Stockmarket Education: How do you buy shares?

Like a piece I wrote a few days ago called Stockmarket Education: What is a Share? the following was inspired by a Google search that reached this blog "How to buy Shares?"

Another bloody good question.

Well, unfortunately one of the first things you will need to do is get yourself a stockbroker.(I say unfortunately because I don't particularly have a high opinion of them) The most popular ways of getting yourself access to one these days is online. One can do this either by hooking up with a dedicated broker that just deals in sharetrading or through your own bank, which in most cases in New Zealand and other countries has a broker service attached to it.

These online brokers, some of which also have telephone services, offer either a "self service" level of brokerage where you do all the research, and selection of shares and execute the buy or sell yourself ranging to a "full service" broker that will do all of the above for you and more if you trade enough!

Beware, and it is only my personal opinion and experience here, full service brokers will try and push their favourite shares on you and their research is more than often than not biased and sometimes suspect in its accuracy and/or knowledge of business or the company being researched. Their loyalties lie with the brokerage company first, not you.

That is why I prefer to use an online broker and do the rest myself. Pick the level of service that is right for you.

The only extra services that I get with my online broker, ASB Securities are:

1. A website with a portfolio and watchlist function.

2. Live share prices with limited market depth - a list of buyers and sellers and the prices being offered and asked.

3. Brief bios of the NZSX companies listed on the NZX - financial ratios, broker ratings.

4. A link to a cash management account through ASB Bank that makes it easy to transfer funds to facilitate share purchases.

When making a buy or sell of a share online you can either sell "at market" (what buyers or sellers on the open market are prepared to pay or sell for) or a pre-determined share price set by you.

The best part of buying online and doing it yourself is that you can do the research at your leisure and set a a buy or sell in off-market hours and the trade will then be made at the price you requested.

The cost for the self service online level of brokerage varies from broker to broker but trading using my online broker, is around NZ$30.00 for a trade of up to NZ$10,000 and at a level of 0.3% brokerage over that. Large trades can be negotiated.

You can find a list of Australian brokers here and New Zealand ones here.

Good luck!

Stockmarket Education

Stockmarket Dictionary
Stockbrokers: What you should know before choosing one
10 Basic questions to ask before investing
How the Stockmarket works
Understanding Risk
Watch Your Risk Tolerance
Stockmarket Education: What is a Share?
What Moves the Stockmarket?
7 Signs of Shareholder Friendly Management
Financial Media For Investors
Dividends in detail

Related Links

NZX - How to Invest


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c Share Investor & Shareinvestor.net.nz 2009

Analysis - Mainfreight Ltd: FY Profit to 31/03/09

Mainfreight Ltd [MFT.NZ] FY 2009 profit out today confirmed a slowdown in sales for the company and highlighted a tough environment for the coming 12 months. Having said that the current result was a good one.

Key Points:

1. Revenue increase of 39% to a record $NZ 1.27 billion (excluding forex gains up 28%)

2. Net surplus before abnormals of $NZ 40 million, on par with the prior year.

3. First half of year good growth, second very poor, indicating the full impact of the global slowdown, with a marked downturn in the last quarter.

4. A focus on cutting operating costs over the period of downturn in the business/economy.

5. A hat-tip to carbon emissions, noting they must take them into account because of political interference in this area of their business, but it is costing them.

6. Cashflow up strongly.

7. Debt increased significantly from $79.89 to $115.28 million.


The outlook for the company is uncertain and given poor economic indicators and a continued slowing performance in the latest quarter of business, profit is going to be down for the 2009/10 year.

They say this will be ameliorated somewhat by focusing on cost cutting, delaying capital expenditure and growing the business organically where they can - very sensible.

Given that the logistics business is one sector of the economy that is often badly affected during a recession, management at Mainfreight seemed to have managed the business well considering the slowdown in consumer demand world-wide and the resultant drop in export/import and local logistics being used in their operations worldwide.

8.5 out of 10 for me.

The stockmarket however has reacted negatively to this result, marking shares down 39c or 6.33% to NZ$4.59 at market close today.


Disclosure: I own MFT shares in the Share Investor Portfolio.


Mainfreight @ Share Investor

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c Share Investor 2009

Obama supporters black with rage over joke

I see it is not just in New Zealand that we do not have a sense of humour and have our freedom of speech and opinion curtailed by the PC morons amongst us - lucky we have the internet huh?

A Canadian broadcaster has been reprimanded for a comedy sketch saying Barack Obama would be easy to assassinate because the first black American president would stand out against the White House.

The Canadian Broadcast Standards Council issued a public reprimand of Radio-Canada, after the government's regulatory agency asked the private industry council to look into the matter before it begins its own investigation.

Canada's broadcast regulator, the Canadian Radio-television and Telecommunications Commission, received 210 complaints about Radio-Canada's controversial "Bye Bye 2008" New Year's Eve sketch. Go here for more

It is hard to see what is so offensive about stating that a man with dark skin stands out against a white background because he does and it is funny in the context of a joke. Do we all have short memories of what the last guy in the White House had to put up with from the very same types of people that would have complained about this joke reference?

So it is OK to pillory a white man but not a black one?

And of course it isnt racist at all to appoint a Latino Woman to the Supreme Court or various other ethnic groups to political positions just because you want your team to look like a rainbow, rather than appointing the best person for the job regardless of skin colour.

Come on, time to grow up and move on. After all there is a black man in the Whitehouse now.

Keep your wallets safe!

c Political Animal 2009

Stockmarket Education: What is a Share?

This little piece originated from a search that found its way to this blog; "What is a share?"

I sort of take this for granted and cant really remember asking this question because I think I already knew what a share was and perhaps that the word was self explanatory of its meaning.

It isn't dumb question though.

Lets see it we can give this question a reasonably intelligent answer because it is important that beginners in the stockmarket know and those that think we know(like yours truly)might find out something we don't.

This is how I would describe a share to a beginner.

Basically when you buy a shares (or stock, security, equity) in a company, in our example a listed company on a stock exchange, your shares get you ownership of a small part of that company and some of the attendant rights of an owner of that company.

Some of these are:

1. A share of profits -through provision of dividends distributed to shareholders.

2. Voting rights on remuneration for management and fees for directors.

3. Votes on selected business associated with areas of the company.


There are also responsibilities.

Some of these are:

1. The company may ask shareholders for additional capital from time to time to help run the business.

2. Keep an eye on the health of the company by reading company reports and third party research written.

The shares in the company that you have part-ownership in have a monetary value and that value can differ from day to day, week to week and year to year and you can add to your ownership or dispense with that ownership at any time but at different values depending on the time you sell-just like any business you might have full ownership over.

Shares are bought and sold using a stockbroker or sharebroker or through issues of company capital through IPOs and various other ways.

What you have if you own shares in a company then are certain rights and responsibilities, much like those that the sole owner of a business but as a part shareholder some of the rights that a majority owner has over the running of a business do not apply to you.

1. You do not have a say in the day to day running of the business.

2. Your vote in any proposition put to shareholders can be voted down if the majority don't fall your way

3. Your shareholding can be sold against your will if there is a takeover or merger that the majority of shareholders vote for, even if you vote not to sell.

Some people don't look at a share as owning a part of a business, just some sort of esoteric measurement of how much a company might be worth on a day to day basis but I and many others do, for that is exactly what a share is.

You are part owner of a business and your shares make you a business owner.


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c Share Investor 2009