Share Investor

Friday, February 27, 2009

Dipshit of the Week: Rob Fyfe

We really have a doozy this week and I am hopping mad.

CEO of failing Kiwi airline Air New Zealand, Rob Fyfe has been meddling in politics this time, giving financial advice to John Key about tax cuts.

The package is solely aimed at middle and high-income Kiwis, and Mr Fyfe says that won't help save jobs in any sector.

"You need to target your initiatives into the areas you get the best bang for your buck," says Mr Fyfe.

Fyfe wants the money to go to those who "would spend it" not those who earned it in the first place-Labour agrees of course.

This A-Grade, economy class knuckle dragger thinks our long awaited tax cuts should be ditched!

Kiwis seem to forget it is because the previous Labour Government doled out more than 1 billion of taxpayer moola to failed companies like Air New Zealand and free money to students, working for families, etc, etc that we didn't get tax cuts much earlier.

Air NZ even boasts that they still have $ 1.4 billion dollars in the bank.

It is our money!

This brain dead socialist wants taxpaying workers to forgo getting their money back just so he and other Government knukkle draggers can play Airport 2009 with our money?

Fuck off back to Stalingrad Fyfe.

Previous Dipshits

Greenpeace

Bob Harvey

Joris De Bres

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.

Recent Share Investor Reading

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.

More Banking Madness @ Shareinvestor

Westpac: I'm Thinking of Returning

ASB Bank: Customer "Service"

Bryce the Banker: The Final Insult
Banks not participating in Recession
Bank Guarantees: Time for banks to return the favour
The Return of Bryce
Banking Madness!

Discuss this topic @ Share Investor Forum

c Share Investor 2009

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.