Forum Archive Index - December 1999

["hugh webber" <hugh.webber@clear.net.nz>]

hmmm, some interesting picks there and some I wouldn't necessarily disagree
with. But why not have 2 competitions, one for the standard big price rise
jump aficionados and one for for value investors - highest earnings (excl
abnormals) per share rise in 2000?

let me tell you a parable.

A new company was formed - Hyped Up Offshore Taranaki Basin Oil Exploration
NL using new technology for drilling much deeper than anyone had before and
utilising the latest geological mapping results which seemed to indicate
the basin went much further out to sea than previously thought. Osaka bin
Kompong naturally picked it for his 10 best performing share picks of 2000.
 It listed brilliantly on 1 Feb 2000 and those lucky enough to get through
the kicking biting screaming queues at their brokers for a small allocation
saw their money tripled from $1.00 per share to $3.00 a share. The project
proceeded amid mounting excitement and continuous media reports and on 1
December 2000 it announced it had had a show of gas and some condensate.
The price went through the roof up to $10.00 and people excitedly swapped
stories of how well they had done. On 15 January 2001 Hyped Up sorrowfully
announced it was a dry hole and moreover that the geological data obtained
was not promising for further exploration. It had used up all its cash
float and had no money to pay the unsecured credtors and workforce. Its
price sank to zero and it delisted and was liquidated.

On the other hand at the other end of the spectrum a quiet boring
manuafacturing company continued to chug along inconspicuously. I t was
called Making Boring Widgets Ltd and its product was so large and so heavy
that it was not economic to either import it or export it. But it did
require such big production runs and capital equipment that it was only
economic for one boring widget maker to exist in NZ. During the year it
brought in new computerised production control machinery for operating
around the clock and at the end of the year some overseas domiciled boring
widget makers started eying it up. Also during the year its earnings per
share went from $1.00 to 1.11 and it increased its fully tax imputed
dividend from 10 cps to 11 cps. However because it was so boring and
unpublicised its share price languished from $1.10 down to $1.08. Osaka
naturally did not pick it because it was so boring.

On 16 Jan 2000 the winner of the Sharechat Forum share picks for 2000 was
announced - it was of course Osaka bin Kompong and everyone lived happily
ever after. Or did they.....  


--------------------------------------------------------------------------
To remove yourself from this list, email sharechat-request@sharechat.co.nz
with "unsubscribe" in the body of the message, or use the unsubscription
form at http://www.sharechat.co.nz/forum.html.