Conflicting Emotions

I was prompted to write this piece after having a discussion with someone in the real world-offline that is-about this blog, my reasons for writing and how I could possibly write about companies that I have a financial interest in.

What I would argue, is how can you write about a company with any authority and conviction without having some of your own moola on the line.

Of course one of the biggest arguments against writing and having a pecuniary interest in your subject is that your output may be tainted and that of course you have a financial imperative to spin your story to make it positive and fluffy.

That is true of some but you are bound to get caught out eventually if all that you commit to the PC is unmitigated candy floss.

I prefer to write about what is happening in the company from day to day, good or bad.

Of course I may put my own "slant" on things but it is unintentional and is purely my own style of writing.

Once you get to know how I write then I guess you may be able to see right through the crap!

Clearly I bought the companies that I sometimes write about so I do see them as good buys and I am bound to accentuate the positive when things are going well. On the other hand if anything is going wrong, I will be one of the first to point it out.

If anything, when I have a financial interest in my subject I tend to be more critical than if I had no money invested. My passion for the subject allows me to explore the negative aspects of a company even if individuals reading it get the wrong idea and perhaps decide they wouldn't want to buy shares in a company because I may have have written something disparaging about it.

Every company goes through bad patches and I will talk about those as well as the good times, I will leave it up to broking houses, brokers and some mainstream commentators to give the market the spin.

In the end it is up to the reader and individual investor to accept or reject the screeds of comment about some companies and make up their own mind.


c Share Investor 2007

Wednesday Political Soup: Edition 3

Two Time Loser

Last week saw the Labour Party chief finger wagger Steve Maharey announce that he wasn't going to run for the 2008 Election but take up the offer by Massey University for the position of Vice Chancellor.

He was previously a student, then a lecturer at the University and after nearly 18 years in Parliament has never held a productive job in the private market sector in his life.

A perfect candidate for the Labour Party of course but both Labour and Massey University will be losers. Losers because Labour need an effective smarmy politico to push more nut case lefty social reforms and Massey are big losers because they are lumbered with a collectivist who will want to push the same sorts of "Labour Like" Socialist reforms on campus.

The only winners will be the New Zealand public who no longer have to put up with this control freak who was behind one of this countries biggest attacks on the family, the anti smacking law, that was passed earlier this year.


Say what?

Dillousional Labour MP
Darien Fenton.

From the department of silly walks and departmental office of equidistant paper clips comes news this week that Labour wants to outlaw working over 40 hours per week.

That is, not just lowering the working week and allowing workers overtime rates after that but making it illegal to work more than 40 hours!

State worshiper and freedom hater, Labour MP Darien Fenton says, "employees currently work too hard". She says the grind of long hours at the office is, "causing too much stress".

Surely individuals are big enough and ugly enough to decide whether they want to work or not eh Darien?

No, not Ms Fenton, a lifelong union "advocate" and succubus of the working man.

Quite apart from the stupidity of Fenton's idea, the chaos that it would cause employers , employees and the economy would be horrendous and would be vast and far reaching.

Employees would have to apply for state assistance to provide additional income and employers would have to find extra imaginary employees to fill the vacuum left.

It fits the Socialist argument that everyone should be equal though, and that of course extends to income, where Labour's bright idea for a 40 hr week would be yet another tool to achieve that end.

France tried the 35 hr week and it nearly sunk their economy. They are of course now trying to move away from that sort of nonsense.


Let them eat Cake


"A lie told often enough becomes truth" Lenin

Tax cuts are on the agenda again this week.

Yes Micheal "Fiscal Drag" Cullen has been making excuses again in Parliament as to why he wont give back the money he has stolen in high taxes to those that earned the money in the first place.

This quote may help out readers of this column:

"The way to crush the bourgeoisie is to grind them between the millstones of taxation and inflation" Lenin

Replace bourgeoisie with middle classes and you get what Cullen and Helen Clark are doing to New Zealand's new proletariat.

Nanny State worshiper Helen Clark is also a disciple of Lenin and seems intent on grinding the masses to a lifeless pulp or until most of them leave to live in Australia.

Cullen and Clark are not about to relinquish the control that they have over the hapless middle class that comes with high taxes.

Any "tax relief" in the grab for control next election year will come in the from of State sanctioned or controlled benefits, like the "working for families" welfare package and bribes that have some sort of State apparatus attached to them for absence of the State means no control over the people:"When there is state there can be no freedom, but when there is freedom there will be no state" Lenin



PC Banging


Almost the end of a Kiwi institution this Guy Fawkes Day when a multitude of restrictions come into use over the sale and restriction of fireworks.

Sure, fireworks are dangerous but they are also fun and the labeling last year by David Benson "Tennis Ball" Pope of Kiwis who like to have a little fun with fireworks as "naughty boys and girls" and if they don't behave public use of fireworks will be made illegal is more than a little over the top when one considers what Mr Pope used to do with school pupils in his days as a teacher in Tauranga.

State sanctioned hand wringing will be De rigour again this year and it is possible that State run firework displays will be sanctioned by the anointed should New Zealand have the misfortune of morons having them elected again in 2008.





c Darren Rickard 2007

The Warehouse: Outcomes of Commerce Commision Decision

The Warehouse Group [WHS.NZ]watchers will know that the appeal case of Supermarket operators Foodstuffs and Woolworth's being allowed to bid for the company started yesterday in front of the Commerce Commission in the High Court at Wellington, after a decision barring either from taking over discount chain The Warehouse was brought down in June.

You will also know that the possible outcome of a Commerce Commission decision is probably going to be far from clear cut and is unlikely to provide investors or speculators with a clear focus on which to base any further investment.

My intention here is to outline what decisions the Commerce Commission possibly going make because it just isn't clear which way the cash register will open. It could go either way, with or without conditions but with the added confusion of The Warehouse itself being involved in the appeal.

What I would like to point out are the possible permutations that any decision by the Commerce Commission might have for the parties involved and investors in The Warehouse.

If the decision goes the way of both Foodstuffs and Woolworths Australia [WOW.ASX] being allowed to bid for the Warehouse then clearly this will be the best outcome for investors as there will be a fierce bidding war in which Woolworth's is likely to be the winner because its pockets are deeper than Warren Buffett, Bill Gates and that Mexican Billionaire who just made the top of the B club, combined.

Also with a open yes decision by the Commission it may leave the possibility of either Foodstuffs or Woollies partnering with Stephen Tindall to buy the company.

A no decision for both would of course lead to another appeal and would also leave the aisle open for Stephen Tindall, the majority owner of the Warehouse, to reignite his bid to launch a buyback of the company in conjunction with a private equity player or perhaps a new grocery entrant.

Woolworth's could be allowed to buy The Warehouse simply because its market share is significantly smaller than Foodstuffs.

Issues involved over domination of retail market segments should any of these decisions become reality may also rear its head. Selling of conflicting parts of any merged business that may cause competition issues may also be part of a Commerce Commission decision.

Whatever the outcome, the decision by the Commerce Commission is going to be a difficult one for them to make and is going to take a long time.

Since the sitting began on Tuesday 23 October the market has given the share price a boost by 20c to $5.65 today.


Disclosure: I own WHS shares


The Warehouse Group @ Share Investor

Long Term View: The Warehouse Group Ltd
Share Investor Short: Warehouse Group yield worth a look
The Warehouse Group: 2010 Interim Profit Review
The Warehouse: Big Brands, Big Opportunities
Warehouse strike opportunity to buy
Long Term Play: The Warehouse Group
Share Investor Short: Warehouse Group yield worth a second look
Woolworths supermarket consolidation an indicator of a move on the Warehouse?
Stock of the Week: The Warehouse Group
Warehouse 2009 interim profit a key economic indicator
When will The Warehouse bidders make their move?
Long vs Short: The Warehouse Group
Warehouse bidders ready to lay money down
The Warehouse set to cut lose "extra" impediment
The Warehouse sale could hinge on "Extra" decision
The case for The Warehouse without a buyer
Foodstuffs take their foot off the gas
Woolworths seek leave to appeal to Supreme Court
Warehouse appeal decision imminent
Warehouse decision a loser for all
Warehouse Court of appeal decision in Commerce Commission's favour
MARKETWATCH: The Warehouse
The Warehouse takeover saga continues
Why did you buy that stock? [The Warehouse]
History of Warehouse takeover players suggest a long winding road
Court of Appeal delays Warehouse bid
The Warehouse set for turbulent 2008
The Warehouse Court of Appeal case lay in "Extras" hands
WHS Court of Appeal case could be dismissed next week
Commerce Commission impacts on the Warehouse bottom line
The Warehouse in play
Outcomes of Commerce Commission decision
The fight for control begins soon

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c Share Investor 2007 & 2009

It was 20 years ago Tomorrow

No not Sergeant Peppers Band but the Great Stock Market Meltdown of 1987.

I didn't follow the Stockmarket 20 years ago. I vaguely recall a news incident at the time but didn't equate it with anything serious.

I was living in Sydney at the time, so the fallout from it wasn't as bad as it was apparently in New Zealand.

My introduction to the Stockmarket came almost exactly 10 years later, when I bought shares in the fast food operator Restaurant Brands Ltd [RBD.NZ]

Since then I have taken a great deal of interest in equities and my 10 years invested in it has taught me much.

Investing in the NZX has given me an appreciation of business, how fear and greed work in financial markets and most of all made money for me.

The biggest lesson that I have learnt is from losing money in a couple of stocks. That hasn't dulled my obsession with the market though.



Craig Heatley (left), and Allan Hawkins
after Rainbow Corporation lists on
the Stock Exchange in the mid 1980s


Unlike some who lost their shirts and more back in 1987 my loss wasn't very large and thousands of Kiwi investors haven't forgotten those heady days and wouldn't touch the sharemarket with a barge poll today.

The New Zealand Sharemarket was one of the worst affected back in 1987 and still hasn't recovered from the hit that it took. Most other global markets have multiplied their values many times in the last 20 years. The US market is now worth more than 5 times what it was worth all those years ago.

True, the NZ Stockmarket is a much more stable and regulated market than it was back in those wild west days but there are still some negative elements that linger today, most notably the insider trading that is done by NZX sanctioned broker firms and management of its listed companies.

Lets hope for a more positive next 20 years. NZX's Mark Weldon is doing a good job so if he straightens the rest of the markets kinks out then we might get somewhere.


Related Share Investor Reading

New Zealand Stockmarket: A History from beginning to present day.
"Mr Market" gets his groove on
A sensible approach to global market volatility
Global Market's dropping and your portfolio
Research, research, research
Watch for dead cats bouncing
Stockmarket Education: How do you buy shares?
Stockmarket Education: What is a Share?


Stockmarket Education

Stockmarket Dictionary
Stockbrokers: What you should know before choosing one
10 Basic questions to ask before investing
How the Stockmarket works
Understanding Risk
Watch Your Risk Tolerance
Stockmarket Education: What is a Share?
What Moves the Stockmarket?
7 Signs of Shareholder Friendly Management
Financial Media For Investors
Dividends in detail



From Fishpond.co.nz - Buy Toughen Up: What I've Learned About Surviving Tough Times



Toughen Up - Fishpond.co.nz


c Share Investor 2007