Owen Rascovich

So let's imagine I give you $10,000 and then you go invest that in some shares.

I could actually invest in the structure or the way that they're held and those things that you manage instead of the actual underlying investments, right?

So I'm paying for not only the investments that are inside the thing, but also your skill, right?

And those things have two different prices, right?

There's the price of like you and the assets, which is what we call the share price of the listed investment company.

And then there's the assets that are inside or the net tangible assets or NTA, right?

That's kind of the way I think about it anyway.

And that's why, so one of the things that people get confused about with listed investment companies is the discounted premiums.

So people say it's trading at a discount to NTA or it's trading at a premium to NTA.

So can you maybe explain those things?

Okay, so let's just break that down a bit.

And use an example.

I found that I interviewed someone called Tony Hanson, who's an investor from Sydney, runs a fund called EGP Capital.

And he said one of the best investments he had made during the GFC was in listed investment companies.

And what he saw was that the listed investment company's share price was 60% of the value of the shares inside the portfolio, inside the listed investment company.

So what he effectively was seeing was that if he bought the Licks shares, he was getting a dollar's worth of the actual shares that are inside the portfolio for $0.60.

So $0.60 on the dollar, as many value investors would say.

Now, he can't then go and say, hey, I want my dollar.

What he has to do is he has to write out the share price and hope that the discount or the difference between the share price and the value of the shares inside it closes over time.

And like you said...