Thursday, December 27, 2007

Share Investor: Best and Worst of 2007

Its the time of the year where I look back on the good, the bad and the ugly in the business world during 2007, with the Inaugural Share Investor best and worst of 2007.

While there was very little good about it; finance companies going bust, management spinning stories till investors got sick with dizziness and a sharemarket that failed to catch afire, some ugliness: Helen Clark and her mates increasing taxes again and not returning them till election year 2008, and few bright sparks, Micheal Hill glittering with gold by returning healthy gains for investors.

Enough verbal diarrhea.

Lets kick it off then with the biggest prick of the year.

Wanker of the year

Little Timmy Saunders and Origin/Contact Energy win this award for steadfastly refusing to step down the aforementioned Tim Saunders and other board members on Contact Energy's board for pursuing Origin's objectives rather than the wishes of Contact Energy shareholders who wanted him gone.

Arrogance and failure were the hallmarks of Saunders reign and his failure at the head of Feltex Carpets seemed to be of benefit for his reelection to the Contact Board at the end of 2007.

IPO Disasters

While there were a number of notable failures in 2007, Xero and Carmel Fisher's Marlin, the IPO that made the biggest headlines this year was Burger Fuel.

Burger Fuel had the highest hit count on this blog on Google so while it is a favourite subject, that doesn't make it a favourite for investors when they decided where they were going to put their cold hard cash this year.

The IPO was shooting for NZ$15 million but got less than a third of that.

The shares were issued at $1.00 and never sold for that figure and have continued to slumber in the 50-60c range, where they finished today at 59c.

It doesn't look promising for 2008, given the global credit crunch so best we all shut our eyes and wish the coming year away.

Leaders of the year

It is for a company that I have a shareholding in but I cant avoid name dropping it again.

Don Braid and Bruce Plested from Mainfreight control a company that is growing profits and sales globally while at the same time having a no nonsense approach to managing his people and his company.

He put the boot in during 2007 into the Labour Government for increasing business costs and interfering with private and public companies. Clearly not afraid of any possible political backlash, New Zealand business needs more no nonsense straight talkers like this dynamic duo.

Cant wait to see the back of you award

Head and shoulders above anyone would have to be Telecom's Teresa Gattung.

Presiding over a company that failed to plan for the future and is now counting the financial cost Gattung left with a hefty payday and never looked back on her years of shareholder destruction at the helm.

Restaurant Brand's Victoria Salmon finally got pushed and her emphasis on marketing and flash over service and substance had a marked affect on sales and profit at the restaurant operator.

Its current decline was somewhat slowed latter on in 2007 but it had nothing to do with new management, it was just another small upwards cycle until the next inevitable downward spiral.

Most battered sharemarket sector

While most NZX sectors got a hammering this year, head and shoulders above the rest, without a doubt, were the retailing stocks.

Battered by high mortgage rates, gas and electricity prices and new taxes, shoppers held off spending and only did so when enticed by increasing sales by retailers.

Retailer's margins were affected and competition by the likes of Hallensteins, Postie Plus, Pumpkin Patch, The Warehouse and others meant that share prices of these retailers sank like their store sales sticker prices.

Pumpkin Patch finished the year at around half its $4.95 high and others had more than 30% come off their market caps.

Losers of 2007

Investors in the myriad of finance companies that folded this year, putting well over a billion dollars of investors money at risk.

Investors ignored the risk or were advised to take the risk by "financial advisors" and were not given the required return for risk taken.

A lesson in investing that hopefully some can learn from.

Woolpullers prize

The prize for keeping its investors and the investor public at large out of the picture would have to go to management at Sky City Entertainment.

Its ability to string out takeover proceedings and its nonsensical market statements and erroneous time frames for deadlines is a skill worthy of David Copperfield, not the manager of a New Zealand blue chip.

Hopefully the new head, Nigel Morrison
, might be able to stop the boardroom table and investors heads from spinning in 2008.

Red tape award

The red tape award has to go to the Commerce Commission for first deciding to put the kybosh on the Warehouse takeover by Foodstuffs and Woolworths and then appealing the decision by the High Court to overrule that decision.

The commission have stretched out the whole process by more than a year and it looks likely shareholders will be none the wiser until well into 2008.

Conflict of interest prize

To large shareholders in Auckland Airport, Lloyd Morrison's Infratil, Auckland and Manukau city councils and their representatives on the board.

The conflicted board members are not serving other shareholders well and put their own conflicted interests before smaller shareholders.

Fairy tale award

For those in the Green Global warming religion whose adherence to fairy tales and junk science has cost New Zealand millions already in 2007 and is set to cost us billions in 2008 and for the NZX and Mark Weldon to latch onto it by starting up a "Carbon Trading" platform in 2008.

Thank you for 2007

If it wasn't for those connected with Sharetrader getting my old share investor forum site removed from its host in July because they were afraid of a little healthy competition, this blog wouldn't have been the success it has been in the latter half of 2007.

The competition has pushed me to expand and enabled a much more immediate and larger audience than before and at this rate of growth it will easily surpass sharetrader's audience by mid 2008.

Blogging really is the way and I want to thank Philip Mac Callister for his help there!


I  own shares in The Warehouse,Sky City,Auckland Airport, Mainfreight, Ryman, Fisher and Paykel Healthcare, Contact

 c Share Investor 2007