Forum Archive Index - October 2002

["tennyson@caverock.net.nz" <tennyson@caverock.net.nz>]

Hi Malcolm,

>
>
>Good on you Snoopy and another point for your argument. 
>
>

I'm not quite sure what my argument is.  I haven't ruled out CLI as a 
good investment.

There are some intelligent and thorough people ( Dimebag and Gerry 
for instance ) who have done their homework and put money into CLI.

But I feel it is my duty to temper any 'irrational exuberance' by 
asking some tough questions.

>
>
>Would not Worldcom and Enron have been stated as very 
>desirable quality tenants, even Onetel or HIH at some time
>would have fallen into this category.
> 
> 

Bad debts are a fact of business and if every business was totally 
dominated by fear of bad debts then no business would ever start.

I'm not interested in scaring CLI investors by suggesting that the 
business will go bad.  I am saying that at some stage some small part 
of it will go bad.  CLI will still have an obligation to pay the 
annuity holder, so I guess the shareholders will have to make up the 
difference.  I wonder what sort of effect a single defaulting tenant 
would have on the return to shareholders?  I think that is a fair 
question.

SNOOPY





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