Association May 2015

the trusted voice of shareholders

May 2015 Vol 29 #4

EXPANDING ASX FUND CHOICES FOR INVESTORS STOCKS AT RISK OF DIVIDEND CUTS

STOCK MARKET COURSE

www.australianshareholders.com.au

PEPYS RULE

MAY VOLUME 29 #4

the trusted voice of shareholders

CONTENTS

FEATURES THIS MONTH

04

EXPANDING ASX FUND CHOICES FOR INVESTORS The ASX is trying to build a financial supermarket, and as its shelves fill up with an array of product, shoppers (investors) will need good information and research to fill their baskets efficiently.

19

06

STOCK MARKET COURSE

STOCKS AT RISK OF DIVIDEND CUT John Addis of Intelligent Investor outlines why he is concerned that blue chip companies have succumbed to pressure from shareholders to increase dividends at the potential long-term cost of financial stability.

Searching online for a stock market course is a daunting and overwhelming task but fortunately with the publication of the ASA’s new stock market course, available to all members, the problem is solved.

MORE INSIDE...

07

UPCOMING

AGMS 11

&

BRICKBATS BOUQUETS

16

Pepys RULE

09 TOP-DOWN INVESTING

10

11

12 13 MEET OUR INVESTING

MONITOR

18

14

TIPS

20

AGM REPORT

REPORTS

21

QUEENSLAND

REPORT

D

T

CHAIR REPORT BOARD OF DIRECTORS Ian Curry FCPA FCIS Dip Fin Planning Max Bonpain BMan MBA MMktg Betty Clarke-Wood ACIP Diana D’Ambra BCom MCom FCA MAICD Don Hyatt BAppSc DipEd M Ed MACE Clare Mazzetti BEc MBA AFMA AICD SDIA Barry Nunn AO BE NATIONAL OFFICE Joanne Parker Chief Executive Officer Samantha Clark Events & Member Services Officer Silvana Eccles National Operations Manager Veronika Ilnycky Communications Officer Anna Lau Head of Research STATE BRANCHES ACT Edward Patching NSW Richard McDonald QLD Alison Harrington SA Kevin Parken VIC Don Hyatt WA Barry Nunn

act@asa.asn.au nsw@asa.asn.au qld@asa.asn.au sa@asa.asn.au vic@asa.asn.au wa@asa.asn.au

EQUITY EDITOR Silvana Eccles

equity@asa.asn.au

CONTACT DETAILS TELEPHONE 1300 368 448

02 9223 8811 FAX 02 9223 3964 ADDRESS Suite 301, Level 3

90 Pitt Street

Sydney NSW 2000

GPO Box 359

Sydney NSW 2001 ABN 40 000 625 669 EMAIL share@asa.asn.au WEBSITE www.asa.asn.au www.australianshareholders.com.au DISCLAIMER This material in EQUITY is provided for information only. No responsibility or any form of contractual, tortious or other liability is accepted for decisions made on the basis of the information contained herein. Nothing in EQUITY is intended or should be interpreted as being investment advice.

Investment advice can only be obtained from persons who are licensed in accordance with the Corporations Act. Views expressed in articles in EQUITY do not necessarily reflect ASA policy.

The ASA does not endorse or favour any specific commercial product or company. The ASA is often able to negotiate discounts or benefits for ASA members however the inclusion of discounts or advertisements in EQUITY, on the ASA website or within other ASA communications does not constitute an endorsement for the products, services or companies mentioned.

COPYRIGHT All material published in Equity is copyright, as are ASA Policy Statements whether published in Equity or not. Reproduction in whole or in part is not permitted without written authority from the Editor.

All graphs for the Company Reports derive from www.netquote.com.au. Any correspondence regarding matters covered in this magazine should be addressed to the Editor.

May 2015 Ian Curry

The month of May shapes up to be critical for the future of Australians, particularly those who have retired or are close to retiring. It is also an important time for the direction of our economy. The budget to be delivered by the Treasurer needs to be better focused on the long-term needs of the country and less on seemingly uncoordinated actions aimed at spending and revenue. The 2014 budget has taken nearly a year to be passed and what is now in place bears little resemblance to the original document. The 2015 budget needs to be seen as a solid foundation for the future, fair and capable of receiving the support of the electorate.

The first four months of the year have seen a number of important reports on taxation, the future of financial advice (FOFA), life insurance sales and commissions and lifting standards in the financial services industry.

Some members may have read the Taxation White Paper. Submissions are required by the end of May and therefore will not be reflected in the budget this year. There is nothing new in this discussion document and it poses 66 questions covering most aspects of taxation in its various forms. It canvases negative gearing, the capital gains tax discount, dividend imputation (franking credits) and the tax freedom of income in a superannuation fund in pension mode including the pension payments from those Funds. The most important issue of all, the GST, is stated to be off limits. This will make it difficult to achieve real reform of income and expenditure. Any increase would need to be accompanied by measures protecting low income earners. All this is of importance to ASA members and our submission to government will make it plain that retirees have provided for their future based on clearly stated rules. Any changes to superannuation must not be one-off and must reflect the overriding challenge of having as many people as possible able to provide for their retirement.

Our National Conference begins in the first week of May. There is an excellent programme of speakers and topics. Site visits to CSL, Asciano and Crown provide the opportunity to see and hear firsthand how these leading companies operate.

Following the conference we hold our annual general meeting. This is an important event for ASA and I do hope that those of you at the conference and many other members will attend and support your directors and National office staff. In particular I urge you to submit proxy votes indicating your interest in and support for the election of directors.

Early last year ASA entered into discussions with the New Zealand Shareholders Association with the objective of formalising a relationship which provided members of each organisation, if they choose to do so, with access to the websites and activities of each other. We are now at the point where details of how you can participate will be available soon. This step may lead to discussions with shareholder groups in other countries with the sharing of information about companies and governance. This may be of benefit to those members who have investments in assets held overseas.

Finally it has been my privilege to Chair the ASA for the last three years. It is now time to step down and let others continue to represent members. Therefore I do not seek re-election at the annual general meeting. ASA has gone through considerable change and is currently re-assessing the direction we need to take to maintain relevance in the future. It is perplexing that membership is not growing despite the recognition by regulators and companies of the important work we do on behalf of retail shareholders.

I thank my fellow directors and staff in the office, particularly Silvana, for their support and friendship. I congratulate Diana D’Ambra on her incoming appointment by the board to succeed me and recommend her to members.

EQUITY May 2015 Page 3

Expanding ASX fund choices for investors

By Dominic McCormick, Chief Investment Officer, Select Investment Partners

The recent listing of the Magellan Global Fund (MGE) has essentially introduced a new structure into the universe of ASX-listed and quoted funds. There is now an array of fund structures offered on the ASX trading and/or CHESS settlement system across asset classes. More specifically these can be divided into the following: 1. Listed Investment Companies (LICs) – typically actively managed funds in a closed end (mostly company) structure. There are currently around 65 of these with a market capitalisation of over $27billion.

2. Exchange Traded Funds (ETFs) – currently there are over 100 Exchange Traded Products (mainly passive) with a market capitalisation of $17billion.

3. mFund – a range of 50 plus unlisted funds (typically active) available through some brokers and the CHESS settlement system but without live pricing/transactions.

4. “Exchange Quoted Managed Funds” (EQMFs) which also trade intraday on the ASX of which MGE is arguably the first, but unlikely to be the last.

One could also include listed property and infrastructure funds which are also a long established and prominent component of the local market. There are 48 AREITs with market cap of $120b and 9 infrastructure vehicles with a market cap of $53billion.

The greater choice of funds via the ASX is a welcome development for investors. However, it also creates some confusion as to the relative advantages and disadvantages of each structure and how they should be used in portfolios.

It also provides challenges for a range of investment industry participants, including advisers, stockbrokers, research houses and administration platforms as the ASX has moved closer to being able to offer all the components to build a well-diversified portfolio. This is particularly important for SMSF investors who have become very comfortable with the ASX platform. Increasingly investors can move away from the concentrated home bias and lack of asset diversity of conventional ASX focused share portfolios while still using only ASX offered vehicles.

LICs are the oldest, and in some respects, the most complex of the fund structures. This reflects their company structure and “closed end” nature which means that the market price can vary substantially from the underlying net asset value (NAV). Of course, this fluctuation creates both opportunities as well as risks for investors.

EQUITY May 2015 Page 4

However, the three other structures are aiming to ensure that investors enter and exit at close to NAV. This will always be the case via mFund and unlisted funds generally (other than small buy/sell spreads) and it will usually be the case for ETFs and the new EQMFs. However, each of these latter two structures relies on market makers prepared to buy and sell and create and redeem units to ensure that trading is close to NAV. However, at times of extreme market volatility bid/offer spreads may widen markedly - at such periods investors who need to sell or buy may be doing well below or above NAV. While such periods are likely to be the exception rather than the norm, the fact that wide spreads and “gapping risk” will likely occur at those times when markets, and investors, are most stressed should not be dismissed lightly.

The new Magellan EQMF differs from ETFs in that the gains or losses from market making accrue to the fund itself not to one or more external parties. In addition, unlike ETFs which typically report their full portfolios daily, EQMFs will only be required to report their portfolios quarterly and even then with a considerable lag, thereby protecting the manager’s intellectual property. The new structure is certainly innovative and potentially a game changer for some funds. A very liquid listed active managed fund vehicle where investors can trade intraday and know that pricing will generally be close to NAV is clearly appealing for many investors. The fact that, as a new fund, it does not have the inbuilt tax liabilities of the existing Magellan Global Fund is a not insignificant advantage also.

I understand there have been significant enquiries to the ASX from fund managers since Magellan announced and launched the new fund. However, in practice I believe the structure only really makes sense for funds focused on large cap, very liquid securities and those managers already with, or committed to building, retail brand recognition. Still, there are a number of managers with these attributes who could do extremely well out of this structure.

My main reservation over EQMFs is related to the possibility of markets entering a period of major volatility in the early days of this structure’s emergence. Extreme day to day and intraday volatility would almost certainly see much wider spreads, the possibility of the fund making losses from its market making activity (with resultant underperformance of the equivalent unlisted fund) and thereby a loss of confidence in the structure. I see this as a low risk but not one to be totally ruled out.

You could see a world develop where established brand name, large cap, active local and global managers seeking retail investors do so via the EQMF structure. Boutiques and less well known fund managers and/or those focusing on less liquid securities and esoteric asset classes (but still keen to have an offering through the ASX platform) will launch either an LIC or offer a fund through mFund.

ETFs will continue to grow with more enhanced passive and smart beta offerings blurring the lines between active and passive management.

So much for the fund managers. What does this growth in ASX fund options mean for investors?

Investors can now build robust, diversified portfolios of both active and passive funds using only ASX listed or quoted funds, something that wasn’t possible even just a couple of years ago. There are certainly still implementation issues – spreads are still too high on some ETFs and LICs are often illiquid and the divergence from NAVs creates challenges, while the number of fixed interest and alternative offerings is still rather sparse.

The increasing range of vehicles is providing the building blocks for more active and dynamic portfolio construction approaches as well as longer term “buy and hold” portfolios.

ETFs are an ideal vehicle for dynamic asset allocation and the retail dominated LICs often provide market inefficiencies that can be exploited by nimble investors. Even ETFs occasionally provide such opportunities. Of course, the discipline and flexibility needed to exploit these more trading oriented opportunities is not the main focus of most investors. While a few specialist multi-asset funds attempt to take advantage of these opportunities, a key aim for most investors should be to avoid being on the wrong side of these inefficiencies/opportunities. Amongst other things they should therefore at least avoid: • Placing market orders or hitting the bid/offer irrespective of the spread size or current/estimated NAV on listed fund • Chasing a hot ETF simply because it has performed well lately • Paying large premiums to NAVs on LICs

Platinum Capital (PMC), a LIC, and the unlisted Platinum International. If an investor bought PMC on August 8, 2014 at the closing price of $1.945 you would also have since received dividends of 10 cents. Given the closing price of PMC on 10, March 2015 of $1.71 and excluding tax effects (as the dividends were fully franked) the total return for the 7 month period was minus 7%. Meanwhile, over exactly the same period investors in the unit trust (with essentially the same underlying portfolio) would have received a positive return of almost 17%, highlighting the risks of paying a large premium to NAV in a LIC. Greater choice is generally a good thing for consumers.

However in the complex world of investing, greater choice increases the risks of poor decisions and misunderstandings that reduces investors’ and advisers’ commitment to a robust investment approach.

As the array of listed fund options grows investors face challenges in comparing the benefits and complexities of each, particularly when they are holding the same underlying assets. For example how do they weigh up the benefit that the ability to trade intraday brings? How do they deal with various levels of discounts or premiums to NTA on LICs given the significant impact this can have on future return and risk as shown above? What about the relative tax positioning and effectiveness of the different fund vehicles?

In addition, those investors who currently use traditional administration platforms to access listed and unlisted funds may begin questioning their value as investors can more easily build well diversified portfolios using the ASX as “the platform”, particularly as stand-alone tax reporting and administration services around these improve. Extremely low interest rates and minimal prospective returns on a range of fixed interest/defensive investment options are also leading many to question the benefits of investing through a traditional platform that typically charges a flat percentage fee on top of any underlying investment management fees.

Clearly the ASX is trying to build a financial supermarket, and as its shelves fill up with an array of product, shoppers (investors) will need good information and research to fill their baskets efficiently.

• Selling out of funds simply because recent returns have been poor without understanding why

An example of how choice of vehicle at the time can be so important is the recent relative performance of the listed EQUITY May 2015 Page 5

Stocks at risk of dividend cuts

By John Addis, Editor, Intelligent Investor Share Advisor

Investors aren’t the only ones to succumb to the lure of higher dividends. Plenty of management teams have too.

As the table below shows, over the past five years the big banks, Woolworths, Woodside and Origin Energy have all suffered falls in dividend cover (earnings per share divided by dividends per share). That makes them susceptible to dividend cuts if business performance stalls.

Commonwealth Bank (CBA)

FY14

FY13

FY12

FY11

FY10

% Changes

EPS

$ 5.37

$ 4.77

$ 4.44

$ 4.11

$ 3.68

46%

64%

64%

53%

65%

38%

68%

1.6

1.6

1.9

1.5

2.6

-40%

WestPac

FY14

FY13

FY12

FY11

FY10

% Changes

EPS

$ 2.44

$ 2.18

$ 1.95

$ 2.33

$ 2.14

14%

73%

70%

68%

54%

43%

70%

1.4

1.4

1.5

1.9

2.3

-41%

ANZ Bank (ANZ)

FY14

FY13

FY12

FY11

FY10

% Changes

EPS

$ 2.67

$ 2.33

$ 2.13

$ 2.08

$ 1.79

49%

53%

51%

39%

39%

37%

42%

1.9

2.0

2.6

2.5

2.7

-29%

NAB (NAB)

FY14

FY13

FY12

FY11

FY10

% Changes

EPS

$ 2.22

$ 2.26

$ 1.75

$ 2.34

$ 1.92

16%

75%

65%

67%

45%

59%

27%

1.3

1.5

1.5

2.2

1.7

-21%

Woolworths (WOW)

FY14

FY13

FY12

FY11

FY10

% Changes

EPS

$ 1.96

$ 1.83

$ 1.49

$ 1.75

$ 1.64

20%

61%

62%

73%

59%

58%

6%

1.6

1.6

1.4

1.7

1.7

-5%

Woodside Petroleum (WPL)

FY14

FY13

FY12

FY11

FY10

% Changes

EPS

$ 2.93

$ 2.13

$ 3.66

$ 1.90

$ 2.04

44%

73%

70%

29%

43%

35%

109%

1.4

1.4

3.4

2.3

2.9

-52%

Origin Energy (ORG)

FY14

FY13

FY12

FY11

FY10

% Changes

EPS

$ 0.48

$ 0.35

$ 0.91

$ 0.20

$ 0.68

-29%

89%

121%

38%

205%

61%

45%

1.1

0.8

2.6

0.5

1.6

-31%

Payout Ratio Dividend cover

Payout Ratio Dividend cover

Payout Ratio Dividend cover

Payout Ratio Dividend cover

Payout Ratio Dividend cover

Payout Ratio Dividend cover

Payout Ratio Dividend cover EQUITY May 2015 Page 6

Of the top 20 stocks by market capitalisation, Intelligent Investor analysts said they were ‘alarmed’ by two and placed six in the ‘worried’ group, including the big four banks and insurance company IAG. The banks generally pay out most of their profits as dividends, but payout ratios have been sneaking up as bad debts and borrowing costs have fallen.

Intelligent Investor Share Advisor’s research director, Nathan Bell, says “current house price growth is clearly unsustainable and tighter regulations may require banks to hold more capital. But the big issue is how the banks would fare if China’s economy or the Aussie house market cracked. I’m worried, but not yet alarmed.”

And the stocks where there is cause for alarm? Origin Energy and Woodside Petroleum.

Analyst Gaurav Sodhi believes Origin is “effectively taking on debt to pay dividends, which is possibly the dumbest thing managing director Grant King has ever done” while Woodside’s dividend “is clearly unsustainable and will be cut”.

In trying to be more attractive by paying unrealistically high dividends, these companies are exposing investors to substantial share price risk if and when the dividend is cut.

At Fortescue, where management is focused on survival, Sodhi believes the company “will probably allocate all cash towards debt repayments and cancel the dividend altogether, as it should.”

Senior analyst James Carlisle also rates the dividend situation at Woolworths as “worrying”.

Although the dividend is nicely covered by profit, it’s barely covered by free cash flow, a fact which doesn’t show up

in the numbers. If profits fall – any they may have to - then the rate of expansion will have to slow or the dividend may need a trim.

Coca-Cola Amatil is exposed in the same way and is “highly vulnerable to further falls in profits.”

There are other pockets of concern. Analyst Graham Witcomb believes that “Myer, Dick Smith and Harvey Norman, with payout ratios of 91%, 63% and 60% respectively, would have a hard time holding their dividends steady if alreadythin profit margins shrink further.”

The Reject Shop, Oroton and AVJennings are similarly exposed, as is any low-margin business leveraged to economic activity.

These are the businesses most exposed to the risk of a dividend cut. But are there any that could pay out more?

Indeed there are. ResMed is one as is Oil Search, which has struck a good balance between growth and income but could easily afford to lift the payout ratio. Growth stocks REA Group, Seek and TPG Telecom are also drowning in cash and could lift their dividends.

But the major risk to investors is in those large blue chip stocks that have succumbed to pressure from shareholders to increase dividends at the potential long-term cost of financial stability.

If circumstances change and stability is threatened you can bet the first thing the board will do is cancel or cut the dividend. Don’t say you haven’t been warned.

John Addis owns shares in ResMed. This article contains general investment advice only (under AFSL 282288). Authorised by Nathan Bell. To unlock Share Advisor’s stock research and buy recommendations, take out a 15-day free membership.

Upcoming AGMS COMPANY NAME

ASX CODE

AGM DATE

LOCATION

COMPANY NAME

ASX CODE

AGM DATE

LOCATION

Santos

STO

30-Apr-15

Adelaide

Sydney Airport

SYD

14-May-15

Sydney

Ausenco

AAX

30-Apr-15

Brisbane

Westfield

WFD

14-May-15

Sydney

GPT Group

GPT

05-May-15

Sydney

Iluka Resources

ILU

20-May-15

Perth

APN News and Media

APN

06-May-15

Sydney

InvoCare Limited

IVC

22-May-15

Sydney

BHP Billiton (EGM)

BHP

06-May-15

Perth

PanAust

PNA

22-May-15

Brisbane

Sigma Pharmaceuticals

SIP

06-May-15

Melbourne

Adelaide Brighton

ABC

27-May-15

Adelaide

Rio Tinto

RIO

07-May-15

Perth

CSR Limited

CSR

14-Jul-15

Sydney

Caltex

CTX

07-May-15

Sydney

Macquarie Group

MQG

23-Jul-15

Sydney

AMP

AMP

07-May-15

Sydney

AusNet Services

AST

23-Jul-15

Melbourne

Scentre Group

SCG

07-May-15

Sydney

PRG

29-Jul-15

Perth

Alumina

AWC

08-May-15

Melbourne

Programmed Maintenance Services

Coca-Cola Amatil

CCL

12-May-15

Sydney

ALS Limited

ALQ

30-Jul-15

Brisbane

Note: for a full list of upcoming AGMs for companies monitored by ASA, please see our website at: www.australianshareholders.com.au/upcoming-agms.

EQUITY May 2015 Page 7

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M.AU

Top-down investing

By Michael Kodari, CEO, Kodari Securities

It is vital to follow a strategy when considering investing in the stock market. As straightforward as it seems, human beings tend to be ill-disciplined, often searching for the quick buck.

One method of investing with the potential to be highly effective is the ‘Top-Down’ and ‘Bottom-Up’ approach emphasizes a focus on company specifics before making an investment decision, a ‘Top Down’ approach asks investors to take particular note of the global economic landscape before delving into the fundamentals of specific businesses.

There are over 2000 companies on the ASX, across 10 industry sectors. Each sector is unique with different dynamics at play and will respond differently dependant on various macroeconomic and structural factors. Let’s consider a tale of two sectors.

On one hand we have the plight of the mining sector. The rapid sustained price rises of the past have come to an end. Price momentum has reverted, with the structural sector shift away from the mining construction phase to the production phase leading to substantial increases in the production volumes of iron-ore, coal, oil and gas in time. Growth in supply has coincided with weak global demand. China’s growth rate is slowing, Japan has recently emerged from a recession, and with European problems persisting, it is unsurprising that global aggregate demand remains fragile.

Economics 101 tells us that a situation where supply is increasing and demand remains constant or declines, often translates into a fall in prices. Over the past 18 months the price of coal, iron ore, oil, and gas all declined markedly, placing significant downward pressure on the companies within mining and energy sectors. Investors need to note that it doesn’t matter if it’s household names BHP or Rio Tinto, or companies with the best management teams, highest quality assets, and lowest costs. These business are ‘price-takers’, and they are at the mercy of the prevailing market price of the commodities.

You quickly see just how an entire sector can be eliminated from an investment portfolio. Through analysis and elimination investors can identify economic themes and fundamental changes in the business landscape ultimately leading investors towards the sectors and companies within those sectors that offer the best opportunities. Quality businesses in growing sectors have a better probability of delivering reliable earnings, and dividend income growth that will lead to superior price performance.

Investors need to consider whether it’s worth swimming against the tide, or whether you should look to make life easier by identifying sectors with favourable momentum.

One sector with undeniable momentum is healthcare. With the population aging, demand and reliance on the healthcare sector will continue to grow. It is estimated that the number of people over 70 will double in Australia over the 2006-2021 period, fundamentally changing the shape of the Australian economy.

The benefits aren’t limited to the domestic environment with overseas economies facing similar changes. While developed nations manage aging populations emerging nations, with their burgeoning middle classes, offer an additional benefit.

Healthcare spending typically accounts for more than 10% of GDP in developed nations. In the US spending is pushing 20%. Populations with established middle classes, poor health habits and hopes of living forever have the monetary means to spur on the health sector for many years, making the sector a highly attractive prospect for many ‘top-down’ investors.

The chart above highlights the benefits of following the ‘topdown’ approach. The blue indicates the ASX materials sector, while the red chart is the ASX Healthcare sector. There is an undeniable wave of momentum against the materials sector, while the opposite is true for the healthcare sector. By following a ‘top-down’ approach investors essentially get guided towards a favourable outcome away from the train wreck, which may translate into positive outcomes for one’s portfolio.

Like most things in finance, the ‘top-down’ approach isn’t without its risk or downfalls. The major downfall of the ‘topdown’ approach is that entire sectors are often eliminated from an investment universe, a process that occasionally overlooks quality businesses falling within the omitted sector.

Investors may miss turn-around stories and deep value plays that offer potentially mind-blowing returns. Perhaps this is the trade-off with following a disciplined method like the ‘topdown approach’, which avoids chasing big winners that may be value traps.

Investment strategies are often over-complicated, promote over-diversification and are consequently counterproductive to portfolio performance. The ‘top-down’ strategy is one approach which gives investors a starting point by helping them simplify investing, take a big picture view, before identifying sectors

of the market that have bright prospects and favourable macroeconomic thematics.

EQUITY May 2015 Page 9

From ASIC, the financial regulator

Invest smarter

By Miles Larbey, Senior Executive Leader, ASIC’s MoneySmart team

A smart investor doesn’t rely on good luck. Instead, they take the time to consider their investment goals. Then they develop a plan and choose investments that align with their needs and objectives.

Here are our tips to put you on the path to investing smarter.

WORK OUT YOUR NEEDS AND OBJECTIVES If you’re planning to invest, there are a few steps to take before you jump in. Preparation is the key to success.

If you have a financial goal in mind, it will be easier to develop an appropriate investment plan. Think about what you want and why, and set a timeframe to achieve each goal. Then you can consider and assess all investments against your plan.

UNDERSTAND RISK AND RETURN While your investment goals are very important, you should also consider your appetite for risk when you’re shaping an investment plan. Successful investors understand the types of risk that can affect their investments and what they need to look out for.

If you are borrowing money to invest, you are taking even more risk if your investments fail. If the market falls and you’re not prepared, the results can be disastrous. You could lose your entire investment or worse, end up owing money to the lender.

If you are investing in a diversified portfolio of shares or a managed fund, borrowing more than 50% is usually considered highly risky.

DIVERSIFICATION A good way of managing risk is to spread your money between different asset classes such as cash, fixed interest, property and shares. This will leave you less exposed to a single economic event, so if one business or sector you’ve invested in fails or does badly, you won’t lose all your money.

JUDGING EXPECTED RETURNS To help you work out whether the returns offered by the investment opportunity are reasonable, look at the expected returns for other similar products. If the returns seem very high in comparison, be very wary. And be aware that some investments that appear to offer relatively modest returns can also be extremely risky.

GET TO KNOW THE INVESTMENT BEFORE YOU INVEST Before you jump into any investment, carefully assess its suitability. Read the PDS for each investment product and make sure you understand the product’s key features, fees, commissions, benefits and risks. Ask the product provider or a financial adviser if you need further clarification.

EQUITY May 2015 Page 10

PROTECTING YOUR CAPITAL How would you feel if you lost some or all of the money you invested? Would you be able to recover or would you be in deep trouble?

If protecting your capital is important, make sure you find out where you stand if something goes wrong with the investment. Words like ‘safe’ and ‘guaranteed’ mean nothing if the investment fails and the fine print says you’ll be the last on the list of creditors.

ACCESSING YOUR MONEY Check to see if there will be heavy fees or penalties to get your money back before the end of the investment period.

If flexibility is important, think about investing in other financial products that allow you to access your money when you need it.

KNOW WHAT YOUR MONEY IS BEING USED FOR If you know what your money will be used for, you will be better placed to decide how risky the investment is and whether you’re comfortable putting your money into it.

If you’re investing in a company, find out what the company does, how long they’ve been in business, and how successful they’ve been with similar projects in the past.

CONSIDER THE TAX IMPLICATIONS An investment is ‘tax-effective’ if you end up paying less tax than you would have paid on another investment with the same return and risk.

While lower tax can help your savings grow faster, you should never base an investment decision on tax benefits alone. Many tax-driven schemes designed to minimise tax are high-risk investments. Any investment you choose should fit within your investment plan and risk profile.

MONITOR THE INVESTMENT Even with careful planning, you can still get caught out. For example, economic conditions can change and company profits can vary from year to year, so it’s important to keep track of your investments.

Market conditions can change rapidly - but a panicked reaction can often make things worse. Some investors try to time the market and fail. If your strategy is sound, and the investment is long-term, stay with it.

Smart investors don’t rush; they prepare, plan and then monitor their investments. Make sure you’re clear about why you’re investing and only invest in products you understand.

Visit ASIC’s MoneySmart for more investing tips, including information about how specific investments work.

QBE AGM 1-Year Chart

QBE TURNAROUND – HOW SUSTAINABLE? Unlike QBE AGMs in the recent past, this AGM was a convivial affair. Shareholders were soothed by QBE’s improved results, accompanied by an increased fully franked dividend from 32 cents to 37 cents. In his address Chairman Marty Becker reported on the status of the three initiatives QBE undertook in 2014. These were: • A refresh of the Board: now completed with the recruitment of Sir Brian Pomeroy, Ms Jann Skinner and Mr Stephen Fitzgerald. All three bring more insurance and international experience to the Board. Their election was supported by ASA. QBE’s new CFO, Pat Regan, was the fourth appointment. While ASA does not favour the appointment of a second executive director to the Board, Deputy Chairman John Green convinced us at the pre-AGM meeting that the Board considered Pat Regan could contribute to QBE at board level.

MONITOR: JOYCE YONG Date

2 April 2015

Venue

Wesley Conference Centre Sydney

Attendees

Approximately 300

ASA proxies

494

Value of proxies

$20,823,545

Proxies voted

1,551,680

Market cap

$18.3 bn

Pre-AGM meeting

Yes, with deputy chairman John Green

• S trengthening and normalising the balance sheet: this involved the capital raising of September 2014 and the sale of several businesses. In relation to the capital raising, Mr Becker commented that he was aware retail shareholders would have liked a bigger allocation in the SPP but he believed that they did better than institutional shareholders. Retail shareholders received shares equal to approximately 17% of their shareholding on the SPP record date while institutional shareholders received approximately 6.3%. ASA commended QBE for responding favourably to our request to raise the cap in the SPP for retail shareholders.

• T he third initiative was a return to stable and predictable earnings through QBE’s business transformation and reserve strengthening, both now largely complete.

ASA questioned the sustainability of QBE’s turnaround and was assured that there were no QBE specific factors that could derail this. Indeed Chairman Becker hinted that QBE would be able to meet consensus analyst forecasts of a 30% increase in FY15 dividends of around 30% relative to FY14 and that the company may revisit the current 50% dividend payout ratio.

For 2015 Chairman Becker forecasted continued improvement in the above areas plus a focus on better use of IT and data analysis to get an edge on competitors.

All resolutions were put to a poll with ASA voting all undirected proxies for all resolutions, including the remuneration report. We pointed out, however, that ASA did not favour sign-on bonuses such as the one given to Pat Regan.

BRICKBATS

To Nanosonics for allocating shares on a “first-come, first-served” basis if its share purchase plan (SPP) was oversubscribed. The SPP opened on 13 March and on 18 March the company announced it was fully subscribed, despite the anticipated closing date of 30 March. We think the “first-come, first-served” policy unfairly disadvantages shareholders who live in regional areas or are otherwise not able to respond quite so promptly. Any scale back policy for “overs” should reflect the size of a shareholder’s existing holding so as to prevent dilution to existing holders.

To the Senate Committee considering the abolition of CAMAC for recommending in favour of this action. This was despite every submission but one supporting the retention of this important advisory committee. Those in support other than ASA included Australian Council of Superannuation Investors (ACSI), Chartered Accountants, Governance Institute, Law Council of Australia, AMP, Australian Institute of Company Directors. The only group opposing was the Financial Services Council which represents the vested interests of most of the major financial institutions.

The recommendation exposed the weaknesses in our government systems whereby a committee with a majority of government members can ignore the wishes of the majority of interested parties.

EQUITY provides a platform for members to comment.

Comments included here do not necessarily reflect those of all members. Please email your contributions to equity@ asa.asn.au.

BOUQUETS

To the Orica board for taking action in relation to the termination of CEO Ian Smith over his overly aggressive management style. The Orica Chair, Russell Caplan, subsequently admitted publicly that the board was wrong to keep the CEO in the job whilst searching for his replacement and promptly rectified that decision by appointing highlyregarded former BHP Billiton executive and current Orica director Alberto Calderon as the interim boss. Much could be said about the CEO’s contract allowing a $2.5 million payment to Ian Smith for the early departure, but we commend Orica for its frank disclosure and forward-looking approach to an unfortunate state of affairs.

To Macquarie for sending shareholders a reminder email about the upcoming closing date of its “in-the-money” SPP and also deciding not to scale back applications after receiving approximately $170 million from existing shareholders, despite reserving that right when the SPP was first announced (as many companies do). On the downside, Macquarie should have offered shareholders who accepted the SPP the chance to apply for up to the $15,000 maximum. Retail take-up of “in-the-money” SPP offers is not often high, so we encourage companies to do what they can to ensure retail investors are not diluted.

CORRECTION: In the April 2015 issue of Equity, we incorrectly referred to all “non-executive directors” other than newly appointed CEO/Managing Director Peter Gregg recently resigning from the Primary Health Care board. This was intended to refer to all “executive” directors.

EQUITY May 2015 Page 11

MEET OUR MONITOR

Stefan Landherr ‘Meet our Monitor’ is a series introducing one of our company monitors and helping us get to know more about the work they do. Our company monitors are volunteers who come from a diverse range of experiences and backgrounds. This month, we introduce you to Stefan Landherr from South Australia, who has been a company monitor for nearly three years and currently monitors Santos, Codan and Adelaide Brighton.

1. Why did you decide to become a company monitor?

It started as an intellectual curiosity, soon after joining the ASA in 2009. I was intrigued by the AGM reports in Equity – exactly who were these monitors, how did they produce these reports, how did they digest all the information on a company and what were their criteria for judging performance? So when I saw a call for additional monitors, I thought it would be an interesting way to keep my mind active after retirement, to learn new skills and to do some voluntary work for the ASA. I had just completed the company director course run by the Australian Institute of Company Directors to help me with sitting on committees of some small not-for-profit organisations and I thought I would be able to put that knowledge to use, by being able to look at issues from both perspectives.

2. What do you think makes a good company monitor?

Firstly, a good monitor needs to have an interest in investing so that you can look at things from the point of view of a typical ASA member. Secondly, he or she needs to understand broadly how companies operate in Australia and how to find and interpret relevant information in their reports and media releases, particularly the Annual Report.

Thirdly, the monitor needs to be able to apply the ASA voting guidelines intelligently and consistently, to engage constructively with the companies and produce fair and balanced voting intentions and AGM reports. Fourthly, monitors need to have enough spare time to do all this, usually to a tight timeline in the weeks before an AGM! Finally, and most importantly, you need to be able to continuously absorb new knowledge and skills. The ASA provides formal monitor training and there are many monitor resources available on the website. However I found that the best way to learn was a year as an assistant monitor, observing carefully how the experienced monitors operated.

3. Tell us about some AGM highlights.

The Santos AGM last year included a resolution by the Wilderness Society to abandon a new gas project. There were colourful protestors outside the venue and passionate statements supporting the resolution inside but the Chairman gave everyone a chance to have their say, and in the end the resolution was overwhelmingly defeated.

EQUITY May 2015 Page 12

4. Which aspect of company monitoring do you enjoy the most?

I enjoy the detective work of analysing Annual Reports, but as with many other monitors, I also enjoy having meaningful discussions with high-powered directors and executives.

Standing up and speaking at AGMs is a bit daunting because I am conscious of representing the ASA in public and needing to avoid any slips of the tongue. On a different tack, I like to contribute to the refinement and improvement of ASA’s voting guidelines and other documents – it appeals to my sense of structure and logic (I used to be a computer programmer!).

5. What do you see as the biggest benefit of being a company monitor?

I value the ongoing mental stimulation, and the challenge of doing a good job on behalf of the ASA membership.

Being a company monitor has also increased my general knowledge about the Australian commercial environment and the different industries in which companies operate.

6. What changes have you seen in the way companies engage with shareholders?

The companies that I have been involved with have been quite good at engaging with the ASA and with shareholders more generally. Companies recognise that we are an influential voice for retail shareholders and are more than willing to have pre-AGM meetings and other engagements with us. In areas where the company’s policies are not in full alignment with ASA’s voting guidelines, we are often able to bring about gradual improvement.

7. Tell us more about what you do when not monitoring companies or attending AGMS for the ASA. I am involved as a volunteer with several NFP associations in the educational and military sectors. When people find out that you have just retired, they cannot wait to rope you in to be Secretary or Treasurer! I spend time with my family and friends, try to keep fit by going to the gym and jogging regularly. I also do a lot of reading.

INVESTING TIPS

What is a share registry company and what do they do?

By Elio D’Amato, CEO, Lincoln Indicators

A share registry company is an entity that can provide a range of services to shareholders on behalf of public listed companies. If you own any shares, you’ll have come across a few of these, with Computershare and Link being notable examples in the Australian corporate landscape.

There is an obvious scale benefit when share registries specialise in the provision of these services for listed companies. The range of services that a share registry provides is usually administrative in nature.

Among these services, share registry companies can help their listed clients maintain their share register. A share register is a list of shareholders that own stock in a listed company. Share registries will collect the personal details of individual shareholders, including postal and contact details. Share registries will also collect additional personal information to assist with their functions, including bank details, tax file numbers, holder identification numbers and dividend payment instructions. Share registry companies take care of the processes involved with buying and selling shares, including the processing, receipt and validation of share transfers.

Share registry companies streamline the return of funds to shareholders for listed companies. In particular, they usually have the important job of distributing monies back to shareholders, including dividend distribution through various modes of payment including direct deposit and cheque.

They will also have carriage of the paperwork involved in the dividend distribution. The client facing divisions of share registry companies will assist with general enquiries about the companies.

What happens if I am an Australian resident and I don’t provide my tax file number (TFN) or Australian business number (ABN)?

When you first purchase shares you will be asked to provide a bank of personal information to a share register or listed company. You have the option to provide a tax file number (TFN) or Australian business number (ABN) at this juncture, but the decision is up to you. However, investors should be aware that there are tax consequences for not providing a tax number in this instance. If you don’t provide your tax file number (or exemption type), the share registry will need to deduct tax from any dividend payment to you.

Technically speaking, the share registry will need to deduct any unfranked portion of your dividend at the highest marginal tax rate, regardless of the actual marginal tax rate which applies to you.

This will ultimately lead to greater compliance and paperwork at your end. The share registry cannot refund tax deductions.

You will need to claim this tax from the Australian Tax Office when completing your tax return.

Lincoln Stock Doctor educates its members in order to equip them with the tools to effectively participate in the share market and achieve their investment goals with control, confidence and peace of mind. This is the final in a series of articles commenced in October 2014.

For more information about Stock Doctor and how it can help you achieve your investment goals, please contact Lincoln Indicators on 1300 676 333 or enquiries@lincolnindicators.com.au. You can also visit our website www. lincolnindicators.com.au

Important Information: Lincoln Indicators Pty Ltd ACN 006 715 573 (Lincoln) AFSL 237740. This information is current as at 7 April 2015.

This communication is for educational purposes but may contain general product advice. The advice has been prepared without taking into account your personal circumstances. You should therefore consider the appropriateness of the advice in light of your objections, financial situation and needs, before acting on it.

Investments can go up and down. Past performance is not a reliable indicator of future performance.

Economic and other information taken into account in forming any opinions are subject to change and therefore opinions expressed as to future matters may no longer be reliable. Lincoln Indicators Pty Ltd, its director, employees and agents, makes no representation and gives no warranty as to the accuracy, reliability and completeness or suitability of the information contained in this communication and do not accept any responsibility for any errors, or inaccuracies in, or omissions from this communication; and shall not be liable for any loss or damage howsoever arising (including by reason of negligence or otherwise) as a result of any person acting or refraining from acting in reliance on any information contained herein. No reader should rely on this media release communication, as it does not purport to be comprehensive or to render personal advice. This disclaimer does not purport to exclude any warranties implied by law that may not be lawfully excluded.

EQUITY May 2015 Page 13

REG REGIS HEALTHCARE LIMITED

BIG MEMBERS Len Roy Lorraine Graham Stephen Weston Lloyd Phillips Peter Tallentire Stan Taylor Peter Scales Derek Miller Peter Denham

REFERENCES IPO Prospectus Sept 14 Half Year Report Dec 14 Company Website ASX releases Morningstar data via Comsec

MARCH

2015

LEN ROY AND LORRAINE GRAHAM WITH SIGNIFICANT INPUT FROM THE PERTH BIG E GROUP

COMPANY OVERVIEW Regis Health Care (REG) is a residential aged care provider offering high quality aged care facilities in six states and territories of Australia. The business was established in the early ‘90s with an initial portfolio of 104 places and has grown to 46 facilities with 4855 “operational places” for people who cannot live independently (at home or in retirement village accommodation), but who do not require acute hospital care. The facilities are purpose built and mainly located in metropolitan areas. REG targets the premium end of the market with a focus on high acuity care.

The business relies upon two sources of revenue, Government funding under the Age Care Act and resident funding. The government funding is via the Aged Care Fund Instrument (ACFI) which provides subsidies to eligible aged care service providers.

67% of REG revenue in FY14 was from government funding.

Means tested resident contributions to care, including for extra service places, makes up 28% of revenue.

Residents also pay refundable accommodation deposits (RADs) which are accounted for as capital and listed on the Balance Sheet as a current liability. The RAD is refundable to the resident or their estate when they depart the aged care facility. Historically, outgoing RADs have typically been replaced by incoming RADs at an equivalent or higher amount. Recent changes to aged care funding have resulted in all residents now being liable to pay an RAD or equivalent, whereas In the past some high acuity residents were not required to pay an RAD. Site locations – referred to as catchment areas – are strategically important and REG focus on higher median house price areas to facilitate higher RAD per resident. REG owns the real property on which its facilities are located.

The business employs about 5300 people including 478 registered nurses, 204 enrolled nurses and 4362 facility staff. Labour (nurses and personal care assistants) make up about 64% of operating costs. Nurse retention, after 12 months, has been 85%.

The company states that no Regis operated facility has been sanctioned and the review committee considered this a strong point considering the high level of dependency on government funding and compliance requirements of numerous regulatory agencies.

Average occupancy achieved 1H15 was 94.4% and all facilities are accredited with the Aged Care Standards and Accreditation Agency.

The co-founders Ian Roberts and Bryan Dorman each retained a 27.3% shareholding following the float on 7 October 2014.

Both have some 20 years involvement in the aged care industry and continue as NEDs of the listed company. Their shares are in voluntary escrow until the release of the audited FY15 results on the ASX website. MD/CEO Ross Johnston holds approximately $12.4m of “legacy shares” which have a five year holding lock.

THE COMPANY AND ITS BUSINESS The net proceeds of $409.9m from the IPO were largely used to facilitate the net debt repayment of $393.4m leaving the listed company debt free. Director related party loans of $35.9m were also paid out.

EQUITY May 2015 Page 14

Total shares on issue after listing is 300.3m and the issue price was $3.65 per share. The shares ended their first day at $4.02 giving a market capitalisation of $1.21bn. By 6 March 2015 the share price had risen to $5.36 giving a market capitalisation of $1.61bn.

The residential aged care sector is a sub sector of the aged care industry which provides approximately 190,000 places and is more than double the size of the hospital sector which approximates 87,000 beds. The IPO prospectus indicated REG had about 2.5% of the residential aged care market. There are four major private competitors representing about 36% of the market plus the non private operators such as religious, charitable or community based groups which make up about 59% of the market. Compliance and occupancy levels may result in small operators being uneconomical.

REG consider their growth opportunities will come from: • Greenfield development – multiple new sites are planned per annum; • Expand and reconfigure existing sites; and • Acquisitions.

FINANCIAL PERFORMANCE Comparison of half year results to prospectus forecast The 2015 first six months financial performance generally support the company’s guidance that it is on track to outperform the FY15 forecast in the IPO for EBITDA and NPAT by 5-10%.

The revenue for the first half was $219.2m, up 9.6% on the prior year first half. The EBITDA of $47.9m was up 15.9% over the corresponding prior year result. The EBITDA for the half year is 57% of the prospectus forecast for FY 2015 and the operating cashflow is 55% of forecast, so the company is well on track to exceed the forecast values for the full year.

Prospectus forecast FY

First Half to Dec 14

Revenue

428.3

219.2

51%

Operating expenses

343.9

171.0

50%

84.8

47.9

57%

124.6

68.3

55%

EBITDA Net operating cashflow

% of FY forecast

The pro-forma forecast NPAT for 2015 is $48.0m, or 16c per share, putting the company on a forward PE of 33.5 at the 6 March 15 share price of $5.36.

While this appears high, the company generates strong cashflows, with incoming RAD’s generally higher than outgoing ones, and some outgoing non RAD residents are being replaced by new residents pay a RAD. The RAD’s paid in are listed as a current liability on the balance sheet, giving the company an overall equity of $186m. With $238.5m in intangible assets the company has a negative NTA value of 17.5c per share.

BETTER INVESTING

10 YEAR

5 YEAR

1 YEAR

However as new RAD’s are received to replace previous RAD’s that are paid out, this liability does not affect the viability of the company and is not interest bearing debt.

Finance facilities REG has no drawn debt but has in place a $40m revolving loan note facility for funding growth acquisitions and capital expenditure plus a second facility of $50m for multi-option working capital requirements.

Dividend policy REG has indicated it intends to target up to 100% of NPAT subject to business conditions at the time.

INTANGIBLES The 2015 first half yearly financial information lodged with ASX showed REG had a total of $238.5m non current intangible assets.

REG intangibles are made up of bed licenses at historical cost or fair value on acquisition less any impairment and goodwill associated with acquisitions.

The level of Regis Health Care intangibles compares with total assets of $947.2m and issued capital $271m.

GROUP

REMUNERATION CULTURE Given that the first annual report as a listed company will not be available until after publication of the FY15 audited accounts, our comments are based on IPO information.

The remuneration structure is based on the three components, fixed, STI award and LTI award. The STI performance award hurdles include EBITDA, occupancy, workplace health and safety plus compliance and accreditation. 66% of the STI award is paid shortly after year end results, 17% is subject to 12 months deferment and 17% is subject to a further 12 month deferment.

The LTI award performance hurdles include financial leadership, operational metrics and strategic metrics.

The review committee felt the details a bit sketchy but probably satisfied requirements before the company was ASX listed.

AUDITOR REPORT Ernst & Young Australia are the appointed auditors. A formal audit report will not be available until the 12 months financials for year ending 30 June 2015 are tabled. Ernst & Young did perform a review (not an audit) of the half year 31 December 2014 financials.

MAJOR SHAREHOLDERS

BUSINESS RISKS

The top 5 of the Top 20 shareholders at time of listing were;

A significant amount of revenue is from government and REG could be exposed to changing healthcare policies and subsidies.

In addition there are numerous government compliance and accreditation agencies to comply with on an ongoing basis.

Ashburn Pty Ltd (interests associated with NED Bryan Dorman) Galaby Pty Ltd (interests associated with NED Ian Roberts) HSBC Custody Nominees Aust Ltd National Nominees Ltd JP Morgan Aust Ltd

27.30% 27.30% 5.62% 5.02% 4.88%

DIRECTORS AND CHIEF EXECUTIVE The current six person board is made up of MD/CEO Ross Johnston Independent NE chairman Mark Birrell Independent NED Trevor Gerber Independent NED Sylvia Falzon Co-founder and NED Bryan Dorman Co-founder and NED Ian Roberts There are two board committees; Audit, Risk and Compliance chaired by Independent NED Trevor Gerber Remuneration and Nomination committee chaired by Independent NED Sylvia Falzon.

To date, REG has demonstrated high occupancy levels and the review committee considered it would be vital to uphold this performance.

General market conditions, outside of REG control, could result in fluctuating values for RADs (the other major revenue contributor).

The availability and management of nursing labour is a key operational responsibility particularly at times of award renewal negotiations.

The interests of founding shareholders may not be aligned with other shareholders (a voluntary escrow is in place until release of FY15 audited financial results are announced on the ASX).

Given that there appears to be a strong growth opportunity within Australia in the sector in which REG operates, the committee felt that management will need to effectively manage the REG culture across all business units, ensure profit performance of acquisitions meet or exceed budget and ensure the company avoids significant goodwill impairments.

The board has a good mix of professional qualifications, relevant business experience and three of the six directors are independent.

DISCLAIMER: This report was prepared by a member of the ASA for use by a Better Investing Group. The content included in this Better Investing Group Discussion Report should not be interpreted as investment advice or be taken as representing the ASA’s view of the company. While ASA representatives report on their analysis of company reports, investment advice can only be obtained from persons appropriately licensed to give it. Neither the Association nor its representatives are licensed to provide financial advice and accept no responsibility for decisions made on the basis of information contained in this report.

EQUITY May 2015 Page 15

The Pepys (“Peeps”) Rule (Tip 3)

By Peter Schiefelbein, ASA Company Monitor

Samuel Pepys (pronounced “Peeps”) is the Englishman who famously buried a wheel of parmesan cheese to save it from harm during the Great Fire of London. We know how Pepys protected his parmesan because he recorded in his diary burying the cheese in his garden as the fire approached. Pepys’s diary is more than just a valuable witness’s account of events surrounding the Great Fire.

The diary provides contemporary insights to life in England between 1660 and 1669 including the momentous events of the time. Pepys accompanied Montagu’s fleet when it brought Charles II back from exile in the Netherlands and his diary provides a first-hand account of the restoration, life in the Royal Court, the Great Plague of 1665, and the Second Anglo-Dutch War. The Pepys rule for investing is more than just the dictate that all investors keep a diary. There are three important elements to the rule as follows: be a disciplined diarist, make your diary a very personal record and write for the benefit of your future self.

BE A DISCIPLINED DIARIST Pepys was very disciplined. He wrote daily entries for nine years starting on January 1, 1660 and only ending when his eyesight failed. To maintain a best practice investor diary also requires a high degree of self discipline. Not the discipline of making daily entries, but instead the discipline of always doing the homework for each new investment chapter of the diary and keeping the chapters up to date.

Investor diaries are not structured chronologically but instead as chapters. Each chapter concerns one specific company whose shares you have purchased. The contents of each chapter should include the following: • Brief company profile (your own words); • Your investment thesis illustrated with relevant

fundamentals data and charts;

• Your expectations for company and share price; • Your action plans including triggers for adding, reducing

and exiting;

• Regular updates that report all news items relevant to

your investment thesis; and

• A personal investment postmortem written when you

exit your investment showing what you learnt and how you think you can improve your investing going forward.

“...we weighed Ancre, and with a fresh gale and most happy weather we set sail...”

EQUITY May 2015 Page 16

Based on what ASA members have told me, and my academic study of investor decision-making, most individual investors seem to think they do a pretty good job of investment record keeping. Yet the typical methods of record keeping fall short of proper investor diary keeping.

For example, entering financial data into spread sheets to calculate ratios and then tracking those ratios over time by updating the financial data is important to fundamental analysis. However, doing fundamental analysis alone is not diary keeping. Fundamental analysis may inform our investment decisions but it is the decisions themselves that form the most important part of a diary. Depending on your investment methodology diaries can include the fundamentals and stock charts with trend lines and technical indicators on which you are basing your decisions. They are included as evidence and to illustrate the decisions and action plans you detail in your diary.

YOUR DIARY MUST BE A VERY PERSONAL RECORD It is clear from the content that Pepys intended his diary as a purely personal record. He writes frankly about his sex life, his several marital infidelities and is scathing in his criticism of his colleagues on the Navy Board. The method of shorthand he employed meant few people could have deciphered his writings and certainly no members of his household would have understood his diary entries.

We should try to emulate Pepys. I don’t mean sexing up our investment diaries, but rather being candid when we write about our thinking and our motivations for the investment actions we plan and we take. This is important even when an investor is making decisions based mostly on the recommendations of a broker or a stock research company. The diary in those circumstances becomes a record written in our own words of how we interpret the broker’s recommendation not simply the cutting and pasting of paragraphs from their stock report. This for many individual investors is the greatest challenge of proper diary keeping.

Many investors don’t feel they have enough investment knowledge to keep a diary. They don’t think their investment decisions are worth writing about. In such cases, the beauty of making our investment diary our personal and very private record is that the diary becomes the place where we confront and grapple with our perceived shortcomings as an investor. Then also, hopefully, it becomes a private record of how we successfully strived and overcame our perceived weaknesses as an investor, how our investing style evolved, how we became more successful and how we learnt from our mistakes.

YOU WRITE FOR THE BENEFIT OF YOUR FUTURE SELF Pepys often made promises to himself in his diary. You get a sense from his writings that his diary was somehow a mechanism for personal accountability, but you also see how he struggled to meet his own expectations for himself.

For example, on New Year’s Eve 1661, Pepys wrote that he had “newly taken a solemn oath about abstaining from plays and wine.” By mid February he had lapsed and he records on the 17th: “I drank wine upon necessity, being ill for the want of it.”

Like Pepys’ Diary a good investor diary should be a valuable tool for honestly striving towards a better self. If every investment is a chapter, and every chapter has to be maintained until the stock that is the subject of the chapter ceases to be an investment then it becomes impossible to sweep our mishaps under the carpet and out of mind. We are forced by diary keeping to think through our investments, to confront our past mistakes, justify our new decisions and rethink, adjust and act.

Hopefully we all learn from our mistakes but without the discipline of a diary there is an innate human tendency to wrongly remember and re-justify the reasons for past actions. For example buying for growth may, when growth falters, be rationalised as buying for dividends. The plan to sell if the share price falls to close below $10 becomes wrongly remembered as a plan to reassess the stock below $10. We succumb to false and selective memory and can often suffer unnecessary long-term financial pain as one

price for the short term psychological comfort we seek from self rationalising delusions. When it matters most investing hindsight is never 20:20. To properly chalk up a mistake to experience we need to be really chalking it up, that means actually writing it down.

SOME USEFUL TIPS ON DIARY KEEPING Physical and flippable I write my diary in Microsoft Power Point. I use titled text boxes to record my thinking. I copy and paste analysis from Microsoft Excel spread sheets. I capture charts with trend lines using Snap Shot. The diary pages don’t stay on the computer they are always printed and placed in plastic page protectors then put in ring binder folders. When I flip through my diaries I see my past mistakes and, far from being delete-able like a purely soft copy record, I have permanent reminders of my past learning experiences.

Postmortems should go at the front of each chapter The most important component of each diary chapter is the investment postmortem. This should be short, painfully honest, and unavoidable when you flip through your diary.

In my diary it is always the first page of each chapter and I colour code my postmortems using high-lighter pens.

Green highlighter for investment successes, pink/red for setbacks. I regularly re-read my pink pages.

Be clear on your Action Plans (add, reduce, exit – why? and when? etc) Diary keeping is not navel gazing. We write with the purpose of refining our thinking into planned actions and then acting. By writing our plans for action in advance we become more likely to act on those plans and are more accountable to ourselves when we don’t act. A good diary can be distilled down to two main themes in each chapter 1) I think this... and 2) I will do this... .

Reward yourself for acting in accordance with the action plans in your diary not solely on your profits A good investor diary has clear plans for action. A good investor acts in a disciplined way to implement his diarised plans. We can’t control the markets and “the best laid schemes o’ mice an’ men aft a-gley” (often go awry). So, rather than rewarding ourselves solely based on our profits we should encourage ourselves to greater investing self discipline by also rewarding ourselves when we implement difficult decisions in accordance with the plans in our investor diary.

Markets, like London in the 1666, have great fires from time to time. When Pepys buried his parmesan cheese he was protecting an investment because unlike most food stuffs parmesan increases in value as it ages. During our market fires there is a human tendency to also bury investments.

This we do by slipping unpleasant investment records into bottom drawers, by denial or by rewriting history. Keeping an investor diary means instead of burying our setbacks we are shining a light on them which should mean better outcomes from our investing going forward.

Next Issue Investing Tip #2: The Rommel/Montgomery Rule The author, Peter Schiefelbein, is a member of the ASA Education Committee and was former CIO of the Institutional Alpha Fund and Research Manager of Standard Chartered Securities and Daiwa Institute of Research.

EQUITY May 2015 Page 17

Dear Editor Thanks for an informative and stimulating February/ March Equity. I’d like to make a number of comments on the Duncan Fairweather article “Lights flashing on amber for super savings”. I endorse the work of the SMSF Owners’ Alliance and their commitment to supporting the interests of individual investors. I also support his contribution to the general discussion about superannuation.

I have two concerns about Fairweather’s article. In the second paragraph he writes “We face a Budget in May from a government whose efforts to overcome the huge deficit and debt they inherited by cutting spending are being frustrated by an unruly Senate and a cynical Opposition”. I am concerned about the obvious political bias and do not believe it is appropriate to appear in Equity.

My other concern is that the article is alarmist in its tone about any possible changes to the superannuation system.

We need to have a mature debate about superannuation, especially in regards to the tax concessions that are available in the system. The superannuation structure was first initiated to assist the average Australian to support themselves in retirement rather than being dependent on an aged pension. As a community we need to revisit the purpose of this system so as to make appropriate alterations that will produce equitable outcomes for all sections of the community.

I certainly see this publication as an ideal platform where such discussions could occur.

Andrew Kennelly, Brisbane Dear Editor The article “Questioning Shareholder first management” questions whether company directors should be responsible, in their decision making, for the wider community as well as shareholders.

I realise that it’s probably impossible to separate shareholders from community. If I, as an educated and caring person, felt that the actions of a company I held shares in was going to damage the community and thus me, I would sell those shares no matter what the profit. Other shareholders may react quite differently. Not all shareholders will agree whether or not (eg mining coal in some circumstances) is detrimental to communities. How can a director make decisions on how I, and other shareholders, may or may not think?

As a shareholder I pay directors to manage the company. I do not pay directors to second-guess philosophical and rarely agreed-on issues. Others in the broader governance chain (eg parliament) can shut down the operation should the broader community come to agreement (eg by denying the necessary licences etc). If I learned that that company policy was to have its directors make such judgements, I would sell those

EQUITY May 2015 Page 18

shares immediately. I would have no real grounds for judging its performance against another company.

If a director’s conscience is troubled, he/she can resign, with honour, and so the very existence of the company might be brought into question. By this time the share value would have plummeted and, hopefully, the company’s actions directed elsewhere.

RAP, Melbourne (name and address supplied) Dear Editor Thank you for the latest issue of Equity. Judith Fox may have had her tongue in her cheek in the article “Questioning Shareholder first Management”. Many shareholders consider triple bottom-line reporting in deciding in which companies to invest; others practise Socially Responsible Investing (SRI) and would never invest in Woolworths, with its swag of pokies under its control, or in gambling ventures etc. SRI investors do not “remain indifferent to how corporate profit is generated”.

Most shareholders consider that directors should be responsible to shareholders and cite the issue of directors voting themselves enormous salaries and other benefits without appropriate achievement targets as wrong in principle. This is why many small shareholders join ASA because of its strong stand against those processes.

Education of shareholders to adopt those more community directed factors is difficult. Until the large institutional organisations who have such a strong influence on investment strategies and the “fast traders” using algorithms to foster their personal aims, rather than support sound long term investments that serve the public, adopt more ethical procedures, the position will remain unchanged.

Organisations such as the Responsible Investment Association of Australasia (RIAA) are working hard to improve ethics in the investing world, especially financial advisors. ASA is working for improvements in governance. I encourage all ASA members considering investing to think of their targets in terms of “If this were my very own company, how would I like to run it?” Let the discussion continue and self-interest be modified to the needs of the whole community.

Richard Manuell, Sydney Dear Editor Thank you for an intelligent issue (April 2015), well laid out and very readable, intelligible even to an investment dullard such as myself. I commend broadening discussion of Shareholder First thinking. I consider this hackneyed line to be a cop-out. Anyone who parrots it raises my distrust!

David Donaldson, Adelaide

Stock Market Course

By Silvana Eccles, National Operations Manager, ASA

Searching online for a stock market course is a daunting and overwhelming task but fortunately with the publication of the ASA’s new stock market course, free to all members, the problem is solved. There is a profusion of providers including private colleges, financial organisations and TAFE – all offering stock market courses. The cost of courses varies considerably and some providers will inevitably encourage you to purchase software or subscribe to a service.

The ASA course, however, is presented by an independent active investor, pushes no particular product or service, and aims to empower investors to better communicate with investment professionals or take control of their own share portfolio. Presented in video format, the Stock Market Course is easily accessible via the ASA website www.australianshareholders.com.au under the E-LEARNING tab which you access from EDUCATION, NEWS AND RESOURCES section in the top banner.

The first session addresses the types of risks that can be avoided and how to manage the risks you cannot avoid.

This leads into the need for an investment plan, the central pillar of an investment strategy.

Sessions two to five provide detailed explanation of both fundamental and technical analysis. The fundamental analysis session, for example, will introduce you to the value investing approach which aims to find a stock’s intrinsic value based on an analysis of fundamentals from company reports. This is the widely used method developed

by Benjamin Graham and well known from the investment record of Warren Buffett.

Pure fundamentalists do not believe in the need to use chart patterns, indicators and trend lines. However, many believe that technical analysis is as integral to share selection as fundamental analysis and Bill explains the use of technical analysis in sessions three and four.

With an understanding of the analysis techniques, Bill sets out to demonstrate how different methods can be applied; one using just fundamental analysis; a second using only technical analysis and a third approach where both methods of analysis are applied. These are followed up with case studies and comparisons to the approaches of Alan Hull and Colin Nicholson.

Created and produced by Bill Dodd, who has kindly donated the course to the ASA. Bill is a retired academic. As a plant scientist at QIT and QUT his research interests were in the biotechnology of tropical plantation species. He has been a private investor/trader for more than 20 years. His analytical approach allowed him to emerge unscathed from the 2008 bear market but he was concerned at the significant financial losses incurred by his friends and relatives.

As a result, Bill developed investment education courses for investors. Over the past six years these courses have been presented in all states for the Australian Shareholders Association and the Australian Investors Association.

Each of the ten sessions is between 25 and 40 minutes long and includes examples of Australian stocks with most sessions including appropriate exercises to emphasise the points being made.

Money management is another very important topic and in session nine Bill discusses how many shares should be bought, how to maximise profit and most importantly when to sell.

For those who are just starting out session eight will be invaluable as it addresses ‘How do I start to invest?’, ‘What if I have very little capital?’ and the pros and cons of using a broker.

Finally, with the plethora of information available online, via publications, subscriptions and advisers, Bill outlines how to avoid information overload. He also encourages those starting out to practice by paper trading as it provides an opportunity to evaluate, review and perfect an investment system before committing money to the market. It provides a simple low risk means of assessing a new investment plan.

I’d encourage all interested in learning, refining or wishing to reinforce their knowledge base to access these courses (https://www.australianshareholders.com.au/stock-marketcourse). Free for members they are great value. As the courses are streamed directly to our website site there is no delay in downloading – I promise!

EQUITY May 2015 Page 19

RETIRING WITH OUR BEST WISHES

ARDENT LEISURE SITE TOUR

Two Victorian stalwarts have retired from Victorian group convenor roles this year. Geoff Read founded the ASA Manningham Group in 2004 and has convened the group since that time. In March 2014 the group celebrated its 100th meeting in its 10th year and in February 2015 Geoff was presented with a Certificate of Appreciation from the ASA for his contribution. Geoff has also been a company monitor of three very large companies: Telstra (TLS), Australian Foundation Investment Co (AFI) and Treasury Wine Estates (TWE) and will continue as a company monitor and ASA involvement following his relocation to Perth.

Twenty two ASA members enjoyed a half day tour of Dreamworld, Australia’s biggest theme park, on one of the Gold Coast’s sultriest days. Hosted by Craig Davidson, CEO, Theme Parks, members learnt that the leisure sector is still flat but considerable efforts are being made to open a route direct from the Gold Coast to China as this is the fastest growing international market. However, with an 85% market share the domestic market remains the key to the park’s success.

To keep the 35 year old property presentable Dreamworld spends $8m on capital each year with the latest acquisition being the Tailspin. Indeed presentation is key and Davidson was pleased to advise that Dreamworld has won the Queensland Tourism Award for the past two years. With the Commonwealth Games gymnastics and netball venue being built on the eastern boundary, the Westfield Coomera Town Centre on the northern boundary and close proximity to the train station, Davidson believes Dreamworld is well situated to grow. There was even a suggestion of a hotel possibility.

Although invited to stay on, with the temperature over 30 degrees and 80 per cent humidity, most opted to leave, after seeing the tiger show of course!

Don Hyatt, Victorian State Chair; Geoff Read and John Parrott

Pete Johnston was elected as chairman of the ASA Geelong Branch in 2010. Since that time the Geelong Group have added six day meetings to the traditional six evening meetings, thus expanding the opportunities for the very active group members to attend. With an increasing workload and outside commitments Pete retired as group convenor early in 2015.

We wish Geoff and Pete well in their new ‘retirements’.

ASIC LAUNCHES FINANCIAL ADVISERS REGISTER ASIC has recently launched the first stage of the Financial Advisers Register. The new register contains details of persons employed or authorised by Australian financial services licensees to provide financial advice to retail clients on investments, superannuation and life insurance. ASIC encourages consumers to use the register to find out information about an adviser before receiving financial advice. The second stage of the register will be available by the end of May 2015 and will capture financial adviser qualification, training and professional membership details. The register is available to search on ASIC’s MoneySmart website at www.moneysmart.gov. au/investing/financial-advice/financial-advisers-register.

ALBURY WODONGA GROUP Started in 2002 this group meet on the fourth Tuesday of each month (except for June 2015 when it will be the fourth Thursday because the venue will not be available) and December which is always too close to Christmas, in the Commercial Club, 618 Dean Street, Albury. Featured here are the group at their March meeting with the convenor, Linda Martin, to the left.

EQUITY May 2015 Page 20

MARK YOUR DIARY – INVESTORS’ BIG DAY OUT 2015 Following the outstanding success last year of the Investors’ Big Day Out, we are very pleased to advise that we will once again partner with the ASX to host this series of events in most capital cities. Program details are currently being finalised, so please note these dates.

Canberra

Thursday, 20 August 2015

Melbourne

Friday, 21 August 2015

Adelaide

Wednesday, 26 August 2015

Perth

Friday, 28 August 2015

Sydney

Friday, 4 September 2015

Gold Coast

Saturday, 5 September 2015

QUEENSLAND REPORT

By Alison Harrington, Queensland State Chair

In the three years since I became State Chair the external investing circumstances have changed markedly. The mining boom is over and iron ore and oil prices have collapsed, the Federal government and the Queensland governments are struggling with debt and falling revenues, the RBC cash rate is very low, the dollar has fallen to well below parity, and Queensland had a surprise election result which impacts on infrastructure spending. Yet, although not to pre-GFC levels, the market has recovered well. Many new companies which were small three years ago have grown rapidly, REA for one. ETF’s are growing in popularity and property prices in major cities continue to rise. Meanwhile the media still trumpet the doom and gloom, and ignore the positives.

No wonder the average investor remains confused.

How much better would they be if they joined ASA and heard from the informative topics covered by the wide range of excellent knowledgeable speakers who are always ready to present at our meetings, our seminars and our conferences? We are fortunate to have a wealth of members, investing professionals and academics willing to write articles for Equity magazine. ASA continues to forge strong relationships with the investing community and this is apparent in the calibre of presenters consistently available to educate and inform our members.

In Queensland our Company Monitors do an excellent job on a range of very important Queensland-based companies.

We are always delighted to hear this hard-working group of monitors present at our December meeting where we gain insight, only possible from the corporate interaction monitors have with the companies. Kim D’Arcy is enjoying his new role as Queensland Company Monitor Chair.

Pictured at the Ardent Leisure Tour are the ASA members with CEO Craig Davidson (very left) and standing next to him Paul Callander, GM Commercial Operations, seated Michael Dodd, CFO and Letitia Lester, Executive Assistant, to the very right.

Brisbane has had an excellent range of speakers, Derryn Manwaring from BlackRock, presenting on ETF’s, being the most recent.

Brisbane Investor Forum Meetings have a new venue and will now be held in the Wesley Mission Brisbane building, 140 Ann Street, opposite City Hall and a short walk from Central Station. Both the venue and access are excellent.

We now offer tea, coffee and biscuits, before and after the meeting, so we look forward to a more social aspect to our meetings. Inclusive meeting charge is $3, for all attendees, plus $15 for non–members.

Toowoomba has had a busy year and is restructuring now that Bill Dodd has stepped down. Our thanks go to Bill for restarting this group and providing such intellectual investing leadership. Bill is an excellent educator and ASA benefits from his strong research and presentation skills.

Ron Graham is heading up a team of members keeping these meetings informative.

Sunshine Coast is a successful group under Don Matthews, who is now training his replacement. The Gold Coast has smoothly transitioned from the leadership of Chris and Di Kelly to Bryan Moore and his team. They had their first site tour this year at Dreamworld, one of the “worlds” of the Gold Coast. Ardent Leisure were their hosts and it was a fascinating day.

The new Brisbane Investor Forum venue, March 2015

As always, I encourage members to bring family and friends to any ASA education event so they can see for themselves how beneficial ASA membership can be to their financial skill development. We are very lucky in Brisbane to have some skilled superannuation speakers so the recent SMSF seminar was very informative.

I will be attending the conference in Melbourne. As well as being an excellent programme, it is fun getting to know ASA “tragics” from other States.

Finally, thank you to Marion Loughnan and the rest of the volunteers in Brisbane for making our meetings flow so well.

EQUITY May 2015 Page 21

ASA Events Location

Date

Time

Venue

Speaker

Topic

AUSTRALIAN CAPITAL TERRITORY Macquarie

14-May-15

12.30pm

The Canberra Southern Cross Club Jamison, Cnr Catchpole & Bowman Street, Macquarie

Northside Discussion Group

General investment topics

Weston

02-Jun-15

12.30pm

Weston Club, 1 Liardet Street, Weston

Southside Discussion Group

General investment topics

NEW SOUTH WALES Bondi Junction

05-May-15

10.30am

Mill Hill Community Centre, 31-33 Spring St, Bondi Junction

Bondi Discussion Group

Investment topics

Port Macquarie

08-May-15

10.00am

Senior Citizens Centre, Munster Street, Port Macquarie

Guest speaker

Port Macquarie Meeting

Wollongong

12-May-15

6.00pm

The Builders, 'Sonata Lounge', 61 Church Street, Wollongong

Geoff Wilson, Wilson Asset Management

Listed investment companies and market trends

Sydney - North Shore

15-May-15

10.00am

Killara Uniting Church Hall, 9 Karranga Avenue, Killara

Sydney North Shore Discussion Group

General investment related topics

Sydney Investor Forum

21-May-15

12.00 midday

Sydney Mechanics' School of Arts, Mitchell Theatre, 280 Pitt St, Sydney

Scott Phillips, Motley Fool

Winning strategies for patient investors

Newcastle

25-May-15

11.00am

Club Macquarie, 458 Lake Road, Argenton

Guest speaker

Newcastle Meeting

Taree

28-May-15

10.00am

Greater Taree City Library, 242 Victoria Street, Taree

Taree Discussion Group

General investment topics

Bondi Junction

02-Jun-15

10.30am

Mill Hill Community Centre, 31-33 Spring St, Bondi Junction

Bondi Discussion Group

Investment topics

Wollongong

09-Jun-15

6.00pm

The Builders, 'Sonata Lounge', 61 Church Street, Wollongong

Wollongong Discussion Group

General investment topics

Gold Coast

12-May-15

9.30am

Robina Community Centre 196 Robina Town Centre Drive, corner San Antonio Court, Robina

Craig Godfrey, Triple A Super

An update on SMSF strategies

Brisbane Investor Forum

13-May-15

11.00am

Wesley House, 140 Ann Street, Brisbane

Michael Knox, Morgans Financial

Economics and the May 12 Federal Budget

Toowoomba

18-May-15

1.30pm

University Open Learning Centre, 27 Jellico Street Toowoomba - Main Conference Room

Rob Martin, Magellan Group

ETFs and the Magellan Group

Gold Coast

09-Jun-15

9.30am

Robina Community Centre 196 Robina Town Centre Drive, corner San Antonio Court, Robina

Guest speaker

General investment topics

06-May-15

10.30am

University of Adelaide Club, North Terrace, Adelaide

Discussion Group Led Resource related topics

by Keith Potts, ASA

Adelaide 13-May-15 Industrial Shares Discussion Group

10.30am

University of Adelaide Club, North Terrace, Adelaide

Genevieve Ward, ASA member

Current share market developments

Adelaide

11.30am

Scots Church Hall, Corner Pulteney Street & North Terrace, Adelaide

General meeting

General investment topics

Adelaide Investor 20-May-15 Forum

12.00 midday

Scots Church Hall, Corner Pulteney Street & North Terrace, Adelaide

Travis Adams, WHK Group

Equity analysis and the provision of advice in the current climate

Adelaide 03-Jun-15 Resources Discussion Group

10.30am

University of Adelaide Club, North Terrace, Adelaide

Discussion Group Led Resource related topics

by Keith Potts, ASA

Adelaide 10-Jun-15 Industrial Shares Discussion Group

10.30am

University of Adelaide Club, North Terrace, Adelaide

Genevieve Ward, ASA member

QUEENSLAND

SOUTH AUSTRALIA Adelaide Resources Discussion Group

20-May-15

Current share market developments

NB. Dates, speakers and topics are correct at time of printing but are subject to change. Please check the ASA website www.asa.asn.au for the latest details.

EQUITY May 2015 Page 22

Location

Date

Time

Venue

Speaker

Topic

VICTORIA Melbourne 4-6 May 15 ASA Conference

9.00am5.00pm

Crown Conference Centre, 8 Whiteman Street, Southbank

ASA National Conference

Learn Build Empower

Melbourne ASA AGM

06-May-15

3.005.00pm

Crown Conference Centre, 8 Whiteman Street, Southbank

ASA AGM

Melbourne ASA Masterclass

07-May-15

9.0012.30pm

Batman's Hill on Collins, 623 Collins Street, Melbourne

Elio D'Amato, Lincoln Indicators

Portfolio Construction and Management Masterclass

Manningham

12-May-15

10.00am

Koonarra Hall, 7 Balwyn Road, Bulleen

Manningham Discussion Group

Minerals and energy

Geelong

12-May-15

1.00pm

The Elephant & Castle Hotel, 158 McKillop Street, Geelong

Geelong Day Discussion Group

General discussion topics

Ballarat

13-May-15

7.30pm

McCallum Conference Centre, Leopold Street, Alfredton

Ballarat Discussion Group

Investment related topics

Kingston

14-May-15

10.30am

Longbeach Place, 15 Chelsea Road, Chelsea

Round table discussion

ASA conference 2015: a review

Monash

19-May-15

10.00am

Wheelers Hill Public Library, 860 Ferntree Gully Road, Wheelers Hill

Simon O’Connor, RIAA

Responsible Investment - more than just ethics and risk

Bendigo

20-May-15

10.00am

Bendigo Club, 22 Park Street, Bendigo

Guest speaker

Bendigo Meeting

Mornington

21-May-15

9.45am

Mornington Golf Club, Tallis Drive, Mornington

Roundtable discussion led

by Ian Thomson, ASA

General investment topics

Melbourne 21-May-15 Evening Meeting

6.00pm

The Limerick Arms Hotel, 364 Clarendon Street, South Melbourne

Duncan Seddon, ASA Company Monitor

BHP and RIO - where to next?

Albury-Wodonga 26-May-15

10.00am

Commercial Club, 618 Dean Street, Albury

Elizabeth Redman, Eureka Report; Evan Tsipas, RSM Bird Cameron

Why the market is where it is; Value investing - why it works

Melbourne Investor Forum

03-Jun-15

12.00pm

Melbourne City Conference Centre, 333 Swanston Street, Melbourne

Michael Kemp, The Barefoot Investor

Uncommon sense (investment wisdom since the stockmarkets dawn)

Manningham

09-Jun-15

10.00am

Koonarra Hall, 7 Balwyn Road, Bulleen

Manningham Discussion Group

Health sector stocks

Gippsland

10-Jun-15

11.00am

Westpac Bank Building, Corner of Hotham and Franklin Streets, Traralgon

Guest speaker

Gippsland Meeting

Geelong

10-Jun-15

6.00pm

Geelong RSL, 50 Barwon Heads Rd, Belmont

Guest speaker

General investment topics

Ballarat

10-Jun-15

7.30pm

McCallum Conference Centre, Leopold Street, Alfredton

Guest speaker

General investment topics

Perth Members 05-May-15 Monthly Meeting

10.30am

State Library Building of Western Australia, 25 Francis Street, Perth

Members Meeting

General Investment

Perth Investor Forum

05-May-15

12.00pm noon

State Library Building of Western Australia, 25 Francis Street, Perth

Alan Hull, ActVest

Share strategies to help you

Perth Investors' Corner

21-May-15

10.00am

Citiplace Community Centre, City Station Complex, Wellington Street, Perth

Discussion group led

by Lorraine Graham & Peter Scales, ASA

Equity investments including yield stocks, LICs & selected shares

Perth South of the River Group

22-May-15

10.00am

Canning River Eco Education Centre, 'Melaleuca Room', Lot 8 Queens Park Road, Wilson

Tom Hertzfeld, Ian Greenham

Investment styles

Busselton

27-May-15

9.30am

The Equinox Cafe, 343 Queen Street, Busselton WA

Discussion group led by members

Investment related topics

Perth Members 02-Jun-15 Monthly Meeting

10.30am

State Library Building of Western Australia, 25 Francis Street, Perth

Members Meeting

General Investment

Perth Investor Forum

12.00pm noon

State Library Building of Western Australia, 25 Francis Street, Perth

Elio D'Amato, Lincoln Indicators

TBA

WESTERN AUSTRALIA

02-Jun-15

EQUITY May 2015 Page 23