Forum Archive Index - May 2000

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

A cynically amusing question. Depends how many categories a broker has and
what they are called.
J B Were & Son's 2 bottom categories are 'Sell' and 'Hold' with higher
categories of
'Accumulate' and 'Buy'.
Brokers are very reluctant to say 'Sell' on anything at anytime because if
they
do and the stock happens to survive then they will be blacklisted for all
time 
by the directors as underwriters &. They are also afraid of causing general
hysteria.
So if your broker has a 'Sell' category and actually puts something in it
then Panic Now.
Similarly if they don't have a 'Sell' category and put something in 'Hold'
then Panic Now.
Brokers are keen on telling you when and what to buy including right up to
October 20 1987.
Brokers are very bad at telling you when to 'Sell'.
Hence you need to anticipate making some decisions for yourself based on
how far out of
kilter the company's yield and price earnings ratios are compared to (a)
the market average at the moment
(b) an historical series of yields and price earnings ratios.
It can now be seen, just as in 1987, that the 'New Economy' did not abolish
the rules of
economic analysis (cf Factor K, the Theory of Excellence in Management of
NZ Listed Companies in 1987),
and that gravity and the Laws of Relativity still exist.
The argument that the New Economy is hiking productivity to such heights
that it is keeping 
inflation under control and causing company profits to grow rapidly and
sustainably is interesting
but doesn't seem to be borne out by the facts except by a very few
companies perhaps.
The last productivity figure from the US was lower than the previous number
and as people in 
Sharechat pointed out the core inflation (excl oil and volatile items)
figure has shown a significant
increase.
Thus a return to long term value investing is indicated. Look for the good
yields, p/e's, non commodity
stocks that are growing at a sustainable rate. 
Ignore fashion. Don't follow the crowd. Think for yourself. Analyse for
yourself. Dare to be different.
Sharebrokers are incredibly human and self centred - apply the same acid
tests to them as you
would to a real estate agent selling you a house in Invercargill.

cheers,
Hugh 


----------
> From: Kausa Smith <kausa_smith@yahoo.com>
> To: sharechat@sharechat.co.nz
> Subject: [sharechat] BCH
> Date: Sunday, 7 May 2000 15:01
> 
> I have been having very good sleeps after selling my
> BCH...
> 
> What do brokers mean when they place a "hold" on a
> stock?
> A: We cannot see this stock is going anywhere. Put
> your holdings in the bottom of your drawer. Really you
> should consider cash up and put money in stocks we
> rate as "buy". This stock is history as far as we can
> see.
> 
> Cheers,
> Kausa
> 
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