Long VS Short: Fletcher Building Ltd

In this tenth installment of the Long vs Short series I am once again going to take look at the chart comparisons for a stock from the Share Investor Portfolio and compare the 10 year return (above chart) to the turmoil of the last year with a 1 year return chart (large chart at bottom of post).

In this series I want to show the merits of investing, using charts, for the long-term vs short term gains or losses. I will use the longest available data to me for the long-term view (10 years )and will make a comparison against the NZX50.

In this installment of Long vs Short I will look at Fletcher Building Ltd [FBU.NZ].

I currently hold 1114 Fletcher Building shares in the Share Investor Portfolio, the bulk of which I have owned since November 2006. (see small chart below for detail)

The company has been a very good performer with great returns and is still going OK under current tough economic conditions.

Symbol	Price	Value	Earned
FBU.NZ	$7.290	$8087.64	$-615.69
You own 1114 [FBU.NZ] shares purchased at $7.81 [$8703.33]

In my 2.5 years of owning this share my return has been a loss of just over 7 %. This includes dividends and tax credits.(see small chart above)

If I had bought this share just a year ago (see large chart at bottom) my return would have been a 34% loss, with a loss of 50% as recent as March 2009.

Now for the real point of this comparison, lets look at the return for Fletcher Building shareholders who have held the stock for 10 years. (see large chart above)

From a high of a 450% return at the end of 2007, the 10 year return as of writing is still around 200%. All those dividends plus tax credits and time has given the long termers another win.

This series has yet to return a positive for short term investors.



Disc I own a small FBU holding in the Share Investor Portfolio


Fletcher Building @ Share Investor

Fletcher Building's Commercial arm keeps their head above the tunnel
Sweetheart deal for Fletcher Building's Friends
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A solid foundation for the future
Fletcher Building raises profit through canny management
Fletcher's got game


Discuss this Stock @ Share Investor Forum


Long vs Short Series

Ryman Healthcare Ltd
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Auckland International Airport
Freightways Ltd
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Fisher & Paykel Healthcare
Mainfreight Ltd
The Warehouse Group
Sky City Entertainment




c Share Investor 2009

Beam me up Davy

I think Contact Energy directors have been watching too much moon landing coverage over the last week because its seems that a number of them may have disappeared up their own planet of Uranus.

Clearly some live in a parallel universe when they can cost their company nearly 40000 customers in just under a year by making a public exhibition of himself by raising electricity prices, granting directors big bonuses and having an expensive boozy lunch on the company in October last year and then expected to be rewarded for it.

David Baldwin, managing director and CEO of Contact Energy Ltd [CEN.NZ] yesterday applied for a waiver from the NZSX to get "financial assistance", an interest free loan from Contact Energy shareholders, so he can participate in the company's Long Term Incentive plan (LTI).

Boy those Contact shareholders sure are generous!

Fair enough, you deserve the free shares for doing a good job, but Baldwin has cost the company 10s of millions in lost revenue over the last year and since he has become the MD this year he becomes ineligible to participate but has decided in his infinite wisdom that he will apply to his mates at the NZX to waive this rule that allows him to participate.

And guess what, the waiver was granted just 24 hrs latter.

Beam me up Scotty, I wanna be where Dave lives, 'cause it don't work that way down here on earth.


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Auckland Airport Sale: Ready to Fly

This blog was visited by a large number of Googlers yesterday. They were searching for Auckland International Airport [AIA] information.

Those searches were principally related to questions about the possibility of its sale, so I thought I would write something opinionated on just that subject.

This interest would have been sparked by the National Government's relaxing of rules and legislation surrounding the overseas ownership and purchase of New Zealand assets announced by them today.

I wrote back in February that we were likely to see just this very scenario occur:

With the new National Government in place and the current relaxing of the rules around the RMA, the major planning law that has stopped economic development of New Zealand, we could expect to see developments in other areas of business in regards to relaxing laws and legislation to allow business to flow quicker and therefore more efficiently and more profitably.

Small parts of overseas investment criteria have been relaxed immediately but there will be a review of the Overseas Investment Act with a view to relax current complications and confusion.

The 3 main points of the act that will be looked at latter in the year that are pertinent to any possible bid for Auckland Airport are:

1. the thresholds determining which land and business investments are screened are set at the right level -- so only genuinely sensitive assets are captured.

2. Providing greater certainty for investors, by removing the ability to substantially change overseas investment rules during applications.

3. Simplifying the screening of investments in sensitive land, while ensuring that overseas investors are subject to a higher standard than domestic investors.

The airport sale was stymied by the previous Labour Administration by a law that was expressly passed for the AIA bid by DAE and the Canadian Teacher's Pension fund as well as confusion brought by the 3 parts of the act noted above.

With an overhaul of this act, relaxation of other overseas investment rules and a business friendly shake-up of Auckland Council's that hold airport shares, Auckland Airport will soon be in play.

Disclosure I own AIA shares in the Share Investor Portfolio


Auckland International Airport @ Share Investor Blog

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c Share Investor 2009

Aren't those banks just utter Bastards

After getting some shtick recently from my bank, the ASB Albany branch, who have decided, after much arguing by my good self, that they will waive early repayment fees for a loan I made a few years back but didn't agree to any fee charged when initially taking out that loan, I came across a story today in the Nelson Mail that just made my day:



Defiant Mapua artist Roger Griffiths today made a stand against Westpac by withdrawing his $190,000 savings in $20 notes.

The bank provided a red-and-black carry bag to take away the cash after meticulously counting it in front of Mr Griffiths at its Nelson branch.

Mr Griffiths, a loyal Westpac customer for 25 years, decided to withdraw his money after the bank rejected his application for an $80,000 mortgage. "It's about time normal people took a stand."

He said the bank turned down his application because he did not have a regular income as an artist. However, he was a successful artist, exhibiting his paintings at the World of Wearable Art complex, in Christchurch and New York, he said. (Go here for rest of story)

Roger has got it right, you have to fight these bastards because they will walk all over you if you don't.

Incidentally, most good lenders would have lent him the money, and so would I, based on the record with his bank alone. After all, we all remember that Westpac is the bank that will give away millions without any double checking your ability to pay your debts.

My loan payment dispute with ASB has not been rectified to my satisfaction because they have time limited their offer to July 31 and they were not the terms of my original loan.

The fact that they have offered to waive the fees though means I can use that offer against them when I take them to the disputes tribunal.

Fight your bank if you think they are wrong, if you don't get what you want, at least you tried and you might have some fun, like I have had, giving them a hard time.

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c Share Investor 2009