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Henrietta: "...but when I look at the pretty fragile state of the world economy , and my reasonable pessimism about any recovery for some time , I am reluctantly accepting the offer"


I agree with your premise but draw the opposite conclusion, to maintain my NO vote. Recent developments in Europe and the US suggest to me that the world economy is likely to follow the Japan model: zombie banks and essentially zero growth for a couple of decades, which means negative returns on most investments (especially cash) with modest inflation. True, there are always opportunities, if you can find them before everyone else does. For example, a company that has a superior product that can steadily grow market share in a segment of the economy even when the economy as a whole is going nowhere. Like CST, for instance. If you have some better candidates that remain undiscovered by the market I'd appreciate it if you could give some hints.

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One of the best market sectors to be in during an economic downturn is heathcare. A good example is CSL. During the GFC it held up very well because its products are essential for life. Some heathcare stocks are worse than others because they involve some degree of discretionary spending. For example, you can always delay buying a hearing implant , new teeth, sleep machine etc until things improve. TB testing is probably not one that will suffer unless you assume that existing customers will go back to the skin test. More likely that there will be a slowing of growth, but that will be true for almost everything. If someone can point to a stock that will do better in terms of growth rate than CST then let us all know and we will keep an eye on it here. The only logical reason I can see for voting yes is if you want the cash to spend on something outside the market or a stock that provides a regular higher dividend to meet your living expenses.


I can only hope that if the SOA is voted down there will be some restructuring of the management and marketing team.


I have held since the beginning and in the event of a "No" vote I will give CST another couple of years and then make my decision.


I have not reduced my holding and will be voting No.



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G'day David


Firstly ......... sorry, no hints. Don't know enough and am wrong too often anyway.


Secondly, as to the future of the company , I'm afraid I've had my confidence rather shattered. I have been extremely supportive of the way the company has gone about growing its business in the past. However, the revelations this year have prompted me to have a serious re-think about how competently the company executives have acted, and I no longer have confidence in them.


So for me it is a sad parting of the ways. Frankly, I think Qiagen will do a much better job, and I am very sad about losing another Australian innovation to an overseas company. I think the CST executives got it wrong ........ they should have stayed in the research area and hired professional business managers ........ the chairman's fault as much as anybody's.




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By "revelations" do you mean something more than the recommendation to accept the offer? That certainly surprised me as it seems to me that CST has heaps more growth to go and the company executives stand to gain a great deal from that. But assessing future risk is obviously difficult and there's plenty of room for different views (particularly if you have most of your wealth tied up in the company).


Otherwise it seems to me that the company has been run well.

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I do have to respond to this last one even though ive been out for a couple of weeks.

It is every directors duty to act in the interests of the shareholders , (read owners) of the business.

Not just a couple, but as many as they can. is one problem about listing it isnt wholly yours anymore.

They have accepted the first bid that came along.

By their own admissions they went around looking for buyers.

This came out not last year not when they were looking but after the SoA was hatched.

If they wished to sell properly they should have sold their shares on market like everybody else.

It is why we have the Auction system every working day.


to provide a ready market for your shares.

To have an offer that is not subject to the markets opinion (good or bad that may be) just dosent sit right,

and is probably why Henrietta says he has lost faith.

I never had faith , just research, and as the management seem tired.

I sold.

Nothing dramatic, but people run companies after all.



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