Forum Archive Index - November 2000

[Brian Gale <brigale@i4free.co.nz>]

Hi Krypt 
             
Referring to your statements made on the 4th

We are back to the debates we have had before relating to
Investing/Trading.

An Investor is in for the long term. He is endeavoring to
accumulate wealth for some years ahead e.g. for retirement. This is the
Buffett way and the recommendation of the majority of other investment
advisors. There is much evidence to show that this is best way to
accumulate wealth from the sharemarket , i.e. by carefully selecting
" Blue chip " stocks using the Buffett method or something
similar and holding these for the longer term - only making changes if
the attributes of the security show a major adverse change.
  
Taking a selection of  (blue chip) securities from the NZSE Top40
which might have been purchased in December 1999 and assessing their
paper value now:-

       Security
      Quan
           Price
Dec '99   Price Today   Gain 
  
                                              
$                     
$                
$   
      
ANZ          
500             
13.64               
18.75           
5.11
      
INL           
2000             
2.80                 
3.30           
0.50
      
WHS        
2000             
4.30                 
6.20           
1.90 
      
AMP          
300            
21.10               
23.20           
2.10
      
GPG         
2000             
1.38                  
1.52           0.14
      
LNN          
2000             
4.45                  
5.01          
0.56

The total cost is $39,010 plus brokerage $546.  The paper gain is
$9,100  (23%) 
Dividends of  some $1,500 would have been received

During this time the Index fell by some 250 points or 
11%.  These stocks had the resilience to outperform the
market. 

This might be regarded as a best case scenario, but other ' Blue
Chips'  could be selected to give similar results.  The main
point is that there are securities with the underlying strength to
outperform the general market trend in the longer term.

However the trader would no doubt have sold at some stage during the year
but the problem then is what to buy next and unless the pick has similar
attributes, the long term objectives can be defeated.
 
Regards
 Brian


At 02:03 04-11-00 +0000, you wrote:


> You talk about our friend
> Warren...Buffett as you mentioned hardly ever sells his stocks.. if you
> do that here...you WILL NOT MAKE MONEY!!!!
>
> Selling is crucial and is one of the big flaws in applying Buffettology
> to the NZSE.
>
>
> Krypt Or.
>
>
>
> _________________________________________________________________________
> Get Your Private, Free E-mail from MSN Hotmail at
> http://www.hotmail.com.
>
> Share information about yourself, create your own public profile at
> http://profiles.msn.com.
>
>
> ----------------------------------------------------------------------------
> 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.