warm feeling today, page-13

Shepco ... you're right about the downtrend. I would not refer to myself as a chartist, however do at times take into consideration SP trend when making an investment decision.

With AFG I've actually been following it a long time - much of it fluctuating between the $10 and $12 mark. However to me at that level there was not the value I typically look for. As the SP fell what kept me out of the stock was the trend. However below $7 to me the value is too good to ignore regardless of the trend. Mind you, not being a trend trader I'm NOT refering to what might or might not happen in the next couple of months, more what might happen in the next few years.

The "comfort" I have (rightly or wrongly) is that the company has stated their current finance requirements are in no way impacted by what is happening in the sub-prime market. As such, their ability to recycle capital should continue to hold up well. The risk would be if they are not able to recycle their capital to the extent they need to maintain and increase profits (ie. can't get the stuff off their balance sheet).

I am not overly concerned about the portion of profit that has come from selling assets off their balance sheet. I see this more a function of the earlier stage the business is at in its growth. I equally recall there being "concerns" over this aspect of Macquarie at various times in the past. In time, as the level of listed and unlisted funds grows the ratio will change.

MJS