the bad news is all out in the market now.....and that there is a slow and steady restoration of confidence through 2022.