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Tuesday, 24 April 2007


John Snelson

Hey Ian, yes .. I worry about some of these derivatives. I don't mind the leverage and gearing, but I worry about what's behind the securitised instrument.

Nevertheless, on blue chips in a rising market, it's just fine. In addition, if you go for the utilities and infrastructure stocks like ConnectEast, then there is also the defensive nature of the basically captive income stream, even if the stock market crashes - people will still use their cars, turn on the gas and drink water.

As for Macquarie, I REALLY worry about their policy of funding dividends out of revaluation reserves, which is legal in a trust structure like MIG. One day, the whole Millionaire's Factory will collapse is a pile of BMW leases and Giovanni suits.


Yes, it's all very clever but decidedly dodgy.

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