Friday, March 18, 2011

Roy Morgan Poll: 17 March 2011


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The Roy Morgan Poll out today shows the national juggernaut continues to steamroll Labour opposition.

This has continued a trend of polls since the 2008 election that have seen support for national remain at around or above 50% support - higher than their vote share for the 2009 election:

The latest New Zealand Roy Morgan Poll shows the Roy Morgan Government Confidence Rating has jumped 19 points to 133.5 with 59.5% (up 10%) of New Zealanders saying New Zealand is ‘heading in the right direction’ compared to 26% (down 9%) that say New Zealand is ‘heading in the wrong direction.’

At the same time support for John Key’s National-led Government is up 1% to 54.5%. Support for Prime Minister Key’s National Party is 52.5% (up 3.5%), the Maori Party 1.5% (down 1.5%), and ACT NZ 0.5% (down 1%).

Support for Opposition Parties is down 1% to 45.5% — Labour Party 32.5% (down 2.5%), Greens 8%, (unchanged), New Zealand First 4% (up 1%), Progressive Party 0.5% (up 0.5%) and others 0.5% (unchanged).

If a National Election were held today the National Party would easily be returned to Government.

It will be difficult for Phil Goff and the Labour Party to win the 2011 Election on November 26 and he must be wondering what he has to do to gain some traction with the public he clearly has little resonance with.

It looks like a bloodbath for Labour come November.


The Roy Morgan Poll -March 17 2011



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Whimp Makes share offers you can refuse

If you are an investor, a seasoned one or a beginner, you have probably heard of the balding, mustachioed weasel Bernard Whimp by now.

Mr Whimp is the man who has been making "low ball" offers for NZX listed shares for a number of years and has been quite successful in his pursuit of less than sophisticated investors who have, believe it or not, accepted substantially less than market value for a range of NZX shares.

He has also been known to fail to pay for a number of share trades.

His latest exploits though are even more daring than previous attempts at duping the elderly and bewildered.

From the NBR and related to Vector Ltd [VCT.NZX] shares the latest ruse by Mr Whimp goes something like this:

"Mr Whimp is offering Vector shareholders $3.20 per share, which is above current market price, but the amount is only payable in instalments over a ten year period and all future dividends are foregone from the time the offer is accepted," Mr Stiassny said.

"There is no certainty that the instalments would be paid and shareholders should be aware they would become unsecured creditors in the event Mr Whimp fails to meet his payment obligations."

While Mr Whimp's "high ball" offers might look ridiculous in the extreme to most of us, he will probably get enough bites to make the whole exercise worthwhile.

There is legislation in progress to put a halt to this otherwise legal practice and clearly it isn't a good look for the market as a whole when this sort of nonsense goes on.

Having said that, it appears to me that any seller to Whimp is doing so of their own free will after of course reading all the material supplied to the prospective seller and then making their judgment based on that.

One can only protect investors so much.


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From Fishpond.co.nz

Every Bastard Says No: The 42 Below Story

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Thursday, March 17, 2011

Share Price Alert: Air New Zealand Ltd



Air New Zealand Ltd [AIR.NZX] shares have been doing the impression of a kamikaze pilot on speed for the first 3 months of 2011.

Even before the profit downgrade yesterday the shares had dropped from a high of $1.54 in January - the highest share price since mid 2008 - to $1.17 the day before the announcement. A loss of just under 25%.

Shares today were up 2c to $1.08 after closing down at an 8 month low of $1.06 yesterday.

The share price drop can be put down to a combination of oil price rises, and earthquakes in New Zealand and Japan but the uncertainty of its short and medium term prospects is making this company unattractive at the moment.

If you are a reader of mine you will know I am not a big fan of Airlines as investments, and I especially dislike the way Air New Zealand is run but I am going to be unbiased in my assessment anyway.

Surely there must be value in the company at these prices right?

Well if you are a long term investor like myself, forget it. Long term Air NZ has returned 6% in total over the 8 years to February 18 2010. This figure is substantially less than that given today's share price is approximately 30% lower than it was when I made my Feb 2010 calculation.

Short term though you could be onto a winner at these prices.

The Rugby World Cup should get the punters using their planes more in the first half of financial 2012 and they might be able to raise prices to recoup oil cost pressures over the rest of 2011.

After that things start to look a little shakey.

The Japanese, who are big customers of AIRs, may decide to hunker down at home instead of coming down here and the entire town of Christchurch, around 8% of our population, will not be flying anytime soon.

Oil prices may also outstrip the ability of the airline to raise prices further and not affect their patronage.

Just too many variables for a business for my liking!

You may see some more share price pressure if the situation in Japan has longer lasting effects than first thought, so some patience for a further fall might see you get shares under a dollar.

Buy on further weakness for a short term gain.


Share Price Alert

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Download AIR Company Reports

From Fishpond.co.nz

Every Bastard Says No: The 42 Below Story

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Tuesday, March 15, 2011

Auckland Council in conflict of interest furore over Casino Development

If I may be slightly political for a moment for this post - I hardly ever am (yeah right!)

So Mike Lee and his lefty cronies on the Auckland Council want to put the kibosh on a convention centre and development by Sky City Entertainment Group Ltd [SKC.NZX] where they will spend more than $10 million of shareholder money improving streets around their complex.

You would have to ask yourself why Mike and his mates would want to stall the development of a business that provides millions in rates and employs thousands and would employ more with an approved development.

The obvious one that sticks out like a hammer and sickle on a red flag is that the Auckland Council is inherently left and aligned to the Labour Party and they hate development, especially that of a casino.

We wont look at that here though.

The most relevant reason for Mike Lee and his council denying Sky City the right to develop their land and business is that Auckland City Council have a proposal of their own to develop a Council owned, operated and funded convention centre that competes directly with the Sky City development. This is of course public knowledge but wasn't brought up by councilors at planning meetings for the Sky City development or reported in the media over the last few days.

This means that the Auckland ratepayer would fund the bulk of the convention centres development and ongoing running costs.

The cost is in the multi 10s of millions of dollars and the ratepayer will be saddled with debt for generations as convention centres do not make money. Councilors will tell you otherwise but there is no evidence for this at all:

From my peice last year on the Sky City Convention Centre:

"The center was promised to bring out-of-towners who stayed in hotels and spent money," said Heywood Sanders of the University of Texas at San Antonio, who studies the performance of convention centers and is a longtime critic of such publicly financed projects. "They routinely overpromise, and they never do what they're supposed to do. The question is how badly they perform. Putting in a hotel is no guarantee that it will improve the center's performance."

Washington Post: Heywood Sanders of the University of Texas at San Antonio - Researcher of Convention Centre performance.

Ongoing costs will be clearly crippling to Auckland city ratepayers.

Councilors at least need to declare their conflict of interest over this one and decisions being made over the Sky City Convention Centre proposal must be and must also been seen to be seperate from decisions being made over the councils own proposal.

It is not clear at all as to whether individuals on council are making decisions over both proposals and this is obviously an unacceptable practice if it is happening.


Disc I own SKC shares in the Share Investor Portfolio


Sky City Convention Centre @ Share Investor

Share Investor discusses Convention Centre proposal with CEO Nigel Morrison
Sky City Convention Centre Expansion a Money Loser: Part Two
Sky City Convention Centre Expansion a Money loser
SKC Convention Centre power-point slide illustrations & SKC submission to Auckland City Council

Sky City Entertainment Group @ Share Investor


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Failed Sky City bid for Christchurch Casino good news for Shareholders
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Share Investor Q & A: Sky City CEO, Nigel Morrison
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Sky City Convention Centre Expansion a Money Loser: Part Two
Sky City Convention Centre Expansion a Money loser
Sky City Entertainment Group Ltd: Download full Company analysis
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Sky City Entertainment 2009 Interim Result Preamble
2008 Sky City profit analysis
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Sky City Casino 2007 HY Profit


Discuss SKC @ Share Investor Forum
Download SKC Company Reports

Recommended Amazon Reading

The Intelligent Investor: The Definitive Book on Value Investing. A    Book of Practical Counsel (Revised Edition)
The Intelligent Investor: The Definitive Book on Value Investing. A Book of Practical Counsel (Revised Edition) by Benjamin Graham
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c Share Investor 2011