I worked in a law firm in 1991-92 where one of our wealthiest clients liquidated all 16 of her investment properties to plough funds into the stockmarket.
These were dark times for the stockmarket. If you fired a gun in the Australia Square courtyard at lunchtime you'd be lucky to hit anyone (even luckier if you hit a stockbroker). I was told that this client, who was quite elderly, had switched in a similar dramatic fashion (property to shares or vice versa) on about 5 occassions over the last 40 years. I'd bet she's tempted to liquidate her property portfolio again.
I bought a swag of TNT shares at the time (at 50c). Despite being advised "to pin your ears back son" I sold at 55. I think they hit $2.50 within 18 months before they were taken over.
On BBruham's AMP call, can't help thinking there is more bad news out there.
This from AAP:-
"AMP warns profit may fall again
6:32 PM February 26
AMP Ltd has warned more bad news could be on the way after reporting a record $896 million net loss for 2002 and slashing its dividend payouts to shareholders.
The loss - the eighth biggest in Australian corporate history - was in line with expectations and represented a huge nosedive from AMP's $690 million net profit in 2001.
The earnings slump forced AMP to lop six cents off its final dividend to 20 cents a share, partly franked, while the total for the year fell five cents to 46 cents.
AMP's shares plunged 21 cents to a record closing low of $7.71 after earlier hitting $7.45.
Chief executive Andrew Mohl described the 2002 result as "very disappointing" and warned earnings would fall again in 2003 if equity markets continued to slide.
He blamed the massive loss on the poor performance by AMP's troubled United Kingdom Financial Services (UKFS) division and weaker global equity markets, which have sapped AMP's investment earnings.
"We recognise that shareholders have had a rough ride," Mr Mohl said.
"But as much as we would like to change the past, we have to go forward.
"We know the outlook is difficult, that's why we are cutting our cloth to fit ... we are working around the clock to implement the changes we need."
Mr Mohl said many of AMP's problems stemmed from the "real beating" it had taken from its acquisition-driven expansion in the UK.
During 2002, operating margins at UKFS fell 36 per cent to $211 million while new business dropped 21 per cent to $6.8 billion.
Mr Mohl said the outlook for UKFS was "very uncertain", with current market forces "pushing earnings lower".
The volatile conditions on Britain's FTSE 100 index, to which AMP has a major exposure through its equity investments, made it impossible for AMP to give earnings guidance for 2003, he added.
However, AMP had put in place several instruments, including hedging and derivatives, to reduce the impact of further market falls.
Its UK life operations were also exceeding minimum capital requirements and the group did not at this stage need to inject more cash into the business through an equity raising.
AMP tipped more than $1 billion into UKFS last year to shore up its capital position amid regulatory concerns.
Mr Mohl said he did not believe another company would be interested in buying the UKFS division.
"It would be wonderful if we could click our hands and someone walks in with a good price for that business ... it's not going to happen. We have to manage through," he said.
On the chances of a takeover for the entire AMP group, Mr Mohl said he believed it was a target just like any other listed Australian company.
He also refused to rule out further job losses as AMP continued to reduce costs. Last year, AMP's staff numbers fell by 3,465 to 11,403.
AMP's plunge into the red was largely a result of the previously flagged $1.2 billion in writedowns and $344 million in restructuring costs linked to Mr Mohl's major reform program.
Net profit before significant items fell to $495 million from $667 million.
AMP's Australian Financial Services (AFS) division's operating margins also fell nine per cent to $334 million while its new business dropped 11 per cent to $9.4 billion.
The only bright spot was new business for AFS' corporate superannuation unit rose 12 per cent to $2.4 billion.
AMP's Henderson Global Investors also suffered an eight per cent fall in operating margins to $192 million, while assets under management fell 13 per cent to $255.6 billion."
Ajax
