Tax Treatment affect Agriculture Companies!!

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peterloh

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Post Number: 2344
Registered: 03-2003

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Wednesday, February 07, 2007 - 10:08 am:

Indication of changes in tax treatment of deductibility for future non timber MIS Schemes impacted on the SP of these group of companies, TIM, GTP,GNS,ANE etc.2007 will be a big year for these companies as investors are likely to be reminded of this generous tax treatment is about to end and is the last chance for them to act this financial year ie 2006/7.However this does not seem to apply to the timber business, which will see all these companies concentrate more on timber business in the future. There will be rationalization of the industry as a whole.There will be intense lobbying and possible legal challenge.I thought the sell down today is overdone, however with CFDs, margin call and short selling,the shares will be oversold, with value investors coming back once they are able to assess the situation.There is no indication that the SP will come back to the level before the sell down.The market has already factor in this news prior to this to a certain extend as the whole sector has already been sold down quite heavily before this through news leakage,general knowledge that the government is likely to act.

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Disclaimer: Please note that comments made in this column is mainly for the interpretation of charts in technical analysis. It is not made in my professional capacity and should not be taken as advice.In my professional capacity I am only allowed to give advice on certain managed funds authorised by my license dealer.Any share discuss is for general interest and should not be relied on to make an investment decision.It is likely that I may own the shares that we discussed as a trade or as an investment. Please consult your stock broker or financial adviser in regard to your personal situation.

The views expressed here contain information derived from public available sources that has not been independently verified.No representation or warranty is made as to the accuracy, completeness or reliability of the information.Any forward looking information in this representation has been prepared on the basis of a number of assumptions which may prove to be incorrect.It should not be relied upon as a recommendation or forecast by the writer.

peterloh

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Post Number: 2345
Registered: 03-2003

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Votes: 0


Wednesday, February 07, 2007 - 10:25 am:

All is not loss and is not as bad as it look.2006/7 will be a good year for the companies affected.Management will have to focus for future years, a different way of doing things.The indicated tax ruling was on the cards and companies do have sufficient time to adjust themselves with the new enviroment.There could be lobbying to have the ruling extended for a couple more years, nevertheless companies will have to prepare for this inevitable. With an election year looming there is a chance that the lobbying may succeed.Australia has a natural advantage in producing agricultural and dairy products, with our labour intensive industry facing a terminal death due to overseas competition and cheap labour, this is another nail to the coffin for an industry that is already facing difficulties because of drought and an unfriendly enviroment.This is not going to help the rural area, no wonder everyone is ending up in the cities.I though the government should give more incentives to our agricultural industry so that we can supply to Asia and the rest of the world that has a demand for our product.

dug

Member

Post Number: 2148
Registered: 07-2005

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Wednesday, February 07, 2007 - 10:57 am:

well peterloh,I told you about this factor donkeys years ago but you took my patter as rubbish to be Ignored.
Peter,as shonky told you months ago,GNS is for THE GUN.You'll be playing with fire,going along with the strictly past financials of this mob in particular.Their Management are Dinosaurs,have No Idea of the changes in the World,just rip'n'tear merchants.
Anyhow,Tax Treatment has caused over planting of quick growing pulp trees at the expense of at least 25 year til Harvest Hard Wood.
Price Projections for Pulp are going down the Shute,
Demand is falling[fall in newspapers circulations for one thing]and Supply is and will continue to be excessive.
All those Agri crops Tax Avoiding Mobs like in Nuts etc have been seen to be RUINING rural and regional Economies.Competition has been wiped out not by the Clever Management of these Mobs but sheerly[or mostly]because THEY operate with Tax Avoidance ie other Tax Payers Burden Givers,
Funds!!
It's a Rort,peterloh and you should apply your Fundamentals to What you are Investing In,first and foremost;
Rules for these Companies are going to Change Negatively more than Positively for this Sector,in particular.
Fundamentally,a Good Trader should be tracking them for only SHORTING!!!
in my humble opinion,a Curse!

ps-I suggest to you that Political Ramifications alone be considered before you start linking Green House Carbon Credits with Plantation Timber Merchants.
THEY have had dere day at d'TROUGH,
like there will be SPIT CHIPS if d'Pulp Merchants get to Go dat WAY!!
even Johnny GreenB Urrrr anium,
won't try that Root!

Happy Trading,
it's me birthday,
opened with Champagne but still not too old now [54]
to sip
d'Bile.

tick [1] VWAP in the upcoming "Whata we Want" subscriber poll of additions to d'Value 4 $'s IC chart programme.
VWAP is d'Tool of Professionals,TRUE!!

peterloh

Member

Post Number: 2347
Registered: 03-2003

Rating: N/A
Votes: 0


Wednesday, February 07, 2007 - 01:30 pm:

Hi dug,

HAPPY BIRTHDAY !! I hope you have a wonderful Birthday today and give everything else a break. 54 is still young and most important remain healthy.

Let me tell you, you remind me a lot of my second son, always with chip over his shoulder. Even he has mellowed over the years, I hope you will in time be the same. I also noticed you have change and quite often divest yourself from the aggro stuff.By mixing with people in all walks of life has taught my son patience, although quite often I thought he was ready for another explosion.

Now coming back to some of your comments, you see everyone as rip off merchants, well we see things from different set of eyes.I see these people as creative, able to make use of other peoples money to create wealth. They haven't broken any law and it is not for me to judge the way they do business, which I think is fair and acceptable.If they have broken any law, it is up to the authorities to adjudicate.If they are unethical and in moral, then it is up to fellow Australians to judge them by their standards.

As you mention that demand has dropped for paper as evidenced by demand of paper in the media, this is not necessary true, demand for paper has actually increased with the introduction of computers, the usage for paper has actually increased.

As for the contribution of these agricultural schemes to the rural area, 20,000 jobs are created directly or indirectly from the development of rural land.This also help small businesses like tradesmen,contractors, retailers etc in the rural areas.Besides if our agricultural products are being exported, they earn foreign exchange for Australia. I don't see any problem with some tax deductibility, if they create additional jobs, developed our rural area, which no body wants, being productive for our country and earn foreign exchange for australia, if the products are exported to overseas.

There is demand for all type of timber, soft wood or hard wood,suppliers are there to produce if they see there is a demand for the product.As long as there is demand you will find a supplier, it is call open market.If there is no incentive, why should investors throw money in to these area, they can put their money into mines and dug up the country, in other words there must be a balance.

We do not always make the right decisions. Having make the wrong decision, we try to remedy a bad situation, whenever we can.My worst scenario is to write off some of my capital gain form my short term trading and buy the same shares back if I think they are very undervalue.