Thursday, April 16, 2009

Irving gives investor's perspective

I post this Wall Street Journal article here because not only is the WSJ the best financial paper in the world but the article is the most illuminating that I have seen on the current economic and financial mess that we find ourselves in the middle of.

It gives perspective, some opinion and most of all experience.

Perhaps the most illuminating of accounts is about a man called Irving Kahn, I have heard about him before briefly and his story, among the others in this sizable column really put today's investors in the picture more clearly than anything I have read, listened to or watched over the last 2 years.

The following excerpt is about 103 year old Irving Kahn:

Irving Kahn sits at his cluttered desk, peering at his computer screen through thick, dark glasses. The Dow inched up 38 points today, a small move in light of its 332-point drop earlier in the week. But Kahn has made a career of betting on beaten-down stocks, and he's hard at work poring over annual reports and studying balance sheets looking for companies that have lots of cash, not much debt and good long-term growth prospects. General Electric has a solid business and looks pretty good at these prices, he muses. General Motors? Not so much.

Like a lot of us, Kahn has seen good times and bad, bull markets and bear markets, recessions and recoveries. But he's also seen something most of us haven't: the Great Depression. Kahn, who still shows up at work every day and puts in a good six hours, worked as a stock analyst and brokerage clerk on Wall Street in the 1930s. He's 103 years old.

That's right — 103. As pundits half their age dominate the airwaves with prognostications on whether the next Great Depression is just around the corner, a small group of overlooked folks who not just lived through it but worked through it — on Wall Street — are still here. What's more, they're still at it, running their own sizable portfolios and, in a few cases, managing money for clients. Despite innumerable bull and bear markets, 17 presidents, and countless economic policies, they've remained remarkably true to their investing philosophy. They've also remained remarkably true to their methods: Forget BlackBerrys; most of them hardly touch their desktop computers. And you won't find CNBC blaring in their offices throughout the day; that's more noise than news to these gentlemen. Instead, you'll find stacks of reading material (these guys actually read a firm's annual report before investing) and a lot of old-fashioned...what do you call it? Oh, right. Math. See fully story at WSJ

Irving puts the long into long term investing and if any example of longevity can give today's investors hope for that long-term it is individuals like Irving, with qualities like tenacity, a capacity for hard work, honesty, intelligence, ethics and most of all experience.

If the WSJ article doesn't give you a better feeling about where you are going in the future, investing and in life, you haven't read it thoughtfully enough.

Move over Mr Buffett, I think I just got a new Guru.

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Wednesday, April 15, 2009

Ian Wishart's "Air-Con" no con

At last a book from the sensible side of the "climate change" debate.

Air Con: The Seriously Inconvenient Truth about Global Warming looks likely to be a best seller not just in New Zealand but internationally to boot.

It has got the lefty control freaks up in arms already and it ain't even out yet, so it definitely has merit on that point alone.

It may be written by the sometimes off the wall Ian Wishart but the book is a good read, factual rather than the fictional Inconvenient Truth on which title its fucks with and the annotated research it contains is something that Inconvenient Truth lacks in spades.

We know that the science on this matter is far from settled and in fact the balance of known scientific research, not the made up bullshit from the left who are making money out of this, is reinforced in this excellent book.

I would recommend it to all my readers.

From Investigate Website

Straight to the point, easy to read, Ian Wishart has pulled together the latest research and lights a fuse under the global warming industry. Have all the facts at your fingertips, and then you can decide whether you should be paying higher prices and higher taxes to fix global warming.


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The BBC wants you

The BBC are working on a documentary on the Sage of Omaha, Warren Buffett. Associate Producer Charlotte Dawes is looking for shareholders of Berkshire Hathaway (although I don't expect many from New Zealand) who are willing to share their thoughts or stories about the man and his investment style.

I have been asked to participate as to why I follow his unique way of investing but Charlotte is principally looking for Poms to be included, because it is the BBC and they will be following some Brits to the Berkshire Stockholders meeting coming up in May.

If you are interested in participating please email Darren Rickard here .

I would be chuffed to get some readers to contribute their thoughts opinions and ideas, especially if you are a shareholder.

Related Links

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Monday, April 13, 2009

Fruit cake Andrew Williams must go

"The 'dog's breakfast' as you describe us will develop a co-operative plan for our region. I would recommend that you work with us and not be the lone sheep."

Andrew Williams text to John Banks, 10.28pm last Thursday

Andrew Williams said that the Local Government Minister Rodney Hide misled Prime Minister John Key about his consultation with Auckland mayors. Last week in a TV news report.

Fruit cake mayor Andrew Williams paranoid rantings continue, this time over his impending unemployment  due to supercity elections late in 2110.

He has started a stoush with John Banks, Mayor of Auckland City which has lead to a mistaken text sent to him instead of its original recipient Aaron Bhatnagar:

"I leave this to Whaleoil. TV3 are running this lunitic (sic) tonight?"

John Banks mistaken text to Andrew Williams, 5.57pm Saturday.

Whaleoil wants Williams removed from office and is smearing him as much as it can to bring this to a head. I had no idea part of Whaleoil's motivation was because it is run by Cameron Slater - son of Citizens & Ratepayers president John Slater, and a friend of Mr Banks.

Nevertheless, Andrew Williams is out of control, has abused his political foes and ratepayers of the North Shore City so he deserves a good grilling over an open public flame.

Williams recent behavior has seen him send off abusive emails to his constituents, fight with basketball players, drunken abuse at political functions and a number of other bizarre incidents where his mouth has written checks his brain couldn't cash.

Williams was elected by a small minority of Shore residents (and sadly me) and his popularity has plummeted since then, becoming now one of the North Shores most unpopular mayors in the areas history.

I fear the representation of the North Shore by a drunken, abusive, paranoid individual with clear mental heath problems is not doing this region any good at all.

Time to fall on your sword Andy.

c Political Animal 2009


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Saturday, April 11, 2009

Tortoise VS Hare: Tortoise wins again

Long VS short, there just aint no contest!

Yeah, I know, I know, he is going to bang on again about the merits of long term investing over short term.

Absolutely, it is a good subject and important if you want to make money well into the future. Invest in a good business, it will have its highs and lows performance wise regardless of its share price and the odds are better than a short term punt that you will be happier in the end.

I am motivated to write this column because of my sustained interest in Warren Buffett and his investment style; buy a great company for a good price and never sell it.

Recent developments for Buffett have seen his Berkshire Hathaway company lose money, lose share price and Berkshire losing its high credit rating a few days ago.

That has seen his critics lather at the mouth to come out and critique his recent moves to buy stocks and spend money rather than do the opposite I presume.

One virulent critic has been Doug Kass and he has been shorting Berkshire stock over the last year.

But surprize, surprize being the short term thinker he his today he came out and did a complete 180 degree flip flop, Doug is buying Berkshire stock for his long term draw!

This from Doug:

"When conditions change, as they appear to be doing now -- see this morning's Wells Fargo (WFC Quote) news -- opinions must change, and opportunities must be embraced. This is especially true in the case of Berkshire Hathaway as the considerations that led to my shorting of Berkshire Hathaway's shares at around $145,000 a share have now reversed, and, with the shares today trading under $90,000 a share, I have begun to accumulate a long position in Berkshire Hathaway".

Doug could have bought Berkshire at $74,100 in November and again in February 2009 at $73,677.30.

But if you looked at Buffett's move when "his" Wells Fargo bought the basket case Wachovia last year, as a long term investment, you might have had the fortitude to buy Berkshire stock thinking Well's management might know what they were actually doing.

Kass even advocated buying Wells Fargo last November, but not Berkshire Hathaway stock, which owned around a 7% stake in the company according to filings last December. Wells is now one of Americas largest banks.

Berkshire has been the owner or part-owner of many global brands and added more recently.

Kass could have had a stake in all of these cheaply for a long term recovery but only picked one.

The purchase of debt or stock in Harley Davidson, Tiffany, Goldman Sachs, General Electric and a number of other smaller and some larger purchases over the last 12 months also look to pay off as the economy inevitably recovers in the long term.

Oh how the tortoise has taught the hare a lesson, and more to come I would think.

Thanks for your indulgence of my self-indulgence once again.

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Thursday, April 9, 2009

Sir Roger Douglas Parliamentary Speech

There was another speech given yesterday in parliament by the great former Finance Minister Sir Roger Douglas. It was much more interesting, well read, containing actual facts rather than the fantasies in the selfish rant of the former Prime Minister Helen "no regrets" Clark.

I will post that speech here in its entirety when it becomes available but will add a small summary of it taken from the ACT website.

It is about the amount of money stolen by the Labour Government from hard working New Zealander over the last 9 years .

These are facts:

Posted on 08 Apr 2009

ACT New Zealand Finance Spokesman Sir Roger Douglas today released information showing that New Zealanders have spent more than a decade being robbed blind through over-taxation.

"These figures demonstrate that the spending binge of the past 13 years is today costing every man, woman and child $7,567.63 - or more than $30,000 from every family each year in taxation" said Sir Roger.

That is in direct contrast to the 13 years preceding 1996 - the period of reform - during which time the burden of Government spending increased by only $300 per person. From 1984 - 1996 we had economic growth. Now we have economic stagnation. It doesn't take a genius to figure it out: Government spending stifles innovation and growth.

"Given the current economic climate, this robbery must stop. What have families got for their $30,000? How has the Families Commission helped? Or introducing tax breaks for the racing industry? Has the massive expansion in Government really been worth it?

"Had that money been left with families, most would now be mortgage free, educated two children at an Independent School, or provided the entire family with private health insurance while allowing them four family holidays to Australia.

"But the reality is much worse. Wasteful Government spending has significantly decreased our economic growth. Taking into account the lack of growth, the figures are disgraceful: average salaries are $15,000 lower than if we had left the cash in the wallet of those who earned it.

"If we factor in this loss of income, and add it to the increase in Government spending, then the average family is $60,000 worse off every year. It's time to get real and drastically cut wasteful Government spending - and we need to do it now," said Sir Roger.

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Helen Clark Valedictory Speech in Parliament

She waffled on longer than a turtle on mogadon and professed to have no regrets. 

The majority of New Zealanders are happy she is gone but I guess ignorance on her part is bliss.

She leaves behind a country in social and economic turmoil and the bulk of that is her and her partys doing.

Read her sermon and weep:

E te Kiingi Tuheitia, te Ariki Tumu, e nga iwi o te motu, e rau rangatira ma, teenaa koutou, teenaa koutou, teenaa koutou katoa.

This speech is my last in this Parliament and that is something I view with a mix of emotions.

Being a member of the New Zealand Parliament has been a big part of my adult life, and my involvement in New Zealand politics more broadly long predates my election as MP for Mt Albert in 1981.

In 1968, fresh from Epsom Girls' Grammar School, I enrolled at Auckland University, to study History, English, German, and, yes - as an after-thought - Political Studies.

What a year that was for students around the world, with unrest spreading across the campuses of many a country as the post war baby boomer generation came of age.

Here in New Zealand, those of us who were politically minded were not short of causes to get involved in. Opposition to the Vietnam War, apartheid sport, nuclear testing in the Pacific - all these issues sent fault lines through New Zealand politics - some ideological, some generational. The great strength of Norman Kirk as Labour Leader was that he reached across the generations to speak for us as young people on these issues and in articulating an independent foreign policy.

In my childhood and teenage years, a television set was not a feature of every home.

That meant that politicians were rather remote figures whose voices were only occasionally to be heard on one of the handful of government owned radio stations (this was before Radio Hauraki broke the monopoly by broadcasting from a boat in the Hauraki Gulf), or were read about in the then rather dry columns of the print media.

I remember Sir Ronald Algie MP coming to prizegivings at my secondary school. I recall being barked at by Sir Leslie Munro in the Te Pahu Hall when, as a student, I had the temerity to ask him a question about the wisdom of deploying New Zealand troops in Vietnam - but other exposure to politicians was non-existent in my earlier life.

In recent years when children have asked me whether I wanted to be Prime Minister when I was a child, I could only reply that I couldn't have imagined that happening, as the politicians of my childhood and youth were almost invariably rather elderly gentlemen.

Those perceptions changed for me during my student days, and upon joining the Labour Party as I did in 1971. There was a new generation coming into Parliament for Labour, beginning with the election of Jonathan Hunt in 1966. Outside parliament there was the extraordinary energy of Jim Anderton in Labour's Auckland local body campaigns, and later as party president.

As well there was the growing stature of Norman Kirk as Leader of the Labour Party and Leader of the Opposition. I was proud to be a mere foot soldier in the campaign which saw him lead Labour into government in 1972.

But the Third Labour Government suffered greatly from Norman Kirk's untimely death and major economic shocks, leading to its defeat after only three years.

And so it was back to the politics of opposition for nine years, in the course of which I myself entered Parliament as the MP for Mt Albert.

As many are well aware, I grew up on a farm in the Western Waikato and did not prima facie have a background of the kind associated with Labour Leaders of the past. But my wider family, like many, had a range of political allegiances. Politics was definitely of great interest to us, and not something just to be engaged in via a vote on Election Day.

My parents were perhaps initially surprised at the direction my politics took, but, within a relatively short period of time, they extended their strong personal support for me to strong political support. That continues to this day, with my father who is 87 being present in the gallery, and my mother, who is not well enough to travel, being able, I hope, to watch proceedings on television today, along with my sister Jenefer who is caring for her. Words cannot adequately express my gratitude to Mum and Dad for their lifelong love and support of me.

My first general election campaign as a Labour candidate was in 1975 in Piako - one of National's safest seats, held by gentleman Jack Luxton, and later by his son John.

What a great learning experience that was for me, moving through the small towns of the East and South Waikato, drawing support in particular from workers and their families associated with the Kaimäï Tunnel project, the dairy and timber factories, and the Arapuni hydro village.

I well remember a campaign visit in support of me by Sir Basil Arthur, Minister of Transport, where superstition dictated that as a woman I could not accompany him into the Kaimäï Tunnel.

The highlight of the campaign was the late Bill Rowling putting Putäruru on his whistle stop tour of the Waikato. The hall we hired was filled to overflowing for the morning tea held in his honour.

My advice to young people starting out in politics is to be prepared to run first for their party in electorates which are highly unlikely to be won, but where one will learn a lot and have more to offer when a winnable seat comes along. Success is seldom instant in politics, and, where it does come quickly, it can equally quickly fizzle out.

The Parliament I entered in 1981 was far less diverse than that we see today. That year the number of women elected to parliament doubled from four to eight, and there were only six Maori MPs.

The main forms of recreation were the billiards room in what is now the Grand Hall, the Bellamys' bar, and the card schools in Members' offices.

To say that this was an alien environment for a 31 year old woman, fresh from a university teaching position; would be an understatement. It was hard going, as frankly a lot of my political career has been, but it was character forming, and gave me the experience and confidence to go all the way in the system, and, importantly, to be part of changing it for the better.

But saying that Parliament was hard going and an alien environment brings one to the issue of motivation - of what exactly it was which attracted me to this life.

What brought me here was idealism, values, a sense of community and of internationalism, a desire to make a contribution to public life, and overwhelmingly a sense of gratitude for the opportunities New Zealand has offered me and which I believe should be the birthright of every New Zealander.

I have always been proud of New Zealand's egalitarian traditions. Deep in our nation's roots is the ethos that Jack is as good as his master - and these day that Jill is as good as her mistress.

Many of our forebears came to this land to escape the class-bound nature of Britain, where their place in the economic and social order was largely prescribed from birth.

I deeply detest social distinction and snobbery, and in that lies my strong aversion to titular honours. To me they relate to another era, from which our nation has largely, but obviously still not completely, freed itself.

Entering Parliament was for me a way of translating ideals into positive action - hard as that can sometimes be. There have been many issues over my 41 years of political activity when I've perhaps been ahead of public opinion at the time. Yet, so often, today's avant-garde become tomorrow's status quo. Such thoughts cross my mind when I see a cross section of New Zealand families celebrate their children's civil union; or a government delegation from Vietnam welcomed as friends and regional partners, when once to support relations with their country was thought to be beyond the mainstream.

My first six years as an MP saw me focused on three main areas of activity.

First there was my electorate work in Mt Albert. How grateful I will always be to the wonderful people of those central Auckland suburbs for the opportunities and support they gave me to grow and develop as a politician and leader over 27 years.

Mt Albert was formed as a new electorate in 1946. It faced a by-election the following year, when the long serving Arthur Richards, the former Member for Roskill, retired. Warren Freer was then elected at the age of 26 and served for 34 years, rising to the number three position in Labour's parliamentary hierarchy and becoming a senior minister.

It is certainly my hope that Mt Albert will support and nurture Labour successors to Warren and me who have the capacity to rise to the very top of New Zealand politics and serve their electorate and our country with distinction.

The bread and butter constituency work Mt Albert is interfacing with government agencies and departments on matters like housing, social welfare, and immigration, and supporting the endeavours of our fine local schools, sports clubs, and communities.

The communities which make up Mt Albert are strong and diverse, making it a very rewarding electorate in which to live and work. I will miss it a lot over the next four years - but home is where the heart is, and my heart will always be in Kingsland where Peter and I have spent our 27 years of married life.

Second, there was the work here in Parliament - for me, mainly focused around various permutations of what is now the Foreign Affairs and Defence Select Committee - of which I became Chair from 1984 to 1987. The nuclear-free legislation was a highlight of that period, as were the major reports our committee produced on disarmament and on New Zealand's relationship with China.

Third, there was the broader work within the Labour Party, where I had been a New Zealand Executive member since 1978. There was the excitement of the 1984 campaign, and the trauma of the economic shock and adjustments which followed the election. Victory in 1987 disguised the fact that in our heartland seats held by ministers; the Labour vote slumped - as the Fourth Labour Government had delivered economic policies to which our traditional supporters could not relate and which had not been foreshadowed.

That experience and the subsequent massive 1990 defeat left a lasting impression on me - along with a determination for the future to be transparent about election policy, to deliver on it, and to keep faith with the loyal, long term Labour supporters who sustain our movement through good years and bad. There are always fair weather friends in politics - one knows who one's true friends are when they are still standing with you in the aftermath of defeat when the phone (and now the texts) have otherwise gone rather quiet.

My time as a Minister from 1987-1990 was very rewarding and enabled me to engage with communities across New Zealand. As Minister of Conservation, I returned to the extraordinary places I had last visited on South Island family holidays in the 1950s and '60s. I was able to strike the occasional blow for the environment by rejecting obtrusive development projects - like the Monowai Mine on the Coromandel and the Nukuhau Marina proposed for Lake Taupo.

Public housing and health were passionate interests of mine and so much was achieved - from the acquisition of many more state houses, to passage of the pioneering smoke free legislation, and of the innocently named Nurses Amendment Act which freed midwives to practise autonomously.

As Minister of Labour in 1990 I took the Employment Equity Act through Parliament, only to see it gone by Christmas that same year. In the face of a retailer revolt, I also promoted the legislation for seven day shop trading. While that was not welcomed by retail workers, the introduction was softened by my writing what amounted to an advanced industrial agreement into a schedule of the Act. Alas, that didn't long survive the 1990 election either.

The nine years in Opposition in the 1990s were tough years, as we in Labour worked to restore our electoral credibility.

There was the shock treatment of the new National Government's health, superannuation, welfare, and industrial policies, and unemployment rose above ten per cent in 1991.

The electorate clearly wasn't happy in 1993, but still saw Labour as having a lot of baggage from the 1990s. This "plague on both your houses" sentiment was then expressed in the resounding vote for a change to the electoral system in 1992, and the binding referendum on MMP in 1993.

The New Zealand electoral system has never been the same since. The two party system crumbled as the first MMP election approached, with MPs leaving both major parties to sit elsewhere in the House.

I became Leader of the Opposition at the very point that the old electoral order began to crumble, and smaller parties had a chance of finding a niche in the political spectrum. Labour lost support to the Alliance and to New Zealand First in particular.

The nadir came with a Colmar Brunton poll in the mid 1990s which put Labour on fourteen per cent and me on two per cent as preferred Prime Minister. It doesn't get much worse than that - and looking back on it now I am only surprised that concerned delegations of colleagues didn't beat a path to my door more often.

Against that background, success in the 1996 election was impossible, but nonetheless it marked a turning point for me and for Labour. The coalition government stitched together was not a marriage made in heaven, and eventually dissolved.

Meanwhile Labour and the Alliance were able to effect a rapprochement and to campaign as a ready made coalition in 1999.

The rest is history. 1999 delivered a Labour-Alliance minority coalition government with support on confidence and supply from the Green Party.

Our government then and in subsequent terms embarked on a programme of change across the economic, social, environmental and cultural spheres, which over time has made a substantial difference for the better to many New Zealanders' lives.

Fairness, opportunity, and security were our core values - and they were applied across the board.

We took a long term approach to investment - in the Superannuation Fund, in Kiwi Saver, in early childhood education, in skills training, in research and development, in primary health care, in public transport, and much else besides.

Workers' rights were enhanced through the Employment Relations Act, paid parental leave, and a fourth week's annual holiday.

The economy experienced its longest run of continuous growth since the Second World War, and unemployment remained low for years. These successes gave us the capacity to make significant investments in families, services, and infrastructure. The rising tide did lift every boat, transforming the circumstances of Maori, Päkehä, Pasifika, Asian, and all other communities.

In our last term in particular, comprehensive sustainability policies were put in place to put New Zealand on the front foot in combating climate change. I strongly believe that it is important for our country's international credibility that we are seen to take these issues seriously and be prepared to act.

Over nine years we made substantial acquisitions for the conservation estate - with the jewels in the crown being the transfer of Molesworth Station to the Department of Conservation and the purchase of the pastoral lease of the spectacular St James Station.

It was my pleasure to lead our work on arts and culture - to encourage the development of New Zealand talent, audience enjoyment, economic opportunity, and the promotion of our unique New Zealand identity and perspectives.

The heritage part of my portfolio was also immensely satisfying. I look back on years of significant projects from the Tomb of the Unknown Warrior; to the new, "born digital", official encyclopaedia - Te Ara; to volumes of oral and other histories of World War Two and the Vietnam War, and to the major regional museum and gallery projects for which the government become a substantial funding partner.

There's also been the ongoing process of reconciling with our past - of recognising injustice and addressing it. New Zealanders are now very familiar with the settlement of historic grievances going back to the time of colonisation and the signing of the Treaty of Waitangi. These settlements must be completed so that we can move forward together as a nation.

As one who grew up on a farm on Raupatu land in the Waikato, where our family's presence felt like it had been for ever, I cannot even begin to imagine the scale of loss felt by Waikato Tainui from the mid nineteen century, but I hope that I and my government have played our part in putting right. The presence of Kingi Tuheitia and his delegation here today means a great deal to me as did the friendship of the late Te Arikinui, Dame Te Ata-i-rangi kahu over many years.

As well in my time as Prime Minister, there was the apology to New Zealand's early Chinese settlers and their descendants for the unique and severe discrimination they suffered for many decades; and the apology to Samoa for the injustices perpetrated by the New Zealand colonial administration.

And just last year I issued on behalf of the government and people of New Zealand an apology to Vietnam veterans and their families, for the manner in which their loyal service to New Zealand was not recognised as it should have been and for the inadequate support extended to them and their families.

Reconciliation, respect, inclusion, human rights - these were important themes for me as a Prime Minister with a deep belief in equality.

Maoridom in recent decades has undergone a profound renaissance and stands very tall today as New Zealand's first people, as substantial economic stakeholders, and as contributing so much which is fundamental to New Zealand's unique national identity. Our government was a willing partner in that renaissance.

Our substantial Pasifika populations have also made their presence felt from the professions to the factories, from the movie screens to the sports fields and beyond, to become a quintessential part of the fabric of New Zealand society.

I have enjoyed my involvement with New Zealand's many emerging ethnic communities, whose cultures, heritage, languages, and faiths add so much to the richness of our nation.

The Civil Union Act enabling rainbow couples to express their love for each other by cementing their relationship in law; the Property Relationships Act applying the principles of fair division of property on the dissolution of a de facto relationship; and our work guided by the New Zealand Disability Strategy were all important to me.

There is so much about New Zealand which is special and marks us out as a unique and gifted nation.

We have evolved distinctive reconciliation and constitutional processes. Our institutions from our Parliament and executive government system under MMP to our Supreme Court have evolved a long way from our colonial heritage. It is inevitable that our constitutional status as a monarchy will also change - it's a question of not if, but when.

My government sought to reflect our nation's unique personality in New Zealand's international relations. For us, New Zealand needed to stand for peace, justice, reconciliation, and sustainability. Our refusal to participate in the war in Iraq was a decision based on principle - involvement would have ripped our country apart for no good purpose.

I take pride in the high regard in which New Zealand is held internationally; and the work our government did in the Pacific and East Asia, in rebuilding the relationship with the United States, in broadening relations with Europe, in engaging strategically with Latin America, and in deploying peacekeepers around the globe.

That high regard for our nation and our constructive way of working internationally was the background against which I went forward as a candidate for the position of Administrator of the United Nations Development Programme. I regard my selection as a huge honour for me and for New Zealand and I will seek to carry out my duties there in a way which reflects well on our country.

I have no regrets about leaving Parliament at this time. I have had an incredible career here and have been given enormous opportunities. But it is time to go and for others in my party to take forward the cause we believe in and I will always believe in.

The election result of course was disappointing after so many years of hard work and a sense of achievement in so many areas. But we live in a democracy and the people's will must be accepted and respected - as it is by me.

A long and rewarding political career is not a solo act. I stand here knowing that I have been supported by so many people for so long because they believed in me and in the values I represented.

My parents gave me the best start in life any child could have - a secure and loving home, and support for my education at every stage.

My three sisters, my brothers-in-law, and my nieces and nephews, aunts, uncles, and cousins in our large extended family have been very supportive of Peter and me over our many years in the public eye.

Peter himself has been a staunch supporter of my aspirations and career - no matter how unpleasant and difficult things got in political life from time to time. There have been immensely more high points than low points.

For ten consecutive elections I have received solid support from the Mt Albert electorate, and I thank all those who have voted and worked for me there over 27 years. Special thanks are due to the Mt Albert Labour Electorate Committee which has worked hard to make our electorate one of the best organised in New Zealand, and to my hardworking electorate office staff led by my long-time friend and supporter Joan Caulfield.

My political career has been based on the values and principles of the New Zealand Labour Party - and I thank all those at all levels and in all regions across New Zealand for their constant support.

Here in Parliament I have been privileged to work with remarkable colleagues, from my deputy leader for many years, Dr Michael Cullen, to those who made up our Cabinet and Caucus. I have made many friends in politics, and I know those friendships will be life long. The texts will keep coming - and maybe even some tweets.

Other political parties played an indispensable role in the success of the Labour-led Government over our nine years in office. I worked particularly closely with the Hon Jim Anderton, and was pleased to see a friendship formed in the 1970s, which had been put under great strain in the 1980s and 1990s, resume in the 21st century.

Jeanette Fitzsimons and the Green Party worked closely with me and Labour for many years, because we shared common approaches in many areas.

While there was less commonality, nonetheless honourable relationships which guaranteed confidence and supply were established with Hon Peter Dunne and United Future, and Rt Hon Winston Peters and New Zealand First.

A relationship based on considerable common interest was also possible with the Maori Party during the last parliamentary term. Hon Tariana Turia and I go back a long way, and I acknowledge in particular her generous comments in Parliament last week.

My contact with the National Party and ACT has not been significant given the significance of the philosophical differences between us, but I do wish on this occasion to acknowledge the leaders of both parties, John Key and Rodney Hide, for their courtesy in recent times, and also the courtesy of numerous other members, going back to the time of Marilyn Waring and Katherine O'Regan, Paul East, and Simon Upton. I've also enjoyed Jim Bolger's company post-politics.

I have very much valued the ongoing wise counsel and advice of Geoffrey Palmer, and the support and insights provided by Mike Moore on moving into the international system.

As Prime Minister I was supported by the broader public service in general and by those departments and agencies, for which I had direct responsibility in particular Mark Prebble and then Maarten Wevers as heads of the Department of Prime Minister and Cabinet, and Marie Shroff, Diane Morcom, and Rebecca Kitteridge as Cabinet Secretaries, and their staff all worked hard to ensure that Labour as a democratically elected government could implement its policies.

Martin Matthews, Jane Kominik, and all at the Ministry for Culture & Heritage helped me to give arts, culture, and heritage a higher profile than ever before in our country.

The Department of Internal Affairs supported me in my role as Minister of Ministerial Services and as host of countless international delegations at head of state and government level.

I enjoyed my work with the Security Intelligence Service and the Government Communications Security Bureau led variously by Richard Woods, Warren Tucker, and Bruce Ferguson. I placed trust in them and their staff as they did in me, and I believe that their work is in the interests of New Zealand.

I also owe a great deal to the Ministry of Foreign Affairs and Trade, which supported me and my ministers on so many complex issues and me personally through many summits and bilateral visits.

It was also a privilege to be involved in many ways with the New Zealand Defence Force and to see its work on and offshore. I will always remember the amazing visits to Kabul, Bamyan, and Basra; and the Sinai, East Timor, and the Solomon Islands to see New Zealand military personnel at work.

Close personal support for me as Prime Minister came from my private office and the talented teams led by Heather Simpson and Alec McLean; and to this day comes from my parliamentary staff, Jacque Bernstein and Dinah Okeby as it has always come from generations of personal secretaries, researchers, press secretaries, messengers, diary secretaries, typists, and receptionists in the past.

Personal protection came from the Diplomatic Protection Squad of the New Zealand Police who stayed very close to me for the whole nine years. To DPS and the New Zealand Police across our country, thank you for your support. You are New Zealand's unsung heroes and deserve much greater recognition for what you do to protect us all.

Over the 22 years since I first became a Minister of the Crown, I have been not just driven but fully looked after and supported by the government drivers in the VIP service of the Department of Internal Affairs. I have come to know many well, and they are my friends. As a former Prime Minister, I am privileged to continue using their service, so today marks not an end, but an interlude. As General McArthur once famously said, "I will return."

It is 27 years to the month since I made my maiden speech in this chamber at the tender age of 32.

I said then that "My greatest wish is that at the end of my time in this House, I shall have contributed towards making New Zealand a better place than it is today for its people to live in."

I leave knowing that I have fulfilled my wish and that I played a part in making New Zealand a better place.

It has been a privilege to be a member of this House for 27 years and Prime Minister for nine years.

I wish my successor Phil Goff and the Labour team all the best for the next election, and I wish New Zealanders well for what are undoubtedly challenging times ahead.

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c Political Animal 2009

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The NZX continues to lose ground with retail investors

How can you tell if you are important to a business? that is, whether they want your business in the first place and what will they do to keep it.

Lets take a look at the New Zealand Stock Exchange [
NZX.NZ] and see how they stack up for customer service.

Lets ask a number of important questions to give the NZX some sort of customer rating.

Do they look after all their customers?

The answer would have to be a clear no.

Why so?

Well the NZX in all its infinite wisdom gift their larger customers with preferential treatment simply because of the financial/old-schoolboy/business connections between those larger customers and with the NZX itself, that is, it is in the NZX' best interests for example give their mates in the same industry as them advantages over smaller shareholders in recent capital raising's; the likes of Kiwi Income Property Trust [KIP.NZ], Fletcher Building [FBU.NZ], Freightways Ltd [FRE.NZ], and Nuplex [NPX.NZ] because of the backscratching and arse licking that has to go on in the financial industry to make the wheels turn in New Zealand simply because of its small size.

One day the favour will be returned you see. Its wrong but it is true but it happens constantly.

Retail customers-small investors like you and me-are clearly shafted.

Are market rules broken to advantage the "big boys" ?

Well yes they are.

Back to the recent capital raising's, we had the NZX waiver several NZX rules to allow companies to buy preferential shares on preferential terms without consulting smaller shareholders who would have their shareholdings diluted through the issue of more shares.

To add insult to injury any offer made to smaller shareholders to buy shares was not on a pro-rata basis and capped at a set dollar rate, to be scaled down depending on demand.

The little guy gets it again.

But wait there is more.

Access to live market news data is unfairly distributed because unless you are lucky enough to have an NZX terminal you get the market news 20 minutes after the big boys get it.

Boy us retail investors are really on the back foot there.

Does the NZX take rule breaking seriously enough?

In my opinion the answer would have to be a big fat NO.

In my 11 years of market watching I have seen stock prices either dramatically rise or fall days before good or bad news about a company is finally revealed to the little guy. Its out there, an individual insider or some broker is trading on it and big money is made.

Surely it would be easy to find the culprit?

Well, yes it would but little detailed investigation is done into this by the NZX except the usual question to the company concerned about "whether you were aware of any company news that would have affected the company share prices, etc. etc.."

The NZX has access to trading records and irregularities in trading could be hauled up for question.

What does all this do Darren?

Well clearly it puts retail investors at a large disadvantage when it comes to investing in the New Zealand stockmarket.

Rules are broken and there are few consequences, favouritism to insiders is rife and ignored when it should be discouraged and in the vain hope that someone might be found guilty of any shenanigans there are usually very light consequences.

No wonder then retail investors or "Mum and Dad" if you like have deserted the NZX in droves for finance companies, term investments, residential housing and ultimately overseas stockmarkets, when you have different rules for different customers then those given the short end of the stick are simply going to go elsewhere.

Mark Weldon was charged with improving such things in our capital markets when he started as the boss of the NZX early this century but he has failed to halt the decline in New Zealanders investing in the NZX and ultimately Kiwi businesses and for that he should be soundly ashamed.

4 out of 10 from me.


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Wednesday, April 8, 2009

2008-2009 KFC sales figures mislead investors

Let me just elaborate on a short post I made at Shareinvestor.co.nz regarding Restaurant Brands [RBD.NZ] results to the year ended 28 February 2009.

It is something I have mentioned many times before but it must be stressed once again because Restaurant Brands shareholders and prospective investors in the company must be given the full picture when it comes to RBD managements disclosure over their KFC sales.

The "record" $211 million of sales reported in today's result for KFC is only a record in terms of 2009 dollars. KFC are actually serving up less chicken to fewer customers.

Their best listed year was in 1997 where they did $172.3 million in KFC sales. That is because of accumulated inflation at a very conservative 3% annually over the last 12 years amounts to 36%.

36% inflation means in 2009 dollars RBD would have to sell $62 million more chicken just to match the record made in 1997.

$211 million is a long way from the figure they need to make, of $234.32 million, just to match the 1997 record.

I am not an accountant and nor do I think I need to be but if such emphasis of "record sales" is placed on a figure by RBD management to gain market approval that the expenditure of 10s of millions of shareholder funds on KFC refurbishment in order to attain those sales then that figure should be clearly accurate and take inflation into account. That is simply not the case here.

Granted one can do the math oneself to come up with relative figures and compare year by year sales but having said that, to use current sales figures as a tool to push further shareholder expenditure must be justified to the nearest decimal point.

RBD's figures therefore do not pass this test and furthermore for analysts and business reporters to accept this without question is surely remiss to some extent.

Still my record with this company probably goes back longer than many on the RBD board or those professional stock analysts in their professional capacity.

Once again I am not an accountant but I would like to see inflation taken into account when businesses do their books, at lease an annotation in the audited reports of what the inflation rate was in the last year so a stockholder or a prospective stockholder can make a fully accurate comparison before they decide to buy, or not as the case may be.

Just to end on a positive note, the company is negotiating with YUM! over the Pizza Hut franchise and it is expected that this will allow RBD management to divest individual Pizza Hut stores to owner operators.

This is one thing I have argued for Pizza Hut for years that individual ownership makes for a better run business because owners have skin in the game. Pizza Hut's competitor Dominos have this arrangement and they are currently experiencing records sales.

This solution will be at once beneficial for RBD because Pizza Hut loses money and for the Pizza Hut brand in New Zealand which will be able to rejuvenate itself under an alternative ownership structure.

RBD shares were up 1c to 86c today on reasonable volume.


Restaurant Brands @ Share Investor

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c Share Investor 2009






Michael Cullen's legacy a sad indictment of Socialism

Michael Cullen is leaving, how sad for all of us.

Before we all get weepy beyond control lets remind ourselves how good he really was.

His Achievements:  

* Taking New Zealand to the brink of economic destruction at a time when the economy was at its best in generations.

* achieving amongst the highest taxes in the world.

*Using those taxes on handouts to those that didn't earn it in the first place.

*leaving middle income people with high debt as a result of those high taxes.

Failing to cut taxes even though faced with the biggest economic boom in generations.

*Leaving Kiwis with the aftermath, massive state debt and huge financial holes in all Government "services".

*growing Government spending by 50% in the last 5 years while the economy grew less than 26%-from about $42 billion to 62 billion!

*saddling kiwis with record numbers of useless bureaucrats.

*allowing the Auckland Airport shareholders to lose more than $1 billion in income.

*buying KiwiRail at 100% more than it was worth.

*Calling those who earn over $60,000 PA "rich pricks".

There is much more but this rich prick has to go to work.

How appropriate though that he gets a job as one of the head posties at the Post Office, where all the dead politicians go when incoming Governments don't know where else to put them.

Still, like the bulk of his life Cullen will continue to feed off the State tit because he is incapable of anything productive.

Hasn't he done well.


c Political Animal 2009


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Tuesday, April 7, 2009

Flight of Fancy

It looks to be like the twitters in National are starting to get the sickness of overinflated egos from the mad lefties over at the opposition benches.

The arrogance and sheer rabid stupidity of the Minister of Education, Anne Tolley to take a trip in a helicopter just so she can "get an overview of distance" in  Auckland simply defies logic and commonsense, things sadly lacking from Labour and one of the reasons they were turfed out on their arses last November.

Sure compared to the billions wasted by Labour this is small potatoes but it is the message you are sending that is the important thing. It is clearly the wrong message!

The message from me is have a look in the mirror before you do something stupid.

c Political Animal 2009


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Monday, April 6, 2009

Mr Obama has a bad case of the Chamberlains

Imagine if you will Barack Obama as a small child in the schoolyard, a bully crowding in on him ready for a biff.

He gets hit, says hes a "bad boy", turns the other cheek and continues getting hit over the term of his school days.

Imagine again if you will a young good looking Barack Obama in his mid 20s walking down the road with his best friend, when a big fellow with malicious intent lays into Barack's buddy.

Barack utters "bad man", does nothing to defend his mate and he ends up paralysed after the attack.

Fast forward to today, Barack is President and is confronted with North Korea blasting a ballistic missile over Japan, destination unknown, Barack and the UN say "bad country" do nothing and we are all left wondering what next.

These things confronted one Neville Chamberlain in the 1930s.

Appeasement towards your bullies/enemies simply doesn't work, they will still be your enemies if you do nothing but then they will know they can continue to escalate the bullying without appropriate consequence.

Eventually when you turn that much cheek you can run the risk of getting taken from behind.

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c Political Animal 2009

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Sweetheart deal for Fletcher Building's friends makes small investors sick

Bruce Sheppard had a go at it yesterday and now it is my turn to have a go at Fletcher Building [FBU.NZ] management for the cavalier attitude they have for small Fletcher investors.

At the heart of that attitude is the recent capital restructuring to raise funds to retire debt and reinforce cashflow.

Institutional investors basically got a sweetheart deal from Fletcher management when they got cut price shares at NZ$5.35 per share on a pro-rata basis. That is, in proportion to the shares they already hold. A deal apparently will be offered to smaller shareholders, but capped at NZ$100 million and not pro-rata, so we got the arse end of the donkey here.

Compounding this favouritism, apparently non-institutional "large investors" (whatever that means) have also got some cream on top of the sweetheart deal for institutions that makes it so sweet smaller investors are bound to chuck up after reading it. This particular deal will give special rights to those large non-institutional investors to ratchet up their holdings to reduce the diluting effects of the placement to institutions.

Now I don't know about you but if you are a small Fletcher shareholder (I am, I have 1000) you might be suffering a diabetic reaction to all this sweet favouritism to the big boys by now and wonder out loud to yourself again why the NZX might be an unfavourable place for New Zealanders to invest considering they are not on a level footing with the big boys that Mark Weldon's NZX has granted a wavier to to snap up more of Fletchers.

According to the NZX website the folk who may have participated in the $405 million placement of shares concluded last week are connected to Fletchers by virtue of the fact that some are "Associated Persons of FBU Directors by virtue of having a common Directorship with FBU and several placees participating in the Placement".

Those people are:

(a) ANZ National Bank Limited, by virtue of Sir Dryden Spring’s and Mr John Judge’s common Directorship;
(b) Westpac New Zealand Limited, by virtue of Mr Ralph Waters’ common Directorship; and
(c) the Accident Compensation Corporation, by virtue of Mr John Judge’s common Directorship.

So it gets even worse when you dig down into the detail. Its like a bloody incestuous Utah Mormon clan!

I haven't got the time to read through the pages of verbose detail but I guess some will be revealed at a latter stage. Most will be lost on the average small mom and dad Fletcher share holder because media are too lazy to do the research - all except Bruce Sheppard, I am sure we will be hearing from him again on this matter.




There is however a solution to this.

Strong demand from those mentioned above for shares in the capital raising aside, Fletcher Building still operates in an environment of weak business prospects and an uncertain future as far as sales go.

Global stockmarkets have raced ahead over the last month or so and there is downside to come.

Shares in the company have ranged from $5.11- $6.50 over the last six months (see chart above) and it is not unlikely scenario that smaller shareholders like me could pick up extra shares cheaper than the proposed $5.35 to stop dilution of their holdings by buying them on the open market. You don't have to participate in this madness and still stay undiluted!

That is just what I am propose to do .

Bugger them.


Fletcher Building @ Share Investor


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c Share Investor 2009


Latest Colmar Brunton Poll reveals Phil Goff is history

In a week that revealed Helen Clark felt rejected by New Zealand when she lost in a landslide election to National last November comes more bad news for Labour.

New Zealand is in love with John Key and the National Party.

They have done well so far despite for delving into "big gay outs" and cycleways just to win popularity but John Key continues to urinate into Phil Goff's pocket.

Latest ONE News Colmar Brunton poll results as of 05/04/09 (Source: ONE News)

ONE News Latest ONE News Colmar Brunton poll results as of 05/04/09

It might be wrestling with the biggest economic down-turn in 70 years, but the National-led government is riding a massive wave of popularity according to the latest ONE News Colmar Brunton Poll.

Despite some of National ministers needing to be reined in like Richard Worth's, whose private business trip to India had the opposition accusing him of both a cock-up and a conspiracy, it hasn't affected National's or PM John Key's popularity with the masses.

It is still sky high in the polls with 57%. Labour is well back on 31%, the Greens are on seven percent and the Maori Party and ACT both hovering around two percent.

Translating that to seats in Parliament, it gives National 70, Labour 37 and the Greens eight.

Assuming electorate seats are held the Maori Party has five seats, ACT two and United Future and the Progressives one seat each. TVNV.co.nz

What is clear is that Kiwis wont even consider Labour as long as Phil Goff is spluttering his way through his opposition position.


c Political Animal 2009


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