mikes100,If directors wanted to increase managers management...

mikes100,

If directors wanted to increase managers management fees then having a share buyback does just the opposite.

If you continue to buyback your own shares the company will become too small, lack share trading liquidity & have insufficient working capital. This makes a further option issue essential. It is also critical that the exercise price be not too excessive where the options will not be exercised.

If you wind up the company at the nta then that is all you get. What about future dividends for the investors who are in it for the longer term.

Most of the buyback has been under $1.10 so new options @ $1.25 will, upon the exercising of them, ensure the company has additional working capital & ALF can, if approptiate, start a new buyback thus supporting the share price.

A share buyback can be very prifitable for a company when they can issue share at a price well above the average of the buyback price.

You mention ARGO which has a long track record & that is why they usually trade at a premium to the nta.

ALF should reduce the discount to the nta & may even eventually trade at a premium once a longer track record is established. That record should be of continual increases in dividends, not up one period & down the next.

This longer track record with a larger capital base is more likely to attract institutional investors as well as being recommended by financial advisers.

ALF should pay 5.0c & 5.0c dividends (following the 4.0c & 4.0c + special 4.0c last year) & keep any additional franking credits so that dividends of 6.0c & 6.0c can be seen by investors as most likely the following year & 7.0c & 7.0c the year after & so on. This is how to establish a good reliable track record that will reduce the share price discount to the nta with the share price rising well over $1.50.

You mention a conflict of interest with the other LICs but you miss the point that investments for WAM, WAA & WAX are made by Wilson Asset Management & then distributed appropriately but investments for ALF are made by the Investment Manager, Watermark Funds Management, a wholly owned company of Justin Braitling.

ALF predominately invests in the larger capitalised companies while WAM, WAA & WAX invest in small to mid size companies so there is absolutely no conflict of interest, just a matter of swapping ideas & information as well as keeping some areas of sharing costs.