Forum Archive Index - January 2001

["G Stolwyk" <stolwyk@wave.co.nz>]

 

Please refer to my entry of Jan 3.

 

1.Selection of stocks.

This entry does not discuss any investment in property, bonds, cash or investment in any overseas countries(except Australia).

 

I picked 9 NZ. and Aus. stocks and my entry of Dec 10: "Working at...Win some...", describes these stocks in detail. 

 

Most had significant price rises before the recommendations were made, eg. AIA had a low of $2.20 in the 'gloom period'.

Investors who had cash available-or wanted to get rid of long held poor performers- would have bought into these stocks.

 

Knowledge of the internal/external economies are an asset, but judgment and timing are the overriding requirements and nobody can lay claim to this every time!.

 

The 9 mentioned stocks as a whole should have a reasonable chance of making the grade: Often, a couple of large rises-see CLH and LACO- will easily make up for any losses!

 

2.The NZ economy.

 My entry of Dec 22 ( Learning to...) assumes that at this stage $NZ=AUS.80 cents and US 45 cents are a good compromise. Current wholesale rates reflect those proposals.

 

There is some anxiety about wage agreements and fuel prices this year and their inflationary impact.

However, arising from the latest developments in the US and a belief that interest rates will come down further, a flow-on effect on NZ wholesale longer term interest rates has already taken place. 

 

 

This could benefit our selected stocks and specially those with high -but sound- levels of borrowing: SKC and AIA are interest sensitive stocks.

Current prices of these and other stocks do not yet fully reflect lower interest rates!  

 

 

3.Discussion of the potential of the selected stocks.

We have an unusual assortment of stocks: BCH and CLH are both debt collecting stocks ( My entry of Dec.10, suggested that investors could just pick CLH ).

The share price of CLH has been rising but is also fluctuating; a sign perhaps that somebody wants a significant stake?

 

SKC and TAB are both gaming stocks, but the latter concentrates on horse racing. SKC has a casino in Adelaide

 

There has been talk of the NSW government holding an inquiry in gambling: It could be that all negatives are already in the share price of TAB while the positive prospective developments are not.

 

Vendors of LACO seem to -quite rightly- want $A 3.70 and this stock is my favourite! Should be in the bottom drawer!  

Their annual report will be out soon and their AGM is on Feb.6.

 

AFF will have its AGM. on Feb. 21 and we shall know by then if a dividend will be paid. Further capital expenditure will take place in 2002.

 

Given time, the share price of QBE could be similar to that of AMP. Their annual announcement could be on Feb. 27.

They just completed a marvellous takeover! Their results will depend on the degree of reinsurance they have done.

 

They have a very sound record in this field and are used to work in 'difficult' conditions. 

 

Gerry

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Disclaimer. All investments are subject to risks. Contents of this email are my opinion.This could change. Accuracy or completeness of the subject matter cannot be guaranteed. No one is asked to buy, hold or sell shares in any company, trust or any other instrument. Any investment will be entirely at the reader's risk!