Forum Archive Index - November 2000

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

Funnily enuff, $3.40 for Air NZ A was only May or June
last year, the rather weird BIL raid to top up its stake a 
bit, I couldn't believe my ears and got out rapidly with my
profit.

I think the Buffett stance on airlines is based on the fact
that they are a commodity in the sense that they compete
purely or mostly on price and these days there's very
little barrier to entry - any nuts and cola kid with one 
leased aircraft to Oz can hold Air NZ to ransom let alone
Virgin etc etc and the third level airlines seem to surge
onto the main routes meaning Air NZ has to buy them out
again.
Hence AIA which runs a tolling operation is much better
and if the Air NZ engineering workshops in Chch were spun
off I'd be interested - good article on them in the Press 
Business section today.
I don't think the P/E means anything on its own and with
open skies etc its just not possible to tempt me in. I was
eyeing Mr Chips a few months ago but there didn't seem to be
enough volume to make it worthwhile and now they've had
a brilliant report apparently.

I suppose in the end even I would have to take issue with one
or two Buffetisms and 'Never sell' (the last words of Bob Jones
before he crashed) would be one. I mean it stands to reason 
that if you have bought something like Coca Cola ten or twenty
years ago and tripled your money or whatever and you can see
a Buffet type share that hasn't been seized on by the crowd
you'd get out of Coke and into whatever it was. Buffett hasn't in
the last few years and he's paid the price with stagnation and
decline in his portfolio recently.

cheers,
Hugh
----------
> From: tennyson@caverock.net.nz
> To: sharechat@sharechat.co.nz
> Subject: Re: Re: [sharechat] Air NZ AGM Report
> Date: Friday, 3 November 2000 14:03
> 
> >
> > Hey Snoopy, you wanna job??  
> >
> Back to the day job next week I fear!
> >
> >You didnt fly up to Akl to do FFS this arvo did ya?
> >
> Funnily enough, Dogter Deane didn't offer to pay my fare.
> Perhaps he didn't want me to pick a bone with him?
> > 
> > Thanks for another great rundown.
> > 
> No prob, Warner.
> 
> And Hugh, you must be feeling pretty smart selling out at $3.40 (how 
> many years ago was that!)
> 
> I have read the Buffet stance on airlines.   But remember Buffet 
> lives in the US and the US market seems to have different standards.
> 
> Would I buy an airline on a P/E of 30?  No way!
> A P/E of 10.   That starts to look interesting.
> A P/E of 6?   Must give it serious consideration.
> 
> Maybe Buffet wouldn't buy at any of those levels.  But what about if 
> the AirNZ price collapsed to $1, or 50c or 20c?   Surely at some 
> point (company debt worries aside) it must get cheap enough for even 
> Buffet to get interested.
> 
> Personally I can't imagine $1.20, but then a month ago I thought the 
> same about $1.50!
> 
> Maybe the real reason that Buffet steers away from Airline shares is 
> that the business is notoriously cyclical and we know that Buffet 
> doesn't like to sell -ever!  SNOOPY
> 
> 
> 
> 
> 
> 
> ---------------------------------
> Message sent by Snoopy 
> e-mail  tennyson@caverock.net.nz
> on Pegasus Mail version 2.55
> ----------------------------------
> "You can tell me I'm wrong twice, 
> but that still only makes me wrong once."
> 
>
----------------------------------------------------------------------------

> http://www.sharechat.co.nz/          New Zealand's home for market
investors
> http://www.netbroker.co.nz/        Trade on Credit, Low Brokerage. Join
now.
>
----------------------------------------------------------------------------

> To remove yourself from this list, please use the form at
> http://www.sharechat.co.nz/forum.shtml.

----------------------------------------------------------------------------
http://www.sharechat.co.nz/          New Zealand's home for market investors
http://www.netbroker.co.nz/        Trade on Credit, Low Brokerage. Join now.
----------------------------------------------------------------------------
To remove yourself from this list, please use the form at
http://www.sharechat.co.nz/forum.shtml.