Forum Archive Index - December 2000

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

Jesse,
 I can see where you're coming from but I was looking at it
from right now and on the basis of P/E and gross dividend yield
I'd go for selected NZ stocks some of which I wouldn't reveal as 
I want to buy some more next year.
Also (1) you are talking about investing in indices, I don't do that,
too unwieldy and too low a return (2) you are concentrating on 
capital growth - I'm only interested in that as a byproduct, my
emphasis is on gross dividend yield, good management,
reasonable prospects.
I'd put the NASDAQ at about 700 in terms of fair value.
On the basis of the above I'd pick NZ in every case right now.
(3) I'm not interested in investing in Buffett and I doubt I
ever will be. I'm interested in Buffet's analysis and methodology
which is superior to any other existing practitioner.
As far as Berkshire goes the horse bolted long ago for new 
investors, you're much better doing your own thing using 
Buffett's methods.
I'm not an unthinking Buffett follower; if he departs from
his own methodology due to advancing old age or
whatever that doesn't invalidate Buffetology it just
invalidates Buffett. Similarly I have my doubts about the
wisdom of how long he has held some of his investments
such as Coke; it would have been better to set himself
some secret high target in terms of Coke's P/E and then
unloaded. He did once before when the US sharemarket 
was overvalued sell everything and pay back his shareholders
as he couldn't find any worthwhile investments at that level -
a parallel in NZ would be SEU before it received its takeover
offer. I make the distinction that I'm looking for worthwhile
yields on parcels of shares whereas SEU was looking for whole
projects.
I wouldn't touch Coke with a 40 foot pole.

cheers,
hugh

----------
> From: jesse <johne777@hotmail.com>
> To: sharechat@sharechat.co.nz
> Subject: Re: [sharechat] rational, sane investing vs the NASDAQ
> Date: Saturday, 23 December 2000 7:21
> 
> Hi Hugh
> why would you pick NZ to invest in every time? Long term returns right?
> Dow returns from '85 to now in 5 year steps (beginning jan1) were 135%,
> 37% (includes 2 recessions) and 194%....index was at 1198 in '85, 2810,
> 3857 and at 11357 Jan 1 2000.
> Nasdaq 87%, 61%, 455%...make that last one 142% if you like Nasdaq at
> 1800 fair value.
> How do these compare with NZ40 gross?
> Low p/e's can also mean a lack of growth.
> Buffetts Berkshire has a p/e 44 (BRK.a) and 54 (BRK.b) while something
> like coke (KO) sits at 74.
> j
> 
> 
>
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