Forum Archive Index - April 2000

[Mike Hudson <MHudson@placemakers.co.nz>]

Oliver wrote

"For those who lived through 1987 crash - does this pale in comparison? Are
you seeing history repeat itself? 
HOW DO YOU FEEL????????? "

Well jungen, I for one feel rather calm. This is nothing like 1987. At that
time the NZSE was close to 4000 and overvalued across the board although led
by the then equivalent of today's tech stocks. Chase, Equity Corp, Judge
Corp (come to think of it the suffix of "corp" was equivalent to the suffix
".com" and the prefix  "e" today) My only holdings in those days were staff
issued shares in Fletcher Challenge which were restricted and I couldn't
sell until November 1987. As you know the crash was in October and I "lost"
over $50k in one day which was a lot of money in those days.

The hiccup today is minor in comparison and there have been several similar
instances in the intervening years. Buy the company not the market is my
philosophy. The fundamentals have not changed for good companies although as
Ril (bless his little combative heart) points out they will change if the US
economy heads into recession.

As I mentioned the other day I sold out of most of my UK, US and AUS tech
stocks and am sitting on the cash. The question is do I have the nerve to
buy back in today? I like FLB, FEG, AIA, WHS, CAH. The answer is probably
not, I will most likely follow the professionals and wait to see what
happens in Europe and Wall St overnight. If the Dow and S&P 500 take another
major dive tonight we could have some problems but I think it unlikely. The
Nasdaq has IMO a good way to fall yet but only in those stocks which have
been hyped into the stratosphere without any regard for fundementals.

Musing: Why is Amazon.com not classed as a retail stock which it is (it only
uses technology and the internet to sell stuff) and if it was would the
punters' perception of it be different?

So as long as you are in well managed companies with good profits and cash
flows sit tight and add a little to your portfolio if you can. The only
people who will suffer are those who speculate in the crappy little tech
stocks and they don't deserve any sympathy.

Cheers
Mike H

 

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