Monday, June 9, 2008

New Zealand needs an open democracy

During my recent visit to Bangkok, I watched a whole lot more TV, for one reason or another this is a sad fact but I wont go into that here!

While watching various news product from around the world, most of it politics, I was struck by how open and free the United States primaries and the US electoral system were. Where else in the world would two sides of the same political party, the Democrats, would go hammer and tongs for 16 months against each other, throw every filthy piece of dirt, tens of millions of dollars and say the most outrageous things that would be the end of the most stable of friendships in the real world, in the hope that one or other individual would be able to challenge John McCain come November 2008 for the US presidency, in the most powerful open democracy in the world.

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McCain himself was left open to similar scrutiny, his private life stripped bare for all to see, the very marrow at the centre of his soul was open to question.

No matter the politics that one follows or ones own "world view" one cannot deny that politics in America is in a very healthy state, as defined by the process of selection of candidates,not necessarily the quality of the candidates-you only have to look at the poor political and personal records of Hillary and Barry Obama to see the genesis of truth there.

While watching the box I also saw reported other forms of democracy. The brutal, murderous and secretive dictatorship of Robert Mugabe's Zimbabwe, where politics is decided at the point of a gun and more recently through threat of starvation, Thailand's "benevolent dictatorship" or democracy with a bomb strapped to it in the Hamas led Palestine.

Lying somewhere in between those extremes lies the New Zealand democratic system. Sick from the dog wagging the tail, extremist lunatics like the global warming fanatics in the Green Party, the racist propaganda from the Maori Party, the complete nonsense from Winston Peter's and his New Zealand First Party and the evil Socialist intent of the ruling Labour Party Junta.

We have individuals like Margaret Wilson, Winston Peters, Sue Kedgly and Jeanette Fitzsimmons who were not voted into power by New Zealanders, but by their own party members and they have made life and death decisions based on their own ill conceived form of personal agenda politics on behalf of all0p New Zealanders.

The epitome of how closed our political landscape was the imposition of the Electoral Finance Act by Labour government politicians last year. Unlike the openness and strident debate that has been seen in America for the last 16 months the EFA has led to a fearfulness of opposition to speak out against the incumbent Labour government, by New Zealanders, the media and opposition politicians alike. The threat to an open democracy where debate can be had without fear or favour just doesn't exist in this country anymore.

While Mugabe and Hamas use extreme forms of control to influence political and personal behavior to sniffle debate and the freedoms of their respective political systems and retain political control, the New Zealand Labour Party have used legislation to achieve similar results.

For the future of a good democracy in New Zealand we must reform our nations political structure in a way more closely aligned to America, where free and open debate reign supreme, if not our future lies closer to Mugabe's Zimbabwe rather than the open democracy that we once had.

Removal of the MMP voting system and repeal of the Electoral Finance Act will allow such a democracy to flourish once again and give the nation the hope that it deserves.

c Political Animal 2008

Friday, June 6, 2008

Ralph Norris will pounce, you can bank on it

Given the recent marriage between Westpac and St George Bank[SG.AX] to forge Australia's biggest bank, to surpass the size of The Commonwealth Bank of Australia [CBA.AX] it seems unlikely that Ralph Norris, the CEO of CBA, will rest on his laurels.
Australia's banking sector has been ripe for consolidation for some time and talk of marriages and takeovers of various Aussie banks has been rife for the last few years.

It just so happens that Gail Kelly, the current CEO of Westpac Banking Corp [WBC.AX], was the former head of St George until August 2007 and she has wasted no time in making her presence felt at Westpac by moving to swallow the fifth largest bank in Australia, St George.

Ralph Norris is going to be biting at the bit to get his hands on one of the smaller sized oz banks as he cannot make a bid for any one of the "big 4" for competition reasons. Suncorp Metway [SUNN.AX], Australia's 6th largest bank and 4th largest insurer, would be a great fit for CBA and given slumping banking company share prices the current economic turmoil conditions would be a good time to pounce.

Even some of the smaller state banks like Adelaide Bank & Bendigo Bank [BEN.AX], merging themselves in August 2007, or the Bank of Queensland[BOQ.AX] would be possibilities for Ralph and CBA. These state banks have a strong presence in their home states but also have smaller niches in neighboring states.

Ralph is the sort of individual who doesn't like to be beaten. As an aggressive head of CBA's subsidiary in New Zealand, The ASB Banking Group, he helped turn that particular company from a strong regional Auckland based bank into the leading countrywide lender for mortgages today.

Whatever happens in the Australian banking sector though you can be sure that owning any of the smaller Australian banking stocks is going to be an exciting time for shareholders and it is only a matter of time before a few good ones are snapped up by Ralphy.

Australia is really a microcosm of what is happening world wide when it comes to banking stocks though. Right at this time in Thailand, where I am presently sunning myself, there is consolidation going on. In the US we have seen troubled banks gobbled up by competitors and Europe is having a good go at it too.

Ralph Norris will be on the hunt in OZ, he loves a bargain, so make sure as a shareholder you hold out for more come offer time!




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c Share Investor 2008

Thursday, June 5, 2008

Thai Express

Well, I wish the Thailand economy was as hot as the weather. I'm here in Bangkok on a business trip of sorts and while here naturally I would be checking out the action on the stockmarket and goings on economy wise.

There are rumblings of a coup here at the moment, where the "PAD" a people's democracy movement are trying to overthrow the nation's leader. This is naturally having an affect on the local stockmarket and their stock index has waivered in the last couple of days.

Looking around the country though any natural born capitalist, or one who has joined the movement recently, would be excited at the industrial nature of commerce and industry. The economy is of course highly controlled by a benevolent dictatorship(my own estimation) but that doesn't stop the nations people from trying to reach their obvious economic dream of having all the western accoutrement's.

If our tour guide is accurate in her figures, one of the main reasons for the locals and their fastidious work rate is the personal tax system. A range from 3% to a maximum of 30% is a definite incentive to get the country moving in a forward economic direction.

Our corrupt socialist Labour Party New Zealand leaders should take note. Our high tax rate is of course strangling our economy to death. Take my word, the Thai people are very poor as a whole today and the economy is struggling but give them 10 years or so and they will be richer than New Zealand. Far richer.

The constraints of red tape and planning procedures also don't hamper the forwards progress of the Thai economy. Factories belch lovely coloured smoke and their water is undrinkable. The 19th century industrial process is a little late in coming here. You have to let them have it though. It would be greedy and hypocritical of the Western World to hamper them with the Global Warming madness and other business constraints. Time and money will take care of the environment.

Leaving the hotel after this I will be confronted with a million people trying to take a Baht or 2 off me to help feed their families. It is in your face, exciting and entrepreneurial to the extreme. All that New Zealand business seems to lack at present, and has done for a long time.


Related Share Investor Reading

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c Share Investor 2008

Monday, June 2, 2008

Why did you buy that Stock? [Pumpkin Patch]

Pumpkin Patch Ltd [PPL.NZ] was one of my long term growth investments because I saw its potential for future growth to be exceptional but still some time off.

Pumpkin Patch and sell trendy kids clothing in 4 different markets and currently have over 200 stores.


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The brand recognition is very strong and customers are very loyal to that brand. This is one of the main reasons why I purchased shares in the company. That is, while many retailers of children's clothing sell nice clothes at reasonable prices Pumpkin Patch clothing sells at a premium because of its branding.

Pumpkin Patch designers have also enabled the brand to continually be reinforced by constantly releasing new clothing designs and therefore keeping that competitive edge in the markets they enter.

I wanted to purchase shares in the IPO a few years back but waited to see a few years of results before jumping in. Of course profit has slowed over the last 12 months or so, most retailers have suffered from a global slowdown but growth for the company over the last 4 years has been good and entry has been made into Britain and America since their listing.

The expansion management impressed me and those that run the company have been doing a fine job taking the company to the world. America has been a tough nut to crack so far but it seems the slow roll out of stores in Texas and California has been managed well if store level results are any indication.

So good management, as it should be always, is another overriding factor in my purchase decision. They do the selling of kids clothing better than any other retailer in the world that I have seen and this is where I see the growth.

One thing I haven't covered in much detail in any of this series before, with the exception of Mainfreight Ltd[MFT.NZ] I think, is company culture.

Like Mainfreight, company culture at Pumpkin Patch is brilliant, you can see it in the way you are treated when you walk into a store and that culture is bred from management down. If a business has a great company culture its employees are happier, and that leads to better sales and an increased bottom line-you cant go past that when looking at a reason to buy a company's shares.

Another small reason to purchase, my wife loves the clothing and we are trying for a baby and she can shop for Africa!

Now I have held Pumpkin for about 2 years and at an average purchase price of about NZ$3.70, so at a current market price of less than half that, it hasn't been good in the short term but I am a long term man so wouldn't be adverse to buying more should my dividend account have some money in it.

Disclosure I own PPL shares in the Share Investor Portfolio.


Pumpkin Patch @ Share Investor

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Discuss PPL @ Share Investor Forum

Download PPL Company Reports

Buy Pumpkin Patch Clothing

From Fishpond.co.nz

Bird on a Wire: The Inside Story from a Straight Talking CEO

Buy Bird on a Wire: The Inside Story from a Straight Talking CEO & more @ Fishpond.co.nz

Fishpond


c Share Investor 2008