My Thoughts on 2017 and What 2018 May Bring

Well you know after 10 years of writing this blog one thing is common.

You just don't know with any certainty what is going to happen the next year, month, week and day and hour if you ask me.

But let me be specific - for once.

2017 has been a good year for Share Investors Portfolio. It has added around $175,000.00 excluding Divs and for the first time has been valued at way over $1 million dollars - when you include all the dividends returned thus far. 

My attempt at trading shares have been spectacular in various shapes and sizes.

My biggest regret also happens to be my biggest success. Fisher and Paykel Healthcare.

It rallied something like 60% this year and my regret is sadly not buying double what I actually bought at the beginning of 2012.

I havent lost one dollar, as opposed to other years in the past.

The market is at 8398 for the year and I have no dought it will test the 10000 mark next year as the tax cuts in America start to flow through in the 2019 calendar year.

It is looking spectacular on our market and especially European markets as they shake the last vestiges of the end of the GFC. 

It stands to reason that if inflation and interest rates stay low your going to find markets continuing to take a vast amount of the populations moola.

But you could start to see that change should there be a sharp upwards trend in either oil or interest rates.

Then there is debt - all sorts of debt but especially in this country where we recently passed the one Trillion dollar mark in residential housing values - a great percentage of that one Trillion is debt - and you have to eventually pay it back.

And that just little old NZ, a country with a whisker away from 5 million people!

There are manifold problems brewing in the private sector debt all over the world  - watch out.

And...happy trading and holding of course.


www.shareinvestorforum.com




 c Share Investor 2017

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 Portfolio: Value @ 13 May 2013

The Share Investor Portfolio  is well up on the previous posting made a couple of weeks ago.  

The amount of dividends is zero as they are now used for something else so wont be reported here. 

There are also approx $60,000.00 in tax credits earned from the portfolio since it began in late 2002.

My NZX and ASX Portfolio $226,402.72 (76.43%)$296,216.28

New Zealand Securities

as at 16:45:37, Monday 13 May, 2013 (NZT)

Stock			Quantity	Total cost	Market price	Market value	Change	%
		AIA	5,000	$6,291.65 DR	$3.175	$15,875.00	$9,583.35	152.32%
		ASBPB	10,000	$6,607.00 DR	$0.770	$7,700.00	$1,093.00	16.54%
		BGR	3,000	$1,598.85 DR	$2.530	$7,590.00	$5,991.15	374.72%
		CEN	9,200	$44,892.00 DR	$5.520	$50,784.00	$5,892.00	13.12%
		FBU	1,000	$6,318.00 DR	$8.560	$8,560.00	$2,242.00	35.49%
		FPH	20,000	$41,816.50 DR	$2.730	$54,600.00	$12,783.50	30.57%
		FRE	8,000	$18,890.52 DR	$4.470	$35,760.00	$16,869.48	89.30%
		HLG	1,000	$1,156.21 DR	$5.650	$5,650.00	$4,493.79	388.67%
		MFT	5,000	$26,676.75 DR	$10.600	$53,000.00	$26,323.25	98.67%
		MHI	10,000	$5,920.06 DR	$1.420	$14,200.00	$8,279.94	139.86%
		PPL	5,000	$11,843.00 DR	$1.120	$5,600.00	$6,243.00	52.71%
		RYM	5,000	$8,553.74 DR	$6.220	$31,100.00	$22,546.26	263.58%
		SKC	37,100	$62,774.00 DR	$4.500	$166,950.00	$104,176.00	165.95%
		WHS	15,000	$52,878.00 DR	$4.350	$65,250.00	$12,372.00	23.40%
76.43% Total cost Market value Change $296,216.28 DR $522,619.00 $226,402.72

Recommended Amazon Reading


The Intelligent Investor: The Definitive Book on Value Investing. A Book of Practical Counsel (Revised Edition) by Benjamin Graham
Buy new: $14.95 / Used from: $6.99
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Why did you buy that stock? [Fletcher Building Ltd]

As the series Why did you buy that stock? comes to an end-unless I add a new company to the Share Investor Portfolio- the last company in the portfolio I will look at is blue chip darling Fletcher Building Ltd [FBU.NZ]

I have a small holding of 1000 shares which I bought for NZ$9.75 in November 2006 and it has provided me with a gross dividend income of approximately $1400 in total. FBU shares last traded at $7.20 as I write this.


Why did you buy that stock?

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 Group]
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]



OK Darren, you are not usually too concerned about these temporary market driven figures so whats up?

Well I'm trying to make a point actually.

The fact that I have "lost" $1150 approx since my purchase doesn't concern me. It is a temporary thing and it is due to a number of factors.

Most NZX stocks have been punished by weak overseas markets and fallout from the Sub prime mess and Fletchers is no exception.

Building stocks like Fletchers are also cyclical and the company is facing the bottom of a domestic building slump, in Australasia and in the United States-their products are getting harder to shift.

All these things will inevitably change for the better, and if you are a long term investor don't sell. If you are a short termer, you might as well just bugger off now because this piece ain't for you.

The main impetus for me to invest in Fletcher Building was its pedigree for good management.

The company has existed in one form or another for more than 100 years and has grown from humble beginnings, to today developing into a very large multinational building supplier and manufacturer, retailer and commercial and residential builder in its own right.

Throughout that time it has been well manged and the current CEO Jonathon ling has done a good job so far, with the notable exception of buying the over priced Formica Corporation last year-we can all make mistakes.

As I pointed out above the building sector is highly cyclical and clearly good management is very important. So far Jonathon and his team have managed to weather the current economic storm well.

The previous CEO managed to structure the company in such a way as to diversify the company's revenue streams, so as to make the cyclical ups and downs less, well ,up and down.

Ling looks set to continue this in the future.

More revenue has come from markets outside New Zealand and Australia, with an increase in sales in Asia and America.

Good forward planning has also given Fletcher Building a good backlog of commercial building work in New Zealand and this has clearly offset the downturn in the domestic housing market, in which Fletcher's is the biggest player.

To go back to the price of the share again, when I bought at $9.75, the 60c odd per share in gross dividends represented an approximate 6 % return, which was a better return than the cash rate at the time and of course buying shares in a company that will grow profit means there is going to be a higher capital value for that company eventually.

So value for money and good returns was a compelling tick of the box for me to plunk down my hard earned.

Warren Buffett rears his bald, Coke bottle glasses adorned head again in the last column in this series.

The reason is because Fletcher Building, in my not so humble opinion, has a "economic moat" in some of the sectors in which it operates, it is:

• New Zealand's sole manufacturer of gypsum plasterboard;
• a major participant in the New Zealand steel industry;
• a major producer of aggregate, cement and concrete products in Australasia;
• the world's largest manufacturer of decorative surfaces and high pressure laminates;
• a distributor of a wide range of building materials in New Zealand;
• a substantial construction contractor in New Zealand and the South Pacific Islands;
• a major builder of residential homes in New Zealand;
• a major producer of insulation products in Australasia; and
• the world’s largest producer of steel roof tiles.

An economic moat, as coined by Warren Buffett, is an advantage in business, through dominance in the market and/or strong brands that gives the business a competitive edge, that is very difficult to compete against.

Fletcher Building have that competitive edge, they have strong brands and are dominant in the manufacture and distribution of several building materials and have a large enough and efficient enough infrastructure and well managed employees to be able to construct, commercially or domestically.

These sorts of business advantages are especially important in this heavily cyclical industry and management have clearly understood this.

Fletcher Building's strong brands are well known by consumers and the construction industry alike and even Formica Corporation will end up being a positive contribution once the fat has been liposuctioned from the company hierarchy.

So brands and a big competitive advantage were big ticks for me.

I am not adding any more new companies to the Share Investor portfolio currently or adding additional shares to those companies that I already hold, but I would be buying more Fletcher Building now if I was.

It is a great long term company and is therefore is a blue chip for a very good reason.


Fletcher Building @ Share Investor

Fletcher House built on hard times
Fletcher Building down tools in the short term
A solid foundation for the future
Fletcher Building raises profit through canny management
Fletcher's got game


Related Reading

Fletcher Building History - Auckland University


 Click here for full Media Release - FBU 2008 Annual Results



c Share Investor 2008

Drinking and Trading

Well, it could be the red wine I had at lunch or the absolute unbridled enthusiasm that I have for the New Zealand economy and our stockmarket, (naaaah it must be the Cab Sav)I just purchased, from my dividend allocation this last quarter, 3000 Fisher & Paykel Healthcare Ltd [FPH.NZX] shares at $2.35 each.

I am a very happy camper about my new addition and this more than doubles my current holding in the company to 5000 shares.

My 2000 allocation was bought at NZ$3.72 per share and cost approx $3.50 when you include dividends and imputation credits.

The obvious reasons to buy was the current weakness in the stock price, the increased revenue of the company and the downwards trajectory of the New Zealand dollar. It hasn't had a good year profit wise but recent results are not materially important because the profit drop is due to the weaker US dollar, in which much of the company's business is done. A stronger US dollar will take care of that.

I also have an order in for 2000 more shares of Michael Hill International Ltd [MHI.NZX] or which 354 have traded at .82 c each.

It is unbelievable how low the P/E of this stock and others is/are. At just over 12 for MHI it clearly represents great value for investors considering it is trading off its highs only last year of over NZ$1.20 and they announced a record profit for this last period to Dec 31 2007.

As I have said manifold times over the years, when there is a sale it is worth buying what you like when it is cheaper. Investors would do well to grab their favourite companies during this downturn.

I am still on the prowl for Hallenstein Glasson Holdings Ltd [HLG.NZX] but think it still has further to fall given the tight retail conditions at present and the fact that I have exhausted my dividend cash.

The Share Investor Portfolio is still just in positive territory and currently up by 1.5% net overall. Not a good look when you consider the bulk of the portfolio is around 6 years old but hey considering the rorting the market has been getting it has done well and it will recover given time and more favourable economic conditions.

*It ain't advisable to trade shares after drinking half a bottle of good red. I miscalculated the sum of money I needed in my CMA account . A rider to that of course is if you are used to drinking that much and making financial transactions then go for it. What can I say, I'm a cheap drunk!



Fisher & Paykel Healthcare @ Share Investor

Share Investor's 2011 Stock Picks
Stock of the Week: Fisher & Paykel Healthcare Ltd
Fisher & Paykel Healthcare & the US Dollar
Mondrian Investment Partners take stake in Fisher & Paykel Healthcare
Fisher & Paykel Healthcare: 2010 Full Year Profit rests on Foreign exchange movement
Long Term View: Fisher & Paykel Healthcare
Stock of the Week: Fisher & Paykel Healthcare
Analysis - Fisher & Paykel Healthcare: FY Profit to 31/03/09
Schroder Investment Management takes big Fisher & Paykel Healthcare stake
Long VS Short: Fisher & Paykel Healthcare
Big Fisher & Paykel Healthcare trades a curious taleWhy 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

Discuss FPH @ Share Investor Forum
Download FPH Company Reports





c Share Investor 2008