Eureka Correspondence

Thorney Opportunities fund, franking credit hoarders, and finding value in technology and media.

Is Waislitz a new Buffett?

How does the humble retail investor get in on the ground floor of the Thorney Opportunities fund, or must we wait for the listing?

TH

James’s response: Thanks for your letter. The Thorney Opportunities fund will be available to all investors through the Australian Securities Exchange after Christmas. Investors can buy the stock from any broker.

Another franking credit hoarder

I read David Gilmour's great piece Australia’s biggest franking hoarders, but it seems to have an omission. Soul Pattinson had $507.5 million in franking credits in last year’s annual report. Given all the action on this one at the moment, it may be worth a mention.

Name withheld

David’s response: Thanks for your letter. While Soul Pattinson does have a big stockpile of franking credits at over 16% of its market cap, it’s not part of the S&P/ASX 100 Index – which is what I focused on for my research. Though the company is quite large, it’s excluded from the index because of its low free float of around 40%, with Brickworks owning a 43% stake.

Value in technology and media stocks?

I have been investing in mining stocks for the last eight years and thoroughly enjoyed the experience. It is now time to look elsewhere at other sectors within the investment arena.

Social Media seems to be on a huge growth pattern (whether one likes it or not) and I wondered if any of your contributors have knowledge to impart on technology or media investments.  I have noted that Moko Social Media (MKB) seems to be motoring and gathering more volume and interest during the past month.

SJB

Brendon’s response: We do not have a view on MKB, but as a general rule investors should have a diversified portfolio, and this is true even within the riskiest end of the market.

Social Media is a hot area but I don’t think one can say it is substitutable for mining explorers or vice-versa. Those looking for some exposure to high-risk high-reward stocks should hold emerging stocks from a variety of sectors as the probability of success is relatively low.

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