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Author: whatismyoption Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 6186  
Subject: Buying ANZ Date: 7/15/2008 3:52 AM
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I finally got a whiff of fear from the Australian markets today. So I put some money to work.
http://www.fusioninvesting.com/blog/2008/07/fusion-investing...

Dean
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Author: jeffrubinstein Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 6165 of 6186
Subject: Re: Buying ANZ Date: 7/15/2008 8:06 PM
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Hello Folks,

Buying ANZ while the Opes Prime saga is still rolling along would be too high risk for me. Actually, buying CBA or NAB in the current climate would be too high risk for me.

Intending to stay in cash until the bottom has formed. I might miss the first 10-15% rise, but I'll mis the drop from here too.

Not selling any existing holdings either.

Regards

Jeff

Disclaimer - long CBA. no position in ANZ or NAB

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Author: whatismyoption Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 6166 of 6186
Subject: Re: Buying ANZ Date: 7/16/2008 10:22 PM
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Hi Jeff
Thanks for your comment.

Are you concerned about CBA's exposure as the largest mortgage lender in Australia. The potential non-performing mortgage assets they hold is orders of magnitude larger than (it too lazy to look it up, but know it is big) than ANZ total exposure to Opes Prime of $650M.

Even if the absolute worst case scenario comes around for ANZ with Opes that is still a one-off problem. I don't consider that likely as ANZ is a secured creditor. The poor investors who didn't read what they were signing are now, due to falling, moving from unsecured creditors to debtors. I wish them well and hope they learn something of value from this expensive lesson.

Let me know when you here that bell ring at the bottom. ;-) Will that 10-15% move up be from the bottom or just a head fake? It's so hard to tell real time.

What I know is that I am incredibly unlikely to lose capital buying ANZ at $17.16. I hope the markets continue to fall as a net buyer I'd like to be offered more stock at lower prices.

With the high AUD against USD I would not encourage US investors to be buying Australian companies, unless they think it is different this time and the USD is cactus.

Cheers
Dean

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Author: TMFCogitarius Big gold star, 5000 posts Old School Fool Home Fool Global Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 6167 of 6186
Subject: Re: Buying ANZ Date: 7/17/2008 2:27 AM
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Dean : With the high AUD against USD I would not encourage US investors to be buying Australian companies, unless they think it is different this time and the USD is cactus.

Very sage advice! Having watched the Oz go from .50 to ~1.00 in less than 10 years, I'm just waiting to see the inevitable other side of that hill!

Though it's difficult to make any case for the USD today, real interest rates have to get real sometime soon, and housing won't keep on crumbling forever.

The Oz, OTOH, has both Asian growth and one of the developed world's highest interest rates keeping it aloft!

How's the inflation scene down there?

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Author: jeffrubinstein Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 6168 of 6186
Subject: Re: Buying ANZ Date: 7/17/2008 4:48 AM
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Hello again, Folks,

Are you concerned about CBA's exposure as the largest mortgage lender in Australia. The potential non-performing mortgage assets they hold is orders of magnitude larger than (it too lazy to look it up, but know it is big) than ANZ total exposure to Opes Prime of $650M.

I'm not really concerned about CBA, because they are unlikely to have made 100% loans and most of their outstanding mortgages will be for less than 75% of (today's) valuation. OTOH, ANZ are not only likely to lose a substantial sum of real money, they will have badly damaged their relationship with their main customer base - small businesses. Those sort of account holders simply cannot afford to bank with someone with even a hint of shady behaviour. I can see them moving over to Westpac/NAB or one of the smaller banks in droves if any more bad news emerges. JMO, of course and I wish you luck with your investment. It may be that ANZ will quickly recover from the setback as they are the most go-ahead of the four big banks in Australia.

Will that 10-15% move up be from the bottom or just a head fake? It's so hard to tell real time.

There's the rub. But I am intending to wait for two major events to play out before I will commit money to things. One is the US Presidentials as this will heavily influence the investment climate for some time. The other would be an expected crisis in China. I believe the Shanghai bourse has fallen by over 50% from its highs last year. In addition, I noticed that 75% of polled fund managers are now underweight in Indian stocks as they are expecting major inflation problems in the emerging markets sector. I would wait for this one to have played out a bit more. Again, JMO.

With the high AUD against USD I would not encourage US investors to be buying Australian companies, unless they think it is different this time and the USD is cactus.

My bad! I should have said that I wrote from comfy, suburban Melbourne (and NOT the Florida one either) so my picture of currency risk is a bit different.

As it happens, I will almost certainly be putting some money into a foreign currency bank account and using it to by short term bank paper of at least six months duration. I need to look at interest rates to decide on a home for this, but I think parity for the A$ against the US$ will not hold for very long. Australia has the best terms of trade they have ever had. IMO, they can only get worse from here...

Regards

Jeff

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Author: whatismyoption Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 6169 of 6186
Subject: Re: Buying ANZ Date: 7/17/2008 9:27 AM
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Anecdotally a small business owner friend just swapped from CBA to NAB for their business banking. NAB had much better deals on their eftpos. Sleeker wireless terminal, lower rates. Small business will go where they get the best deal.

Jeff, I really hope you didn't lose money in Opes and so sorry if you or someone you know did. I read contracts all the time and still may have missed the fine print that the shares wouldn't be actually owned by me.

I'm about to open a small business bank account, so I'll report back on the deals available.

Inflation
News aggregator http://www.businessspectator.com.au/bs.nsf/search?searchView...
Working person's paper says "Australia winning battle against inflation" http://www.news.com.au/heraldsun/story/0,21985,24031228-664,...

Reserve Bank RBA statistics http://www.rba.gov.au/Statistics/measures_of_cpi.html

On the street people are freaking out about petrol, $1.60 or more a litre. Price of food. Housing prices not going up.

West Australia is still booming like crazy. If you live in WA and earn less than $100k then you're clearly not working for money. Well perhaps a tad harsh, but there are lots of opportunities in constructions and mining.

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Author: TMFCogitarius Big gold star, 5000 posts Old School Fool Home Fool Global Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 6170 of 6186
Subject: Re: Buying ANZ Date: 7/27/2008 11:57 AM
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Hi Dean - looks like the US subprime toxin has leached into Australia too! Do you think NAB will remain the only one 'materially' affected?

It's interesting how high interest rates plus a strong currency are still not enough to control inflation. In fact, higher rates are driving the 10% YOY inflation in financial services.

I was traveling with a family from Perth, and they were rather upset about how the commodities boom was driving everything up for them. Classic case of 'be careful what you wish for'!

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Author: jeffrubinstein Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 6171 of 6186
Subject: Re: Buying ANZ Date: 7/28/2008 8:29 PM
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Hello again, Folks,

ooks like the US subprime toxin has leached into Australia too! Do you think NAB will remain the only one 'materially' affected?

ANZ just announced a huge write-off

http://money.ninemsn.com.au/article.aspx?id=604689

Statement to the ASX

http://imagesignal.comsec.com.au/asxdata/20080728/pdf/008634...

this is also available via www.anz.com.au

They are well down on the news, although they head the 'buys' list on volume this morning

Regards

Jeff

Disclaimer - long CBA, still wouldn't touch ANZ. Might get some NAB, but not until after the next financial report from NAB

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