RE: Downsizing...16 Dec 2020 11:05
Hi Jatw, agree that a key issue will be what AVBOD does with the recently acquired income and how well they use it to the benefit of the Company, its clients/customers and its shareholders, although not sure in what order but think it will be in the order given. I cannot remember if AV have rumoured a share buy back scheme?? They will purport that this is in the interest of the shareholders as it reduces stocks in circulation and hence pushes up the price of the remaining stock issued, however I have always read this is a wolf in sheep's clothing and should only be undertaken if there is absolutely no better use for the money to grow the business. I was told to be careful of business who take this action as it may show lack of imagination and acumen in how to use the money for long term benefits. I think I read AV was using surplus to paydown debt and when its targets on debt repayment had been reached there may be opportunities to return additional to shareholders as a Special Dividend. I was always advised also to careful of a "jam tomorrow" promise on many things including stock dividends, as many take too long to actually materialise, and other bigger benefits could have been missed whilst holding on the any special payment. I am unemotional on all my other stock holdings, but as I said regards AV, i just dont have a happy feeling being one of their investors for many reasons, mainly their seemingly ever revolving door on leadership, their lack of engagement with shareholders and the derisory treatment of same when the know many invested pension money for dividend income and hence financial well being (not that is a driver for AV or usually any business!) but also because they either are unclear, or have been poor at creating a roadmap to success which long term shareholders can be engaged with, believe in and be excited about. Maybe that's the Insurance business for you, unexciting!! I for one intend to show them the same loyalty and contempt they have shown me and other shareholders, remembering that others were not so harsh at a time they didnt have AV's billions in cash reserves. Sooner it goes plus 400p the better and I can pay a trip to Fundsmith / Blue Whale and others who will manage my cash more effectively and return me 20% per annum (Fundsmith actually was annualising 27% pre C19) and unlike AV, I actually like what El Tel says and how he says it. Maybe we are a curmudgeonly couple in that respect.
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