Who is the Deep Throat?

What is more revealing than the uninteresting content on "secret tapes" recorded by an infiltrator at last weekends National Party Conference, is who was it that surreptitiously made the recordings ?

The secrecy of this is the real story. The content is hardly controversial. It is already well known.

It is clear that it was someone from the Labour Party ranks or at an outside chance Winston Peters.

It is a first for New Zealand Politics and a new low in terms of our political landscape.

It appears Labour is going to get even dirtier than they did during the 2005 Election, where at one stage they sent State House tenants pamphlets saying they would all soon be evicted if the National Party won the vote.

Ms Clark is tainted over this Labour leaking of National Party inside info and goes to prove how underhanded and devious she can get.

What next, up-skirt cams in the Women's Beehive loos, video cameras in Lockwood Smith's bedroom (perish the thought).

As John Key has said today, he will not resort to the same sort of gutter politics as Clark and her party have.

Ms Clark must distance herself from this if she want to look a credible candidate for the 2008 elections. It appears that she may have been taking lessons from Winston Peters, this has his DNA all over it.

Like Peters though, she may find her muck raking eventually come back to hit her in the face and Cindy Kiro wont be there to help her out.

Related Political Animal reading

Dirty, filthy politicians

c Political Animal 2008

Dom Post reels in another Peter's payment

It just keep getting worse for the hapless, corrupt and corrosive old pensioner Winston Peters.

The forth, or is it fifth, secret cash payment to Peters or his party, New Zealand First, has been uncovered by the Dom Post this morning.

Once again Peter's denies and his own voters and the rest of us cannot trust an individual running for office until things are explained. But the baubled one wont.

Just goes to prove, when one is holier than though over stopping others from getting donations for running elections, in relation to the Electoral Finance Act that Peters trumpeted from his squeaky clean pulpit, one gets hoisted on ones own cross.

And he could have been Prime Minister.

Another NZ First donation revealed

By PHIL KITCHIN and MARTIN KAY - The Dominion Post Wednesday, 06 August 2008

Winston Peters rebuffs our interview request Video

Winston Peters' credibility is in further doubt, with new claims emerging that NZ First accepted donations from a Simunovich account.

The NZ First leader has publicly stated that the party did not receive money from Simunovich Fisheries, a heavyweight fisheries company.

But a well-placed NZ First source has told The Dominion Post that the party banked at least one cheque bearing the Simunovich name.

The latest revelation heaps more pressure on Mr Peters to answer questions about allegations around NZ First's political donations.

It came as he was referred to Parliament's privileges committee to face questions about a $100,000 donation to his legal bills from expatriate shipping billionaire Owen Glenn, which was not declared in the MPs' register of pecuniary interests.

Continued


Related Political Animal reading

Winston isn't a conspiracy theorist: Yeah right!
Winston Peters lost in Wonderland
Winston Circus hangover continues
Discretion was the essential part of Vela Donation
Winston Peter's Glenn donation scandal: But wait, there is more!
Peter's hangs himself in February Paul Henry Interview
Peter's admits lying about Glenn donation
Winston's silence is telling
Labour gets tangled in Peter's lies
Leaked Glenn Email
Winston got secret donations from Owen Glenn
The Owen Glenn Story: Singing the same tune but hitting a bum note

c Political Animal 2008

Dirty, filthy politicians

c Blanch 2008

Things are getting filthy, but they are set to get even dirtier as the Socialist Labour Party and its supporters tussle to retain their tenous grip on the power that they crave.

Labour or New Zealand First had a stooge who infiltrated the National Party and taped conversations. Pretty low, but we know that already.

Imagine catching conversations at a Labour Party conference. Worse stuff would be dredged up there.

If we were at a number of Labour Party Election conferences over the last 9 excruciating years,we may have heard any number of secret agendas given air time.

Ms Clark could have been talking about the anti smacking bill, the removal of the Privy Council,the purchase of KiwiRail, the legalisation of prostitution, allowing Homosexuals to get married and a whole hot of other socialist meddling. None of these things were in the public domain and on the agenda before Labour was voted in.

True, National are keeping their cards close to their chests, but you have to in regards to Labour party bribes like The Working for Families welfare scheme, KiwiBank and other vote buying rorts.

When one threatens handouts to people, one can scare the natives. Labour have been canny to lock in that feeling of dependence on the State and it is hard to remove these welfare traps without removing your election night success.

c Political Animal 2008

Why Did you buy that stock? [Freightways Ltd]

Transport is a sector of New Zealand business that has done well ever since this country's inception.

Two narrow, mountainous main islands divided by a small body of water, with a sparse population make New Zealand's economy even more reliant on road transport of goods than any other country in the world.

We will always need good competitive transport companies to keep the economy moving.


Why did you buy that stock?

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]

Discuss Freightways at Share Investor Forum


I chose to invest in Freightways Ltd [FRE.NZ] principally because of this, although there are a raft of other key reasons as well. The fact that this industry is so essential to the economy means that it will always be around in some form or another. The certainty of that makes the criteria for investing a strong one for me.

The transport of goods around New Zealand is simple and easy to understand-for the operator and the investor. To operate such a business therefore is also simple and this has obvious advantages over the complexities of say the communications, computer and health sectors, which all require constant and costly updates to technology and the expense of training staff to keep up with that.

A truck, van, plane or boat pretty much stays the same, save for small changes over years.

What can I say, I am a simple kind of investor, and I like to understand the businesses that I invest in.

Unfortunately the simplicity of the transport industry, in this case Freightways, makes the barriers to entry for competition into its main operating areas: express package, business mail delivery, quite low.

It requires excellent management to keep competitors at bay and fortunately Freightways Managing Director Dean Bracewell and his board have provided a consistent approach to the day to day running of the company, in addition to a well researched approach to organic and acquistional growth.

The massive increases in business costs over the last several years; labour,energy, leasing and others, has been countered by cost savings in other areas while investment for future growth has been consistently rolled out where growth areas can be identified. All this and the company has still increased profit.

Tough economic times call for good management to get a company through the other side. The boys and girls at Freightways have proven their skills in this aspect.

As my readers will know, strong decisive management is important to the smooth, efficient running of a business and the team at Freightways have so far delivered for me.

Another good reason for me to buy this stock.

Freightways have a large stable of courier brands across New Zealand, from discount to the premium urgent delivery services, and the branding of these different services has been kept distinctly seperate. This keeps the brands uppermost in consumers minds and allows these respective services to target their consumers easily and keep them distinct from the myriad of competition from outside the company.

Branding is important to me and Freightway's strong courier brands, across a wide variety of income groups in the same industry make Freightway's courier business second to none.

I do like companies that specialize in one type of business, that way management are not easily distracted from their main core of operation and expertise-it is harder to get things wrong.

Freightways have expanded outside their core operations of delivery of packages and business mail but they are in related industries; document management and destruction companies based in New Zealand and Australia. A good compliment to their core operations but in tandem spreading the base of revenue across another business sector.

I paid $3.63 pr share in July 2006 and own the stock now for a cost of approx $3.10 after generous gross dividend payouts. The high dividend return is another reason I purchased this stock.

The last test in the latest Why did you buy that stock? series is whether I would still buy shares in Freightways today. Given the ability to get my hands on additional funds and a lower price than $3.10 per share the answer is a definite yes.

Disclosure I no longer own shares in FRE.

Freightways @ Share Investor

Long VS Short: Freightways Ltd
Freightway's keeps delivering
Why did you but that stock: Freightways Ltd
Freightway's delivers
Freightway's packages up a good result







The Warren Buffett Way by Robert G. Hagstrom
Buy new: $19.54 / Used from: $12.94
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c Share Investor 2008

Well done Cindy !

The success of the anti smacking law rolls on. Yesterday a 4 month old boy from Labour's big socialist welfare experiment, South Auckland, was sent to Starship Hospital with serious head injuries, suffered at the hands of his parents.

Cindy Kiro was on the ball as usual with this:

It was time something was done to ensure "we get it right for the next generation".

Wasn't the law that you were head stooge for supposed to do "something"? Shame on you Cindy and all those who supported the dodgy anti smacking law.

Getting hard on the detritus who do these sorts of things would be a bloody good start. Cindy and her ilk would rather punish good loving parents who want to keep their kids out of danger by allowing them to use a light smack to correct behaviour.

It is perverse that Cindy and her extreme socialist mates in the Labour Party have the whole thing back to front. That is socialism for you though. By its very nature it is dangerous, perverse, backwards, doesn't make sense and has led to much misery and eventually death, everywhere it has been practiced.

The 4 month old boy joins a long list of New Zealand child abuse victims. Despite the Labour led Government spending more than NZ 14 million on anti-violence campaigns, at least three children under the age of 5 have died at the hands of parents or others this year.

Many others have been seriously injured and the removal of section 59 just sits there blowing nakedly in the breeze, as a reminder of how thoughtless its proponents were

Hang your heads anti smacking zealots, your law is a resounding failure but the sensible among us, the majority of kiwis, already knew it would be before it was passed.

Related Political Animal reading

Police called as toddler fights for life
Sascha Cobern's letter to the Editor of the NZ Herald
Anti-smacking petition a slap in the face for out of touch Politicians
Cindy Kiro gets violent

c Political Animal 2008

Its ours, but can we get rid of it already?

Customer service comes with paddle included.

What is all the fuss over national wanting to sell that monstrous failure Kiwibank.

They said they were not going to sell any Taxpayer "assets" in the their first term and they wont.

Will they sell it should they get a second?

Who cares.

The architect of this black hole for more taxpayer funds, Jim Anderton, says most Kiwis don't want it sold.

Really?

Then why are there only 500,000 low value customers then?

Kiwibank has been a drain on the taxpayer for 7 years now. It has been propped up by an initial NZ$125 million injection of taxpayer money, then subsidised by that other great sucker of taxpayer funds the highly inefficient NZ Post.

Typical customer service at a Kiwibank

Its minute "profit" in 2006 and 2007 was creatively accounted to make Anderton look good.

Its CEO Sam Knowles was at the Bank of New Zealand to "fix it up" after it collapsed under Labour's watch in 1990 and then was one of those overseeing the collapse of Databank.

Lets face it the lending book of Kiwibank is high risk and poor quality, much of it revolves around beneficiaries, the low paid and State involvement through taxpayer subsidised or sponsored home loans.

Kiwibank is a high risk possibility in the future for it to go under,taking our taxpayer money with it.

Lets sell it for what we can get for it.

c Political Animal 2008

Labour Party's anti growth stance reckless

"Mr Key is being reckless and gambling with the country's future".

Ms Clark, New Zealand Prime Minister, for 3 more months, is talking about the National Party's plan to borrow, for investing in New Zealand's crumbling infrastructure.

Helen and the Labour Party of course borrow at present. The bulk of it though goes on wasteful spending of the socialist nanny State ilk. State houses, banks, railways, free student money, Working for Families welfare, yadda, yadda, yadda. You get the picture.

Borrowing to build a nation is eminently sensible. We have seen over Winter how a lack of spending on electricity infrastructure has cost the nation NZ 3 billion dollars-in lost production due to power cut backs and billions more due to a lack of faith by prospective companies investing in New Zealand.

Labour has been using cashflow to invest in the wasteful state apparatus that they run and that has led to kiwis paying more and more tax and individuals ending up with high personal debt. A well run country needs to invest in growth rather than socialist dictum's and not to borrow to invest in growth is a highly dangerous agenda.

That is essentialially the socialist way though. According to Cullen himself his government is there to "redistribute wealth" and by default this means that any growth of wealth comes way down any list the Dr of History-not economics-might have on his wall next to the hapless Mickey Savage.

We need to look forward, rather than the backwards way the moronic, dangerous, socialists look at things.

The path to prosperity lies in investing for the future. Borrowing to effect that is eminently sensible and National should be praised for going out on a limb on this.

To continue along the present path, as Helen Clark rightly says, "is being reckless and gambling with the countrys future" and means New Zealand is headed, as we have been over the last 9 years, towards certain financial ruin.

Labour's socialist peril
Labour's State countrol out of control
Pointing fingers in the playground
At least Robin Hood was honest

c Political Animal 2008

For a taste of your Whisky

"You got to know when to hold 'em, know when to fold 'em, know when to walk away and know when to run". Kenneth Donald Rogers -The Gambler

No truer words have been sung about gambling but Ken's advice is quite appropriate to today's investing environment as well.

I have been working my way through Benjamin Graham and David Dodd's 1934 investment bible Security Analysis and have rediscovered and sometimes discovered for the first time, some of the basic investment strategies that one should use when looking for good stocks at a good price, or Graham calls his "Intrinsic Value" approach and the relationship with the market price of a stock.

In today's turbulent marketplace these basic investment strategies are even more appropriate and will help an individual decide what to do when one is put in the position of the individual in the song that Kenny sings about.

Security Analysis was written at a time, in 1934, when the questions an investor had to ask themselves, in relation to buying good stocks at a good price, were more central to the decision to buy stocks at any time in the history of stockmarkets. The time of the Great Depression.

From that perspective then, lets take a look at some of the factors that Benjamin Graham has highlighted in terms of the relationship between intrinsic value to the market price of stocks.

The relationship of intrinsic value to market price is best explained in the chart from page 23 of Security Analysis.

Relationship of Intrinsic Value Factors to Market Price
I.General market factors				} Attitude of public toward the issue (leads to) } Bids and offers (lead to) } Market price
II.Individual factors	A.Speculative	1.Market factors	a.Technical
			b.Manipulative
			c.Psychological
	A.Speculative B.Investment	2.Future value factors	a.Management and reputation
			b.Competitive conditions and prospects
			c.Possible and probably changes in volume, price, and costs
	B.Investment	3.Intrinsic value	a.Earnings
			b.Dividends
			c.Assets
			d.Capital structure
			e.Terms of the issue
			f.Others

What Graham calls "analytical factors" determining the market price of stocks; company management, company earnings, long-term outlook for the company,returns for the shareholder, etc, are at odds and in competition with speculative factors influencing market price; the stock price, traders manipulating large tranches of stock artificially, and the general schizoid nature of "Mr Market" at times, and these factors, analytical and speculative, clearly influence stock prices in opposing directions.

Graham has called this approach to the stockmarket a "voting machine". That is, individual investors are making choices on the basis of part reason and part emotion.

As many stockmarket investors have found over the last year, speculative sentiment or emotion has reined supreme, while the analytical,reasoned approach seems to have gone the way of the dinosaur, Rubik's cube and backwards baseball cap.

The writers of Security Analysis have pointed out, lamentably so in my opinion, that the market should be more perhaps a "weighting machine", where the value of stocks is evaluated by a precise and unemotional means in accordance with the actual qualities that a company or stock has; positive or negative.

I would have to agree with the latter, although having said that I have made various emotional stock purchases in the past. Most of them much earlier on in my 11 years of stockmarket investing.

It is clear to most long term investors such as myself that the role of emotion and other speculative factors plays a big influence on stock investors when they are buying and selling stocks.

If investors took Benjamin Graham's intrinsic value approach to investing I think they would be more likely to buy and sell stocks at a reasonable and fair price for them.

Given that the stockmarket is currently volatile and in a technical bear market, with emotions on every investors sleeve, now is a better time than ever to grab the right stock for a good price and considering stock prices are at good price levels, now is a better time than any to use Benjamin Graham's intrinsic value approach to stockmarket investing.

Security Analysis was written at a time where stocks were at historical lows after the great depression, it seems to me that Graham may have been inspired to invest and write about the intrinsic value approach to investing, first, because of the frenzied great speculative bubble of the late 1920s, and the subsequent need in the years after 1929 stockmarket crash to take such a analytical and unemotional approach to investing in the stockmarket.

Graham's intrinsic value method of stock investing is just as relevant today as it was in the 1930s and will remain so for many years to come and will indeed help you to decide to whether to, hold em, fold em, walk away, or run.

Just don't count your money while your sittin' at the table though.


Related Share Investor reading

Some Bedtime Reading: Graham and Dodd's Security Analysis
10 Basic Buffett questions to ask before investing
Be an active investor
Stick to what you know
Investors can learn from my stupidity
Hard times make great businesses
Fear and Greed are lovely things
Research, Research, Research
Learn before you leap
The Intelligent Investor: Book review






c Share Investor 2008

Roy Morgan Poll: 1 August 2008

For the first time in months the Roy Morgan Poll has shown a drop in the National Party polling.

This is a one-off and by no means a trend. A trend would result if similar results were polled after 3 polls or more.

3 separate polls 2 weeks ago showed a similar outcome as today's Roy Morgan.

Finding No. 4311 - Roy Morgan New Zealand's Latest Polling Results: August 01, 2008

In early August 2008 the New Zealand Roy Morgan Poll shows National Party support at 47.5% (down 4.5%) still well ahead of the Labour Party 32.5% (up 1.5%), if an election were held now the National Party would win.

Support for the Greens was 8% (up 0.5%), NZ First 5% (down 1.5%), Maori Party 3% (up 2%), United Future 0.5% (down 0.5%) and ACT NZ 2.5% (up 2%) — to its highest level since March 2007.

New Zealand First has lost some ground in recent weeks likely due to the funding scandal surrounding leader, Winston Peters, while ACT NZ’s increase is likely due to the strong performance in Parliament of ACT NZ leader Rodney Hide in questioning Peters about where the funding has gone.

The Roy Morgan Government Confidence Rating is up from its record low to 91.5 (up 4.5 points) mirroring the rise in the Roy Morgan New Zealand Consumer Confidence Rating which has strengthened slightly up 2.1 points to 87.8, and up 5.8 points over the month.

Continued at Roymorgan.com.au

Related Political Animal reading

TV One Colmar Brunton Poll: July 20 2008

TV3 News Poll: July 20 2008

Fairfax Neilson Poll: July 19 2008

Roy Morgan Poll: July 18 2008

c Political Animal 2008

Winston isn't a conspiracy theorist: Yeah Right

From Whaleoil

Where's the proof? says Peters Video
Peters addresses allegations in Parliament Video

The Winston Peters saga keep rolling on and getting even worse for the great one.

In Parliament today he had a set to with Rodney Hide, questioning him at one point on the validity of a former girlfriend.

It really is embarrassing to see a member make a fool of himself so much but not think he is foolish in doing so.

There were more revelations today over undeclared donations back in 1999. This is in addition to a secret $100,000.00 plus gift from Owen Glenn, 10s of thousands from the Vela family and over 100,000.00 solicited by Peters from Sir Bob Jones.

Mad Hatter indeed.


Related Political Animal reading

Winston Peters lost in Wonderland
Winston Circus hangover continues
Discretion was the essential part of Vela Donation
Winston Peter's Glenn donation scandal: But wait, there is more!
Peter's hangs himself in February Paul Henry Interview
Peter's admits lying about Glenn donation
Winston's silence is telling
Labour gets tangled in Peter's lies
Leaked Glenn Email
Winston got secret donations from Owen Glenn
The Owen Glenn Story: Singing the same tune but hitting a bum note

c Political Animal 2008

Mikey loves Iti

c NZPA 2008

Much political capital was made last year by the Labour Party and mainstream media when John Key was seen to Hongi with Tama Iti. A criminal facing arms charges Labour called Iti, the John Key Hongi they said supported and legitimised a criminal.

What gives?

It doesn't really matter in the great scheme of things but Cullen especially, does have a record of saying and doing things after telling others they shouldn't.

Witness the meagre tax cuts he passed before the coming election. He has been saying for 9 years that the tax cuts that National have proposed were evidence of a morally bankrupt party and an "election bribe".

The Iti/Cullen love fest is just more of the same.

Can anyone tell me how you can recompense a party (buy maaaoorii votes) who didn't sign a contract(The Treaty of Waitangi) for perceived grievances related to that contract?

A contract these days it aint worth the paper it is written on(The Sonny B defence) and if you dont have a contract you get the benefits of having signed one anyway.

Ahh well, I might just sign up for that write off of $40000.00 in debt that Labour are contemplating, making it easier to break contracts with debtors.

Will someone gag me with a spoon, before socialism does.

c Political Animal 2008

Warehouse decision a loser for all

Discuss this company at the Share Investor Forum

In the absence of a detailed summary of the decision out today by the Court of Appeal to stymie a bid for The Warehouse by Foodstuffs or Woolworths Australia, I have to say I am surprised by the decision.

This from Paula Rebstock, Commerce Commission chairman

"New Zealand consumers know that more competition is needed in the supermarket sector. In coming to its decision to decline the acquisition the Commission considered that The Warehouse had already brought important new dimensions to supermarket competition, and potential competition, through its innovative supercentre stores."

What "new dimensions" have the Warehouse brought to Supermarket competition?

Answer? None.

It has 3 "Extra" format stores whose performance thus far has been underwhelming and its potential for the future is in doubt.

The Commerce Commission and Paula Rebstock have made a name for themselves over this appeal and it seems that was all this exercise has been about. Commercial realities have been left in the dust.

Either the legal team for the defence has lost an easily winnable case and or the Court of Appeal Judge is a knuckle dragging, dribble mouthed fool for making such an inconceivably out of touch decision.

Was the Judge off his medication that day?

That is the only conclusion that a sane individual can come to.

The Commerce Commission's legal team had only one string to their bow, the Warehouse Extra stores and their possible beneficial impact on grocery prices but they have no material influence in the supermarket sector and are unlikely to in the future. They have less than .05% of the grocery market.

Rebstock and her Commission have dragged this possible sale saga out for far too long, it has cost the three companies involved, the Kiwi taxpayer, The Warehouse,Foodstuffs and Woolworths shareholders and ultimately the New Zealand consumer.

Economies of scale can be brought to bear if one of the parties bought The Warehouse and that ultimately means cheaper grocery prices.

Unless a likely appeal to the Supreme Court is successful, New Zealand consumers will be the biggest losers.

Warehouse shares were down .60c to NZ$3.22 per share on 4.6 million shares today on the news.


Disclosure I own WHS shares


The Warehouse @ Share Investor

Long vs Short: The Warehouse Group
Warehouse bidders ready to lay money down
The Warehouse set to cut lose "extra" impediment
The Warehouse sale could hinge on "Extra" decision
The case for The Warehouse without a buyer
Foodstuffs take their foot off the gas
Woolworths seek leave to appeal to Supreme Court
Warehouse appeal decision imminent
Warehouse Court of Appeal decision in Commerce Commission's favour
Why did you buy that stock?[The Warehouse]
The Warehouse set for turbulent 2008
Commerce Commission makes a meal of Warehouse takeover
Warehouse Court of Appeal case lay in"Extras" hands
WHS Court of Appeal case could be dismissed next week
Borders decision an indicator of Warehouse takeover outcome
Commerce Commission impacts on the Warehouse bottom line
The Warehouse in play
Outcomes of Commerce Commission decision
The fight for control begins soon

Share Investor Forum-Discuss this topic


Related Links

The Warehouse Financial Data

• Summary
• Charts
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• News
• Announcements
• Price History
• Related Securities

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c Share Investor 2008 & 2009

Warehouse Court of Appeal decision in Commerce Commission's favour

8.58am The Court of Appeal has overturned the High Court's ruling allowing rival grocery firms to bid for The Warehouse[WHS] by Foodstuffs and Woolworths Australia.

The Commerce Commission case argued that if either Woolworths or Foodstuffs bought The Warehouse, it would result in a "substantial lessening of competition".

This was after the Commerce Commissions case was defeated in the High Court in 2007 and an appeal against that decision was lodged earlier this year.

Trading in The Warehouse shares was thin yesterday, July 30 (NZ time), and price movement was mildly upwards during intra day trading but finished flat, so no pre announcement indications could be gleaned from the markets.

The sale process began almost 2 years ago but has been stymied by the Commerce Commission due to their contention that a purchase of The Warehouse by either Foodstuffs or Woolworths would impact to the detriment of food consumers. The Warehouse, Foodstuffs and Woolworths all argue that The Warehouse food offerings are not significant or successful enough to warrant a Commerce Commission appeal

It is likely that Foodstuffs, Woolworths and The Warehouse will appeal the Court of Appeal's decision to the Supreme Court in Wellington.


The Warehouse @ Share Investor

Why did you buy that stock?[The Warehouse]
The Warehouse set for turbulent 2008
WHS Court of Appeal case could be dismissed next week
Commerce Commission impacts on the Warehouse bottom line
The Warehouse in play
Outcomes of Commerce Commission decision
The fight for control begins soon

Disc I own WHS shares

c Share Investor 2008 & Cartoon Emmerson 2008

Starbuck's New Zealand cup doesn't runneth over

News from the USA that around 600 "unprofitable" company owned Starbucks stores are to be closed and that similar things are happening in Australia, with 61 of 84 stores closing, is bad news for investors in the franchisee operator of Starbucks in New Zealand, Restaurant Brands [RBD.NZ].

Bad news because it is an indication of how many of RBD's franchised stores are losing money.

"Any announcements internationally won't have any effect on the way we do business in New Zealand...the New Zealand operation continued to trade strongly", said Paul Wood, GM of Starbucks in New Zealand, in reaction to Howard Schultz', Starbuck's global CEO, announcement of the closures.

Regular readers of mine will know that I don't agree with Paul Wood's contention. I would argue that the Schultz announcement confirms my suspicions that Kiwi Starbucks are losing money.

Paul Wood maybe right when he says the local Starbucks is "trading strongly", although that is up for argument- small sales increases have come from price increases which haven't kept pace with inflation and rising business costs- but what he didn't say was if they were trading profitably.

RBD's Starbucks are suffering from excessive cost structures. Their leases, especially in their high profile stores, are prohibitively high. That has been the case since the brands arrival here in 1998.

Of late, other running costs have impacted on the size of the loss. Rising coffee, electricity and labour costs are among just a few attacks on the expensively priced coffee makers ability to make money.

The increasing amount of competition for the coffee buck in New Zealand has also made things look bleak for any promise of a profit anytime soon.

McDonalds especially has taken custom off Starbucks. Their lower cost and sometimes better quality offerings has had a severe impact. The fact that the Big Mac has a drive through service while Starbucks is devoid of both that and fast in-store service means revenue increases will not come until something has changed.

There is also a myriad of other competition like Robert Harris, Gloria Jeans, Dunkin Donuts and a whole host of smaller chains, "coffee-to-go" installations and independent operators. Most of which were not around when Starbucks opened here 10 years ago.

After years of losses, the promise of profit for Restaurant Brands Kiwi Starbucks looks even further away than it did at its introduction to this country. Its only hope for real increased sales is to dramatically increase store numbers but that is the very reason the brand got into trouble here in the first place-too much overhead not enough custom.

As RBD are contemplating selling their loss making Pizza Hut chain, the only hope for pegging back theirs and their shareholders losses from the Starbucks brand is for it to be sold as well.

The alternative will be a similar announcement to that of Howard Schultz.

Starbucks[SBUX] shares were up 76 cents at US$14.99 on the New York Stock Exchange and at near year lows look good for a recovery under the eye of the founder once again.


Restaurant Brands @ Share Investor

RBD gives KFC a push
McDonalds playing chicken with KFC
Restaurant Brand's Pizza Hut faces increasing competition
RBD sales analysis
RBD saga continues: CEO leaves
The secret recipe is out
2007 FY profit analysis
Delivering increased profit in October 2007
No reason for optimism in latest sales figures


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c Share Investor 2008

Winston Peters lost in Wonderland

Rodney Hide (left) and Winston Peters.

• Peters addresses allegations in Parliament today
  

Winston Peters used a couple of quotes from Alice In Wonderland in his members speech less than an hour ago.

One quote he used was directed at journalists and politicians from the National Party and its central meaning goes something like this:

If you don't know what you are talking about shut your mouth.
Winston Peters, July 30 2008

I would counter that with another quote from Alice in Wonderland, made by Alice herself. It is a direct quote:

"If I had a world of my own, everything would be nonsense. Nothing would be what it is, because everything would be what it isn't. And contrary wise, what is, it wouldn't be. And what it wouldn't be, it would. You see?"
Alice

While we are quoting Alice in Wonderland, It is clear that Winston Peters has been taking his response to serious accusations of corruption, bribery and secret donations from a fairy tale.

In his members speech today he attacked the media, opposition politicians, and went into great detail. When asked where donations to his party went though-why secret donations were not declared, who they came from and what was done for the donors to get the donations, Winnie the Pooh is deathly silent.

Peters clearly lives in a world where up is down, down is up, black is white, white is black and secret donations to an individual or party are not really donations but gifts of little consequence.

Back to Alice.


"What is the use of a book, without pictures or conversations?"
Alice

Helen Clark should be asking for more from Peters but continues to live in Wonderland herself. She simply wants to stay in power.

This leaves the public asking themselves when they will get answer from Winston Peters and Helen Clark. It leaves us all feeling:

"Curiouser and curiouser!"
Alice

The last word though should be left to the Mock Turtle from Alice In Wonderland, for it sums up our collective thinking to Winston Peters and his denial of corruption in the face of clear evidence and his repetition of an attack mantra upon his accusers.

"What is the use of repeating all that stuff, if you don't explain it as you go on? It's by far the most confusing thing I ever heard!"
The Mock Turtle



Related Political Animal reading

Winston Circus hangover continues
Discretion was the essential part of Vela Donation
Winston Peter's Glenn donation scandal: But wait, there is more!
Peter's hangs himself in February Paul Henry Interview
Peter's admits lying about Glenn donation
Winston's silence is telling
Labour gets tangled in Peter's lies
Leaked Glenn Email
Winston got secret donations from Owen Glenn
The Owen Glenn Story: Singing the same tune but hitting a bum note

c Political Animal 2008

Don't forget Money Managers

In the wake of big coverage of late over the collapse of Hanover Finance last week and 25 other finance companies going to the wall, I thought I might revisit a subject that I have covered since I started writing on the Internet.

Doug Somers Edgar, his Money Managers (MM) company and the myriad of companies within that structure-some of them second rate finance companies-that "lend" money to each other have a host of similarities to some of the finance companies that have collapsed over the last 2 years.

Inter-company lending is just one factor that Money Managers uses to not only clip the ticket but to finance risky lending for dubious projects, to companies closely affiliated or part owned by MM interests. Many projects have fallen over, just do a Google search of Doug's full name and you will find a long list, he does when searching for individuals to sue and has landed on Share Investor.

That is where we get to the crux of my column today. We have seen alot of ballyhoo and publicity over the Eric Watsons and Rod Petricevics of this world and their part played in finance company losses, and rightly so, but our friend Doug Somers seems to have been largely lost in the sheer number of collapses.

While other financial collapses have made top of the bulletin news casts and front page mainstream coverage, Doug's MM gets coverage in blogs and weighty financial tomes such as the National Business Review.

I dont fully understand mainstream medias hands off attitude to Money Managers and their money magician former svengali and now minor shareholder, Doug Somers Edgar.

Lets correct the balance here then.

Just this last Sunday 27 July, in the wake of the Hanover collapse, NZ$ 60 million has been put at risk from Money Manager's Totara First Mortgage becoming insolvent and repayments to investors suspended

At the beginning of June 2008, the latest in the massive First Step losses reveals a slowdown in promised repayments to out of pocket investors. There is NZ $38 million lost and $108 million of investors money at risk in the wound down First Step vehicle. Some of the money at risk is owed by a MM owned company Club Finance.

As the economy moves deeper into recession and individuals and companies who have lent money off finance companies and related party lenders, some of them within the Money Managers fold, have trouble paying back money, there will be further losses incurred by investors in Money Managers.

Keep it tuned here.

Related Share Investor reading

Money Managers First Step gives investors the middle finger
Money Managers First Step saga: 3 Story wrap

c Share Investor 2008

The Winston Circus hangover continues

Winston Peters

Peters faces questions over donations in Parliament

"This whole affair is a shameful episode of dirty politics."

Winston Peters July 29 2008


You bet it is, but it is Winston Peters that has made the scandal over his secret donations "shameful" and "dirty".

In the face of overwhelming evidence to the contrary, that Peters has in fact accepted secret donations from wealthy backers, this Minister has fudged the whole issue and wiggled out of the crapper by obfuscation, omission of fact and legalese. Everything but the truth.

Peters has lied. That is clear to most, except the Prime Minister, who has given her full backing to to him so she and her Labour Party can keep their last grip on power, which is quickly slipping from their fingers.

In Parliament today Peters continued the circus and came out against National's Craig Foss for having a conflict of interest owning shares and Greens co-leader Russel Norman for having an affair. Vintage Peters.

He refused to clear up the mounting accusations made against him.

The minority Labour government would topple if Peters was sacked for his failure to clear up his corrupt actions and Clarks already tattered reputation for her own law breaking and lies is further stretched because of her support for her Foreign Minister.

Corruption like this would lead to the sacking of most individuals in private employment situations.

It appears once again though that politicians, especially those from the left, are exceptions to this accepted rule.

Related Political Animal reading

Discretion was the essential part of Vela Donation
Winston Peter's Glenn donation scandal: But wait, there is more!
Peter's hangs himself in February Paul Henry Interview
Peter's admits lying about Glenn donation
Winston's silence is telling
Labour gets tangled in Peter's lies
Leaked Glenn Email
Winston got secret donations from Owen Glenn
The Owen Glenn Story: Singing the same tune but hitting a bum note

c Political Animal 2008

NZ Herald Digipoll: July 29 2008

The latest political poll shows the trend that started in polls from August 2007. A wide gap of support between National and Labour. National has been ahead in the majority of polls since that date and has consistently polled above a 20 point lead over Labour.

There were several polls out 9 days ago that suggested a claw back by Labour but the Roy Morgan Poll from that weekend showed the continued trend that today's Herald Digipoll shows.

Labour's destruction in the 2008 election.

It will be very interesting to see polls out after the scandal surrounding Winston Peters and his corrupt secret donations from big business and Helen Clarks tacit support for him and this corruption.

5:00AM Tuesday July 29, 2008
By Paula Oliver

John Key has a 3.1 per cent lead over Helen Clark in the preferred PM stakes. Photos / Alan Gibson, Sarah Ivey

National has widened its lead in this month's Herald-DigiPoll survey, recording its highest support in a year, while Labour has dropped to just above 30 per cent with the election no more than 3 1/2 months away.

The poll is the first to be completed since New Zealand First leader Winston Peters became embroiled in fund-raising controversies, but his party has gained slightly and his personal rating has dropped only marginally.

National leads Labour by 24.6 percentage points - reversing signs of a Government comeback in other polls.

National has risen half a percentage point since June to 55.4 per cent support, while Labour has dropped 1.6 points to 30.8.

The only other party to get across the crucial 5 per cent threshold to enter Parliament is the Greens, with 5.5 per cent. But New Zealand First, at 4.1 per cent, is edging closer.

National would govern alone if the poll were translated into seats. The election must be held by November 15.

Continued

Related Political Animal reading

TV One Colmar Brunton Poll: July 20 2008
TV3 News Poll: July 20 2008
Fairfax Neilson Poll: July 19 2008
Roy Morgan Poll: July 18 2008

c Political Animal 2008