Forum Archive Index - July 2000

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

has just been asked.
I have to state the obvious and say it depends what your objectives are.
I'd also say (maybe its the beginning of wisdom) I don't think I have the
definitive answer.
In terms of my objectives not in any order of priority 
(a) I want to avoid the volatile risks of overseas exchange rates and
perhaps the NZ $ has bottomed out anyway
(b) I'd like high sustainable rates of return with capital growth as a
byproduct
(c) I'd like 100% tax imputation or as near as I can reasonably get it
(d) I'd like it to be hands on, completely under my control with no fees &
(e) I don't want somebody's weighted average of mediocrity fund
(f) I'm looking at the medium to long term but I'm willing to sell if
there's
an unexpected large blip upwards from say a takeover offer.
(g) I'd like to apply Warren Buffets successful value investing principles
i.e. no commodity stocks (which includes Air NZ), no conglomerates,
look for good management, a good track record, solid consistent growth
and some sort of hold on the market being sold into.

However these may not be everybody's objectives which is fair enough.
Some people may have all this as a base already and want to have some
fun at the margin in which case I'd go for my old stalking horse in
Australia
Sausage Software with tons of recovery potential and tech growth with the
expert and accomplished Wayne Bos at the helm. Other people can point 
out other worthy techs and other candidates.
Others may seek the excitement of new listings oblivious to the fact that
most
new listings go backwards while still making a major profit for the
floaters.
And then there's traders which isn't my field. 
Maybe parking the money for a while in high interest until a dead cert new 
listing or recovery prospect comes along might be a good idea but then 
probably cash burns a hole in your pocket as for most share chatters and we
have to do something - anything.

Warren Buffett sometimes bought stocks at what people said was too high a
price because he could see the solid consistent growth pattern and 2 or 3 
years down the track his buys proved to have been cheap. On that basis
Auckland Airport, the Warehouse, Baycorp, Advantage might prove to be
cheap.
You can see that NZ meets my criteria far more than the knee jerk invest
overseas at any cost conventional wisdom currently applied by fund
managers.
For my objectives Hallenstein and Cavalier are looking pretty good and so
also 
is Capital Properties.
I'll be interested to see what other observers have to say!

cheers,
Hugh



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