Forum Archive Index - March 2000

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

I think its the old tug of war between buyers and sellers. Before 1984
NZ was a fairly insulated market with clued up NZers & institutions
putting their funds into well performing NZ shares. Then we had
liberalisation
(which I'm in favour of) and 1987. Now most NZers and NZ institutions put
most (if not all) of their funds into overseas markets even though on a
value
basis the best buys are in NZ. The overseas institutions came in and cherry
picked NZ stocks aided and abetted by rather stupidly effected
privatisations
where the government reserved heaps of stocks for overseas institutions who
promptly sold it off to NZers who had been unable to get an allocation, or
at
least one worth talking about. Now the overseas institutions have pulled
out their
dough because of a circular situation where the NZSE won't perform well
because
they won't let it (choking it off with huge sales every time it threatens
to get going)
and worries about the NZ dollar and the eccentric antics of Labour &
Alliance. 
In the meantime myopic NZ funds managers send
all their money offshore in order to diversify into mediocrity apart from
some lucky
hits on the NASDAQ although they don't really understand what its all
about.
And that's in spite of a continuing raft of reports of solid and brilliant
reports from
NZ companies. Eventually sanity will return. Some fund will do better from
investing
in NZ shares on a dividend basis and others will start to copy. 

At least the paper shufflers (1987) are out of it this time although one
suspects
some parallel ops in some techs. 
Depends what you are in the market for. Don't forget 20% are in the market
for
dividends (Egoli web site) and at least they're doing well. And I've found
that an
interesting and useful by-product of that approach is you get large
incidental 
capital gains from time to time from takeovers and episodic revaluations to
more sensible p/e ratios. Recovery stocks is a good avenue giving you the
best
of both dividend and capital routes. My approach is to build up a
sufficient private income
to retire rather early on (hopefully later this year) from the dividend
route, avoiding the
inevitable major disappointments of an only capital gain approach. Then I
might start indulging in a bit of marginal frivolity on one or two more
interesting
NZ techs that have kept their noses clean. But I do have to admit to one
major
departure in buying up large in Sausage at an earlier stage when Wayne Bos
came on board when it became apparent that the market was dtermined to
stuff money down Sausage shareholder throats. Good ol' AFR, its worth
following.

cheers,
Hugh 




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