Some Facts and Questions

I have been watching the threads and comments with great interest. I will not offer any opinion given the wide range of them already available but thought I would provide some thoughts in the form of facts and questions to calmly consider instead of what seems to be some pretty wild claims by both those wanting to see the price fall and those who are hopeful it will rise quickly. The only opinion I will give is that I continue to hold.

A fact - if you look at the price of AMP over 1 year and 6 months it matches the asx200 pretty much. It outperforms over 3 months as it underperformed on the way down during covid. I use asx200 as comparing to banks is not a good comparison. I realise it is imperfect. If you allow for lost dividends, AMP, underperformed. This suggests, and this is bordering on opinion, that the life sale being finalized has had little impact as people priced much of it in. They believed what the board and management had been saying for some time. (I recognise the share issue means that in terms of capitalization the value of AMP grew over 1 year)

Question - This lack of movement in relative price raises questions about to what extent there has been recovery in future earnings factored in to the share price as it has effectively not moved. To the downrampers, they would use this as a sign of pessimism by holders. Those who see the earnings growing, see the potential growth in share price. So the question is then about what will drive profit growth and what will it grow to over what period? What is potential downside risk to profit? What is impact of abnormal costs on profit over next 2 to 3 years?

question - linked to the abnormal costs; how much of the available free Capital is going to be spent on creating the future AMP? How confident are you of a return? Are we ok with a profit before abnormal but loss after them for 2 years if this is what it takes? If you look at marketscreener and the consensus of analysts - I know many don’t like brokers’ opinions but worth a look - it seems some use profit before and some after abnormal which in part explains the huge variance in target prices - from about $1.25 to $2.50.

question - exactly what is the net cash/debt/capital position today and what is it expected to be in 1, 2, 3 years based on abnormal spend?

question - Ferrari talks of advice for masses. Will he present some details about the strategy for making money by providing products, services and advice to the masses. The problem with selling to those with less money is...well....they have less money and either don’t want to or cannot afford to part with it.

question - at what point do those of us who are long term holders stop talking about the new management team? Murray has been there 2 years. Ferrari is in his 20th month.

question - while AMP does have a history of wasting capital, when will the downrampers stop using this as evidence of AMP falling to 50 cents - yes I mean you Helmich. This is where we do have a more conservative and financial oriented board and management at the top who are unlikely to repeat the scale of capital failure of the past. While there may be issues around breaking up AMPCapital due to its interconnection with other parts of the business, it is hard to ignore the $2 billion value of the bank and what seems to now be a $4billion value for AMP Capital (15% is owned by Mitsubishi) plus the value of wealth and advice. This would seem to fully support the current share price plus a bit.