Was anything but the top 20 worth it?
by, 26th-February-2008 at 07:29 PM (5522 Views)
It's fair to say a lot of people who were exposed to Allco, MFS, Centro, ABS - and god knows how many others in the same - had their blood shed.
So my question (I'm not trying to be insulting, but critical) is was it worth it?
Was it really worth investing in a not-yet mature business that has such a complex structure of making money? With layers of complex debt and a spider's web of cross funding and god knows what in the closet?
As opposed to BHP which is simply "we dig earth, we get copper, we send to China".
Or Woolworths - "We sell food because everybody needs it.
Or Woodside who has gargantuan amount of petrol to come for the billion drivers on the road?
Or even a bank - "Need a loan?"
Even Telstra's yield would have sufficed. Everybody needs phone and the internet, the company makes a lot of money but is out of favor because analysts are just a bunch of toolheads.
What I learned from watching this bloodbath is that you really don't need to invest in complexity for simple returns. No aircraft leasing , or debt fueled property expansion that can have seasonal and cyclical factors, no ultra wind farm out there in the Netherlands.
Not invest with debt atleast anyway.
If everyone was in the top 20 stocks today - other than News Corp (which shouldn't even be there) everyone would have been pretty happy.
So as is the way I am only going to put my money into liquid, big and secure companies rather than try out the dodgy scum of the market despite FMG tripling 500% in one year.
I can atleast sleep at night and not worry about Twiggy running away.
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