Saturday, December 20, 2008

MERRY XMAS: NZX & ASX Stockmarket Holiday hours

I wish all my loyal readers a very happy Christmas and a prosperous 2009 New Year.

It has been a pleasure writing on my favourite subject and I hope you may have found some interesting tidbits to help you out in these very crazy financial times.

I hope you can all join me in 2009 where we can all do it again.

Darren, Share Investor.




NZX & ASX market hours, 24 Dec-Jan 5

Wednesday 24 December- NZX and ASX markets close at 4.00pm NZT.

Thursday 25 December - NZX and ASX markets closed.

Friday 26 December - NZX and ASX markets closed.

Monday 29 December - normal market hours.

Tuesday 30 December - normal market hours.

Wednesday 31 December - NZX and ASX markets close at 4.00 pm NZT.

Thursday 1 January - NZX and ASX markets closed.

Friday 2 January - NZX closed, ASX open.

Monday 5 January - normal trading commences.


c Share Investor 2008

Wednesday, December 17, 2008

Share Investor's 2009 Stock Picks

Read the latest - Share Investor's 2010 Stock Picks

It is that time of the year to pick stocks for 2009.

In the face of a global recession, an uncertain economic future and dwindling values, even for good assets, it is going to be hard to pick winners.

Please keep in mind dear readers that the picks are my own and they reflect my investment philosophy and not necessarily anyone else's.

My picks are based on a long-term view, regardless of the current short to medium term market turmoil and economic uncertainty.



Fisher & Paykel Healthcare [FPH:NZ]

With that in mind I will kick off my picks with a company that I consider will be one of the big successes of the next 5-10 years, Fisher and Paykel Healthcare, the health care products provider.

I had it as a pick for 2008 and it has been one of the better performers this year, even though it is still well off its highs share price wise.

Company profit forecasts to March 31 2009 have been estimated at NZ$84 million and revenue is also set to grow as it has done for the past.

Fisher profits are largely immune from the current market turmoil as buyers simply have to have the products that the health care company makes regardless of a global recession.

This invincibility from outside economic influences makes the pick for my next stock a relative no-brainer.


Fisher & Paykel Healthcare financial data


Fisher & Paykel @ Share Investor

Fisher & Paykel set for a healthy 2009

Big Fisher & Paykel share trades a curious tale
Why did you buy that stock? [Fisher & Paykel Healthcare]
Drinking and Trading
Share Investor's 2008 stock picks
Fisher & Paykel: A tale of two companies
FPH downgrade masks good performance



Ryman Healthcare [RYM:NZ]

Ryman Healthcare, the retirement home operator, carer and developer, has been increasing revenue and profit for many years and the most current profit result shows that there has been no let up in this trend with a rise of 10% to NZ$25.9 million.

Development of new villages has increased apace over the last year and there are at least half a dozen new ones ready to go at beginning 2009, including two massive villages at Orewa and Whangerei.

The long-term prospects for this company are excellent as New Zealands elderly are set to grow markedly in the future.

Metlifecare [MET:NZ], Rymans major listed competitor is also worth a look at for the same reasons as Ryman.

I have Metlifecare on my watchlist.


Ryman Healthcare financial data




Mainfreight Ltd [MFT:NZ]

Mainfreight Ltd, the New Zealand global logistics operator, have a goal of NZ$1 billion in revenue before 2010 and are only a gnats whisker short of that figure.

It is on my pick list again for 2009 as it is New Zealands best managed company and if management is good then results generally follow-this has been the history of the company thus far.

Currently business is experiencing a slow down, although profit was up nearly 10% in the last reporting period.

Management are going to approach the global market downturn with a "prudent, cautious approach to costs"-the status quo for the business since its inception.


Mainfreight Ltd financial data

Mainfreight @ Share Investor


Long vs Short: Mainfreight Ltd

Mainfreight drives excellent results through prudent management
Why did you buy that stock? [Mainfreight Ltd]
Mainfreight 2008 Annual report worth reading
KiwiRail will cost Mainfreight
Mainfreight keeps on truckin
A rare breed



Pumpkin Patch Ltd [PPL.NZ]

One of the worst performing stocks of 2008 if you consider a 60% odd drop in share price this year and a drop of nearly 30% in full-year after tax profit to July 31 2008.

All is not lost though!

The company has great long-term potential, with excellent product a strong brand and very loyal customers and with the share price at just over a buck it is a relative bargain when one considers it was trading at nearly 5 dollars just over a year ago.

One to stock up on during price dips and it probably will when pre-Christmas sales figures come through during the beginning of 2009.


Pumpkin Patch Ltd financial data



Pumpkin Patch @ Share Investor

Pumpkin Patch buyback shows confidence in the future
Pumpkin Patch takes a hit
Pumpkin Patch ripe for the picking
What is Jan Cameron up to?

I'm buying
Why Did you but that Stock? [Pumpkin Patch]
Rod Duke's Pumpkin Patch gets bigger
Buyer of large piece of Pumpkin Patch a mystery
Pumpkin Patch a screaming buy
Broker downgrades of PPL lack long term vision
Pumpkin's expansion comes at a cost
Pumpkin Patch VS Burger Fuel
Pumpkin Patch profits flatten
New Zealand Retailers ring up costs not tills



Other quotable notables.

Telecom NZ [TEL:NZ] for its dividend. Buy around $2.

Contact Energy [CEN:NZ], Trustpower [TPW:NZ] and Vector[VCT:NZ] Any infrastructure company, especially these electricity companies are a good buy at any time but battered share prices are a good opportunity to stock up on more or make a first buy.

Auckland International Airport[AIA:NZ] A near monopoly with a beaten down stock price, buy on further weakness.

Westpac [WBC:NZ] and ANZ Bank [ANZ:NZ]. Good opportunities exist to buy at low stock prices.

If you have the nerve, any good company is going cheap in 2009 so there are plenty of companies worth buying.

Pick wisely!

Disclosure: I own RYM, FPH, PPL, AIA, and MFT shares

Related Share Investor reading

Share Investor's 2012 Stock Picks
Share Investor's 2011 Stock Picks
Share Investor's 2010 Stock Picks
Share Investor's 2008 stock picks
Share Investor's 2009 Stock Picks: Looking Back


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c Share Investor 2008



Friday, December 12, 2008

The Headliner: A suck up to my mysterious benefactor


To the mysterious benefactor who sent me a copy of The Headliner today a million thanks.

I have read your publication of biz stories on many occasions but at Albany Whitcoulls and Borders (one and the same nowadays) I cant find it.

The December 11 issue has several interesting articles:

Postie Plus [PPG.NZ]-A resurgence in the tiny retailers fortunes.

Ryman Healthcare [RYM.NZ]-Good prospects for long-term growth

Smaller pieces on Hanover Finance, Nuplex, Delegats, The Warehouse, Pike River and some very interesting stock picks.

The Headliner is frequently on the mark and a good read, albeit too brief.

Quality not quantity I guess.

Anyway to my mysterious benefactor, you know my address, please keep it coming.


Disclosure: I own Ryman, Postie Plus & The Warehouse shares
.


Related Links

Subscribe to The Headliner @ Headliner.co.nz
Headliner.co.nz

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12 months, 24 issues



c Share Investor 2008

90 day employment probation period good for NZ Inc

The legislation currently under consideration in the New Zealand house of representatives, as I write this, to enable a 90 day probation period for employers and employees for businesses of 20 workers and under is being rushed under urgency, so it can be allowed to be put into place April 1 2009. It is a good law and has come at a time in history when it is needed more than ever.

For many years, especially the last 9 of the Labour Government, employers have been put under the thumb by unscrupulous employees and deleterious employment law and have suffered undue stress from malicious and frivolous employment claims brought by disgruntled employees simply because they have not fit the purpose of employment, have not fit in with the company culture or other employees or have attempted to get away with theft, fraud or unacceptable behaviour in the workplace.

This has put small businesses on the back foot, has cost them money and time training sub-par workers and as a result productivity, profit and business growth has fallen.

It has simply been too hard to expand your small business and employing extra workers for this expansion has been a burden many small businesses simply do not want to face because of the possibility of being slapped with an employment fine by a litigious employee.

With a probation period of 90 days it provides opportunity and choice for new employees rather than the deleterious effects that the Labour opposition say it will have and employers will have the ability to easily grow their businesses and therfore our economy.

The ability for employers and employees to negotiate the terms of the probation before employment then sit down and discuss outcomes after 90 days will enable a better fit for both employer and employee.

If either the employer or employee do not get on or their are any problems both parties can mutually agree to walk away with no repercussions for either. Easy, quick, cheap and ultimately good for small business because the hiring and firing process is the key to a good start in the employer/employee relationship.

Small business is at the heart of the New Zealand economy and it is going to suffer more than ever over the next year or two.

Making changes to employment law such as this, along with a National Government promised simplification of red tape, tax law and heavy handed government regulation will help cushion the blow of the 1999-2008 Labour Government engineered recession we are currently experiencing and the bigger downturn to come due to global financial effects.

Employees have to remember that it is employers that take on the risk when running a business. Money is borrowed, mortgages are taken over personal property and the risk of getting unsuitable employees weighs heaving on their minds. Without the business employees simply wouldn't be able to make a living.

Of course one hopes that this is a reciprocal arrangement with benefits on both sides but we mustn't forget who the boss is.

This 90 day probation law has been a long time coming. Most other western nations have such a law and it is no accident of statistics that New Zealand has one of the lowest productivity ratings(and falling) of any of those nations.

The economy needs this law to complement other companion legislation to be passed to make our industry and economy grow sustainably again and its urgency is necessary because we have to do everything we can quickly to ameliorate the current world financial crises and associated economic fallout.

If we don't act now future generations will be berating us for sleeping while our economy burned.

Lets embrace freedom of choice, the ability to be flexible in employment issues and therefore the opportunity to work towards the future in a more efficient and productive way.

To do otherwise is simply socialist dogma with as much promise and future as a rat with venereal disease.

New Zealand has suffered under that regime for 9 years and today's urgency in Parliament is but one counter to that to redress the balance in favour of commonsense and a brighter future for all.


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c Political Animal & Share Investor 2008

Wednesday, December 10, 2008

Long vs Short: Sky City Entertainment

http://chart.bigcharts.com/custom/fairfax-com-nz/chart.asp?rnd=0.3338466193181723&style=2242&symb=SKC&size=1&type=64&time=10yr&freq=1dy&comp=&compidx=NZ50G%7E1392984&ma=&maval=&lf=&lf2=&lf3=&uf=16384&arrowdates=&arrowlegend=&country=NZ&sid=162937


In this second of the Long vs Short series I am once again going to take look at the chart comparisons for a stock from the Share Investor Portfolio and compare the 10 year return (above) to the turmoil of the last year with a 1 year return chart (bottom of post).

In this series I want to show the merits of investing, using charts, for the long-term vs short term gains or losses. I will use the longest available data to me for the long-term view and will compare against the NZX50.

The second stock in the series will be Sky City Entertainment [SKC.NZ] which I have held for 6 years, the longest of any stock of the 17 that I currently own.



My Portfolio

Symbol
Price
Value
Earned
$2.94
$102900
$30800
You own 35000 [SKC.NZ] shares
purchased at $2.06 [$72100] *













As I said above I have held Sky City for 6 years and my current return (see small chart above)* is around 42%. Not good considering it is 6 years but when you look at the current market situation not bad.

If however you had held Sky City for the full ten years(see large chart at top) your return would have been a staggering 350%.

Taking a look at the short term outlook for the last year your loss would have been almost 35%.

As in the first Long vs Short installment the long-term portfolio wins again.



http://chart.bigcharts.com/custom/fairfax-com-nz/chart.asp?rnd=0.3338466193181723&style=2242&symb=SKC&size=1&type=64&time=1yr&freq=1dy&comp=&compidx=NZ50G~1392984&ma=&maval=&lf=&lf2=&lf3=&uf=16384&arrowdates=&arrowlegend=&country=NZ&sid=162937



Long vs Short series


Mainfreight Ltd
The Warehouse Group


Sky City @ Share Investor

2008 Sky City profit analysis
Sky City Entertainment 2008 Full Year profit results , NZX release, 2008 full year presentation, result briefing webcast, financial statements
Sky City 2008 profit preamble
Sky City outlines a clear future plan
As recession bites Sky City bites back
Sky City Assets: Buy, sell and hold
Why did you buy that stock? [Sky City Entertainment]
Sky City Share Volumes set tongues wagging
Sky City half year exceptional on cost cutting
NZX Press release: Sky City profit to HY end Dec 2007
Sky City Cinemas no Blockbuster
Sky City Entertainment share price drop
New Broom set to sweep
Sky City Management: Blind, deaf and numb
Sky City sale could be off
Opposition to takeover
Premium for control
Sky City receives takeover bid
Sky City Casino Full Year Profit to June 30 2007
Setting the record straight
Sky City CEO resigns
Sky City Casino: Under performing
Sky City Casino 2007 HY Profit(analysis)
Sky City Casino 2007 HY Profit

Share Investor Forum-Discuss this topic


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Sky City Financial Data


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c Share Investor 2008

Tuesday, December 9, 2008

Burger Fuel: Running on empty

Listed Franchisor Burger Fuel Worldwide [BFW.NZ] results out yesterday were disappointing for shareholders.

Back in September 2007 directors anticipated NZ$50,000.00 in losses per month but losses of NZ$669,000 in the six months to 30 September 2008 were more than double that figure.

Even more worrying, losses have mounted as 2008 continued. If you strip out 2007 IPO costs the losses for the 9.5 months to 31 March 2008 were $83,578.00 per month. This compares to $111,500.00 per month for this latest reporting period.

Hardly a positive trend.

Lets look at revenue for the company to see if that changes the picture.

Surely if losses are more than double company estimates then revenue should be sharply up when we compare the 30 September 2008 revenue with the previous 3.5 month period in 2007?

Yes it is but sadly not more than double.


Burger Fuel @ Share Investor

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Burger Fuel management cagey over company progress
Burger Fuel cooks up Dubai deal
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Don't buy Burger Fuel, yet
Burger Fuel: Inside info?
Burger Fool IPO: Burger Fool?
Exclusive Interview with Burger Fuel's Josef Roberts
Burger Fuel's Daytime drama
Burger Fuel share price out of gas
Beefing up store numbers
Director explains share price drop
Burger Fuel slims down in value
Burger Fuel and Coke
Marketing Burger Fuel's future
Pumpkin Patch VS Burger Fuel
Burger Fuel results and commentary



With revenue of $3,518,000 in the six months to 30 September 2008 and $ 2,336,000 for the 6 months to 30 September 2007, it is quite a good lift but hardly the stellar stuff that was shouted from Burger Fuel's advertising pre IPO, because it shows costs have far outstripped income and as I pointed out above these costs appear to be increasing rather than abating.

These revenue figures are based on 4 more stores since listing so this makes income figures look even worse.

Burger Fuel management say the next six months will be about cost containment and they will not anticipate opening any new outlets until well into 2009.

This will clearly be important to stem the franchisors already increasing operating expenses as their franchisees come under pressure from increasing business costs such as labour, ingredients and energy.

Like its bigger listed cousin Restaurant Brands Ltd [RBD.NZ] who had a recent poor last quarter sales, Burger Fuel will continue to struggle in the face of increasing competition, fickle consumer tastes and demands for better service and quality fast food.

Its short company history as a listed vehicle have been wildly disappointing and it looks even further away from any tangible success than it was when it listed mid 2007.

As least there is still their bastard Burger.

Burger Fuel shares were at 38c at close of the NZX at 5.00pm Tuesday 9 December 2008.


BFW
Burger Fuel Worldwide Limited Ordinary Shares
As at 5:59 pm, 9 Dec 2008


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c Share Investor 2008




Thursday, December 4, 2008

Mr Conservative

Alan Bollard is inherently conservative and has only ever acted re-actively in his position as Reserve Bank Governor.

The current economic climate, unlike the weather, is melting down and this should lay heavy on his mind.

One might say that he saw all this turmoil coming and left himself alot of room to move interest rate downwards when really needed but I do not credit him with that much foresight-hey he works in a government department how talented can he be?

Like tax cuts, lower interest rates stimulate economic activity, simply because they leave more money in consumers pockets and even though inflation is supposed to be his only target wee Alan should have been cognisant of a failing economy for some time.

Economic pundits have dangled cuts of anything between 1-2% and I myself would contend that 2% would be the more appropriate figure, in fact I have argued for a year that he needed to move downwards.

Given Bollards track record of blind conservatism though it would be a surprise to the market if he picked a rate close to 2%.

I dont buy lotto tickets (I only in markets!) but I am going to stick my neck out and pick a 1.25% cut at 9.00am this morning (NZ Time)

Realated Share Investor reading

OCR puts pressure on investors seeking a better return

Time for OCR intervention by Dr Cullen
Alan Bollard's indecision over OCR a worry to NZ INC
Bollard sits on his hands


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c Share Investor 2008

Wednesday, December 3, 2008

Never mind the length, look at the volume

If you are one of those nervous nellies you probably shouldn't be reading this blog because I haven't lost interest in the stockmarket as some have in the NZX.

In fact I am more interested than when the market was going up over the last 5 years-it is more exciting when there are bargains to be had!

Most of the big overseas investors have retrenched and sold while the NZ dollar was higher and most Mum and Dad investors seem to have sat on their shares and the NZX is now operating on a mere trickle of volume where wild swings and achy hearts are the order of the day.

We only have die-hards like myself making the odd trade and during some days in November there were as few as 2000 trades .

We all know that the New Zealand Stockmarket operates on small volumes by comparison to overseas markets, but the very low volumes traded over the last month or so are an indicator that those that are left in the market want to stay and conversely those that have left are not ready to take what they see as risk and get back into a market they presumably think has further to fall.

They are probably right.

Watch though when things in the economy start to improve and news media releases are of a more positive nature the volume of shares traded will begin trending up and that is when a sustained improvement in the market is likely.

Until then the current trickle of trades on the NZX is largely a lack of interest rather than any sort of market meltdown, as is the case with the current high volumes traded on the NYSE .

Keep a look out for any significant and sustained volume increases for a more meaningful indication of the mood of the market.

Positive, and indeed, negative.


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NZX Hangover from 1999 possible



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c Share Investor 2008

Tuesday, December 2, 2008

OCR cut puts pressure on investors seeking better returns

The OCR rate cut coming this Thursday varies from 1-1.5% depending on which financial media commentator you are following but what is clear is that this cut isn't going to immediately stimulate any sector of the economy because most people have put their wallet away thinking there are cheaper bargains to be had.

What it will do is put pressure on many who have money to invest to go out and find a better return than the gross 6% (and dropping) interest rate they maybe getting for a term investment and the meager real returns still to be found in residential real estate for rentals-values for that sector still have a long way to fall and then will become more attractive return-wise.

I would contend that there are many good stocks on New Zealand's NZX that will find an attractive home for the vast amount of billions currently tied up in term investments in our three major banks.

With a 1.5% point cut on December 4 the OCR rate would be 5% and another likely cut early in 2009 would see our OCR fall below 5% putting pressure on investors coming back from holiday to go hunting for better returns in the stockmarket.

Look for higher yielding and safer large capital stocks to benefit from rate cuts.

A dozen or more Kiwi stocks are paying more than a 10% gross yield and companies like Telecom NZ [TEL.NZ] should do well from those bailing out of banks.

Eventually the rate cuts will work to stimulate our economy, just as tax cuts do.

I am hoping against hope that since the previous Government has guaranteed finance companies that no more term deposit money goes after their higher rates.



Related Share Investor reading

Time for OCR intervention by Dr Cullen
Alan Bollard's indecision over OCR a worry to NZ INC
Bollard sits on his hands

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Interest.co.nz


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c Share Investor 2008

Monday, December 1, 2008

Dominos poised for another slice of Pizza Hut

With the latest push by Domino's Australia [DMP.AX] for more market share released today it might well be worth another look at the hapless Pizza Hut.

Restaurant Brands [RBD.NZ] the operator of the Pizza Hut Brand in New Zealand, must be wondering what they can do next to stem the flow of customers from their doors to that of their main competitor Domino's Australia which operates 76 stores in New Zealand.

Their American style advertising, where they compare the size of a large Domino's pizza to theirs(see below) smacks of a little desperation and,well, it isn't working. Domino's are still kicking Pizza Huts oily little backside in the food quality, service and price areas of the pizza business.

Customers simply like the way Domino's does its business and they are voting with their feet.

This leaves Pizza Hut management with a big problem.

What do they do next to regain their lost sales?

I doubt whether management have the answer, for they have been trying to regain their lost mojo since Domino's entered the New Zealand market in 2003 and started getting a big slice of the action from the get-go.

I do recall a rather blase' reaction to Domino's arrival along the lines that Pizza Hut was such a dominant and strong player any new entrant was going to find things very difficult in "their" market.

This has been the hallmark of their reaction to competition until very recently and it seems it has been increasingly hard to shake that complacency.







Restaurant Brands @ Share Investor


Domino's Australia Dominant in Australasia
RBD consider slicing off Pizza Hut
Restaurant Brand's Pizza Hut faces increasing competition
RBD sales analysis
The dots get the hots
2007 FY profit analysis


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c Share Investor 2008

NZX Hangover from 1999 possible



Looking at charts for the beginning my Long vs Short series I got a bit sidetracked-but still related- as you can on the internet and found to my horror that the chart for the NZSX50 index for the last 10 years(above) looks like the kind of chart that would plot the course of the Hindenburg shortly before it crashed.

To be fair the New Zealand stockmarket pretty much reflects the sad performance of the Dow Jones index when you compare the 5 year chart (below) but when you look back a further 5 years that is when things look as ugly as Paris Hilton having it off with her shih tzu.

The NZSX50 is currently at early 2005 levels and only has 800 points further to fall to get back to 1999 levels. It has lost 750 points in the last 3 months, so it is not beyond the bounds that our index will be having a flashback hangover early 2009 inspired by New Years Eve 1999.

Time to resurrect Prince.


Chart for <span class=



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c Share Investor 2008












Long vs Short: Mainfreight Ltd



In the first of a series of 17, I am going to take look at the chart comparisons for stocks from the Share Investor Portfolio when comparing the 10 year return (above) to the turmoil of the last year with a 1 year return chart (bottom of post).

In this series I want to show the merits of investing, using charts, for the long-term vs short term gains or losses. I will use the longest available data to me for the long-term view and will compare against the NZX50.

The first stock we will look at is Mainfreight Ltd [MFT.NZ] the global logistics company.

As one can see from the two large comparison charts if you have been a Mainfreight stockholder for 10 years your return has been over 300%. A magnificent return by anyone's standards.

Conversely if you look at the one year chart and bought Mainfreight a year ago your return is negative 30%.


Symbol
Price
Value
Earned
$4.80
$15000
$-7218.75
You own 3125 [MFT.NZ] shares
purchased at $7.11 [$22218.75]













I have held Mainfreight shares for 2 years and as you can see from the chart above my 2 year return is around negative 33%.

Clearly the long-term view is the winner here and I would contend that if I hold for another 8 years the opportunity to gain similar returns to the last ten remains only if I continue to remain a shareholder.

I will also guess at this point that the next 16 posts in this series will show a similar story.

Keep checking back to see if my hunch is wrong!




Related Share Investor Reading

Why did you buy that stock? [Mainfreight Ltd]
Mainfreight 2008 Annual report worth reading
KiwiRail will cost Mainfreight
Mainfreight keeps on truckin
A rare breed
Share Investor's 2008 stock picks


Shareinvestorforum.com- Discuss this Share Investor Post


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c Share Investor 2008