Comments on: Stockwatch: Global Mining Investments (GMI)

By: Greg Atkinson

Greg Atkinson — Tue, 28 Apr 2009 04:03:37 +0000

I have had a response from the GMI company secretary (Liesl Petterd) about the management and performance fees shown in the half yearly report (31 Dec 08)

” …the performance fee for the 12 months to June 08 of
$4.8million (plus GST)(as disclosed in the 30 June 2008 Financial
Statements) was paid during the 6 months to 31 December 08, and is
therefore shown in the cashflow statement for the 6 months to 31
December 08. The management fees for the quarters ending 30 June 08 and 30 Sept 08 were also paid during the 6 months to 31 December 08. ”

I hope that clears things up.

By: Greg Atkinson

Greg Atkinson — Tue, 21 Apr 2009 02:11:29 +0000

Hi J Perks, I can only see $2 million in management and performance expenses for the half year. (page 10) The figure you mention from the cash flow statement would include (I hope) payments for FY0708 when things were ticking along well. You raise a good point though and I will look into it.

The full year FY0708 management and performance fees from the annual report came to around $12 million and net assets were around $407 million so this is getting up into the 3% range as far as the MER in concerned. This is a touch on the high side in my view, but it was a bumper year so the performance fees kicked in. (I don’t think they will kick in this year)

But like all the LIC’s you have to watch the MER as you rightly point out.

Finally I am cautious about looking for LIC’s trading at a large discount to their NTA’s per share backing as often this valuation gap never seems to close

By: J Perks

J Perks — Mon, 20 Apr 2009 13:24:19 +0000

Re GMI, their half year report to 31 Dec 2008 (cash flow statement) indicates management and performance fees of approx $7.5m. Seems a huge amount for an LIC with market cap of $180m, and would put me off buying it, even though some of these fees may be “hangover “from the 2008 financial year. The discount to NTA is not enough in the face of such fees.

By: Greg Atkinson

Greg Atkinson — Thu, 26 Mar 2009 08:49:15 +0000

8020 I also watch what Jim Rogers has to say, I also like Marc Faber. BHP I think is a good quality mining stock (and I own some BHP shares) but I also feel GMI gives me access to companies that are simply not listed on the ASX. You are right about the middleman..someone is taking a slice of the action when you go via an LIC or managed fund.

Hope the recent ASX rally is treating you well! Can we dream about cracking the 4000 level before the end of the financial year?

By: 8020 Financial

8020 Financial — Wed, 25 Mar 2009 05:01:45 +0000

Hi Greg,

I am not a buy and holder, but if I’d buy and hold anything it would be BHP, even though I consider it a high risk stock. By the way, I would suggest investing directly in the stocks themselves rather than through a LIC or managed fund – the middleman (the LIC or fund manager) always gets his cut with these vehicles. Various online brokers can give you access to most of the major financial markets for non-ASX stocks.

If we see a genuine recovery I do think commodities will lead the way. I’m a big fan of Jim Rogers, former right-hand man of George Soros and author of ‘Hot Commodities’, who was a China/commodities bull years before it was fashionable, and remains so now even with the correction.

But that recovery might be 5-10 years off, or even longer. But if you’re really willing to ride it out BHP and perhaps Newcrest would be good (if volatile) bets. Another option would be not to bother with the miners, and simply invest in the commodities themselves via futures contracts, but I guess that might be too scary for most people.