Eureka Correspondence

Dividend franking credits, masterclass investing and takeover updates.

Dividends, franking credits and PPL

I rely on dividends and franking credits for a large part of my income. I am happy to lose a small part of this income for a short time if it helps to see off what is undoubtedly the worst six years of government this country has seen. Those against the paid parental leave scheme fail to consider that in the event of a change in government conditions might improve to the extent that company profits increase, effectively nullifying the higher tax. Also if the Coalition can return the budget to surplus (a herculean task) this tax can be axed.

Name withheld

Masterclass investing

Thank you to Bruce Teele and Robert Gottliebsen for bringing Bruce's comments to Eureka Report subscribers (see Seven secrets from an investment master).

Bruce Teele brings long-term perspective and demonstrated investment success to us. And learnings; Yes learnings!  I suggest that it would be worthwhile to obtain further advice from him for us. Perhaps invite him to write on a couple of investment topics of his choice. Or ask him to address the question: “If you were 50 and planning for 'the term of your natural life', how would you invest?”

Name withheld

Takeover updates

It's nice to have Tom Elliott's contributions again after a break of some months. Is there any chance he could make some brief comments about one or two of the takeover situations he was following prior to the break? In particular, the Equity Trustees/Perpetual move on the Trust Company. Tom was rather keen on this one as a trade, I followed the suggestion by buying Trust Co but things have become rather bogged down. His current thoughts on that takeover would be very much appreciated.


Tom’s response: Thanks for your letter. The ACCC has invited submissions on the bid by Perpetual and will release its findings by September 19, so I think Trust Co is a hold for the time being. This is still a competitive situation as Equity Trustees still has a rival bid in the wings.

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