response midlife crisis

Hi Midlife,

i respect your view ... however any investemnt carries it risks.

With shares, heavy gearing and poor cash flow are the 2 major risks to buying a share in the current environment.

Risks of ownership are significantly reduced when the share price is significantly below valuations and when the company carries no debt.

Any announcement to highlight these undervaluations are likely to positively move shareprice. Over time the shareprice will likely reflect valuations. Yes there is a risk that valuations could drop further however management is doing the right thing clearing the deck. Will asset values drop to 1/3 of their current valuation ? ... i think not in my lifetime !!!


Overall fear in the sharemarket is the key factor weighing on all shares. This is cyclical. i buy when every one else is selling (eg gulf war, current recession). Some shares have dropped more than 50% in the past 6 months even though their fundamntals have improved !


For any one do your own research and seek finacial advice if you are uncertain.


Author owns many shares including recent purchases SDG, GPT and looking at other property and contrarian investments .