Friday, February 27, 2009

Reader Correspondence

I thought it was time I revisited my semi-regular email correspondent regarding his Sky City Entertainment [SKC.NZ] holding.


I am using this readers experience as an example of what real people are doing and how they are reacting to the current economic and stockmarket turmoil.

It is a good learning experience to see what others are doing and how they react in these kinds of stressful financial situations.

I had first correspondence from him early 2008 regarding his holding and then in July when he asked whether it was wise to hold this company that he bought for $4.30 and was holding now and had ... "lost a fair amount of money."

I answered that the company was solid and should perform well during an economic downturn, or words to that affect.

I didn't advise him to sell or hold (I don't really advise, I just point out what I would do and that every individual has different circumstances and therefore should probably make their own decisions) just what I would do and as most of my regular readers will know I have a reasonable holding myself and still hold at a cost of NZ$1.925 per share.

Well you might be glad to know that my correspondent has kept his shares, which I must say requires big balls in today's market, even though he expresses an element of "fear" when it comes to investing and the stockmarket-as indeed I do myself and most of us out there would also if we were honest.

He also ponders whether he should "take the plunge" and buy additional stocks considering the poor returns coming from other types of assets.

As an addition to that he asks whether I will be using the current season of dividends-around NZ$8000.00 I would expect- to reinvest back into the market.

My answer to that would be a big fat NO.

I am keeping them in anticipation of even lower share prices and will be reassessing the situation as this horrible year slowly moves on.

The last time I purchased stocks was back in July 2008 when I bought two very small holdings of a couple of retailers. My ASB Securities trading account is now firmly closed.

For now.


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Thursday, February 26, 2009

Bank Guarantees: Time for New Zealand Banks to return the Favour

This week ASB Bank got more publicity milage than Goldstein on speed when they announced via press release that they had NZ$ 1 billion burning a hole in their pocket and they wanted to use it to help out business to "encourage employment" during these hard economic times that all of us are facing.

Cynicism aside the announcement had everyone in Joe citizen land jumping for joy and business writers and politicians verbally clapping ASB on the back.

All well and good you might say, it was a brilliant move by the Bank, genuine or not but it left me thinking-what have you done for me lately.

I have been thinking that for the last 3 weeks when I took it upon myself to go down to my ASB in Albany, speak to my "personal banker" and ask him to see what he could do about my mortgage.

After Bryce reluctantly decided to meet with me "after hours" -6.00pm Thursday when the bank had a late night, I got down to business.

I wanted to renegotiate a lower mortgage interest rate, mine has 2.5 years left to run at 7.25%.

Now before you send me rude emails, yes I did sign a contract for 5 years so you are thinking I have some sort of obligation to my bank right?

Well, yes I do, in "normal" circumstances.

But as I rightly pointed out to Bryce at ASB Albany these sir are not "normal circumstances".

The world is facing financial oblivion, etc, etc( are you weeping yet? I really laid it on with a trowel)

Well, Bryce wasn't having a bar of my sob story ( I really was trying to squeeze him, I'm not hard-up, not yet anyway.) and he said we couldn't negotiate because it "wasn't bank policy", I pointed out to him again that the world was facing financial Armageddon and he gave me a poker face so good it seems he was well practiced at his craft.

I then thought to myself, I really had to pull out the big guns.

So I hit him with it!

But Bryce, the New Zealand taxpayer(what socialists call the Government) is guaranteeing your deposits and your borrowings from overseas (stony faced expression again) which makes your borrowing easier and cheaper, surely we can negotiate my mortgage.

"Its not our policy Darren".

Well, I thought this man is an immovable brick wall and I am wasting my time here. (nice coffee, water and kids games though.)

I then shook Bryce's hand, thanked him for his time and told him I would be back in a few months when things got worse and perhaps his bank would then reconsider their "policy".

Imagine the publicity should Brendan and ASB say yes next time I meet with him.

It would be worth at least a billion or two.


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Wednesday, February 25, 2009

Digging at Pumpkin Patch's lower profit

Given the dire state of retailing in New Zealand (it is much worse in overseas markets, as you will find as you read on) yesterday's result for Pumpkin Patch Ltd [PPL.NZ] for the 6 months ended 31 January 2009 is a comparatively good one.

To be sure the next six months are going to be far tougher for retail in general and at the big Pumpkin but a $NZ 9.5 million profit compared to last years $10.2 million is well done considering the pressure the company has faced in New Zealand the USA, Britain and Australia.

A focus on costs is clearly important and Pumpkin Patch has managed to deliver a 60% reduction in debt to just over NZ $32 million and a $15 million reduction in inventory without it affecting margins too much.

Good management of capital during these uncertain economic times is crucial to company survival and the Pumpkin are doing the business.

The Australian and New Zealand stores are doing well considering the downturn but the worst has yet to hit this part of the world, so expect a bigger downturn over the following six to eighteen months.

America and The United Kingdom are a different story.

Sales were up strongly in America, mostly because of extra stores and the UK had sales slightly down but losses for these two markets almost tripled over the period bringing down overall net profit for the group by perhaps as much as $3 million.

Pumpkin Patch has fared better than most Northern Hemisphere retailers, especially in the USA, where retailers are going to the wall quicker than you can say sale but unfortunately these markets are going to continue to deteriorate and worst case scenario could take Pumpkin's stores in those markets under.

Management have clearly done the right thing by halting expansion though.

Pumpkin Patch management can pat themselves on the back for a good 6 months but as I have already pointed out it is going to face what is probably the hardest period in its 15 odd years in business.

The company has a good brand, good management and loyal customers and that will help ameliorate the tough economic conditions somewhat but as the failure to indicate any forward forecasting for profit or sales shows uncertainty rules in retailing at present.

Pumpkin Patch shares have risen more than 20% in the last 2 days since the result on higher than average volume traded.



Pumpkin Patch @ Share Investor

Long vs Short: Pumpkin Patch Ltd
Pumpkin Patch Buyback shows Confidence in the Future
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I'm buying
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Half year to Jan 31 2009 profit result data

Attachment 1H09 Cover note to NZX.pdf 1H09 Cover note to NZX.pdf ( 21.26 KB )
Attachment PPL HY09 Appendix 1.pdf PPL HY09 Appendix 1.pdf ( 20.28 KB )
Attachment PPL 1H09 Appendix 1 Segment Note.pdf PPL 1H09 Appendix 1 Segment Note.pdf ( 11.31 KB )
Attachment PPL 1H09 Chief Executive Officer's statement.pdf PPL 1H09 Chief Executive Officer's statement.pdf ( 56.67 KB )
Attachment PPL 1H09 Appendix 7.pdf PPL 1H09 Appendix 7.pdf ( 31.51 KB )
Attachment PPL 1H09 Press Release.pdf PPL 1H09 Press Release.pdf ( 32.58 KB )

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Tuesday, February 24, 2009

Warren Buffett's 2008 Letter to Berkshire Hathaway Shareholders

2008 Annual Letter

The Berkshire Hathaway 2008 annual letter authored by Warren Buffett will be posted on the Internet on Saturday February 28, 2009, at approximately 8:00 a.m. (read the letter here) eastern time and will be one of the most anticipated letters in decades.

People will be looking for indicators of where the company has been in the last 12 months and more importantly where they are going in the future.

Of particular importance to all investors will be a heads up on where the big guy sees the world economy going.

The letter will be available at Everything Warren Buffett in PDF and a little latter HTML.

Keep watching, the next 2 weeks will be big for Warren Buffett news, commentary and analysis.

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Monday, February 23, 2009

Sky City Entertainment 2009 Interim Profit Review

One of the best results by a long shot this reporting season was the interim 2009 profit for the six months ended 31 December 2008 for Sky City Entertainment Ltd [SKC.NZ] which was revealed this morning.

While most companies that have already reported in February have recorded slumping profits, Sky City has delivered net profit of $54.8 million for the half year, compared to $55.9 million for the first half last year-that profit was before a writedown of $60 million due to the money losing cinema division.

A drop of $1.1 million during the current economic slowdown is nothing short of breathtakingly spectacular to this shareholder. (see chart)

Of particular interest to me was that this profit was produced on revenue that was dead flat but on lower tax paid and due to around $9 million in extra operating costs.

Labour and energy costs would have taken the bulk of that and the lower tax rate attributed to the lowering of corporate taxes from 33 to 30%, so it looks like much of the vaunted cost savings that were launched around 16 months ago have come to an end.

A very pleasing turn of events was the announcement of a dropping of dividends from 90% of profit payout to 60-70%.

This is something that I have advocated and wrote about just last week.

This will enable the company to pay down more debt than the $24 million that they have in the last 6 months and a wise move considering the current credit squeeze.

The focus by Nigel Morrison in his first nearly full 12 months as CEO, on keeping down costs, efficient use of capital and maximising returns on existing assets is a good move away from the previous CEO Evan Davies and his expensive expansionist ways.

Once again Sky's Cinema division is still losing money even though it has improved revenues by 15%-mainly due to more cinema screens and higher ticket prices.

Once again I must say it is a turkey and it needs its neck wrung.

As I mentioned in the Sky City Preamble published last Saturday the erratic "high rollers" revenue, was well, erratic. Down substantially this year and the win rate fell on the average for the casino, rather than last years favourable one.

Company indications for the next 6 months of operations was pretty vague, as one might expect in the current environment. Nobody is giving clear forecasts for profit or revenue and that is wise should the company disappoint the rabid market.

Sky City shares finished today even.


Sky City @ Share Investor

Sky City Entertainment 2009 Interim Result Preamble
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

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Sky City interim results
for 6 months ended 31 December 2008.

2009 Interim Result Presentation
Media Release
NZX Announcement
Financial Statements
Result Briefing Webcast

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New Zealand Financial Oversight bodies fail Blue Chip investors

"We've already sold our home. We're in a one-bedroom council flat. That's all we've got."

Two former Blue Chip "investors" in their 70s, in Mark Bryer's Blue Chip Ponzi Scheme forced to sell their house after losing all they have.

Meanwhile Bryer's runs a similar company in Sydney and according to The NZ Herald is receiving money into his personal bank account from one of his collapsed companies that is owed to creditors-creditors like those above.

Yes Bryer's is free to go about his merry way like he always has.

Now I know about innocent until proven guilty and all that stuff but the evidence to support fraud committed by this individual is as clear as a Bernard Madoff Ponzi Scheme.

Bryer's has committed fraud, has ruined many lives and led some to commit suicide because of the financial position they have found themselves in because of Bryer's Blue Chip house of cards.

Why the hell have the Serious Fraud Office and the police let him free?

He is clearly a flight risk. Many fraudsters in the past have gone on the run and never been brought to justice.

He has committed very serious offences that if committed in other jurisdictions, say the United States for example, he would have been slapped in leg irons by now.

The law and the Serious Fraud Office have been found wanting over this particular rip-off and there have been many more finance companies, pyramid schemes, "financial advisers" and even main-stream banks that have so far been left off the hook.

This Mark Bryer's bastard needs to be brought to account, tried, convicted and sent to prison for at least 10 years.

Judging by our financial governing bodies modus operandi so far though it seems Bryer's and his filthy ilk could be walking free for some time to come.

That needs to change.

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Saturday, February 21, 2009

Sky City Entertainment 2009 Interim Result Preamble

Sky City Entertainment [SKC.NZ] is announcing its 2009 interim result on Monday 23 February (view the webcast here 10.am NZ Time ) and I for one will be keenly interested in that result.


Sky City is the largest shareholding in the Share Investor Portfolio and indications from the company in October for first quarter revenues for 2009 were up 3% year on year, excluding its high-roller and money losing cinema divisions.

Standout performers in the first quarter were its Darwin and Queenstown properties (both up 7%), but the company’s Auckland casino, where the bulk of revenue is derived, was down 2%.

As this excerpt from a mid 2008 letter to shareholders the focus will be on cutting costs:

"Our shareholders have made it clear to us that they want us to focus on maximising the performance of the assets we operate. This is what we will be doing. as we have said previously, we expect to achieve this within an 18-month time frame. We will retain tight control over capital and not expend capital unless we are very confident of healthy returns for shareholders".

This cost cutting was first apparent in the previous interim result in Feb 2008 and continued through to the 2008 Full Year result in August of the same year.

Clearly if first quarter 2009 revenue has continued into the second quarter and cost cutting has further strengthened then Monday's result will be a good one.

The only two wildcards will be the massive economic slowdown since October and wins/losses from the high rollers, which can alter the result markedly.

For a more extended analysis of what might be see Value Cruncher for Reuters and other analyst's outlooks on revenue and profit margins for Sky City to June 2011.

Sky City shares reached near multi-year lows on Friday 20 Feb closing on overall market weakness.


Sky City Entertainment Ltd Ordinary Shares
As at 6:15 pm, 20 Feb






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
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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
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Sky City Management: Blind, deaf and numb
Sky City sale could be off
Opposition to takeover
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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)
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SKYCITY will announce the 2009 Interim results on Monday 23rd February 2009.

Please click here to access the media webcast link.


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Friday, February 20, 2009

Time to ditch the dividends

I wrote a couple of days ago about Goodman Fielder Ltd [GFF.NZ] using a dividend re-investment plan to help with company cash-flow in these hard times.


Let me add another string to that cashflow bow.

Shareholders in NZX listed companies should expect dividends to be cut even if profits are not correspondingly lower.

Far be it from me to suggest this because many of the companies in the Share Investor Portfolio have good dividend returns but I think it would be a prudent move for companies to lower or cancel dividend payouts until this recession comes to an end.

New Zealand companies pay handsome dividends at the best of times but as we know this aint the best of times.

The scary thought is that some companies even use borrowed money to pay dividends and that isn't wise even when the economy is ticking along nicely and will certainly be more difficult to do during this credit drought.

Unfortunately Kiwis live in some sort of dividend fools paradise where investors often gauge the investing potential of the company by that criteria alone. Company hierarchy don't often help that scenario either by pandering to that market expectation of more company moola for stockholders = a good company.

I have been guilty of this peculiar investor trait! but have learned to relax when a dividend cut is used for a more business efficient purpose-like investing moola back into the company.

Cash-flow is all important for businesses at the moment and it is normally used to pay all sorts of short term liabilities, so clearly having a bigger free cashflow will help a business function better on a day to day basis.

Just remind yourself a dividend cut will not be forever and ultimately it will be good for your investment in the long run-Warren Buffett's Berkshire Hathaway has never paid a dividend and its shares are currently traded at around US$84,000.00 each. (Its high was near double that!)

You might even like to to give your CFO a friendly phone call and gently suggest he take my advice.

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Wednesday, February 18, 2009

Goodman Fielder turning on the DRIP

Dividend Re-investment Plans or DRIPs are a way for a company to distribute profits to shareholders by allowing them to get shares in lieu of cash.


In the normal state of affairs when the economy is in a healthy state it is a good way to keep cash flow in the company to help run the day to day machinations of your company.

Many listed NZX companies have DRIP plans.

Goodman Fielder Ltd [GFF.NZ] has taken that opportunity today by issuing a DRIP offer to its shareholders.

One other company in the Share Investor Portfolio has a DRIP plan and that is Sky City Entertainment. [SKC.NZ] Its DRIP has been running for several years and was instituted at a time when the company found itself with a little cash flow problem due to poor management leading to a couple of awful profit results.

With Goodman Fielder issuing their DRIP intentions I wonder out loud as to whether a cash flow problem might be influencing their decision to make a DRIP available.

Several NZX companies are currently making plans to improve cash flow.

Fletcher Building Ltd [FBU.NZ] signalled the sale and leaseback of their Penrose head office this week and issued millions of dollars of capital notes while Fisher & Paykel Appliances[FPA.NZ] indicated yesterday that they are looking at a capital raising.

Many other companies have issued debt and others are now planning to to get themselves through the current economic crises through prudent and some imprudent means.

Freightways Ltd [FRE.NZ] cut their dividend for example even though their 2009 half-year profit rose slightly.

Goodman's DRIP is a good move to help during these hard times but nevertheless it does leave me with a slightly uneasy feeling.

* Disclosure: I own GFF, SKC, FRE, FBU shares.


Goodman Fielder @ Share Investor

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Monday, February 16, 2009

Fisher & Paykel Appliance's profit downgrade continues fine tradition

Today's poor trading update announcement for Fisher & Paykel Appliances [FPA.NZ] was really of no surprise to the market as a whole and to those insiders who traded the stock down over the last week because they knew this announcement was due soon.

There will be more bad sales updates to follow methinks because today's indication only covers the last few months of trading since the previous profit announcement at the end of 2008.

I wrote back in May 2007 the main reason why I see the company having problems and it ain't the recession or the exchange rate:

While the left of Lenin media and every two-bit polly and union rep have a go with their own wide of the mark opinion, blaming the F & P move on a high dollar and high costs the fact is that F & P have never been competitive but are now being forced to by the market reality of cheap well constructed and better designed appliances coming from the very places that Fishers are now moving to...Share Investor Blog 2007

I see today that John Bongard, Company CEO, is still blaming outside influences beyond his control. Sales are down but that shouldn't account for a halving in profit.

It is bad management of costs, poor product at high costs and a siege mentality to selling that still lingers from the days when the company wouldn't allow any other brands in a store if they sold their product.

Bongard continues that tradition accepting today that he wouldn't say no to a taxpayer handout if it was offered one.

Bongard needs to fall on his sword for poor management over his tenure and now would be a good time.

I wrote on January 21 that the company was "looking fair value" at $1.32 but countered that with a warning that appliance makers were going to be hit hard.

This is clearly going to continue for sometime and likely to get worse before it gets better and there could be another profit downgrade before the company profit announcement in May.

The opportunity presents itself now for savvy investors to buy a stake in the company for less than half the price it was less than a month ago.

Fisher & Paykel are contemplating a capital raising on a pro-rata basis which means that any existing shareholder will have a right to purchase x amount of securities when it begins so if you are looking to get a stake a dilutionary effect on the share price will likely happen so you could well get shares for less than today's closing price of NZ $0.65c , down 35c on the day.

Fisher & Paykel Appliances @ Share Investor

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Fletcher House is built on hard times

Fletcher Building Ltd [FBU.NZ] will be one of the biggest recipients of the New Zealand Government pulling out all the stops to get infrastructure built to "stimulate" the economy and whatever your political views on Government economic stimulus', as a shareholder you would have to be pretty pleased with taxpayer dollars coming Fletcher's way.

Fletcher Building made much of the fact earlier this week when releasing their latest profit result that they are now celebrating their 100 year anniversary.

This is clearly significant because over this time the company has weathered countless recessions, a depression and two world wars.

During the Great Depression, Fletcher Building constructed buildings such as the Auckland Civic Theatre, The Auckland University Arts Building and Wellington Railway Station.

In the late 1930s Fletcher's mobilised themselves quickly enough to become the dominant force in the newly created "government housing" sector and when WW2 hit they ameliorated raw material supply problems somewhat by simply manufacturing their own building products.

My point is here that they manged to get through the depression, so far the worst economic downturn in living memory, there is no reason to believe that they cant do the same during this big downturn.


As at 6:15 pm, 13 Feb


To a certain extent the bad times have made the company what it is now and as history repeats itself Fletchers are set to build from this once again and move towards another upturn.

I have pointed out before that every cloud has a silver lining and in Fletcher's case it is infrastructure.

Even before the big downturn that started in September 2008 and the recession that bit in New Zealand in January 2008, Fletchers had a massive backlog of commerical and infrastucture building on their books.

Thanks to cash being thrown at infrastructure in New Zealand, Australia, America and other markets that they operate in, that list of infrastructure is going to grow.

In fact Fletcher Building is somewhat of a barometer when it comes to the health of the economy as a whole.

Building companies are the first to feel the effects of a downturn and the first to show the inevitable turnaround.

Fletcher Building's profit announcement last week was as expected, marked down, and the outlook for the next year looks uncertain at the moment but as I said earlier the money being thrown around in Fletcher Buildings operating markets looks set to push them through the hard times.


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Saturday, February 14, 2009

The Definition of Insanity

The definition of insanity is, doing the same thing over and over again and expecting different results. Albert Einstein

I have been mulling this opinion over for the last few months and think it is valid, simple and has a charming sort of 3rd form economics (14 yr old thinking for my foreign readers) approach to things.

Here goes.

Just what do Barrack Obama, Gordon Brown, Kevin Rudd and a whole host of other world leaders know that we don't?

I would argue, when it comes to the large sums of taxpayer dollars these imbeciles are doling out quicker than a rotund Wall Street banker in quicksand, that our leaders know very little indeed.

The answer to the Albert Einstein quandary is quite simple really and not as complex as those who dare to represent us might make out.

Why would one hand out very large sums of borrowed money to citizens to spend and "stimulate" economies when it is that very thing that got the globe and especially North America, in the proverbial in the first instance!

We must do the very opposite to this.

While not stopping spending entirely in the German or Japanese extreme, the answer to our current problems is to save.

Well duh !

Sufficient savings allows us to actually give us a real sense of wealth, rather than the plastic fantastic kind that contributed to this mess. That has to be paid back at some time and that time I would argue is now.

It is the same for individuals, business, large corporations and countries.

This is where reality and fantasy go in polar opposite directions and will probably have serious consequences somewhere else in the future.

What happens if you pile this much debt on top of debt to spend your way out of a problem caused by debt?

Well, eventually you have to pay that debt back.

So what Obama, Rudd, Brown et al are doing is postponing the inevitable and when that time comes the problem will be oh so more dire than it is currently.

Perhaps young Albert had something when he uttered those famous words that I posted above.

Here is another poignant ditty to end the lesson:

"Any intelligent fool can make things bigger and more complex... It takes a touch of genius - and a lot of courage to move in the opposite direction". Albert Einstein

Sorry for the complexity of my simplicity but it had to be said.


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Thursday, February 12, 2009

Love your Customers; Hate your Competitors

The attitude that your business competition is supposed to be looked at as some remote entity that is supposed to be good for all players in the sector in which you compete is not just untrue it is complete and utter bollocks.

I would go even further than that. If you love your customers -and mostly you should otherwise you shouldn't be running a business -then you should at least loathe your competition.

I hate mine with a passion.

It is not that I don't like to compete, I love competition but unless you treat your competition like your arch enemy you are not approaching your business in the correct manner.

The business world has been full of animosity between the fiercest of market players, from Coke vs Pepsi, Ford vs Holden, Chicago Bulls vs L.A. Lakers, Google vs Microsoft and in New Zealand Telecom vs Vodafone.

Everyday should be a battle against your competitor and every opportunity for you to get one up on them or make it harder for them in some way means you are doing what you should.

For craps sake they are trying to put you out of business, why shouldn't you match like for like?

Competing on price and service are two major factors that make good businesses better but advertising or telling his customers that your product or service is better than XYZ company is a great way to undermine his sales growth.

It is taken as granted that you are of course better. There is nothing wrong with yelling that from the rooftops.

If someone asks you what you think of your competitor, be honest, tell them what they are really like, warts and all.

A little bit of nonconstructive criticism pointed at your competition will be good for you and your business.

You can have respect for your competition, nothing wrong with that, taking your competition seriously is the number one rule in a competitive market but putting the boot in at every opportunity, when it is warranted, is also a requirement of good business practice-that is if you want to stay in business!

Tattoo it on your forehead.

I hate my competition!

Your competition sure as hell does.


Related Amazon Reading

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c Share Investor 2009


Tuesday, February 10, 2009

Scam Watch: Optionetics (UPDATE)

You may have noticed that I use Google advertising on the Share Investor Blog.


I use it because it is easy.

I have now blocked the offending advertising thanks to a reader, please let me know if you can still see them in a URL I haven't thought of.

There is one ad that keeps coming up and I must warn my readers about the company.

It is an options trading package that is over hyped, overpriced and underwhelming.

You can options trade by simply doing it yourself or perhaps buying a book and learning.

The company is called Optionetics and the ad will appear with your local URL depending on the country you are viewing this on.

Long-term readers of this blog might like to know that Philip MacCalister, he of Good Returns and a whole host of other financial websites and a rather underhanded individual when it comes to competing with me, is still spamming me with emails and the latest one was spruiking Optionetics.

Here is the link and the content of the email.

Mind you you cant expect much from a man who endorsed Bridgecorp and a whole host of other failed finance companies.

I DO NOT endorse Optionetics and would advise my readers to take a very wide berth of that company and anyone pushing it.


Related Links

Consumer.org.nz - Consumers take

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Fishpond


c Share Investor 2009


Long vs Short: Pumpkin Patch Ltd

http://chart.bigcharts.com/custom/fairfax-com-nz/chart.asp?rnd=0.3338466193181723&style=2242&symb=PPL&size=1&type=64&time=4yr&freq=1dy&comp=&compidx=NZ50G~1392984&ma=&maval=&lf=&lf2=&lf3=&uf=16384&arrowdates=&arrowlegend=&country=NZ&sid=162937


In this fifth installment 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 4 year return (above chart) (PPL listed June 15 2004, so I cant give you a 10 year period like other stocks in this series) to the turmoil of the last year with a 1 year return chart (large chart at 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 (10 years )and will make a comparison against the NZX50.

In the fifth of this segment of Long vs Short I will take a look at Pumpkin Patch Ltd [PPL.NZ]

I currently hold 5000 Pumpkin Patch shares after buying 1000 in August 2006 and have added more since then to take the total to 5000 (see small chart below for detail)

Now this is one of the worst performing shares in the portfolio so I expected a poor result for my shareholding which spans about 2.5 years.

I was right!


My Portfolio

Symbol
Price
Value
Earned
$0.900
$4500
$-8200
You own 5000 [PPL.NZ] shares
purchased at $2.54 [$12700]

If I had held this stock for a full 4.5 years of company listing (see large chart at top) my return would have been 60%-including dividends, tax credits and minus brokerage, the NZX is a gross index of stocks.

By comparison if I had held the stock for just one year (see large chart below) my return would have been a loss of just under 30%.

My total return after 2.5 years or so is a loss of 64% (see small chart on left) That is after dividends and tax credits are added and brokerage applied.

When I initially started this edition of the Long vs Short Series I was expecting to see the long-term return to be negative because the stock has really been hammered. If you were lucky enough to participate in the June 2004 IPO at NZ$1.25 you would still have had a 60% return after collecting the dividends and tax credits, even though the share price ended at 90c today.

Long is still winning after five editions of Long vs Short.


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



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 buy 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


Long vs Short series


Fisher & Paykel Healthcare

Mainfreight Ltd
The Warehouse Group
Sky City Entertainment

Related Reading

Pumpkin Patch financial data


Related Amazon Reading

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c Share Investor 2009

Sunday, February 8, 2009

Follow Share Investor's Portfolio: Edition 2

It is about time we took another look at the Share Investor Portfolio. All this market hurly burly surely must have made a significant difference right? Last time we took a look on November 24 (or see portfolio below the current one).

When we compare it with the latest update from Thursday 5th Feb market close we can see that the portfolio is actually mostly marking time, if not slightly up.

The biggest gainer in the portfolio Sky City Entertainment, [SKC.NZ] is up and the biggest loser, Pumpkin Patch Ltd, [PPL.NZ] is even stevens.

I don't look at the Share Investor Portfolio all the time-apart from being depressing you all know that I am a long-term stockholder-but after a 2 month comparison things really don't seem that bad at all.


Share Investor Portfolio @ 5 February 2009

ASB Capital No.2 0.80(0.00%)
Auckland International1.90.02(1.06%)
Briscoe Group Ltd0.80.03(3.90%)
Fisher & Paykel Health3.29-0.05(-1.50%)
Fletcher Building5.52-0.01(-0.18%)
Freightways Ltd2.95-0.05(-1.67%)
Goodman Fielder Ltd1.76-0.01(-0.56%)
Hallenstein Glasson2.16-0.04(-1.82%)
Kiwi Income Prop1.030(0.00%)
Mainfreight Ltd40.1(2.56%)
Michael Hill Inte0.530.02(3.92%)
Postie Plus Group0.30.01(3.45%)
Pumpkin Patch Ltd0.930.01(1.09%)
Ryman Healthcare 1.370(0.00%)
Sky City Entertainment3.08-0.01(-0.32%)
Steel & Tube Holdings3.06-0.04(-1.29%)
The Warehouse Group3.6-0.1(-2.70%)


Share Investor Portfolio @ 24 November 2008

ASB Capital No.2 0.85-0.007(-0.82%)
Auckland International1.660.05(3.11%)
Briscoe Group Ltd0.750(0.00%)
Fisher & Paykel Healthcare3.01-0.04(-1.31%)
Fletcher Building5.550.13(2.40%)
Freightways Ltd2.9-0.03(-1.02%)
Goodman Fielder Ltd1.80(0.00%)
Hallenstein Glasson2.280(0.00%)
Kiwi Income Property1.040(0.00%)
Mainfreight Ltd4.250.04(0.95%)
Michael Hill International0.570.02(3.64%)
Postie Plus Group0.30(0.00%)
Pumpkin Patch Ltd0.930.13(16.25%)
Ryman Healthcare 1.450.05(3.57%)
Sky City Entertainment2.980.01(0.34%)
Steel & Tube Holdings2.70(0.00%)
The Warehouse Group3.60.03(0.84%)

Go here to see updated prices and refresh your browser to get the latest market price*

* 20 Mins delayed

**The two comparisons above are snapshots of performance for the Share Investor Portfolio on the given dates and have no relevance to its overall performance over the long-term.


You can follow the Share Investor Portfolio now by scrolling down the left hand side of any page of the blog and go to the "Share Investor's Portfolio" module. Each stock in my portfolio is listed there with a 20 min delayed feed of prices from Yahoo Finance and associated charts, news and NZX releases for the day.

See how badly or well it is doing.

You can also follow the daily market value of two individual shareholdings of mine, Sky City Entertainment and Pumpkin Patch, the best and worst performers in my portfolio respectively, just below the Share Investor's Portfolio module on the left-hand column of the blog. These update the dollar values of each stock and return they have given me thus far.


Related Share Investor reading

Why did you buy that stock?

Why did you buy that stock? [Fletcher Building Ltd]
Why did you buy that stock? [Freightways Ltd]
Why did you buy that stock? [Kiwi Income Property Trust]
Why did you buy that stock? [Hallenstein Glasson]
Why did you buy that stock? [Briscoe Group]
Why did you buy that stock? [Fisher & Paykel Healthcare]
Why did you buy that stock? [Pumpkin Patch Ltd]
Why did you buy that stock? [Ryman Healthcare]
Why did you buy that stock? [Michael Hill International]
Why did you buy that stock? [Mainfreight]
Why did you buy that stock? [The Warehouse]
Why did you buy that stock? [Goodman Fielder]
Why did you buy that stock? [Auckland Airport]
Why did you buy that stock? [Sky City Entertainment]

Shareinvestorforum.com- Discuss this Share Investor Post


Long vs Short series

Fisher & Paykel Healthcare
Mainfreight Ltd
The Warehouse Group
Sky City Entertainment


From Amazon

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Project Portfolio Management: A Practical Guide to Selecting Projects, Managing Portfolios, and Maximizing Benefits (<span class=
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More Portfolio Management books from Amazon here


c Share Investor 2008, 2009