GC> Like Bob Muirhead, I'm generally against DRP's, for 
 GC> the reasons he has 
 GC> given, as well as the odd lot problem when trading 
 GC> as against long term 
 GC> buy and hold investing.

The odd lot problem is a major bummer, but I'm undecided about
some of the other points. The reduction of debt is not to be
sneezed at, especially with some of the companies involved.
 
Fosters, I believe, had a >100% debt to equity ratio. They've
since reduced their debt to manageable levels (and suspended
the DRP as a result). Those sort of debt levels cut into 
everybody's dividend levels. Some have argued that DRPs keep
dividend levels up, as the company knows they'll get much of the
cash back and can thus be more generous initially.
 
As to dilution of shareholdings, what about all those companies
which make share placements to large institutions and other 
companies - The small shareholder never gets a look in.
 
Some companies, such as CSR, give shareholders the facility to
round up to a marketable parcel either at every distribution or
when you sell the bulk of your holdings. I think the ASX or the
ASC should make a roundup/rounddown facility a compulsory
part of every company DRP scheme.
 
The fact that DRP can result in you buying at a time when you should
be standing aside or selling is also valid, but partially depends
on the style of investor. Some people are happy to buy and put
their shares in the drawer for the next 10 years. It may not be
the optimum strategy but it suits them. Come to think of it, I
wouldn't have minded having a 10 year DRP in place with BHP or
NCP ;-).
 
LM.

--- Maximus/2 2.02