Forum Archive Index - August 2000

["Steve Moxham" <steve@ezysurf.co.nz>]

My two cents...

 

As a nation we are perhaps less risk inclined than American investors who may be more willing to take an "all or nothing" approach. I think NZ investors take a more 'safe and cautious' approach towards the market and need to see a return on their money. The pressure to pay a dividend may come from NZ investor's themselves. It's my belief that NZ'ers are on the whole risk averse, and it helps explain why the crash of '87 is still a topic of conversation whenever the markets are discussed. Once burnt twice shy. The resilient risk taking entrepreneurial spirit of America picks itself back up and gets on with things, seeing the crash as merely "a blip on the screen".      

It has been said that the Americans have a love affair with stocks, whereas the Europeans are more inclined towards bonds. The difference between the mentality of a market could be as arbitrary as the psychology of a nation.

Of course I'm sure that if NZ management are doing their jobs correctly they will forgo dividends if they are able to make a greater return on that money. But that doesn't mean that NZ investors won't rerate downwards the value of that stock!