Forum Archive Index - December 2000

["Colin Ross" <ceejaynz@xtra.co.nz>]

Debt
As a retired Retailer, I am very conscious of the drag that Inventory can
have on profitability, most particularly when there is debt to service.
Warehouse has proved itself adept at managing what appears TO ME to be a
frightening amount of Inventory, and so far - so good.
However, ( there always needs to be a However)  - Once growth reaches a
plateau inventory control becomes ever more critical - Eventualy the
suppliers have to be paid.
I guess it would not be unreasonable to allow 1% per month to cover the Debt
portion of inventory - that is without any consideration of storage, wastage
leakage shrinkage - all those eupheumisms.
Wonderful debate.. lets hope we can all moderate our language - despite our
frustrations.
Happy new Year everybody
Ceejay
----- Original Message -----
From: hugh webber <hugh.webber@clear.net.nz>
To: <sharechat@sharechat.co.nz>
Sent: Friday, December 29, 2000 9:55 AM
Subject: Re: [sharechat] WORKING AT THE COAL FACE


> yes Gerry, I'd agree with that. After 1987 and in the current
> environment debt gives me an uneasy feeling although interest
> rates look likely to go down significantly.
>
> You need to be in a company with dependable cash flow and
> profitability like AIA and to a lesser extent the Warehouse to
> be able to borrow with assurance.
> So much is changing so rapidly; the Post Office makes its first
> ever loss and although its killed off one competitor in the process
> there are a myriad others but worst of all burgeoning email traffic
> which is faster, cheaper, in electronic storage with immediate
> hard copy available, and Telecom is no longer a reliable investment.
> Its getting harder and harder to pick reliable companies in NZ who
> can safely borrow.
> I suppose its lucky we have S & P and a couple of other crowds
> around to publish credit ratings on companies although sometimes
> some of their decisions appear rather precious and footling and you
> start to wonder whether its coy directors who are making the
> investment decisions or S & P's. I note that some of the very
> successful Chinese investment families have a policy of no debt.
> When the chips are down its the bank who is the weak link that
> will give way.
>
> I'd say AIA is worth rather more than the $3.30 you mention, I
> think Changi paid two dollars ninety something for their 5% stake
> with alacrity and that was a while ago now. Unfortunately I don't
> have any but I look at the nice picture on the front of their
> investment prospectus and slaver occasionally....if only the
> People's Republic of Christchurch would float some of Chch
> Intnl Airport...
>
> cheers,
> Hugh
> P S I usually just read the sharechat that comes via email but
> I now notice I'm missing an increasing number that get posted directly
> without coming as email. I'll have to make an effort to log on more -
> not easy with a teenage daughter chiyacking me to get into hotmail &.
>
>
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