Forum Archive Index - January 2000

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

I wrote

"I had a better experience, I bought HLG for $1.60 in October 1997 (not
recommended by any brokers at that time)
as a contrarian on the basis of gross yield, low debt, good management and
sold for $2.80 in April 1999 and
enjoyed some good dividends in between. The operative thing is to buy on
high gross yields and sell when
they have gone down due to the market rising. I wouldn't agree HLG is going
nowhere - I have seen brokers
 recommending it not too long ago partly because its now got a good
beachhead in Melbourne and is opening
more shops in Oz. Unlike the property shares it has full imputation."

Mike Hudson, I've looked up my broker print-outs from Access and I do have
to adjust 
one of the dates and one share price (slightly).

The correct data is; bought HLG on 18 March 1998 at $1.6550.
Sold HLG on 14/04/99 and on 15/04/99 at an average $2.7930.

Anyone who doesn't believe me I can show them the broker slips. 
The point is it was done on a contrarian basis after looking at the gross
yield
and the record and the attributes of HLG. Hence (and I have several other
similar scores
to back that up) my distaste for index averages and mediocre fund
performances
being touted as the best one can achieve. Also one needs to take brokers
analysis and 
recommendations with a grain of salt - no brokers were recommending buy or
sell at the
time I moved in the stocks in question. This reinforces the view that one
should do one's
own analysis (while also looking at whatever broker material you can find)
and back yourself as 
most of the contributors to this Forum do. 


Mike Hudson wrote

The point I was trying to make was that over a period "growth" stocks will
produce a better return (capital growth plus interest) than yield stocks.
Of
course if one can time your entry and exit as Hugh did the returns can be
enhanced.

Interestingly in this case though when I looked at the numbers (I had to
make some assumptions on dates as I think Hugh's recollection must be a bit
astray in this area as HLG did not, according to my records, trade as low
as
$1.60 in October 1997, more likely he bought them in between Dec 97 and Feb
98 which would have given him an even better return than he claimed) the
return on WHS would have been only slightly less.

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