Thursday, August 6, 2009

Bruce Sheppard's debt debate points the finger at you

Bruce Sheppard's crusade on NZX listed companies and their debt levels has apparently come to an end but what has it achieved?

Well, it is always good to get frank and open debate about our listed companies, because if you have been reading my comments over the years the NZX and their mates are almost a closed shop as far as communication and disclosure are concerned.

Bruce also highlighted several companies that have either collapsed or a sailing very close to the wind in terms of their debt levels; Cadmus-Provenco, Nuplex Ltd [NPX.NX], Fisher & Paykel Appliances [FPA.NZ] and more.

The non-reply's to Bruce's letters from Sky Network Television [SKT.NZ] and Team Talk reveal more about respective company management and poor attitude to shareholders apart from a possible debt problem.

Nothing substantive in terms of conclusions were made by Bruce but he quite rightly puts the responsibility back on individual investors to do their own homework:

Just as I and the SA are prepared to be judged by what we do, right or wrong, well or badly, so too should companies be judged. So rather than me analysing the responses in detail or providing you with any guidance on the strength or weakness of the companies written to, you must do this for yourself by reading our letters and their replies.

The companies were on my list because I thought, and still think, they have too much debt and are at risk in an economy such as this. That is my prerogative, you will each have your own risk profiles and you will each analyse the prospects and debt profile of these companies for yourself. It is my view that debt is the number one risk faced by equity investors today and that is why I did this work. 

Read the full conclusion @ Stirring the Pot

Why am I interested in Bruce's opinion so much on such matters?

Well, I mostly like what he says, he stimulates debate and he is an influential person.

The main point of Bruce's debt exercise? Looking at issues like debt, company management and company performance are essential when investing and should be done by you dear reader.

Oh, and he also finally disclosed ownership of shares in a couple of companies.

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Bruce Sheppard's Stirring the Pot

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