I am always amazed by investors who want to pay $110 for something that is worth $100. And that’s exactly what is occurring when they buy two of Australia’s largest and most respected listed investment companies – Australian Foundation Investment Company (ASX: AFI) and Argo Investments (ASX: ARG).
These companies own no assets other than paper assets – listed shares. They don’t have any real assets, intellectual property, trademarks, sales or annuity income. They have an in-house investment team with an investment track record – but that’s about it. Presumably, the investment team would be roughly the same size whether they managed $5bn or $20bn of investors’ monies.
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