Cream Always Rises

If your me, lets begin this diatribe with a warning. Your going to get busted around the head about what to do, what not to do and how to do it.

This is coming from a place that can very few can come from, essentially death.

I almost bought the big one in February 6 2012 and the first 6 months after that has got to be the hardest I have ever spent on this planet.

The point is I am still not working and together with my allotment of stocks and some state help I am managing.

It will not be until next year when my dear ex-wife will try to pry my daughter from cold wet dead hands that my portfolio really gets a rinsing.

That is surely when it gets to test its mettle.

When its down.

Well so far the portfolio has provided 3 years of income and Ive even managed to BUY one thing - 1000 Contact Energy Ltd for $4.85 and once again it is related to my ex-wife - she works there.

(Watch the CEO Dennis Barnes he's a great guy, I believe he's going to make this company great-the people that are surrounding him, he's got Transpower on his sights.)

Well, when you buy at the correct time - the correct time is not now - you buy value.

When I bought Fisher &Paykel Healthcare in January 2012 it was the right time to buy. It actually got cheaper, $1.86, but at $2.15 I got it. I sort of wanted it to get cheaper than $1.86 but it wasn't going to be.

I watched this stock like a hawk for YEARS, I had aready bought 5000 because I was aware of the quality of the company, but I literally spent years waiting for this stock to become a bargain.

And It did, and it has become one of the rising stars of my portfolio, and looks set to become a superstar in the many years to come.

I wouldn't buy it now. I would wait. It will happen again, the stockmarket WILL tank and there you will be, buying when everyone else is selling. Just remember it will perhaps take years but as long as you have bought a good solid company (Fisher & Paykel didn't even come to the market for cash like a whole host of others did in the Great Financial Crash) it wont matter much.

Cream always rise to the surface.

The last time the stockmarket started to tank was the end of 2008 and it really didn't start getting better until sort of 2011-2012 and it has been blue skys ever since.

I'm not with your Forbes.com though I don't believe we are headed for another head turner, not just now.

The only thing you really need to concentrate on during your seach for that Apple or Google is the possible duds you might collect along the way.

My office romance has been The Warehouse.

It just hasn't made the transition to"just in time" delivery yet. Its STILL trying the thing out. While the competition has entered its earlier mode, the Warehouse really doesn't know where its at RIGHT NOW it doesn't know whether its selling online or to us.

They just haven't got it right during bad times and if you take a look down the aisles of smiles there's not many smiles anymore.

Bye bye The Warehouse Ltd.

You've just gotta keep the original basis of a few stocks FOR LIFE and change them if you really have to - like the WHS.

Stuff like the aforementioned Fisher & Paykel your Auckland Airport, Ryman Healthcare and Mainfreight is stuff I will NEVER SELL. It just continues to add value to itself.

Like others I was more interested in adding value elsewhere - Fisher & Paykel - so I didn't buy more shares in Auck Air, Ryman and Mainfreight but you as an individual identify that one company, tap into it, and ride it for all its worth.

I've got four companies I can truly be proud of, they make a positive difference in the lives of those that work for them and those that encounter them on a day to day basis.

And you're gotta be happy with that.

After all, you only get one chance.

	Toughen Up: What I've Learned About Surviving Tough Times byMichael Hill
	Think Bigger: How to Raise Your Expectations and Achieve Everythingby Michael Hill

c Share Investor 2015

Share Investor Q & A: Ryman Healthcare's CFO Gordon MacLeod

Please forward to near the end of the review. Gordon talks of Australian expansion just before they actually started. VERY illuminating.

Ryman Healthcare Ltd [RYM.NZ], the retirement village and aged care provider, is one of the NZX's best performing companies and historically it has increased earnings by at least 10% for each of the last 10 years.

Its full year result to March 31 2010 was up 16% on last years 2009 full year and indications are that these sorts of results are likely to continue for the foreseeable future considering the increasing age demographics for the New Zealand population and the seemingly unparalleled popularity of their offering to their prospective customers.

It seems a well managed business with unlimited prospects. In fact you would find it hard to find anything negative written about the company and the way that it is run.

Little is known about who the company is run by and how -they just get in and run the business and get good results - and I would like to know what is behind the hype of promised increased returns forever. Is this company going to achieve the lofty results of the past into the future?

With these things at the centre of my mind I flicked off an email to Ryman in Christchurch and got back a response from the Chief Financial Officer, Gordon MacLeod who kindly agreed to a Share Investor Q & A.

The Q & A was conducted via email .



The Q & A

Share Investor - Congratulations on a great full year result to 31 March 2010. Was this expected by management or a surprise given the state of the economy?

Gordon Macleod - Our growth in realised profits of 16% to $61m was mainly driven by strong growth in earnings from completed villages. This growth reflects our portfolio doubling in size over past 5 years – feeding through into earnings – and higher occupancy. So, we experienced higher care fees, management fees and resale gains in addition to the initial earnings from the three new villages opened in 2010. Most importantly, this increase in profitability was also reflected in even stronger growth in operating cashflows, up 31% to $149m.

The growth in earnings was therefore not a surprise to management, and reflects the robust nature of our business model along with the very real need we are serving to the elderly.

SI - Ryman Healthcare has had significant growth in the size of the business, its revenue and long-term returns to shareholders since listing in 1999. Are you able to continue with this sort of growth for say the next 10 or 11 years or do you see a tail-off, for whatever reason, of these sorts of spectacular results?

GM - We believe that Ryman will grow strongly for many years to come for a number of reasons. There remain many locations throughout New Zealand which are ideally suited for a Ryman village, and we are continuing to see a strong number of land opportunities from which we will continue to pick the best.

Most importantly, we are now entering a prolonged period where the elderly population will increase at a significantly faster rate than ever before. In fact, the number of people aged 75 years and over is set to increase on average by 12,000 per annum for the next 20 years.

Add to this the harsh reality that although we are living longer we are also somewhat frailer. Recent medical research estimates that men spend the last 6.8 years, and women the last 9.1 years, of their lives with the limiting diseases of old age. In addition, it is also expected that the incidence of dementia is set to rise by 50% and osteoporosis and osteoarthritis by 40% by 2025.

Our confidence in Ryman’s future prospects is therefore not just the result of the quality of what we do – our purpose designed villages meet a very real, and growing, need in the community.

So, our medium term earnings target is to grow realised profits 15% per annum, or put in more simple terms - to double the size of the business every five years.

SI - Do you anticipate continued growth of the aged care sector in general or do you see a plateau sometime in the future?

GM - Given the growth in our elderly population expected over the long term (as outlined above) it is hard to see a plateau – the demand will just get stronger over the next 20 years. Capacity in the sector generally is getting tighter, and there is very little in the way of new build going on (except for Ryman), so we expect very strong demand.

SI - Is your growth rate above that of the rate of growth of the elderly population?

GM - Since listing in 1999 our growth has significantly exceeded the rate of growth in the 75 plus population – our realised profits are up ten fold from $6m to $61m, whereas the 75 plus population has increased by 30% over that same time frame to 256,000. So our growth in realised profits has far exceeded the demographics growth rate. Market share wise we are only just over 12% of the retirement village market (ie independent and serviced units) and 5% of the aged care market (ie rest home, hospital and dementia beds).

Reader Question - What is your projected yearly growth rate in net profit for the next five years? Also, what would a 10% decrease in residential property prices have on net profit, say over a 1 year period?

GM - Approximately half of our realised profits are retained for our organic growth strategy, as the business model provides returns well in excess of our cost of capital. We aim to grow our dividends in line with our realised profits, so shareholders should expect growing dividends in addition to our capital growth.

SI - What kind of profit margins are you achieving and have they been maintained as the company has grown?

GM – Our overall realised profit margins have averaged just over 20% for many years and we have maintained this rate.

SI - Interest free loans for senior staff of up to $2 million to buy shares as pointed out in the 2010 Annual Report. Shouldn't senior employees use their own money to buy shares and wouldn't that be a better incentive for them to achieve positive results?

GM – Our Board views it as important that management’s long term interests are aligned to those of long term shareholders, with the on market share scheme representing an important part of the senior management remuneration package. The Board (and shareholders for that matter) prefers the on market purchase mechanism ahead of share options. This is because they are non dilutive, as existing shares are bought on market – rather than share options which constantly impact the issued share capital for existing shareholders.

SI - How hard is it to purchase suitable sites for a reasonable price for your villages and has the recession provided some added opportunity in this area?

GM - We have seen a number of good opportunities over the last two years, our landbank is very healthy, and we continue to explore potential new sites. It has been a good time to buy, as there are very few competing bidders with too much cheap debt. Prices are therefore more sensible than before. We now have 4 to 5 years’ worth of stock in the landbank which is a strong position to be in.

SI - Could you envisage another style of aged care in your business, say a move away from the "village" type layout of your properties to a more self contained, self sufficient sort of living?

GM - Our residents tell us that our lay out works very well, and this has been the case for many years. A Ryman village is tailor designed by us to meet the needs of the elderly, and includes a range of care options to ensure we can meet our residents needs as their health needs change. It is hard to see a time when the elderly will not want this peace of mind and security. In addition, our retirement village environments are very difficult to replicate in the broader community when you consider the village facilities, companionship, beautiful gardens, secure environment and so on that we offer, all on one site.

SI - Do you offer "hotel" style living, that is, rent a unit in one of your villages, rather than own, therefore allowing individuals to free up capital in the latter years of their lives or generally do your customers have enough free cashflow on top of what they might put into buying a unit to allow them to live how they want?

GM - Residents actually often free up capital when they come into a Ryman village, as we offer an affordable product due to our cost advantages. In addition, our weekly fees are very affordable, and in over 20 years we have never increased the weekly fees to an existing retirement village resident. This has given residents real certainty over their weekly outgoings, which is very important for the elderly. We therefore do not offer a rental type model for our independent and serviced units.

SI - As we all live longer and are generally healthier, we are living longer in our own homes. How much of an impact do you think that will have on your business in the long-term as the age when we might want to consider moving to a retirement village moves out?

GM - Our average age of entry is 78+ for independent units, 83+ for serviced units and 85+ for rest home / hospital, so we are catering for the older end of the spectrum rather than the 65’s as some independent retirement villages do. As noted above, people may be living longer, but often frailer due to the health issues of old age. So we see demand increasing, especially with the 75+ population doubling over the next 20 years. Over the long term we may see the average ages of entry noted above increasing, but this will depend on people’s health needs.

SI - Is New Zealand in its infancy in terms of retirement living, in the sorts of complexes you build and run, and if we are how much more advanced are say things in Australia and the United States?

GM - Based on what we have seen overseas, and feedback from overseas investors, our Ryman offering is unique and world class. Self constructing our own villages, with a full range of care options integrated on one site, is uncommon around the world. Most often, nursing or care services are run by different operators to the providers of independent living villages and in different locations. This is not what the older resident wants, as they want the peace of mind and security that they can age in place with the same friends and staff, and stay in the same location as their partner.

SI - How much impact will the recent Government tax changes on building depreciation affect Ryman and will the lower corporate tax rate ameliorate the situation if the company has been impacted?

GM - At this early stage we estimate that we will lose tax depreciation on buildings of $9m to $10m. Shareholders currently pay tax at 33% on our dividends, so they will start to receive the benefit of imputation credits once tax losses accumulated during our investment / growth phase have been utilised over the next 2 to 3 years.

Reader Question - Do you have a maximum debt to equity figure that directors aim to keep below?

GM - Our strategy is to only incur bank debt to fund the construction of new villages, which ultimately fund themselves by the time of full occupancy. We have never incurred debt to fund acquisitions, or share buy backs and the like. In this way, there is no debt on a substantial existing portfolio and we aim to keep this conservative position. Our strong operating cash flows mean that we have been able to invest $730m in new villages since listing in 1999, and we haven’t needed to raise any fresh equity from shareholders to do so. Our current bank debt to equity ratio is only 31%.

SI - What are your biggest challenges as the company expands?

GM - Executing well is our most important focus.

SI - You have a sizable workforce of over 2000. Is there much of a union movement in that workforce or are your employment contracts mostly on an individual basis?

GM - We are a good employer and there is very little union involvement. Staff are on individual employment contracts.

SI - How have you managed the business in relation to your competitors, do they have or will they have an impact on your business in the future?

GM - We don’t manage our business relative to competitors. The demographics mean that if we offer a first class product to our residents at an affordable price then we will do well.

SI - Why have you done better results wise than your listed competition, Metlifecare Ltd [MET.NZ] for such a sustained period?

GM - We only focus on why we do well and don’t really want to compare and contrast ourselves to MET.

Reader Question - It has been suggested to me that Ryman’s success is built on its being a property company, rather than a healthcare one. If there is a significant element of truth in that assertion there would be implications?

GM - First and foremost our core business is looking after the elderly. We are therefore a healthcare company, which meets a very real need from the growing elderly population. Our rest home and hospital beds are purely needs driven, as are our serviced apartments – collectively these account for two thirds of our units / beds. We have shown that we can trade well in a difficult property market, as was evidenced in 2009 when the market fell 10% yet our realised profits increased 5%. Without the absolute healthcare focus we have, our business could well be considered as more a property company.

SI - In my investing experience I have found the level of business leadership in New Zealand wanting – with a few very notable exceptions - when it comes to making good long-term decisions based on sound business skills, the basic understanding of running a business and accountability when it comes to making mistakes and this is often reflected in businesses hiring from an overseas talent pool. What are your views on how we can get good shareholder representation in the boardroom?

GM - I think Boards should always be looking for the right mix of skills, experience and commercial acumen – and not just ticking governance boxes. Real business experience is critical. Of particular importance is that a good balance of directors on the Board understands the perspective of shareholders - by having a reasonable amount of skin in the game through share ownership. This is the best way to get shareholder representation in the Boardroom (along with having the usual respectful dialogue with all forms of shareholders). This contrasts with some theories out there that ‘pure’ independence on Boards (ie no financial interest at all) improves governance – what is important is a good balance.

SI - What company or companies do you admire the most (apart from RYM) that you don't have a financial interest in and why?

GM - I think that Fulton Hogan in Christchurch have done a great job of growing their business in NZ and Australia. They seem to take a good long term approach and look after their staff well. Also I have really respected the way Foodstuffs have successfully responded to the Australian challenge through their Pak N Save and New World stores. Neither businesses try and grab the headlines, they just focus on offering a good product to customers.

SI- Are there any particular books , periodicals or websites that you have read that you would recommend to Share Investor readers in terms of business and investing?

GM - I think that people in business should read Jim Collin’s books – Good to Great, Built to Last, and How the Mighty Fall. All good stuff, practical and not full of MBA jargon. I try not to read too much from economists anymore, the last three years has been proof enough to me that you can’t predict the future – just focus on running your own business extremely well, and mind the farm.

SI - I have read Benjamin Graham's Security Analysis and find it crucial to long-term investing not just in the stockmarket but for investing in general. Have you read it and if you have what have you taken from it as its main points?

GM - I haven’t read it. I think investing is about finding a very good quality company that you would be happy to be the owner of, and then taking a long term perspective.

SI - What does a Chief Financial Officer do and responsible for in a listed company?

GM - A good broad range of stuff! Providing advice to the Board, strategy and planning, forecasting, cash management, banking relationships, financial reporting, maintaining controls, IT, and investor relations. Dealing with the financial and investment community is a very important part of the job.

SI - Who are some of your business mentors/heroes and why?

GM - He will hate me for mentioning his name, but I greatly admire Kevin Hickman (Ryman co-founder). Ryman has been built from the ground up (literally) over 25 years, and the business principles installed in the team many years ago are still just as strongly recognised today. In my experience it is highly unusual for founding principals to be so respected and still part of a large company’s (family) culture.

SI - What do you see as the strongest and weakest quality of your leadership style?

GM - I will have to think about that! Basically I have just worked very hard for many years and tried to get on with people, not matter what their job title.

SI - Where do you see yourself and the business you help manage over the next five years?

GM - Ryman – Double the size, from well managed growth in NZ and Australia and with lots of happy residents and shareholders. Me – I have never really thought more than one year ahead, the ‘to do list’ is too daunting! If I do a good job then there will be lots of good opportunities for me at Ryman.


On Ryman's Australian Expansion

I asked Gordon a question about Ryman moving their business model across the ditch before the announcement last week that they were looking at expanding there, so asked some additional questions about that move.

SI- How long will the first village be assessed before expanding further?

GM – We will carefully assess the entire Australian experience, from land acquisition to consenting to constructing, sell down and operations. During the initial sell down phase of the first stages we will get a good feel for how we are going. We have strict business case criteria for capital pay back of a village and we will set the same criteria as we do in NZ for whether the opportunity stacks up.

SI - Just how much research was done before the move?

GM – We have undertaken substantial research over a number of years. Australia has always been an opportunity for Ryman, and we felt the time was right now to take the next step up.

SI - Is your business model different to how such villages operate in Australia?

GM – We are quite different to many, in that we plan to continue to building and operating our own unique villages (many others simply undertake acquisition activity). Most importantly, what we offer will be different in that we plan to offer the same sort of integrated village with a full range of care as we do in NZ. This means that residents will have the security of having their changing health needs met within one village.

SI - Why Melbourne, Victoria first?

GM – We have a number of contacts in that area and it is easy to get to from Christchurch. That said, other states on the East Coast remain a possibility too.

SI - Will business conditions, employments laws, tax structures etc allow you to operate the way you do in New Zealand or do you have to tweak the model for Australia?

GM – As always we will have adapt to local conditions to a certain extent. However, on the whole the overall industry attractiveness and dynamics are very similar which is good. Encouragingly, build costs are actually lower in Australia and on the care side of things providers can obtain an accommodation bond on top of the weekly fees (in NZ rest home / hospital care offers weekly fees only), which we see as an advantage.

SI - If successful in Melbourne what are 5 year growth plans for that State and other Australian States?

GM – We actually just plan to focus on this first village for now. We will develop our strategy once we have a better idea as to the long term opportunity.

SI - Will you concentrate on growth in Victoria first before other States are considered?

GM – Victoria is our initial front runner, as you need to focus your energies somewhere to get traction, but a site could equally pop up in Queensland or NSW first. Once the first site is underway our plan is just to focus on that before anything else is planned. Thereafter it would make sense to focus our energies in one State for a while.

SI - How will expansion in OZ be funded?

GM – Traditional debt funding from our bankers – ANZ and CBA, and through our strong operating cash flows.

SI - Will RYM consider listing on the ASX sometime in the future?

GM – Yes, this is a real option for us once we have a site established. An ASX listing could be a way to achieve better liquidity for investors and to broaden the base of Australian fund managers in the Ryman shareholder list. That said, we have no plans at this stage and the Board will assess this option when the time is right.

Q & A End.


Disclosure: I own RYM shares in the Share Investor Portfolio


Gordon MacLeod Bio - Supplied by Ryman

Gordon MacLeod is the Chief Financial Officer and Company Secretary of Ryman Healthcare Ltd. Gordon is responsible for investor relations, treasury management, planning and budgeting, financial and management reporting, IT and systems development, taxation compliance, aged care billing and insurances. Previously, Gordon was a Corporate Finance Partner of PricewaterhouseCoopers, and was also the Finance Director of a London listed hi-tech engineering company based in Cambridge, England.


About Ryman Healthcare - Various sources including RYM website

Established in Christchurch in 1984, Ryman draws on over 20 years of experience to provide the best possible retirement living options for its residents.

Ryman Healthcare Limited develops, owns and operates integrated retirement villages, resthomes and hospitals for the elderly within New Zealand. Its villages provide a range of retirement living and care options, including independent townhouses and apartments, serviced apartments, and a care centre providing resthome, hospital and dementia level care. As of March 31, 2010, the Company operated 22 operational retirement villages from Auckland to Invercargill and plans to open two new villages every year. The villages are all designed, built and operated by Ryman. Since listing in 1999 the company has increased profits and dividends ten-fold without seeking any fresh capital from shareholders. The company is a six times winner of Best Retirement Village in New Zealand, serves over 4500 elderly New Zealanders, and employs over 2000 staff.

The Company's subsidiaries operate in the aged care sector in New Zealand. Its subsidiaries include Anthony Wilding Retirement Village Limited, Beckenham Courts Retirement Village Limited, Edmund Hillary Retirement Village Limited, Ernest Rutherford Retirement Village Limited, Evelyn Page Retirement Village Limited, Frances Hodgkins Retirement Village Limited, Grace Joel Retirement Village Limited, Jane Mander Retirement Village Limited and Jane Winstone Retirement Village Limited.


Share Investor Q & As

Ecoya's Geoff Ross
Xero's Rod Drury
Mainfreight MD Don Braid
Burger Fuel Director Josef Roberts
Sky City CEO, Nigel Morrison
Sky City Entertainment: CEO Nigel Morrison discusses 2010 HY
Convention Centre proposal interview with Sky City CEO Nigel Morrison


Ryman Healthcare @ Share Investor

Ryman Healthcare: Interview sneak peak
Ryman Healthcare Ltd: Australian Expansion Needs Care
Share Investor Q & A: Reader Questions to Ryman CFO Gordon Macleod
Long Term View: Ryman Healthcare Ltd
Stock of the Week: Ryman Healthcare Ltd
Why did you buy that stock? [Ryman Healthcare]
Long VS Short: Ryman Healthcare Ltd
Time for retirement?

Discuss RYM @ Share Investor Forum

Download RYM Company Reports



c Share Investor 2010

Share Investor's 2015 Stock Picks

Author at beginning of year.

I think I will pick stocks this year and give readers a chance to fill in the blanks yourselves.

Apart from the fact that the NZX 50 is up around 900 points to finish at 5530 today, you would have to say the index shows our market has been way overbought and is due for a correction, how much and when is a little harder to define.

That may also not happen, if America keeps on with its wacky ways.

With this in mind here we go.

Fisher and Paykel Healthcare

Quite high at the moment but long term readers will know I've picked this every year since I started this.

Give it a miss at these prices if you want to invest - it will get cheaper. But if your one of those short termers its worth grabbing. Will go north of $6.00.

Sky City Entertainment

This is the year I'm picking for this wonderful stock, it has almost paid for itself in 13 short/long years, divs.

I'm picking it to finally deliver in the last part of 2015. Momentum will see this stock in the high 5s.

The Warehouse Group

I'm picking this stock, because I have a hunch its dec statement to us, the public, will be a good one and its sales figures out in Jan will be more of the same. It is likely that a turn around has come.

Cross fingers.

Mainfreight Ltd

I picked this stock because of its ability to stick to its knitting, get the job done, and bring in the results.

Time after time.

2015 will be an outstanding year for the company.

Contact Energy

2015 will be a good year for Contact.

Although 2015 - 17 will be restrained in terms of demand, their supply will rewarded with historical lows in terms of cost of production.

Management have signalled either buy back, special div or higher divs for now and into the future.

Ryman Healthcare Ltd

This stock amazes me.

While it was languishing in the high 20s that's $1.20 during the financial crises of 2008 - 2011 it hardly rated a mention, I was buying it then (first disclosure).

It was making record profits then.

Now it and its sisters are making headlines once a week, how hot is the property market right now.

This will take off once the most recent profit result is known - this Friday 21 Nov.

Get it while you can.

Auckland Airport

This company is well on the road to earning the big bucks.

It wasn't long ago, 4 years ago, that it was making 100m, now it will do close to twice that.

Ain't going to have any competition, not while I'm or my daughters alive.

I see nothing but growth for this one, get on and fly.

Hallenstein Glasson Holdings

A brief one which I've traded 4x before that goes in cycles the way that it always has.

Management are aware things change - they have been in the clothing biz for over 100 years and know where it at, that is why I don't mind holding. They are a good company.

They are near the bottom once again and by most they appear to be making there way to the top again.

Heartland New Zealand

This one I picked last year @ 80 something cents.

I pick It again next year as it looks set to expand and grow revenue and profit.

Something tells me that this is a dark horse.

A Xero, in the making if you like, except this company makes a profit and has got a clear purpose.

Get it now for big future gains.

NZ Refining

NZ Refining is a cyclical stock and at present its in the low part of the cycle.

1.97 per share is cheap when one considers your buying 2.05 of NTA.

Get in while you can on good long term - 2 plus years - gain.

Trademe Group

If you can get this around $4.00 you could earn almost a buck a share next year.

It looks set to consolidate next reporting season, perhaps a we bit up and grow slightly during 2015.

Not a share I would own for a long time, has no future, but good to get in and out of on its way down to zero.

Team Talk

This one has been on my watchlist for years.

Its on the small-cap index.

Principally because of its dividend, which has been 2x 10c for long as I can remember but has recently come down to 7.5c x 2. The company say it will stay that way all of next year.

The share price has come down by more than the cost of the div making this a good long term bet to take off once it sees an improvement in bus.

Any improvement in the biz would see the div raised.

Air NZ

Just one last one to tempt the weak and perhaps make the very same strong if they hold onto this one to long.

If you can get this at 2.15 per share you should be good for the rest of 2015.

The running costs are going down and patronage is up.

Beautiful!

It will not last forever.


Warning

What not to buy!

At the time of writing this addition 19.12.14 11.30am the stock that I've got to mention is XRO. It is at $15.70 at time of writing and is set to make further slippages in 2015. It reached a high of over $45 and some and is many years away from making a profit - if at all. It has been 6.5 years on the NZX.

Stay away.

Conclusion 

As I said in the brief intro I think the index looks a little shaky.

I see a brief upswing in the new year then a tapering off throughout the year.

But we are talking a new reality, markets aren't going down like they should do.

America is doing things with its dollar that we haven't seen before and suffering the consequences - the market is going up not down.

The economy is lulling itself into a false sense of security, its not letting out the bung, it just continues to stuff it with continued monetary expansion.

O.k, I'll leave it there.

Except to say, they - America - cannot let the bung out, to do so would jeopardize world markets.



* As an addendum, the stocks from  Fisher and Paykel to Hallensteins are stocks in the share investors portfolio and are included because they are the bomb.

The rest are very worthy additions.


An Alternative to that biased, joke that is Sharetrader.


www.shareinvestorforum.com


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c Share Investor 2014, 2015

The Share Investor Portfolio: Where it is today

Time to check in and see if I have refashioned, refocused, retooled or just left things the way they are with the Share Investor Portfolio.

Well, I have just revised the portfolio by adding one thing, and that is MOA.NZ. With that I have bought just 1000 at 55c. Of course they are now down to 41c, any minute now they are going to do a Lazarus like recovery and head on way past $1. That is the theory, we will soon see the practice.

I have noticed that MFT.NZ has really packed on the pounds recently putting on 45c to finish closing at $14.85. A real little rocker that finished on a high on Friday and looks set to continue. I wouldn't sell it at any price, look to see this share setting new records over the years. Management don't set well with dividing up share prices for the hell of it so looks like its headed up to Xero territory, and to stay there.

Another share doing well has been FPH.NZ , at around $4.68 it looks like it will double in value over the coming 5 years as its revenue tops 1 Billion - could be a race between Fishers and Mainfreight to see who reaches silly heights, love the market.

SKC.NZ isn't doing well at the moment, I thinks its started this year about where it is now - but be warned when news comes out about the new gaming features the company is going to bring to the market and how well they do - the share is going to take off. It owes me very little.

RYM.NZ is another great , fantastic, splendid share. Cant really say much more about this, growing BIG.

AIA.NZ has taken a wee turn for the worse but owes me very little, while CEN.NZ has returned about 30% but has yet to take off - National winning the election will take care of that.

And the WHS.NZ is doing what it always does, lurching along from one profit warning to another.

One truly good company, HLG.NZ is down about 25% bought 10000 last year for $4.42 is struggling and even though it has recently came out with all looks well, seems to be marking time to the actual profit announcement in September.

Well, thats it really, remember, think and do your OWN research before plucking down the dollars. It is only money but its your money!


Share Investor's 2014 Stock Picks

	Toughen Up: What I've Learned About Surviving Tough Times byMichael Hill
	Think Bigger: How to Raise Your Expectations and Achieve Everythingby Michael Hill

c Share Investor 2014

Share Investor's 2014 Stock Picks

2013 has been another great year for stocks rising almost 15% to roughly 4700 on the index so forget about what might happen and suspend belief for a nanosecond and take a squiz at what I have for you.

The stock picking monkey has been very busy this year with a few surprises.

This year the monkey had a really hard go at it but managed to get through quite a few interesting picks.

This year I have picked stocks based on nothing except value of the stock based on where I think it will go.

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

This year I have sold some stocks, PPL, HLG, MHI, BGR and others, because I had to - My ex-wife said so - and some of them had run their natural course, about $110,000.00.

My picks are primarily based on a long-term view, regardless of the current short to medium term market turmoil and economic uncertainty, I pick a down year for 2014.

NB: Since I think most of my portfolio consist of the best stocks on the New Zealand market, I found it difficult to pick stocks outside my realm of self interest. This year I will give you the individual number of shares I have of each stock.



[RYM.NZX] Ryman Healthcare has got to be the pick of the bunch. One that I have held for at least 6 years I bought this one for $1.97 and it has returned at least 400%. I have 5000.

This had another record year this year of a 22% profit lift on last year of $58.5m.

It is looking good for the short to medium term but could face some hurdles when its housing stock needs modernizing because it is the company that owns the stock.

The big thing of recent weeks is the fact that their foray into Australia looks to have gone better than planned and they are going into the second stage of this development. They are also looking at another site.

This is not a stock that I'm currently buying but new investors could not find a better stock to get into.

Id climb into this one with gay abandon, especially if the Oz experience mirror ours and we find that out in March/April 2004.


[MFT.NZX] Mainfreight Ltd is only the second stock of mine that I deem is worth another glance in 2014.

Mainfreight has had an up and down year in respect of results with Novembers report indicating a profit up 7.7%  at $29.87m but some warnings about various divisions struggling next year.

I am however picking a stellar year for Mainfreight, with revenue up on last year and profits up at least 10% on most divisions. Why do I say this? Simply because of the way Mainfreight is designed for individual success, I am picking 2014 for Mainfreight to finally get things together and for that individual stuff to combine and really make things hot in 2014.

Buy on anything close to $10, with a view to long term gains.



[FPH.NZX] Fisher & Paykel Healthcare Ltd is a stock that I have picked for each stock pick series and here the reason why, well several reasons why it should be in your portfolio picks for next year.

This years profit result, announced mid November was a record at NZ$303.9 million, 14% above the prior comparable period as a result of strong revenue growth in the company’s two major product groups and that is set to continue next year.

The revenue is growing and set to grow further in 2014 and set to double in 5 years - it grew around 15% this year and is set to outstrip that in 2014.

Our dollar certainly cannot stay where it is for 2014, it is set for a big re-ratng because of interest rate hikes.

The product range is huge for 2014, and plenty of funds will be used to produce more for the new year.

Get in at under $4.00.


[SKC.NZX] Sky City Entertainment Group Ltd has had a good 2013, with a  FY 2013 profit at the hands of an excellent CEO who was able to win the Govts (national and local) over their plans for a convention centre and a number of strategies planned and executed to produce pleasing results for shareholders. The share price of the company has not however tracked its increased fortunes and has been trading in 2013 from $3.50 to just over $4.50.

It has also won the Govt over in Adelaide with a major revamp of that particular centre. with lower taxes as part of the deal.

This and the fact that all of their assets are competition free mean this one is probably the buy of all my picks this year.

Its had a profit downgrade on the 17th of  December but these things happen it will shine again - spectacularly .

At $3.60 this share is cheap, get it while you can.


[CNU.NZX] Chorus Ltd. This may seem an anathema to my usual picks and it is, it is purely a spectator play because I see it as very cheap at $1.45 and worth releasing at about $2.20-$2.30.

Most notably its asset backing is $1.21, so that leaves 24c for intangibles and that looks very cheap at that price.

No matter what the larger market may say about the dividends - and if they come at all watch for another rise - they will come again soon, and any way your not going to be in long enough to know or care about those.

Get them while you can.


[HLG.NZ] Hallensteins Glassons Ltd used to be a company I held for about 5 years until my wife considered it surplus to my requirements any way I made about an additional $4000 from a $2500 outlay. Considered that this had had its day. But wait bad news and its time to go sniffing again.

Hallenstein Glassons has warned investors it expects its first-half net profit to fall by 20 per cent compared to last year. The NZX-listed clothing retailer said it expected to post a net profit of $8 million for the six months ending February 1, a decrease from last year's interim net profit of $10.4m.

There has been the talk of international competition from various websites, tax free, and they may have a point, but this has happened before and Hallensteins has aways managed to counter this and get back margins.

I have done this before with this share and have held it overnight and have held long term, either way you will get your money back.

Buy up to $4.50.


[HNZ.NZX] Heartland Bank New Zealand Ltd has been a bank only since last December and its shares were trading last week at around 85c, what they are trading at now, below their net tangible asset value of 85.2c. Assuming the assets are valued accurately, the shares are therefore relatively cheap.

Profitability is low, sure, but it is improving. In the coming year, it is expecting net profit of $34m to $37m.

As a new bank, Heartland has been given more onerous capital requirements by the Reserve Bank than the established players. Its tier-one capital ratio - basically the equity as a percentage of risk-weighted assets - must exceed 12 per cent, while the requirement for ANZ and Westpac is 6 per cent.
 
They all exceed the minimum by some distance, but Heartland naturally has a little less headroom. Its tier-one capital ratio at balance date was 14.8 per cent, providing a buffer of 2.8 percentage points over the minimum.

You would do well to get them below $1, get them while you can.


[SUM.NZX] Summerset Group Holdings Ltd has a strong development pipeline for future growth. Five villages are currently under construction, including the recently acquired site in Dunedin. Summerset also has three quality land sites in Karaka, Katikati and Hobsonville and is continually evaluating new sites to support the development of further villages based on what is the sheer demand for units.

In 2012, 160 retirement units were completed at four of Summerset’s developing sites –Hastings, Nelson, Dunedin and Warkworth. Summerset now have 1,646 retirement units and 327 care beds.

The company has also purchased two new sites in Auckland: 7.6 hectares of waterfront land in Hobsonville and a prime 3.9 hectare site at Ellerslie. These sites bring their land bank to 1,400 retirement units and more than 400 care beds. The one in Hobsonville should be a cracker, pure waterfront, prime position, plenty of land for decent sized footprint.

This should do what  [RYM.NZX] & [MET.NZ] have done and defy all expectations and take off depending on what they all do come reporting season.

Get them while you can.


                    
Nasdaq

YUM! Brands Inc
[YUM.NASDAQ]



A pick from 2010, 2011,2012, & 2013 Yum ! Brands Inc has consistently grown each and every year and achieved a 40000 th store opening for 2013 and with more tasty growth to come in 2014 and beyond from China & India still make this company a Finger Lickin proposition. It will never be cheaper. China is the BIG growth story for 2014.
 

Conclusion & Outlook for 2014

2014 will be an interesting year for stocks, will they do what they did in 2013, unlikely. What we will have to wait and see is what the USA will do with unwinding there debt - will they,wont they - how China reacts to that and how Europe will do has a major effect on that.

As an investor, you must simply find value in the companies you invest in. Its out there, you just have to do a little research yourself.

You may not find this approach pleasing, if you don't find a broker and put your money with him or her.

These are my picks.


*Just an added footnote. Please feel free to post your own stock picks for 2014. The only requirement is that you say why and declare any financial interest. Post them below at the bottom of this piece or click here.


Disclosure : I own SKC, FPH, MFT, RYM, CNU, HLG, SUM shares in the Share Investor Portfolio.


Share Investor's Annual Stock Picks

Share Investor's 2013 Stock Picks
Share Investor's 2012 Stock Picks
Share Investor's 2011 Stock Picks
Share Investor's 2010 Stock Picks
Share Investor's 2009 Stock Picks
Share Investor's 2008 Stock picks

Broker Picks

Brokers 2013 Stock Picks
Brokers 2012 Stock Picks
Brokers 2011 Stock Picks





c Share Investor 2012, 2013, 2014