Tuesday, August 21, 2007

Watch for Dead Cats Bouncing

Image result for dead cat bounce

It seems global markets have all of a sudden forgotten that they have plunged over the last few weeks. At the best of times share market psychology is difficult to come to grips with but we appear to have a patient with bi-polar disorder here. Mr Market moves in mysterious ways.

Gains have carried over two days now and credit woes, crunches and squeezes seem to be distant memories for investors.

What has changed to give investors enthusiasm and verve to go out and spend cash on equities again?

Nothing.

As a whole, investors are still unclear as to the extent of the credit driven market woes and any reversal of the previous selling of stocks seems premature until the full picture develops.

I don't necessarily think that it is a mistake to buy beaten down stocks but it seems a little odd to me that the market as a whole seems to by discounting the last two weeks all of a sudden like nothing has happened.

It is likely that volatility and downwards pressure will continue on global markets until we know more about the reasons for recent falls.

Watch out for that dead cat bounce.




c Share Investor 2007

Monday, August 20, 2007

Sky City Entertainment Group Ltd: 2007 Full Year Profit Commentary

Sky City Entertainment Group Ltd [SKC.NZX] reported on Monday an as expected 18 per cent fall in annual profit.Sky City made a net profit of $NZ98.4 million in the year ended June 30, compared with a $120.1 million profit the year before. Revenue was up just over 6% to $815 M.

The company said in May that it was comfortable with analysts' estimates for an annual profit around $98 million. Future guidance for profit growth in the next year is estimated at 10-12%.

Sky City Auckland Casino Ebitda dipped slightly, Adelaide was down by nearly 10% and Darwin continued to steam ahead with a nearly 7% rise while the dairy farming led boom down in Hamilton lead to an increase in Ebitda by over 12%. Holy cow!

There is little detailed information as yet about promised updates to the market about disposal of under performing assets such as the cinema division and Adelaide Casino. These two assets have been named for possible sale but only if offers exceed the company's "internal view of value". So we know nothing more here than we did 3 months ago when asset sales were initially signaled by management. Today's announcement was supposed to bring detail of which assets would be disposed of.

There has however been an indication of interest by some parties in the Adelaide Casino and speculation during the last few months over various cinema companies kicking the tyres over at Sky City Cinemas.

As indicated here a few months back, any asset divestment proceeds will either be used to reduce debt and/or be returned to shareholders. The appropriate capital management strategy will depend on assets divested and the level of proceeds realised.

There was also mention of the overblown accusations by TVNZ of corruption at Sky City Casinos and managements counter of effective structures within the company, while not perfect , were able to ameliorate any dodgy practice that individuals might try from time to time.

Elmar Toime, executive director and acting CEO seems focused on cost cutting and efficiency of the business, something that he did well when he cut costs at the former bloated State Postal provider, NZ Post in the 1990s.

While management are looking for a replacement for the dear(read expensive)departed Evan Davies , in my humble opinion Toime looks good to get his shoes under the big desk.

A dividend of 12c has been declared.

The markets early reaction to the news today sent the share price up 17c to $4.37. Sky City Casino(SKC) are currently at $4.21 3.25pm August 20 NZ time.


Disc: I own SKC shares in the Share Investor Portfolio


Sky City Convention Centre @ Share Investor

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Sky City Convention Centre Expansion a Money Loser: Part Two
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SKC Convention Centre power-point slide illustrations & SKC submission to Auckland City Council

Sky City Entertainment Group @ Share Investor


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c Share Investor 2007

Sunday, August 19, 2007

Sky City Casino: Setting the record straight over Corruption Accusations

With Television New Zealand making accusations of "loan sharking" within Auckland's Sky City Casino complex, motivated by the deep left within the Green Party, for most of last week, it seems the truth, as reported by them maybe somewhat further from the truth.

Accusations were made that Sky City Staff were "skimming jackpots", "prize fixing" and heavily involved in loan sharking seem the views of a "journalists" over active imagination if the following response by Sky City to the accusations from TVNZ are anything to go by:

SKYCITY Sets the Record Straight
TV One news has made allegations this week regarding the integrity of SKYCITY’s operations and its staff with particular reference to alleged loan sharking at SKYCITY Auckland.
SKYCITY has continually provided comment and facts to TVNZ which they have chosen to ignore.
SKYCITY takes any allegations seriously and takes action immediately.
In accordance with these investigations, and advice of the DIA, a person was suspended from the SKYCITY property on Tuesday. This person was not a member of SKYCITY staff as stated by TVNZ. SKYCITY is unable to provide further information on this person due to privacy.
SKYCITY has no evidence of any improper dealings by our staff or in our VIP spaces which are continually monitored by security and surveillance.
SKYCITY is continuing its investigations and has zero tolerance for impropriety of any nature by staff. If TVNZ or any party has facts on which SKYCITY can act, then we encourage them to tell us directly.
SKYCITY wishes to inform all media of the information previously shared by SKYCITY Auckland’s General Manager, David Christian, with TVNZ:
SKYCITY has extensive polices and leading-edge technology in place to identify and manage undesirable behaviour. For example:
• Extensive surveillance systems are in place and are monitored at all times by highly trained personnel.• There are close working relationships with the DIA, who are on site, and with the NZ Police.• Information is regularly shared with relevant parties - DIA, NZ Police.• Suspicious activity is investigated by SKYCITY’s security and surveillance department and if appropriate reported to the relevant agency.• Suspicions of loan sharking are always investigated. This can lead to exclusion or trespass.• Training programmes are in place to support our staff in dealing with undesirable behaviour. Security personnel receive additional specialised training.• SKYCITY has a professionally skilled team of harm minimisation and host responsibility staff.• Gambling helplines are promoted throughout our casinos.• SKYCITY relies on information from our own investigators, staff, customers, the NZ Police, problem gambling service providers and the government inspectors operating on site. If TVNZ or its viewers have any information relating to undesirable behaviour, then we encourage them to speak to us or the DIA directly and we will take any appropriate action immediately."
SKYCITY reiterates that the casino industry in New Zealand is strictly regulated and supervised by DIA and the Gambling Commission.
SKYCITY respects its license to operate and values its reputation for being a responsible gambling provider - a strong commitment to the safety and security of our staff, visitors and customers underpins all of SKYCITY’s operations at all times.
(16 August 2007, Sky City corporate website)

It seems to this market watcher that hysteria has been whipped up by TVNZ just to fill some dead airtime. The TVNZ propaganda machine is an over the street neighbour to Sky City and there are rumours circulating that many staffers from the State Broadcaster have lost considerable sums having a flutter during long lunch breaks and boozy late night sessions after work. It must be remembered that it wasn't long ago that employees of TVNZ were caught out using TVNZ credits cards to rack up huge food and beverage bills at expensive eateries around the town.

Clearly there is a small story here but as is often the case a so-called journalist blows it out of proportion just to make a name. Dont let the facts get in the way of a good story huh?!

It seemed fit to re-print the Sky City reply as I have not seen a printed response to TVNZs muck raking.

These things should be cleared up before concentrating on the real, factual story, that is the Full Year 2007 profit announcement tomorrow 20 August(NZ time)

Until then.


c Share Investor 2007

Disclosure: I own Sky City Casino Shares

Saturday, August 18, 2007

Pointing Fingers in the Playground

Growing up in small town, Hastings, New Zealand during the 1970s I was an average boy from a poor family, in spirit and financial acuity, who didn't really aspire to anything above my position in life. Sure, I dreamed of getting out of the life I found myself born to and found an inspiration in my otherwise hopeless Father, in that he worked hard and did his best to provide for his family. I inherited his resounding spirit of working hard for a living and along with my Mothers ability to make my Dads meager wages stretch further than Jonah Lomu could run, I have managed to do quite well in life.

It is often ,as one starts out in life, that ones social outlook on life is formed. The fact you might be born into a certain family background and have particular experiences because of that background can shape how one makes decisions latter on in life and ones general view on how things should be. A political view if you like.

Hopefully one is not stuck in that mold for life though. As an individual grows he becomes more independent and wants to make "his own way in life".

I remember, especially growing up during my High School Years at Hastings Boys, how if you had a talent, especially an academic one, that it was derided and considered negative if you did well at it.

I excelled at an early age in Economics. My home life afforded me the ability to work out that if you could understand how to work hard and save your money, you would be able to get yourself out of the working class background that you found yourself born to.

My school mates however found that continuing to come first in class in Economics wasn't something that was positive at all, in fact I was given hell for excelling at a subject that I loved and understood very well. Collectively bullying an individuals success was the programmed response. Welcome to the New Zealand Socialist grounded, knocking machine!

In places like the United States achieving such a feat was celebrated and you were set apart from your peers because you had worked hard and done well. In New Zealand the Socialist knocking machine didn't allow for you to stand out from your peers for doing well. Those that did better than the average were always treated by others badly because clearly there was a pervading jealousy that came out in them as their efforts never quite got them there.

The answer was to pull achievers down to their level.

Nothing much has changed today. The great Kiwi Socialist knocking machine has reared its ugly head in the New Zealand Parliament. Ever since John Key popped his head above the parapet and became leader of the Opposition his success in life has become the stuff of derision , envy, jealousy and avarice from the Labour Government.

At no time has this vindictive, nasty,cancerous attitude towards individual success been more apparent than during the last few weeks in the house.

Helen Clarke and her "House-Yard" bullies have been braying and knocking at John Key simply because of the achievements he has made during his very distinguished career in the finance industry. He has educated himself at University, worked hard in his chosen career and made allot of money. Something to be looked up to one would think?

Not in this country and certainly not by those in the Labour Government.

John Key grew up in from very humble beginnings coming from a poor background and working hard to achieve in life.

His position therefore in a political party in opposition to a Socialist, collective, Labour Government is an anathema to Helen Clarke and her comrades. Ironically Clarke is from a privileged farming background and learnt her socialist ways from the theories expounded from communist dictum's read at Auckland University. John Key grew up with a socialist background and managed to break free from the socialist collectivism that restrains individuals from being themselves. Helen Clarke and Micheal Cullen learnt at Auckland University in the 1970s to do the very opposite.

It is from this perspective of a "everyone is equal" collective ideal and theory learnt at University that Labour has attacked John Keys individual achievements in life and every piece of policy and thinking coming from Labour sets out to stifle individuality, achievement and the possibility that ones endeavours could put them in the spotlight because they have worked hard and their efforts have put them in a position that should be admired rather than derided and chided by those either too lazy or not talented enough to want to stand out from the crowd.

In fact mediocrity and laziness is rewarded by Labour. Two glaring examples , High School pupils get passes in subjects at school for picking up litter and unmarried mothers get welfare from taxpayers to have children.

Incidentally in Labours efforts to fashion New Zealanders as "equal" and have "equal opportunity of outcomes" the same collective missives don't apply to those that deem themselves worthy that they know best, have New Zealanders best interests at heart and are doing for the collective Kiwi nation what is best for them. That is Socialism at work though. The anointed deem themselves as above the very collective Socialist ideal that they wish for us and the epitome of this is evidenced in the arrogant and high handed manner of Helen Clarke in her attitude that would have her careen dangerously through a country town at high speed in her Limousine but would have an average member of the public lose their license and end up in court and Clarke seeing nothing wrong with that scenario at all. Telling lies to cover up what really happened was the means to make this episode look more palatable to the proletariat of course.

The bullying of John Key and his background and life achievements, in and outside the house, from the likes of Helen Clarke, Micheal Cullen, Trevor Mallard and Phil Goff reeks of envy and jealousy of the kind children would have when they see a child in the playground with a new bike. Rather than a base attitude that would have the collective playground pointing the finger at the individual on the new bike and making fun the collective should be asking themselves individually what one must do to get a shiny new bike for themselves !

What we are seeing in action at present is that John Key is a threat to Labours very core belief that the way for society to progress is for us all to move forward as a group, no one putting their head up , nobody really excelling. Key is a figure of success from a poor background that the majority of the Labour government have not experienced themselves and only read about in books at University.

He has managed, through hard work and obvious talent, to break away. John Key embodies everything that Labour hate. Individualism, capitalism, hard work and ambition to do better and most of all to be rewarded for doing so and they know this trait is latent in every individual .

John Key and successful individuals like him are role models to look up to rather than deride and be the butt of jealousy, envy and pure vindictive Socialist nastiness. The promise that he shows and the threat that he poses to the ideals and Socialist Fauvism that the Labour Government are wedded to, make him the target of their scorn. He encapsulates all that Labour believe should discouraged in society; a good role model to look up to , aspire to be like and be proud to lead a country towards social, moral and financial prosperity through individual pursuit and reward.

In him they can see the individual they would have liked to have been themselves and the possibility of him as Prime Minister in 2008 have them apoplectic with rage for they see in him their collective grip of a South Pacific Socialist Republic of Aotearoa slipping away day by day.

That is Labours agenda for us should they get another 3 years.

The alternative, while not perfect, is the possibility that New Zealanders may finally be free to make decisions for themselves, be responsible for their own lives and most importantly be rewarded for their efforts and achievements.

c Darren Rickard 2007