Monday, November 24, 2008

Follow Share Investor's Portfolio

You can follow the Share Investor Portfolio now by scrolling down the left hand side of any page of the blog and go to the "Share Investor's Portfolio" module. Each stock in my portfolio is listed there with a 20 min delayed feed of prices from Yahoo Finance and associated charts, news and NZX releases for the day.

See how badly or well it is doing.

Here is what it looks like:

ASB Capital No.2 0.85-0.007(-0.82%)
Auckland International1.660.05(3.11%)
Briscoe Group Ltd0.750(0.00%)
Fisher & Paykel Healthcare3.01-0.04(-1.31%)
Fletcher Building5.550.13(2.40%)
Freightways Ltd2.9-0.03(-1.02%)
Goodman Fielder Ltd1.80(0.00%)
Hallenstein Glasson2.280(0.00%)
Kiwi Income Property1.040(0.00%)
Mainfreight Ltd4.250.04(0.95%)
Michael Hill International0.570.02(3.64%)
Postie Plus Group0.30(0.00%)
Pumpkin Patch Ltd0.930.13(16.25%)
Ryman Healthcare 1.450.05(3.57%)
Sky City Entertainment2.980.01(0.34%)
Steel & Tube Holdings2.70(0.00%)
The Warehouse Group3.60.03(0.84%)

Go here to see updated prices and refresh your browser to get the latest market price*

* 20 Mins delayed

You can also follow the daily market value of two individual shareholdings of mine, Sky City Entertainment and Pumpkin Patch, the best and worst performers in my portfolio respectively, just below the Share Investor's Portfolio module on the left-hand column of the blog. These update the dollar values of each stock and return they have given me thus far.

Related Share Investor reading

Why did you buy that stock?

Why did you buy that stock? [Fletcher Building Ltd]
Why did you buy that stock? [Freightways Ltd]
Why did you buy that stock? [Kiwi Income Property Trust]
Why did you buy that stock? [Hallenstein Glasson]
Why did you buy that stock? [Briscoe Group]
Why did you buy that stock? [Fisher & Paykel Healthcare]
Why did you buy that stock? [Pumpkin Patch Ltd]
Why did you buy that stock? [Ryman Healthcare]
Why did you buy that stock? [Michael Hill International]
Why did you buy that stock? [Mainfreight]
Why did you buy that stock? [The Warehouse]
Why did you buy that stock? [Goodman Fielder]
Why did you buy that stock? [Auckland Airport]
Why did you buy that stock? [Sky City Entertainment]

Shareinvestorforum.com- Discuss this Share Investor Post


From Amazon

Portfolio Management for New ProductsPortfolio Management for New Products by Robert G. Cooper
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Project Portfolio Management: A Practical Guide to Selecting Projects, Managing Portfolios, and Maximizing Benefits (<span class=
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c Share Investor 2008

Ruminations, meanderings and recriminations

So many bargains!!

Come one, come all, its a giant pre-Christmas sale of listed NZX and foreign stocks.

Ah, Mainfreight's shares might be traveling south, Michael Hill's may have lost their sparkle and Pumpkin Patch's share price looks like it could reach the same figures as some of its clothing sizes but if you think stocks are cheap now just wait until the New Year sales.

To be fair markets have now overreacted-they always do whether up or down- to the credit crunch and its associated impacts and we now seem to be running on negative emotion caused by over zealous finance media ready to make a name for themselves and their media owners whose headlines grab at sensationalism in order to sell advertising.

This media inspired negativity is set to continue well into 2009 and the New Zealand stockmarket is unlikely to see any stability until next spring with an upturn looking promising for the 2010 year.

I thought I would be a smart arse sort of guy and buy beaten down stocks a few months back but my Pumpkin Patch purchase back in June at NZ$1.53 has nearly halved on Fridays closing price, my Michael Hill purchase of the same month went from 82c to below 60c and my Briscoes "bargain" is back in the high 70 cent range.

The only upside buy was my clear expertise led delve back into Fisher and Paykel Healthcare[FPH.NZ] Bought at $2.33 this stock is currently above 3 bucks and has at times been above $3.20, just going to prove that timing the market isn't the easiest thing to do-for me anyway.

To be fair the upside for Fishers was clear to the market because sales were going to be up and the US dollar strength meant that repatriated funds back to head office in New Zealand would be well up, so the only mistake I made there was not to buy more.

This will be one stock whose sales and profit will hold up during this economic downturn and any substantial stock slump below $2.35 will see me back in.

Having spilt my guts about some of my stock meanderings over the last few months I am nevertheless in it for the long haul and my purchases fit my investment profile and ability to eat should everything become worthless in 12 months time.

Having said that I am still very tempted to get the checkbook out again for some more "bargains" but human nature being what it is I am going to wait until prices drop further latter on in 2009.

I am looking at buying more Mainfreight Ltd [MFT.NZ] which is still doing well, Pumpkin Patch[PPL.NZ], which is struggling in North America, Britain and New Zealand, Michael Hill International[MHI.NZ], which is holding up so far, Fletcher Building [FBU.NZ] which is in the middle of a residential building slump and Briscoe[BGR.NZ]which is having the Christmas sale to end all sales at present.

So I am still optomistic for the economy and the stockmarket long-term. Short term?

Its a fools game.


Related Share Investor reading

Share Investor Portfolio: Taking a beating
Why did you buy that stock? [Briscoe Group]
Why did you buy that stock? [Fisher & Paykel Healthcare]
Why did you buy that stock? [Pumpkin Patch Ltd]
Why did you buy that stock? [Michael Hill International]
Why did you buy that stock? [Mainfreight]
Why did you buy that stock? [Fletcher Building]

Shareinvestorforum.com-Discuss this Share Investor Post


From Amazon

Why Stock Markets Crash: Critical Events in Complex Financial SystemsWhy Stock Markets Crash: Critical Events in Complex Financial Systems by Didier Sornette
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The Great Crash: How the Stock Market Crash of 1929 Plunged the World into Depression

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More stockmarket and finance books at Amazon


c Share Investor 2008

Sunday, November 23, 2008

Hanover's "White Knights" are really daylight robbers

Some of the tripe written recently about how positive the "rescue package" that owners of Hanover Finance have put forward this week has me concerned because it presents a false picture of what is going on at Hanover now, and what has happened with the company in the past.

This from Phillip Macalister of Good Returns, a company that used to advertise on its websites and magazines for Hanover:

"It has been pretty open about its situation and its plans. That is a major plus." Phil's Blog, Nov 2008

When asked if he thought that the deal would silence all the critics he said: “I don’t think there’s any solution which would deliver that.”

The package being put forward though is designed to show that the “shareholders are standing up and supporting the business in its time of need.”

Also it makes sure that there is a future for the business. Good Returns, News Centre Sept 2008

Macalister contends that Hanover and its two top monkeys, Eric Watson and Mark Hotchin have been "pretty open" about the situation of the company but nothing could be further from the truth.

If one did just a little googling one could find a plethora of writing from credible investigative journos that would give lie to Phil's assertions. Unfortunately many of the 16000 investors in Hanover are of an age that they think googling might be related to self abuse rather than information that they would find illuminating about Hanover.

As far back as 2004, Deborah Hill Cone-ironically writing in a piece originally written for the National Business Review but reprinted in one of Macalister's websites-discovered there was trouble brewing for Hanover and its 16000 investors:

But if you want to write anything about Hanover Group itself ­ why it has more than $100 million tied up in related party loans, say, or why it lent money to the sad sacks signing up for conman Henry Kaye's seminars or even the seemingly simple question of why it doesn't file consolidated accounts ­ that's not considered quite so charming. Deborah Hill Cone, The Secretive Rise of the House of Hanover, Sharechat, March 2004

Just in the last two years alone the NZ Herald reports that $NZ86.5 million in dividends were creamed from Hanover and went to Watson and Hotchin:

Hanover Finance yesterday told the Herald that of $86.5 million in dividends it had paid out to Mr Watson and Mr Hotchin over the last two years, just over $70 million had been used by them or their companies to repay "related party" loans. Investigators swoop on Hanover, NZ Herald, July 2008.

But as Deborah wrote back in 2004, financial figures supplied by Watson and Hotchin for Hanover don't show the full picture because of the vast amount of inter-party lending and the complex nature in the way Hanover and its dozens of interrelated companies are structured is able to disguise inter-party lending so that Eric and Mark could even buy a super yacht with depositors money.

Why aren't accounts filed for Hanover that would show the consolidated picture for the whole group?

Karen Toner, one of the authors of KPMG's Financial Institution survey laughs when I say I'd like to see the consolidated figures for Hanover Group.

"Wouldn't we all? I think everyone in the industry would like to know that."

The group has a complex structure, with Hanover Group Holdings as the overall holding company and Elders Finance and Nationwide Finance subsidiaries of Hanover Financial Services. Elders is the parent company of subsidiaries United Finance, Leasing Solutions and FAI Finance.

Another finance company, Onesource Finance, is owned by Hanover Group, a separate subsidiary of Hanover Group Holdings. Deborah Hill Cone, The Secretive Rise of the House of Hanover, Sharechat, March 2004

Now the way Hanover was structured and its vast amount of inter party lending-that is lending that personally lined the pockets of Eric Watson and Mark Hotchin-may not be different from the 2 dozen or so finance companies that have done investors dough over the last two years but for Greg Muir, the outgoing chairman of Hanover, to come out today on behalf of the dastardly duo to make them look like white knights coming to the rescue of investors and they should all be grateful and in awe of their generosity has got to be the joke of the year:

"I can't talk about their personal motivations, I don't know what they are...all I can say is I think the shareholders have dug into their pockets as deeply as they feel they possibly can and this is the best result they can deliver." Hotchin told the Star-Times that shareholders had no obligation to put in more money but had done so because they wanted the company to keep going and repay investors. "I personally don't owe that money [to investors], neither does Eric, the company does, but we're pledging fresh money to help ensure they get back their principal. Hanover Duo Dig Deep, Sunday Star Times, Nov 2008

Morally, the principal duo do owe investors in Hanover because they extracted at least NZ$300 million from the company since 2001 and possibly as much as half a billion, which puts this weeks offer of $56 million of cash and dubiuos "assets" in some context.

The most recent publicly available Elders accounts, for the year to June 2003, show related party transactions of $93.5 million, up from $83.6 million in 2002, and $67.7 million in 2001. ShareChat, March 2004

Hanover Finance yesterday told the Herald that of $86.5 million in dividends it had paid out to Mr Watson and Mr Hotchin over the last two years. NZ Herald, July 2008

This easy money went to themselves and other "related parties" but hey according to Hotchin there is nothing personal about it, it is the Hanover business that owes 16000 investors more than half a billion bucks.

If you expect the same people to look after you in a restructure of the company, through their moratorium, that ran it into the ground in the first place then you need to take a good hard look at yourself.


Related Share Investor reading

Hanover collapse: It was just a matter of time
Money Managers Saga: 3 Story wrap
Money Managers gives First Step investors the middle finger
Greed is bad: Geneva Finance Folds
Financial 101: Learn before you leap
Kevin's Blog

Related Links

From Stuff.co.nz

Hanover downgrade raises questions about credit ratings
Hanover Finance in troubled waters

Watchdog probes Hanover
Hanover et al, punt for the cash- Bruce Sheppard

NZ Herald on Hanover

Mark and Eric buy super yacht-TVNZ


From Amazon

The Seven Signs of Ethical Collapse: How to Spot Moral Meltdowns in Companies... Before It's Too Late

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Paper Prophets: Fraudulent Accounting And Failed Audits

Paper Prophets: Fraudulent Accounting And Failed Audits by Tony Tinker
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c Share Investor 2008







Friday, November 21, 2008

Coke is it

People love it, it is ones of the worlds most enduring and loved brands. Warren Buffett loves it and has a massive shareholding in the American icon.

In this day and age of dwindling fortunes and sagging sales this brand is a stalwart and Lion Nathan [LNN.NZX], the Australasian brewer, wants a piece of the Australian company that makes the black sticky concoction in this part of the world, Coca-Cola Amatil [CCL.ASX]

Lion Nathan previously owned the loss-making Pepsi franchise in Australasia so clearly see a non-alcoholic soda drinks company as integral to its alcohol brands.

Buffett calls companies like Coca-Cola Amatil "economic moats". That is, a company that has a strong brand and a product that is unique, enduring, easy to understand and sells, even during hard times.

Lion Nathan execs must have been reading some of Warrens screeds of pronouncements on his investing principles because they have their target right. The only problem being they haven't offered CCL Amital stockholders enough for their sweet black goldmine.

Lion have offered only AU$ 7.7 billion for Coca-Cola Amatil . The cash and stock bid, made at a 25 per cent premium to cokes share price, has been roundly criticised by CCA management as "unattractive" and "complicated". The offer from Lion gives Coke shareholders stock in Lion Nathan which is majority controlled by Kirin, the Japanese brewer.

The parent company and approx 30% shareholder in CCA will not comment on the matter but its CFO said last month to analysts:

"if the purchaser had the financial and the management resources to really grow that market for the long term, and that when selling we would sell if at fair value."

The stock and cash offer, even at a 25% premium is still below "fair value" and its is unclear as to whether Lion's management would grow the Coke brand and its other products long-term but of course the answer to that would be why wouldn't they?

The CCL Amital parent company, The Coca-Cola Company [NYSE: KO], wouldn't necessarily go for a higher price for their 30% shareholding but a company that would provide a higher return for their providing the syrup for finished product, which they get whoever owns CCL Amital.

Coke is a strong brand with a massive market share in this part of the world and that and its other strong brands; Fanta, Sprite, Lift, Lift Plus, Powerade, L&P and Schweppes make Lions initial bid too low by far.

Hang on CCL stockholders, don't sell yet.



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Related Links

Buffett and Coke

CCA Shareholder centre

2007 AR

2007 SR

2008 NOM

Complete
2007 annual report
PDF format (802kb)

Complete
2007 Shareholder Review
PDF format (2.6mb)

Notice of Meeting
PDF format (235kb)


From Amazon


For God, Country, and Coca-Cola: The Definitive History of the Great American Soft Drink and the Company That Makes ItFor God, Country, and Coca-Cola: The Definitive History of the Great American Soft Drink and the Company That Makes It by Mark Pendergrast
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The Real Thing: Truth and Power at the Coca-Cola CompanyThe Real Thing: Truth and Power at the Coca-Cola Company by Constance L. Hays
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Petretti's Coca-Cola Collectibles Price GuidePetretti's Coca-Cola Collectibles Price Guide by Allan Petretti
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Coca-Cola: The Collector's Guide to New and Vintage Coca-Cola MemorabiliaCoca-Cola: The Collector's Guide to New and Vintage Coca-Cola Memorabilia by Randy Schaeffer
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Other Coca Cola books from Amazon


c Share Investor 2008