Pinewood...more Govt Propaganda

[carbon selector]

That would be interesting to know Slim.

 

maybe someone will come along and buy the lot for four times more than we paid for it...who knows.

 

For the sake of argument, let us imagine there was a miracle and that happened. Then we would only have made up for a single year's VAT overpayment.

 

The Isle of Man had a miracle each year for quite a number of years.

[Lxxx]

Of course there are no dead certs

 

That's right, but then you laugh and call into question the intelligence of someone who suggests it might go down. Given that it has been going down for the last three months puts your knowledge into question.

 

but if I was to have an option of where to put my currency for a rainy day I would opt to put it into gold, something that has been money for thousands of years. In fact I would probably put it into silver as well, it's 'poor relation' if I wanted a more riskier option but that's another argument.

 

I wouldn't (and don't) put my savings into any single holding. Why take that risk?

 

Central banks at the moment all around the world are buying gold in record quantities as they don't want to be sat on ever depreciating currencies. In fact countries are now asking for their physical gold to be repatriated back from New York and London (Venezuela, Germany...) such is their desperation to hold the physical stuff and not have it rehypothecated numerous times over and just earn leasing fees for it.

 

Yet the price is dropping, so there must also be selling in greater quantities. I don't think buying gold's a bad bet, but I don't think it's the dead cert you have it as particularly when the worlds largest holder is in such an uncertain place at the moment.

 

Point 1 - Maybe I shouldn't have used the word 'Intelligence' as it's a bit disrespectful. I did change it after I'd wrote it but you'd already responded.

 

Point 2 - I haven't advocated putting all eggs into the gold basket, we're merely discussing my views on the old yellow relic

 

Point 3 - Until you understand the precious metals market and how it works looking at the short term fluctuations mean nothing. I can assure you that whatever the US bullion banks (who probably hold the gold, not Fort Knox) do they will not sell their physical bullion. Yes they may sell billions of ounces of paper metal but not one ounce of physical. Some very large players are manipulating the gold price downwards at the moment, many speculate it's China playing a very smart game, driving down the price by shorting the paper market and using their huge stockpile of dollars to acquire the physical on the cheap.

 

'He who has the gold makes the rules' as the old saying goes.

 

But we digress. I think a proportion of our reserves should be in gold. No more, no less.

Edited December 31, 2012 by Lxxx

[censorship]

Why aren't you calling for that to be released to shore up front line services?

Because it's not the same. The money should have been put into reserves in the first place, rather than creating a £25m MDF. But it wasn't. The MDF didn't work, and at that point the money should have gone into general reserves and be wisely invested. Instead, the cash was seen as government's personal property to play Monopoly (or perhaps Risk) with. Our reserves should be just that, and wisely invested to ensure they are protected and produce some return. Our money shouldn't be used to play with on the invesment equivalent of roulette.

My point was that if this money was up for grabs, it should have been used to help people here in the Island rather than a speculative punt on job preservation for a handful of people in the UK - however, the money should never have been up for grans in the first place.

[Slim]

Because it's not the same. The money should have been put into reserves in the first place, rather than creating a £25m MDF.

 

But if you don't know where the rest of the £1.5bn reserves are, how can you say it's not the same?

 

If that money was put into a pot to develop a media industry in the past, and it's shown some signs of making a difference, then it makes sense to continue that. If we had massive unemployment, homelessness or other massive problems I might agree with you, but while we're in challenging times, we're not completely knackered. This looks to me to be a better place than the old arrangement, it's not giving up on what's gone by, but refining it to hopefully make it more viable. It could go up in smoke, but it could work, and given it's a fairly small slice of something that was already allocated for reserves, it seems like it could be worth a punt.

 

Like I said, we don't micro analyse the other decisions relating to the much larger reserve, I think that the attention this has received is simply because it's an interesting subject; movies. There's 12 million in the economic development fund, 5 million agriculture, 9 million marketing fund, where's the discussion about these, and what value they're returning? Some 400 million with other external investors, do you know where? For such a hot topic of debate on here, 25mil is a pretty small slice.

[asitis]

"It could go up in smoke, but it could work, and given it's a fairly small slice of something that was already allocated for reserves, it seems like it could be worth a punt."

 

Slim for me what sits uneasily is your line above, not when applied to you, me or my business etc !, it is wrong when that line is applied to a democratic government entrusted with the welfare of its elected !

I don't care how small a slice of other peoples money it may be, the point is, it is other peoples money, and whilst we are scrabbling around here at home looking for savings in the PS/CS it would have been far more worthwhile "taking a punt" on investing that money in support of startup business or expanding existing business here ! and no I don't fall for the job creation bullshit trotted out everytime an off island film company comes here and buys some fish and chips !You clearly know more about this than me and I would be more than prepared to apologise to all the yaysayers if we see a set of accounts clearly stating the current position, taking into account the huge loss on the films already made and after the vat "arrangement" came to an end. That would put this to bed for many once and for all, but as even the PAC were not permitted to view accounts the chances of this becoming available to mere taxpayers is probably nil !!

[manshimajin]

This is a way out, to preserve what's left in the fund and to continue to have a toe in the sector.

 

The problem is that to date taking a combination of the Government Accounts and Eddie Teare's statments in Tynwald the managers of the MDF have lost at least 39% of its value - maybe more if only £25 million was left to be passed on to Pinewood. Eddie has not said what happened to the difference between that last number and the £33 million value he credited the MDF with in Tynwald. If the same people who achieved this continue with that track record the MDF will have minimal value in 2-3 years time.

 

I think that this investment has attracted public comment because for the last two years more and more information has emerged about the IOMG investment in films and its 'benefit' to the economy. Unfortunately Craine, Bell and Christian all came up with significantly different numbers which inevitably creates suspicion that either they really do not know what is going on or someone is being economical with the truth. Pinewood is just the tail-end Charlie of a series of investments which came under the spotlight much, one suspects, to Bell's disgust.

 

The other thing Slim is that whatever the paper price is of a share it's real value is the net cash generated when it is sold. A lot of people have kidded themselves they are wealthy based on paper profits.

 

Woolley, you may be right - I thought I had read the description "high risk" from Bell on here referenced to MR. At the same time investment in a film studio is definitely at the "high risk" end of the scale.

[Slim]

Slim for me what sits uneasily is your line above, not when applied to you, me or my business etc !, it is wrong when that line is applied to a democratic government entrusted with the welfare of its elected !

 

Why? The government takes all kinds of punts like marketing, grants for businesses, reserves invested in funds that have risky elements. I don't fully understand the singling out of this as something people object to, when there's government cash being spent on all kinds of things that will never generate a return, agriculture's one example that'll probably never be fully economically viable and has been supported for years. Why's that ok? Because it's a traditional industry? Why not have a punt in some new industries as well?

 

The problem is that to date taking a combination of the Government Accounts and Eddie Teare's statments in Tynwald the managers of the MDF have lost at least 39% of its value - maybe more if only £25 million was left to be passed on to Pinewood.

 

Yes, well that does depend on how you value things, and that's not exactly clear cut. Like I said, I see the current set up as being a way of getting clear of that old mess, was it a fund that expected a direct return on investment, was it a pot of development money that was supposed to stimulate an industry and not pay for itself directly? What was the full benefit? Well that ones hard to say because it's so difficult to quantify.

 

The other thing Slim is that whatever the paper price is of a share it's real value is the net cash generated when it is sold. A lot of people have kidded themselves they are wealthy based on paper profits.

 

That's not entirely true, you're ignoring the dividend for a start off. The investment into pinewood shares came out of the reserves which would be invested into other equities presumably, so the same's true of wherever the funds came from. And like I said, there's trades in the pinewood shares this month that shows they're worth a fair bit more than what the govenment paid them for.

 

 

. At the same time investment in a film studio is definitely at the "high risk" end of the scale.

 

Says who? It made a £2 mil profit in the last six months, got significant assets and a nice full order book. Why do you consider it a high risk?

[asitis]

"Yes, well that does depend on how you value things, and that's not exactly clear cut. Like I said, I see the current set up as being a way of getting clear of that old mess, was it a fund that expected a direct return on investment, was it a pot of development money that was supposed to stimulate an industry and not pay for itself directly? What was the full benefit? Well that ones hard to say because it's so difficult to quantify. "

 

This part of your considered response only adds fuel to the fire imo, we are talking about taxpayers money here and phrases like "getting clear of that old mess" and not having a clue about what it was meant to do is symptomatic of the incompetence and secrecy surrounding this current administration. What was the full benefit ? hard to say ! Ye Gods, if I were an MHK I would want to know unequivocally what the benefits were when I was sanctioning the use of what a total of 50m of other peoples money. No honesty and no accountability sum up the situation.

[Slim]

This part of your considered response only adds fuel to the fire imo, we are talking about taxpayers money here and phrases like "getting clear of that old mess" and not having a clue about what it was meant to do is symptomatic of the incompetence and secrecy surrounding this current administration. What was the full benefit ? hard to say ! Ye Gods, if I were an MHK I would want to know unequivocally what the benefits were when I was sanctioning the use of what a total of 50m of other peoples money. No honesty and no accountability sum up the situation.

 

Compare it to other government activities: What's the direct return of a grant to an engineering company to buy new plant equipment? Getting rid of the old mess isn't the current administration, is it?

[spermann]

Of course there are no dead certs

 

That's right, but then you laugh and call into question the intelligence of someone who suggests it might go down. Given that it has been going down for the last three months puts your knowledge into question.

 

but if I was to have an option of where to put my currency for a rainy day I would opt to put it into gold, something that has been money for thousands of years. In fact I would probably put it into silver as well, it's 'poor relation' if I wanted a more riskier option but that's another argument.

 

I wouldn't (and don't) put my savings into any single holding. Why take that risk?

 

Central banks at the moment all around the world are buying gold in record quantities as they don't want to be sat on ever depreciating currencies. In fact countries are now asking for their physical gold to be repatriated back from New York and London (Venezuela, Germany...) such is their desperation to hold the physical stuff and not have it rehypothecated numerous times over and just earn leasing fees for it.

 

Yet the price is dropping, so there must also be selling in greater quantities. I don't think buying gold's a bad bet, but I don't think it's the dead cert you have it as particularly when the worlds largest holder is in such an uncertain place at the moment.

 

Point 1 - Maybe I shouldn't have used the word 'Intelligence' as it's a bit disrespectful. I did change it after I'd wrote it but you'd already responded.

 

Point 2 - I haven't advocated putting all eggs into the gold basket, we're merely discussing my views on the old yellow relic

 

Point 3 - Until you understand the precious metals market and how it works looking at the short term fluctuations mean nothing. I can assure you that whatever the US bullion banks (who probably hold the gold, not Fort Knox) do they will not sell their physical bullion. Yes they may sell billions of ounces of paper metal but not one ounce of physical. Some very large players are manipulating the gold price downwards at the moment, many speculate it's China playing a very smart game, driving down the price by shorting the paper market and using their huge stockpile of dollars to acquire the physical on the cheap.

 

'He who has the gold makes the rules' as the old saying goes.

 

But we digress. I think a proportion of our reserves should be in gold. No more, no less.

 

Wow, have you spent the afternoon on google to come up with point 3. Sounds good!

[spermann]

It may be a good move long-term, maybe Pinewood will succeed and the share price rocket, maybe we'll attract more film productions (and their budgets) to the Island, maybe someone will come along and buy the lot for four times more than we paid for it...who knows. The evidence we have of 'returns' from investment in film so far don't exactly fill you with hope.

My problem is that right now that money could have done a lot of immediate good in the Island, supporting front line services, minimising painful cuts, assisting local businesses to weather the financial storm, preserving jobs, promoting local start-ups etc etc.

 

I like the sentiment in this post but don't you think that the same could have been said when the government invested in e gaming, space commerce, shipping, aircraft register etc... They were all investments in new business. The pinewood deal is more than just a dividend return on a shareholding. It is also about bringing film production to the island from pinewood.

[manshimajin]

Why not have a punt in some new industries as well?

 

Film sector is not a new industry Slim - if that is what you are suggesting. A very old one. A new one may be more aligned to home media and games but even these are getting oldish. If you are suggesting the money might have been better spent on a new industry such as, for example, software development and export for 3D printing then I agree with you. Even renewables...

 

The problem is that to date taking a combination of the Government Accounts and Eddie Teare's statments in Tynwald the managers of the MDF have lost at least 39% of its value - maybe more if only £25 million was left to be passed on to Pinewood.

 

Yes, well that does depend on how you value things, and that's not exactly clear cut. Like I said, I see the current set up as being a way of getting clear of that old mess, was it a fund that expected a direct return on investment, was it a pot of development money that was supposed to stimulate an industry and not pay for itself directly? What was the full benefit? Well that ones hard to say because it's so difficult to quantify.

 

Slim it lost value, if you take the time to look at the accounts, because the investment managers have continually over-estimated the value of the films they promoted which resulted in write-downs. I understand that at least some of the current managers are the same people who failed in the past. Their track record is not encouraging. Running down the value of a fund because of the value of the products it makes is not a sustainable strategy for groing that sector.

 

The other thing Slim is that whatever the paper price is of a share it's real value is the net cash generated when it is sold. A lot of people have kidded themselves they are wealthy based on paper profits.

 

That's not entirely true, you're ignoring the dividend for a start off. The investment into pinewood shares came out of the reserves which would be invested into other equities presumably, so the same's true of wherever the funds came from. And like I said, there's trades in the pinewood shares this month that shows they're worth a fair bit more than what the govenment paid them for.

 

You were talking specifically about share price Slim so I was commenting on what you said. Until you realise the value by selling any increae in share value is clearly a paper profit. You can only be sure of securing that increase in value by selling. For example what are RBS shares worth now compared with their peak - you have to sell to get the price! How big is the Pinewood dividend since you say it should be included? Is the £2 million you quote gross profit or post tax profit or dividend? We would need to know how much profit is paid as dividends and how much is retained for the business before saying it is a good, bad or indifferent dividend.

 

. At the same time investment in a film studio is definitely at the "high risk" end of the scale.

 

Says who? It made a £2 mil profit in the last six months, got significant assets and a nice full order book. Why do you consider it a high risk?

 

Allan Bell for one. £2 million in 6 months is about 2% of the capital value of the business. Is it pre tax profit you are quoting or after tax? Slim as above how much of these profits have been paid as dividends into the Reserves?

 

Anyway Slim a Very Happy New Year to you and yours.

Edited January 1, 2013 by manshimajin

[Andy Onchan]

For the record, I don't think Allan Bell ever said it was "high risk". He said something along the lines of "like all investments, it is a risk".

 

http://www.energyfm.net/cms/news_story_219619.html

[Albert Tatlock]

 

 

Beware though, Manx Treasury Minister's IQ's can go down as well as up.

[Slim]

Film sector is not a new industry Slim - if that is what you are suggesting. A very old one. A new one may be more aligned to home media and games but even these are getting oldish. If you are suggesting the money might have been better spent on a new industry such as, for example, software development and export for 3D printing then I agree with you. Even renewables...

 

Before the MDF, the financing and facilitation of film production wasn't happening on the island. It's a new industry for the island.

 

Slim it lost value, if you take the time to look at the accounts, because the investment managers have continually over-estimated the value of the films they promoted which resulted in write-downs. I understand that at least some of the current managers are the same people who failed in the past. Their track record is not encouraging. Running down the value of a fund because of the value of the products it makes is not a sustainable strategy for groing that sector.

 

You're not even reading my posts are you? I said it depends how you value it. I've seen nothing to say the media *development* fund was supposed to produce direct returns.

 

You were talking specifically about share price Slim so I was commenting on what you said. Until you realise the value by selling any increae in share value is clearly a paper profit. You can only be sure of securing that increase in value by selling. For example what are RBS shares worth now compared with their peak - you have to sell to get the price! How big is the Pinewood dividend since you say it should be included? Is the £2 million you quote gross profit or post tax profit or dividend? We would need to know how much profit is paid as dividends and how much is retained for the business before saying it is a good, bad or indifferent dividend.

 

But that's true of any asset. Why single out the pinewood shares, when the bulk of the reserves, plus the NI and Public Pension pot will also be invested in similar equities?

 

Allan Bell for one. £2 million in 6 months is about 2% of the capital value of the business. Is it pre tax profit you are quoting or after tax? Slim as above how much of these profits have been paid as dividends into the Reserves?

 

Pre-tax of £3m http://www.guardian.co.uk/media/2012/nov/27/pinewood-shepperton-studios-returns-profitability

 

The dividend will be £250k I guess?

 

Did Allan Bell say high risk? Where? In the link above he said "He also believes the investment is no more high-risk than other investments made by the Manx Government and by other countries.", that isn't saying it's high risk, it's saying it's not more risky than existing investments.

 

 

 

I don't see anything you're saying to back up 'high risk'.