Forum Archive Index - March 2000

[jesse <johne777@hotmail.com>]

If your into fundamentals when researching a company then it makes sense
to use fundamentals when making other investment decisions such as
reducing risk. If strictly by the book, your share portfolio would be
spread by country to minimise risk (country risk, liquidity risk,
foreign exchange risk etc) so that for instance, NZ, which represents
<1% of world sharemarkets, would make up 1% of your portfolio. People
don't of course, because they feel  uneasy about offshore investments,
they like local firms, whatever.
Point is, it's fundamentally more sound than having 80% or 100% of your
money here.

I have to disagree with your other points Nick.

People have been saying overseas markets are fully priced for 4 or 5
years. As long as an economy is growing, markets follow. ie US. And,
visa versa, as long as economy flat, market same ie NZ. (Might be
changing soon, hopefully)

Yes, NZ has some value buys based on P/E's, but go to a stock screening
site in US and you will find dozens of quality US firms with P/E's below
10 and growth twice as good as NZ stocks.

NZ stocks cannot go lower? Says who? Potential of any stock is to go to
zero. Look at stock (death) pages OCT 1987.

Trend to list overseas is no easy fix. Telecom being removed from ASX
100 through lack of liquidity. That doesn't help price. Others like AIA
sometimes doesn't trade at all on ASX.

Net bubble? I don't think so. If this happened over ten years people
would feel a whole lot easier. The speed is the worry, with speed comes
volatility and that hurt.

Anyway, just my bit. I invest in US  because of better choice,
liquidity, volatility, better technology. I'll increase my 5% NZ
holdings when the money flow returns to NZ.
cheers
j


----------------------------------------------------------------------------
http://www.sharechat.co.nz/          New Zealand's home for market investors
To remove yourself from this list, please us the form at
http://www.sharechat.co.nz/forum.html.