Eureka Correspondence

Share trading, LIC coverage and asset allocation.

Share trading

Thank you for your service--it is simply .the best .

I wonder if anyone in Eurekaland has any knowledge of an outfit called Capital Group Holdings ltd.?

It has supposedly an office in Melbourne. Check out their website here http://www.capitalgroupholdings.com.au and http://australasianeconomicwatchlist.com/?p=49. Level 3, IBM Centre, 60 City Road, Southbank VIC 3006. Phone 03 9909 2163 Free call 1800 380 050 Fax 1800 550 543 Email admin@capitalgroupholdings.com.au Download our Brochure ( .PDF).

They have been in constant contact with me wanting me to purchase their share trading software.

Briefly

a) The "small cap" trading program --which allegedly averages around 19% per month profit  -cost (investment") $19,000.00 "written guarantee" that your "investment" will be recouped in 12 months , or they will refund difference.  I have received an email from them to that effect.

b) The "Blue Chip" trading program --9% per month --"written guarantee" that money will be recouped in 24 months maximum--or they will refund difference. I have received email to that effect also --PLUS they will send me a new laptop with program loaded.

Investment?--$14,800.00.

All very attractive--but it also has many of the fingerprints of a scam of some level.

The handing off to a "more senior" "investment analyst" followed by constant calls --always  prefers to call not email presumably to weave his imagined salespersons magic on me . I owned a share of a very successful Real Estate business for 20 years last century so Ive seen every level of sales talk ..veiled (almost) aggression with the "please do me the courtesy  of returning this call" etc.

Does anyone know anything about this outfit? Are they a legitimate  business?

They have some kind of ASIC registration and not listed on Scamwatch --but my old (perhaps overly sensitive) radar is blinking.

The main reason for this enquiry is--if they are calling me-- I am "Mr Average Baby Boomer" in nearly every statistical way--so I would think that they are working the phones with a great many of us in Eurekaland--and we and our super  funds may be collectively taken for a ride--or we could be simply buying something that comes under heading of "caveat emptor".

My concern for everyone is that it may be totally ephemeral--so if anyone , particularly in Melbourne , knows anything about them, I think there would be many people who would appreciate the information.

Paul

Managing editor James Kirby's response: Thank you very much for your correspondence in relation to this trading software offer. As a rule we don't recommend share trading and we certainly don't recommend share trading software.

In any event, some early examination of the company and its products by Elizabeth Redman at Eureka has prompted more questions than answers.

We will look more thoroughly into this product offering in the days ahead, and if we have any more to report we will be back to you . Thanks again.

BKI

Have Eureka Staff read this article: http://barnabyisright.com/tag/bki-investment-limited/. Has it been considered for its veracity.

I was considering investing in BKI until I read this article. I was considering transfer of funds to LICs to reduce risk and remove my own involvement in direct share purchases. The last thing I need is large losses based on a corrupt LIC industry.

Dennis

Mitchell Sneddon's response: Thanks for your letter. It is an unfortunate part of any investment that you need to take into account the potential of managers and directors not acting in the best interests of shareholders and in the case of unlisted managed funds, unit holders.

If you invest in any stock, be it the big four banks or our largest telco or a small cap start up you run this risk. LICs have their share of long established names as well as new upstarts. If you are looking to invest in LICs and have strong concerns for unethical practice when starting your search look for managers with long track records and with a board of directors with a great depth of experience. Additionally keep in mind they need to comply with the rules of ASIC to remain a listed business and this includes twice yearly external audits. Saying this I know a number of companies though who did not act in the best interests of shareholders pass the above mentioned audits and comply with all the rules too.

I hope the above information helps and remember as I do not know your personal circumstances it is general in its nature. 

WHF

I appreciate the coverage of LICs. Mitchell Sneddon's article on Brickworks was very interresting. I am a long term investor and holder of LICs stocks exclusively. I recognised a long time ago I was a dud stock picker. I have been hearing a little lately, particularly at the AIA conference of a little known LIC but at the same time one that has been around for a long time. It is Whitefield or WHF ticker I think. Would appreciate some coverage on this stock LIC)

Bob

Mitchell Sneddon's response: Thank you for your feedback it's much appreciated. I'm a LIC investor myself due to the time it takes to adequately evaluate one stock let alone a diverse portfolio of them. WHF has been on my radar of LICs to check out. I would say a few people would be interested in it too given it doesn't have any exposure to BHP or RIO. 

Talking with my colleagues here though they did say there will come a time when you will want that resource exposure, picking it is going to be tricky though. I will be looking to get in touch with WHF shortly and hope to have something on them in the next two months I'd say. So far my efforts have been focused on what is attractive right now to go into the model but now that it is starting to fill up I can turn my attention to "watch list" LICs.

Asset allocation

I read endless Super fund analysis which is irrelevant to me and I suggest a lot of your subscribers.

I have a super fund balance of a significant sum and by the time I stop work in 7-10 years I hope will be more. I would appreciate a discussion of the management of larger fund balances, allocation and returns.

Greg

Managing editor James Kirby’s response: Thanks for your letter. The fund managers interviews are aimed at subscribers who may wish to invest in these funds which are often specialised - occasionally they are aimed directly at Sophisticated Investors. As an experienced investor you will find the contributions of Doug Turek on asset allocation (http://www.eurekareport.com.au/contributor/dr-doug-turek) and Tony Rumble in advanced investor products (http://www.eurekareport.com.au/contributor/tony-rumble) particularly useful.