Monday, 11 October 2010

Buyer beware !

Mum and Dad investors are being invited to buy shares in the Queensland freight railway - which moves incredible amounts of coal daily and claims to be a rail movement leader.

The seller is the Queensland government - and the first question a prudent investor should ask is - why ?

Assets owned by the government are assets owned by the people of Queensland. It sounds like the daddy of all con tricks to sell what the people own - back to them !

The offering price seems to be about three dollars a share and this will give the public a sixty percent shareholding - with the government hanging on to that other forty percent. A good time to read the small print to make sure that full control is exercised by the majority - and not still invested in government hands.

And we keep coming back to that same question - why sell what is supposedly a profit making asset ?

Before you part with a single dollar it would be a good idea to have a competent accountant have a long, hard look at this railway operation. Is the rolling stock worn out and due for replacement ? Is global warming about to reduce the burning of coal ? Is some other unseen political event going to impact on rail operations in that state ?

And that old adage about " looking a gift horse in the mouth " comes to mind !

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