-=> Andrew Freeman wrote to Graham Comitti <=- 
-=> On 11-16-94 about Dividend Re-investment p <=-

AF>* Quoting from "Graham Comitti to Andrew Freeman on 13 Nov 94  21:51"
AF>* 

AF> -=> Andrew Freeman wrote to All  <=- 
AF> -=> On 11-09-94 about Dividend Re-investment pl <=-

..cut..

Hi Andrew

AF>I have addressed Bob Muirhead's comments. I agree with long term

Saw your reply to Bob

AF>buy and hold investing - this is facilitated by DRPs. For
AF>example, one might start with 3000 Westpac shares at 30 years of
AF>age, after paying off ones home, and maximising ones investment
AF>in employer funded superannuation, and when retired perhaps have
AF>over 10001 shares with the aid of DRPs.

There is some logic in what you say, but........only if your following a  
buy and hold strategy (or one of the many executives that have made a 
small fortune out of DRP's and similar schemes)

AF>Odd lots are only a
AF>problem is sold seperate from a marketable parcel. This means
AF>they are normally not a problem for either short term holders or
AF>long term holders, unless they choose to retain an odd lot when
AF>they sell the rest of their shares (to ensure this does not
AF>happen as a result of getting some more residual shares from
AF>scheme after sell shares, cancel participation in scheme when
AF>sell last holding).

On some occasions it maybe after the cut off date and before the actual 
distribution that you sell the last holding thus still leaving you with 
the odd lot.

AF>For example, they are not a problem if one sells ones holdings of
AF>Westpac shares in two parcels - one of 5000 and one as 5001.

There are arguments for and against DRP's and similar schemes, some suit 
may suit some investors, but not others.

BTW I think that one the best schemes currently associated with shares 
is the Coles Myer shareholder discount card.  Anyone/family who spends 
around $100 a week in participating stores could be getting an Income 
return of around 22.5% in the 2nd year (without gearing) (and around 
193% if they borrowed $2000 to buy the 500 ordinary shares necessary to 
participate) this is tax free/paid return on share price of around 
$4.20. 

Good investing/trading



Regards, Graham from Sunbury

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