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Allan Gray buys?

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partridge
Super Contributor
What's this I hear that AG has bought them as a telekoms holding? I am still not sure if I tell my mother that she could buy a used car from these lads but AG are consistently the best bottom up buyers around. So maybe I will tell her to buy a car from them.
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4 REPLIES 4
kwagga
Super Contributor
They have to substitute their Dimension Data holdings with something else after the buyout - hence Blue Label and Vodacom.
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partridge
Super Contributor
I knew that - but I think that it is not looking deep enough when we say " had to substitute" - they aren't a " had to" style of company - and as you will know as a value buyer they won't buy for the sake of being able to point to a sector and say " we have got those " ? DO you agree - and moreover you will no doubt recall what Investec said about this share - so ..?
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Spoegs
Contributor
Allan Gray may have been a "not have to style of company", but once you get over a certain fund size (R5 billion and more) and you've got limitations on exposure to different sectors then you sort of have to become a "have to style of company". There was an interesting piece of research done that concluded that for the JSE, funds over R5 billion become limited in terms of shares they can invest in due to lack of liquidity. Their conclusion was that due to these liquidity constraints they effectively become index trackers and the biggest contributor to investment decisions becomes liquidity of the share they are looking at. I'm still hoping to get a job like that at AG one day - a share analyst - all you need is one spreadsheet with one column which works out which shares you'll be able to buy based virtually on liquidity. Any non-liquid stocks they invest in they face the risk of "moving the market" just to get in and out.
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partridge
Super Contributor
Jaaa..... I think there is something in that argument but when one simplifies things down to this sort of one pager reasoning I think one is risking losing sight of the reality of market complexity. I note you have not commented on Investec's view of the group as a value driven opportunity....?
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