Tauranga Electoral Finance Act protest goes off

Newstalk ZB, 4 May 2008: More than 800 people protested against the Electoral Finance Act in downtown Tauranga this morning.

Organiser John Boscawen says the government legislation limits New Zealanders' ability to participate in the electoral process. He says six months after the Act was made law, people are still wanting it gone.

Mr Boscawen says it is the right of all New Zealanders to hold their electoral representatives to account, and this law restricts people's ability to do so. He says the Electoral Finance Act will be a major issue for people voting this election.

Political Animal: The Tauranga protest comes in the wake of Labour being the first to break their own law and with news out last week that the $800,000 plus that was stolen from taxpayers to buy the 2005 election was paid back with anonymous donations from wealthy backers. The very thing Labour pollies pointed the fingers at the National Party for doing.

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c Political Animal 2008 / Cartoon c Stan Blanch 2008

Investors can learn from my stupidity

What was one of those pithy comments that your mum used to make to you when you were growing up?

One of my mum's favourites was "if you don't learn from your mistakes you are doomed to repeat them in the future". To be fair, mum's phraseology contained some four letter words and was knowhere as concise or fluent, but she just might have had something there.

When it comes to investing in shares, my mistakes have taught me not to go there again, even though on occasion I may have made the same boo boo twice, and I thought I might share a few of my investing nightmares with you dear readers, in the hope that you may take something from them, file them away and use them for future reference.

I started investing in shares in 1997, my first purchase being Restaurant Brands [RBD] , the New Zealand fast food operator, the price per share was $NZ 2.20 and I bought 1000 shares.

I purchased initially because I loved KFC and thought the shares were "cheap". I feel dumber than dumb just reading that back.

Little did I know, the company had been performing badly for a number of reasons and I neglected to go further than the glossy prospectus for impartial information.

I bought around 60000 shares up until late 2002 and sold them all at the end of that year for a small profit, around $2000.00-not a good investment.

Two other things I learn't from that sojourn into fast food, don't fall in love with a stock and don't be afraid to cut and run if you know you might have made a clanger in the first place.

The second lesson I learn't, and probably the most cutting for me, is that you shouldn't get greedy, follow the herd mentality and plunge oneself into something one doesn't understand (Warren Buffett would spank you for that).

On Jan 25 2000, I bought shares in a "tech" company called Strathmore. I had no idea what they did who they were and whether they were making a profit. I just bought because I thought I should be in that sector,everyone else was buying, shares were going up and would continue to do so(duh!) and once again the shares were cheap.

I outlayed NZ$3900, plus $24.95 brokerage, for 6500 shares and I think they may have gone up to about 65c at their high. 13 October 2000 I sold 5000 odd at 18c and left the rest in some other company Strathmore had morphed into and lost the rest latter.

The herd mentality struck me again big time on Sept 11 2001. I remember I was in such a frenzy to sell, I spent the morning of the 12th here in New Zealand selling my whole portfolio. After around 1 hour I sold everything! A NZ$80000.00 portfolio gone at crazy prices. I didn't lose alot , if anything at all but current and future gains were erased, as we know that the market rebounded soundly months after that ill fated day.

September11/12 was a turning point for me of sorts, although I was to repeat my stupidity less than a year latter, when markets were nervous about greedy corporate "Gordon Gekko" types fiddling company books, when I sold a very large holding in Sky City Entertainment[SKC] because I thought markets were going to spiral down to nothing. They didn't.

So it has taken me around 5 years to get over my emotional ties to "Mr Market" and in that time I have realised that:

1: One shouldn't listen and act on others advice unless your own research backs up your investment criteria.

2: Greed can be good but is also bad when not practiced without emotion.

3: markets go up and down for no particular reason.

4: do not follow the herd under any circumstances unless you are smart enough to be at the front of the herd and remove yourself from the herd before the bull gores you.

5: do the opposite to everyone else.

6: Don't read the "funny pages" (a great quote from Warren Buffett and a reference to analyst/ brokerage reports and economic forecasters.)

7: Don't listen to the latest tips from friends (cyber or real life)

8: When the taxi driver, dinner party guests and party invitees all start talking about stocks, commodities,real estate or carbon trading as the thing to invest in. Don't.

9: A low share price doesn't make a company cheap. Bad management does.

10: Do your own research until your nose bleeds.

11: A hunch can often be wrong and infrequently right.

12: "Mr Market" and his bad moods can be profited from, but only short term.

13: Don't listen to me, only I know what I am doing.


The five years from 2002 have been far more rewarding financially-even including the current "credit crises" and while I have probably made some small mistakes since, my investment strategy has been honed by the years previous to 2002 and I now approach my investments with a sensible long-term view of my portfolio.

The companies I have invested in, not stocks, are assets which fluctuate daily in price and I will not sell unless there is a very good reason to do so or unless that schizophrenic "Mr Market" offers me a price for my share of a company that I just cant resist.

History is littered with the corpses of those that kept their eyes and ears closed when they were regaled with others past mistakes, but often one can learn more from the stupidity of others than the experience they have within themselves.

I hope my reflective stupidity helps.

My mum, and yours, was right.


Disclosure: I own SKC shares


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c Share Investor 2008

PRESS RELEASE: Tauranga Electoral Finance law protest

This Saturday in Tauranga there will be a march against the Electoral Finance law. Below are the details from John Boscawen.

"We will meet on the corner of First Avenue and Devonport Road at 10.45am and proceed along Devonport Road through the centre of Tauranga to The Strand and up Hamilton Street to Baycourt. At Baycourt there will be a rally at 11.30am, either outdoors if fine, or indoors if wet. Speakers will include myself, Garth Mc Vicar of the Sensible Sentencing Trust and Hon. Ralph Maxwell, a minister in the Lange government and former member of the Electoral Select Committee.

If you live in the western Bay of Plenty it would be good to see you there. Alternatively I would greatly appreciate you bringing to the attention of your friends and family who do, the march and rally by forwarding on this email and encouraging them to attend."

Why did you buy that stock? [The Warehouse Group]

The Warehouse Group [WHS.NZ] has been in the news over the last week, with a Court of Appeal case being heard over its possible future ownership. This saga has been going on for nearly two years now.

That aside, my history of share ownership with this company goes back to 2000 when I first bought a small holding and stupidly sold them on September 11 2001. I then bought more in 2002 and have added to my holding since then.

The main reason I bought this share was that I spent an awful lot of money buying stuff there and noticed lots of other people doing the same. Not a good reason to buy a share, on its own but there are other reasons as well.


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The Warehouse and its dominant position in the market made my decision to buy even clearer. I cant ignore the fact that the company is the largest seller of various products on the New Zealand retail landscape: Music, books and gardening items are among the categories it kills.

This dominance has been impossible for other retailers to chip away at over the company's 25 year history and its low cost business model: goods straight into the store, with "just in time" delivery and sophisticated logistics make it hard for other retailers to compete on price.

It owes alot of its success to the company it is modeled on, Walmart, and apart from an awful execution of an expansion into Australia in 2000 management have been good managers of the business.

Like the other companies in this series, The Warehouse runs a business that is easy to understand and being a rather simple fellow myself that appeals to my investing genes.

The question I always ask, would I buy this share today? The answer would have to be a resounding yes. I am slightly put out that Woolworths or Foodstuffs would want to buy my shares off me because as my readers would know, I like to hold for the long term.

Being part of a larger group or on its own as a publicly listed company The Warehouse look likely to continue to dominate the New Zealand retailing scene.


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c Share Investor 2008 & 2009