DISCLAIMER: The following material was presented at ASX Investor Hour.

Transcription

1 ASX Investor Hour DISCLAIMER: The following material was presented at ASX Investor Hour. The views, opinions or recommendations of the presenter are solely those of the presenter and do not in any way reflect the views, opinions, recommendations, of ASX Limited ABN and its related bodies corporate ( ASX ). ASX makes no representation or warranty with respect to the accuracy, completeness or currency of the content. The content is for educational purposes only and does not constitute financial advice. Independent advice should be obtained from an Australian financial services licensee before making investment decisions. To the extent permitted by law, ASX and its employees, officers and contractors shall not be liable for any loss or damage arising in any way (including by way of negligence) from or in connection with any information provided or omitted or from any one acting or refraining to act in reliance on this information. Presenter: Roger Montgomery, Value.Able Topic: When to sell Date: 3 August 2011 Location: Melbourne Investor Hour

2 When to sell A Value.able presentation by Roger J Montgomery ASX Investor Hour, Wednesday 3 August 2011 web: blog: blog.rogermontgomery.com

3 Warning This presentation does not constitute personal advice. It provides educational information and content only. All comments made are for educational purposes only and should not be regarded as advice regarding the purchase or sale of securities, options, futures or any other financial instrument of any kind. You should consult your professional, licensed, financial advisor before making any financial or investment decisions. The information contained in this presentation has been obtained from public sources that are believed to be accurate, but the accuracy of this information has not been checked or verified. Except to the extent that liability cannot be excluded, neither Roger Montgomery nor any associated entities, accept any liability for any loss or damage caused by any error in, or omission from, this presentation. Past performance is not a reliable indicator of future performance. Forecasts used in this presentation are intended as a guide only. They are predictive in character and as such may be affected by inaccurate assumptions or by known or unknown risks and uncertainties and therefore may differ materially from results ultimately achieved. Any information concerning taxation is general information and does not constitute advice. This presentation has been prepared without taking account of your objectives, financial situation or needs and therefore you must consider its appropriateness having regard to your objectives, financial situation and needs and consult your professional, licensed, financial advisor. Securities trading has large potential rewards but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in securities markets. Don't trade with money you can't afford to lose. This presentation is neither a solicitation nor an offer to Buy/Sell securities, options, futures or any other financial instrument of any kind. No representation is being made that any person will or is likely to achieve profits or losses similar to those [if] discussed in this presentation. The past performance of any methodology is not necessarily indicative of future results.

4 You have never made money in the stock market until you have...

5 but...

6 You make all your money when you buy

7 You can t hold shares forever...

8 Price eventually follows value...

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11 Is Amcor really a blue chip?

12 BUY

13 reasons to sell

14 Your portfolio is junk reasons to sell

15 Expensive Your portfolio is junk reasons to sell

16 Falling value Expensive Your portfolio is junk reasons to sell

17 Falling value Expensive Your portfolio is junk Better reasons to sell

18 Falling value Better Expensive Your portfolio is junk Read Value.able Ch13 reasons to sell

19 Go for Quality

20 A Blue Chip Portfolio Company Montgomery Quality Rating (MQR) Dividend Yield Future change in Intrinsic Value Forecast P/E BHP B1 1.99% -0.51% Rio Tinto B1 1.48% -16.8% 8.31 Commonwealth Bank A2 6.03% 9.04% Westpac A1 6.33% 4.22% ANZ A3 6.08% 7.18% NAB A4 6.06% 9.17% News Corp A3 0.87% 25.0% Telstra B3 9.35% 8.79% Woodside B % 22.3% Wesfarmers A3 4.51% 22.6% Newcrest Mining B2 0.79% 12.6% Westfield C4 5.35% 5.06% QBE Insurance A3 7.09% 8.42% Fortescue B2 0.85% -3.12% AMP A3 5.92% -5.14% Macquarie Group A5 5.79% 19.8% As at May 2011

21 Go for Quality

22 No Junk Please

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29 Are your stocks Expensive?

30 When is it too high?

31 When is it too high?

32 When is it too high?

33 When is it too high?

34 When is it too high?

35 When is it too high?

36 When is it too high?

37 When is it too high?

38 When is it too high?

39 When is it too high?

40 When is it too high?

41 When is it too high?

42 When is it too high? Source: montinvest.com

43 High Maintenance = Expensive

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45 Declining Value

46 Declining Value Source: montinvest.com

47 Expensive... and poor quality A distasteful combination

48 Found something better...

49

50 Which business would you prefer to own?

51 Understand Amcor s business Change Normalised Profit (m) $ $ $235 Equity (m) $2, $ $1707 ROE 11.98% 12.40% 13.7% Debt $2, $ $812 Additional shares (m) m

52 Understand Amcor s business

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54 Understand Forge s business Change Normalised Profit (m) $1.969 $ $28.7 Equity (m) -$0.853 $ $94 ROE 0.00% 45.76% 30.5% Debt $0.104 $6.305 $6.2

55 Understand Forge s business

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57 Which business would you prefer to own?

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67 The proof is in the pudding

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