Forum Archive Index - October 2000

[Nigel McCarter <n.mccarter@clear.net.nz>]

The rbd points are fascinating in that they itemise why NZ companies have
difficulty in filling any of the buffett criteria.
(a) limited market, therefore limited growth
(b) lack of control, (viz franchising and other restrictions, thanks chris
and snoopy -- I wasn't aware of the licensing restrictions)
(c) and high dividend rates.

Which is the reason I bought the share some time ago, and even given the
25% capital drop the dividend return has just about paid  the capital
already ...

Which leads me to ...

One of the differences between NZ and the states are the tax laws.  This
means there is less incentive for companies to return profits to
shareholders via dividends, and therefore there is greater emphasis on
capital growth as the primary return.

If you look at the all australian ACCUMULATED index , which is based on
both capital and dividend return rather than the all ords which is based on
share value, there is less difference between the american and australian
returns than is usually supposed.

Unfortunately the same does not apply to the NZ share market, where even if
you take dividends into account, the returns are still pretty awful.

Nevertheless, high dividend shares such as rbd, mhi, and cav are very well
worth getting.

I don't expect to find many companies in a restricted market like NZ that
will meet all buffett criteria.

We are not big enough.

Nigel

Nigel McCarter
Safety Management and Information Services Ltd
Box 23 019 Hamilton
Phone 64 7 858 2429 
Fax 647  858 2689
Mobile 021 212 4901

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