What 11 years of Stockmarket investing has taught me

This might be depressing or revealing or both but hang on dear readers you just might learn from my experience.

Discuss this subject @ Shareinvestor.net.nz

If I knew what I know now before I started investing in the stockmarket 11 years ago would I still invest today?

I think that is a really good question.

Again it is a question of long VS short term investing.

The first stockmarket investment I made was quite large at the time. It was around 90% of what I owned at the time. I bought 9600 Telstra shares in March 1998, from memory at about $3.9o something, and sold them 4 days latter for $4.47. I made around $4000 very quickly and got bitten buy the stockmarket bug.

The brokerage was around 600 bucks, no internet trading and getting a broker was akin to joining a secret schoolboy club.

My second investment was made in 1998 (7 April to be exact), was for 1000 shares in the Restaurant Brands [RBD.NZ] IPO at NZ $2.20 per share. If I had held on until last week I would have been able to sell RBD shares at around 80c each. If you include dividends and tax credits totaling around $1.20 I would still be short 20c per share! (see chart below for the sad story)

I sold out years ago at around $1.30. Interesting that I was to pick the buy and hold approach to investing because since these two purchases stockmarket investors have seen: *The Asian meltdown of the late 1990s *The tech bubble bursting in 2000 *9-11, where stocks dropped afterward for many months *The accounting scandals in America in 2002 *2007- ? The credit meltdown and associated recession I have learnt along the way and I am still learning. I bought one internet stock that I lost money on (around $3000) sold all my shares on September 11 and lost a little and then started investing in Sky City Entertainment [SKC.NZ] shares in 2002 and then sold during the accounting scandal for another small loss. Looking back I can see how much of an A-grade moron I really was. I shouldn't have bought the internet stock, that was greedy and I shouldn't have sold in 2001 or 2002. They were mistakes but I learnt from them. I started my current portfolio in 2002 and haven't looked back since. Seven years latter it is still in the black (when dividends and tax credits are included) even after all the recent stockmarket calamity-among the worst in living memory-and I am looking forward to a good return as the years go by. It took me until 2002 to develop my investment strategy, a full five years after my first stock purchase, and it has been from my mistakes that I have learned the bulk of what I now know. I knew nothing of the stockmarket 11 years ago, the most I had heard or seen about it was when I saw Michael Douglas in Wall Street 10 years previously and even then it was as foreign to me as a brain cell is to Al Gore. After 11 years, knowing what I know now would I still invest in the stockmarket? I will keep you posted. Recent Share Investor Reading The Headliner: 2 April 2009 Edition Emotional Refuse A Hickey in Bernard's Advice Nuplex rights decision a dilemna for shareholders Share Investor's 2009 Stock Picks: Looking Back Dead Cats and Vicious Bears Long VS Short: Freightways Ltd Related Amazon Reading The Intelligent Investor: The Definitive Book on Value Investing. A Book of Practical Counsel (Revised Edition) (Collins Business Essentials) by Benjamin Graham Buy new: $13.25 / Used from: $9.24 Usually ships in 24 hours c Share Investor 2009

The Headliner: 2 April 2009 Edition

Subscribe to The Headliner @ Headliner.co.nz

Direct from my Mysterious Benefactor comes another edition of one of New Zealand's leading finance papers, The Headliner.

This April 2 edition has a major story on Sky Television [SKT.NZ] and its coming battle with Tivo.

It also covers something I have missed, a foray by Jan Cameron to buy more shares in Postie Plus Group [PPG.NZ] She now owns a whopping 17.75% for a very low total price.

It also skips over retailers Hallenstein Glasson [HLG.NZ] and Briscoe Group [BGR.NZ] with a look at results and future prospects.

Pike River Coal, GPG and Cavalier are also given the once over.

The Headliner has an interesting Portfolio picks section. Here are this edition's picks:

Pike River Coal [PRC.NZ]

Lyttleton Port [LPC.NZ]

Northland Port [NTH.NZ]

F & P Appliances [FPA.NZ]

Just Water [JWI.NZ]

Nothing I would have chosen except perhaps Fisher & Paykel Appliances and only below 20c.

To my mysterious benefactor thank you and please keep them coming.

Disclosure: I own PPG, BGR, & HLG


Recent Share Investor Reading

• A Hickey in Bernard's Advice
• Nuplex rights decision a dilemna for shareholders
• Share Investor's 2009 Stock Picks: Looking Back
• Dead Cats and Vicious Bears
• Long VS Short: Freightways Ltd

Related Links

Subscribe to The Headliner @ Headliner.co.nz
Headliner.co.nz

From Amazon

The Headliner Subscription
12 months, 24 issues


c Share Investor 2009

Hairy "T"

This is the gift that just keeps on giving.

Paul Henry can be annoying but that is part of his charm.

I'm going to buy one and send it to Stephanie Mills.

Watch the video here and wonder at the same time why the fuss?

c Political Animal 2009

Emotional Refuse

Discuss this topic @ Shareinvestor.net.nz

Further to my criticism in February of recent detractors of Warren Buffett's moves to "buy up US stocks", Steve Jordan from The Omaha World-Herald adds another dimension to my argument for me when he quotes me back contrasting my contention that Warren knows his business VS Doug Kass who reckons Buffett is dead wrong in his long-term investment approach:

Bloggers are fighting over whether Warren Buffett's recent financial plays have been wrong or wise. Darren Rickard of the Stock Market & Business Blog sought to refute Doug Kass of RealMoney Silver and TheStreet.com, who said Buffett's strategies are "stale" and don't work these days. Kass cited the declining value of several investments Buffett has made since last fall, plus the 38 percent drop in Berkshire Hathaway's own stock price. Rickard said such criticism is shortsighted and that critics "haven't given Buffett's big bets a time to play out." "Warren Buffett has faced similar stock market and economic meltdowns before, bet huge sums while stocks were affected by these meltdowns and always managed to come out smelling of roses," Rickard wrote. Steve Jordan, Omaha World-Herald Feb 8, 2009

I missed this in my February diatribe, Doug Kass points out that Buffett's Berkshire has suffered a 38% drop in share price but what stock hasn't in this market?

Share price isn't always a reflection of real value. Like Kass' view of the stockmarket, this is short term thinking and it is wrong. Stock prices will fluctuate for manifold reasons other than concrete results and the Berkshire Hathaway stock price has been murdered far below its recent results, mostly for emotional rather than actual reasons.

The same is true of many listed stocks in New Zealand.

Emotion has departed from reality and taken some stocks down the road less traveled towards dead mans curve.

There are bargains out there, Warren Buffett is buying them and commentators like Doug Kass are doing their best to make him look bad in the short-term.

I am willing to admit that the great Sage of Omaha could be wrong this time but on the balance of probability it would be a foolish man who would bet against him.

Just be patient, Buffett has spent the last 80 years doing just that and his results speak for themselves.

Recent Share Investor Reading

• Shareinvestor.net.nz - The Home for New Zealand Stockmarket discussion
  
• A Hickey in Bernard's Advice
• Nuplex rights decision a dilemna for shareholders
• Share Investor's 2009 Stock Picks: Looking Back
• Dead Cats and Vicious Bears
• Long VS Short: Freightways Ltd

Related Amazon Reading


How to Pick Stocks Like Warren Buffett: Profiting from the Bargain Hunting Strategies of the World's Greatest Value Investor by Timothy Vick
Buy new: $15.61 / Used from: $5.90
Usually ships in 24 hours


c Share Investor 2009

Andrew Williams, the Great Panjandrum

More sleaze and innuendo, no not from Dunkin Donut Garner from TV3 but from our self appointed king of the North Shore Mayor Andrew Williams.

I have been called much worse than a selfish nasty person in my life but my favorite description of Andy comes from John Roughan from the NZ Herald who called him "North Shore's panjandrum ".  I had fun looking it up too. 

This from the Sunday Herald:

Heather McCracken

Nobody likes being called names, least of all North Shore mayor Andrew Williams. After the outsider wrestled the city's weighty chain of office and $350 million budget from the incumbent in 2007, Williams now believes he has the qualities necessary to become mayor of the new Auckland super-city.

The problem, he said, is that he is being "victimised" by a "nasty and vicious super-city faction" that is out to get him and seize control of the big new council proposed for the region.

He named right-wing Auckland politicians and bloggers, including the author of the Whaleoil blog, who calls him "the Mad Mayor" and "the Clown of Campbells Bay".

But now the criticism is coming thick and fast: Television's Breakfast show labelled him "egg of the week" for spending $1300 of ratepayers' money on Stop Banks sauvignon blanc for the council chambers; NZ Herald columnist John Roughan tagged him "North Shore's panjandrum", and the Herald on Sunday's Dylan Cleaver dubbed him "a joyless sod" for his objection to an Auckland bid for the Commonwealth Games.

Williams is increasingly responding in kind.

Yesterday morning he emailed arch-critic Cameron Slater, the Whaleoil author, with one word: "Tosser!". Earlier this week he called blogger Darren Rickard a "selfish nasty person"; he called email correspondent Stan Blanch a "loser" and a "tosser" ; and a few months ago he left a council meeting in haste after he called councillor Chris Darby a "smart arse".

His own councillors are now divided about the image he presents of the North Shore. The concerns were exacerbated by his absence - cycling around Central Otago - when the region's leaders gathered for the publication of the Royal Commission's report on Friday.

Most were quick to back Williams yesterday, saying he was a tireless campaigner who was prepared to speak up on tough issues.

"I think there's a silent minority who quietly say 'Good on you, mate'," said Callum Blair. "There's a noisy minority who are trying to attack him."

But Ann Hartley, supported by two others, said: "He's burned his bridges on so many issues on the Shore and offended so many people. I don't think he'd get elected as mayor of North Shore again, let alone anywhere else."

Williams was unperturbed about the criticism, blaming it on a "faction" led by Slater, Auckland City councillor Aaron Bhatnagar and the Newmarket Business Association's Cameron Brewer.

"They're all over there in a super-city faction wanting to get control of greater Auckland," he said yesterday. "They attack anyone who opposes them, and they do it in a particularly nasty and vicious manner."

A vocal opponent of a one-city structure, he said the holiday had been planned months in advance and he couldn't return when the report was released early.

Favourite in a crowded field:

Auckland Mayor John Banks is the favourite for the race to be Auckland's first super mayor, but it's shaping up to be a crowded field. North Shore mayor Andrew Williams hasn't ruled out standing but added there was "a lot of water to go under the bridge".

Auckland Regional Council chairman Mike Lee wants to see the city structure sorted out before making any decision. He said the candidate would need to be someone with a vision for Auckland, who can work collegially.

Broadcaster and columnist Paul Holmes said the increased powers of the new mayor to "get things done" were attractive. However, it was too early to say whether he would run. "I'll be talking about it with friends, and running it past she who must be obeyed."

Recent Political Animal Reading

VIDEO: Daniel Hannan MEP - The devalued Prime Minister

Earth Day 2009: Time to turn it on!

Herald On Sunday to publish Andrew William's Expose'

Hirsute Heffer Hogs the Headlines

Shes Gone, only the devil can replace her

Related Amazon Reading

Where Have All the Leaders Gone? by Lee Iacocca  Buy new: $10.20 / Used from: $4.29 Usually ships in 24 hours

c Political Animal & NZ Herald 2009

Shareinvestor.net.nz - The Home for New Zealand Stockmarket discussion

I launched a stockmarket forum last year but haven't had the chance to spend much time on it for one reason or another and it hasn't had much traffic as a result.

Diddly squat really.

It is still there, it has been since May last year and it isn't going anywhere. I still intend to compete with the big boys.

So here is what you get.

The site is called Shareinvestor.net.nz and can be reached by using that address.

The site is free to read and join, you can post text, pictures, attachments and video and email other members if you want to have that option.

You also have the ability to social bookmark posts.

The forums covered are companies listed on the NZX, ASX and global indices as well-listed with the company prefix.

Forex, property and a beginners section is also included.

There is also the obligatory off-topic section.

Oh and you should see the smiley icons!

Come and have a look, join up and have your say.

Related Links

Shareinvestor.net.nz

c Share Investor 2009

VIDEO: Daniel Hannan MEP - The devalued Prime Minister of a devalued Government

A saw this early last week but this is the first time I have had a chance to post it.

It is essential watching/listening for everyone because governments around the world are spending taxpayer money we don't have like drunken politicians trying to solve a problem caused by the very same practices.

Some governments are not, and John Key and the like are the ones on the right track.

In this speech Daniel Hannon gives the globe a wake up call in his speech to the European Parliament last week and we need to head his advice.

Enough ranting, watch it.

Related Amazon Viewing

      

Marx's Revenge: The Resurgence of Capitalism and the Death of Statist Socialism by Meghnad Desai  Buy new: $15.60 / Used from: $3.79 Usually ships in 24 hours

 c Political Animal 2009          

        

A Hickey in Bernard's Advice

I usually rate Bernard Hickey very highly, he basically tells it like it is and is right more often than wrong.

He knows interest rates, property and all investment categories generally very well.

His latest column on the death of stocks as a long term investment bugs me a little though because I think he has got things horribly wrong.

There has been much talk about the end of equities or the end of buy and hold but my experience in the stockmarket would prove otherwise.

After more than 10 years of market experience(not long at all and still learning) and my stock portfolio which is 7 years at its oldest and 2 years at its youngest and given one of the worst stockmarket routs since the Great Depression my portfolio is still in the green.

Granted things could get worse and they probably will but the thing that Bernard et al are forgetting is that investing in good companies and time will take care of your stock investment for the positive.

Generally, the longer you have held the stocks in your portfolio the better for your wallet.

In my series of Long VS Short columns I have proven after looking at six different stocks in my portfolio that the longer you have held the better you have done.

Bernard either has a different view to me what long term is (10 years plus is my interpretation)or he has neglected to take into account all aspects of long term investing; tax credits, compounding dividends when combined with length of time.

Any asset class (bar residential housing for living in) is better for your pocket in the long-term, especially if you have chosen well and at the right price at the get go.

You simply cannot beat compounding investment over time and while getting out of that investment is usually inevitable the timing of that must be made before you make that investment.

Stick to your initial investment intention(if it is a short term investment, stick to it as well) and only alter it if you know you have made a mistake or see circumstances drastically change.

Bernard Hickey may be right now but I can almost guarantee that years from now he wont.

Be patient!


Recent Share Investor Reading

• Nuplex rights decision a dilemna for shareholders
• Share Investor's 2009 Stock Picks: Looking Back
• Dead Cats and Vicious Bears
• Long VS Short: Freightways Ltd
• Jon Stewart VS Jim Cramer: Full Interview Video & commentary
  
• Briscoe's cash worth looking at

Related Amazon Reading


The Warren Buffett Portfolio: Mastering the Power of the Focus Investment Strategy by Robert G. Hagstrom
Buy new: $14.96 / Used from: $4.34
Usually ships in 24 hours

c Share Investor 2009

Nuplex rights decision a dilemna for shareholders

I have been chatting to a customer about his Nuplex Industries Ltd [NPX.NZ] shares for around a year now.

A year ago he was very positive about the company and its prospects for the long term.

He was also in the money because his shares had risen, up to over 8 bucks.

Oh how times have changed.

Since then then the stock has crashed 90% to finish at 89c today (it hit a low of 51 c on Mar 23) it has announced a big drop in profit and also a rights issue to raise more capital because of high debt levels and therefore a lack of cashflow for the day to day running of the company.

The rights issue key points are:

- Entitlement Ratio: 7 new shares for every 1 existing share
- Issue Price: NZ$0.23 per new share
- Total New Shares: 577,643,738 million new shares to be issued
- Gross Proceeds: NZ$132.8 million to be raised (fully underwritten)

My customer asked my advice on whether he should in effect chase good money after bad by participating in the issue.

I wasn't about to give him advice because everyone has different financial circumstances but I did tell him what I would do given the same situation.

It went sort of as follows.

You would have to consider that given they are in their current situation after the beginning of an economic downturn, then when things get worse will they have the cap out again in another 12 months for more money?

If the answer is no and the company will recover and you may get a recovery in profitability and share price.

Then and only then if I was sure about the long term viability of Nuplex then I would participate in the rights issue.

If not then the only other thing to consider is when to cut and run before the share price is diluted, presumably down to 23c, the rights issue price.

I am not sure if I was helpful at all to my client but I think he is erring on the side of pluncking down some more money.

I hope his hunch is right.


Related Links

NPX- Rights Issue Offer Doc



Recent Share Investor Reading

• Share Investor's 2009 Stock Picks: Looking Back
• Dead Cats and Vicious Bears
• Long VS Short: Freightways Ltd
• Jon Stewart VS Jim Cramer: Full Interview Video & commentary
• Briscoe's cash worth looking at

Related Amazon Reading


The Share Owners' Handbook: A Simple Guide to Dividends, Bonus Issues, Consolidations, Rights Issues & Takeovers by Francis Groves
Buy new: $16.50








c Share Investor 2009

Earth Day 2009: Time to turn it on!

Just like last year, this year's "Earth Day" will prove to be the biggest waste of time since Al Gore's parents decided to have sex.

Demented unwashed dipsticks all around the world will be turning off electrical appliances for an hour.

Imagine streets and homes without lights, what a wonderful opportunity for the less law abiding citizens.

No lights, no heat, no air-con, no commerce, no business...

All for "climate change", a non-existent problem.

As I did last year this is what I propose we do this coming Mirth Day March 28:

My proposal is this. At 8.00pm sharp, when the dolphin loving, Volvo driving, mung bean eating, bearded female, non smoking, non drinking, Leo Dio loving, vegetarian, hairy arm pitted, sandal wearing , finger pointing, lesbian school teachers are sitting in the dark with all their lights out for an hour, playing with the insert appropriate expletive here next to them, I will turn on every light, appliance and electrical device that I can lay my meat eating, chain smoking, 6 litre V8 Holden driving hands on... for two hours.

My first earth day last year was a success and I will update you afterwards to let you know how much power we used.

We managed to use so much energy and waste so many of the earths resources we did enough to cancel out the efforts of a dozen brain-dead morons who switched off(their lights as well).

This year we are hoping to double our efforts.

From Amazon

	The Great Global Warming Swindle (DVD)  Buy new: $14.99 / Used from: $39.38 Usually ships in 24 hours
	The Great Global Warming Swindle (DVD)
	Global Warming Hoax DVD Trilogy
c Political Animal 2009	Great Global Warming Swindle & Global Governance (2 DVDs)

Herald On Sunday to publish Andrew William's Expose'

An article will be coming out in the Herald on Sunday about North Shore Mayor Andrew William's recent and historical shenanigans with his constituents and other individuals and groups that have had the unfortunate opportunity to meet with him.

It is being written by Heather McCracken. 

She has asked me a few questions about that email and is currently trying to get hold of the great one on his cycle trip around the South Island (we on the Shore are grateful he has gone) to get his views about why he is so unpopular.

It is to be published either this week or next.

If you have any input you would like to add to the article I am sure Heather would like to hear from you, especially if you are a 'Shore boy(okay or girl) like me.

Email Heather here:  heather.mccracken@heraldonsunday.co.nz

As Heather pointed out to me, it seems strange, given Williams very vocal opposition to the "Super City" plan that he would be absent from his post when the news came out that this plan is going ahead.

Kinda nutty if you ask me.

Related Amazon Reading

Controlling Corruption by Robert Klitgaard  Buy new: $21.95 / Used from: $11.08 Usually ships in 24 hours

c Political Animal 2009