Forum Archive Index - January 2000

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

Its too late to panic. At the risk of sounding smug I got out at $1.30 and
$1.20. 
The problems are (a) Selwyn Cushing hasn't read Buffettology by Mary
Buffett (b) its got several hundred million sunk in Molokai Ranch in Hawaii
on which it is making about a $1.5 million profit a year and where real
estate development has been stopped by town planning (c) its got over a
billion sunk in Mt Charlotte Hotels bought before British land values
collapsed in a heap and on the premise that new entrants weren't possible
(in fact entrepreneurs then converted office blocks into hotels overturning
that argument), also hotels are commodities (d) its got over a billion sunk
in Air NZ and as explained in Buffettology airlines are commodities - sales
depend on price competition, there is practically no barrier to new entry,
any nuts and cola kid with one leased aircraft can hold Air NZ to ransom.
(e) its doing quite well with James Hardie and cement fibre building
materials in the USA but thats not enough (f) its bleeding unquenchable red
ink over Vox stores in Australia and Everest wheelchairs etc in the USA has
just gone belly up (g) its much bruited investment fund in Asia with
Rothschilds never made any investments.

However there's obviously some value in it but it needs someone ruthless,
aggressive, determined and skilled to realise it and get out of everything
except James Hardie and that will take time and if it happened you might
get say two to three times the present share price.
I hung on for years thinking Paul Collins knew what he was doing and
believing the unrealisable book values and the plausible stories but after
reading how they were going to sort out Vox in one annual report and seeing
it had only got worse in the next report the penny dropped. A lot of people
followed Ron into GPG when he was elbowed out of BIL and that was obviously
a good move. The pity is up to a hundred thousand Kiwi Mum & Dad investors
have been done, conned, by accountants who were only accountants. And that
means most of them will steer clear of the sharemarket as an investment
because they've justifiably lost confidence in their leaders. 


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