Forum Archive Index - January 2001

["Mark Hubbard" <mhubbard@es.co.nz>]

From: Narena Olliver <narena@nzbirds.com>

> I have no desire to be rude but I wonder how in touch you are with your
> farmer clients. It is the excessive use of and reliance upon chemicals
> and nitrogen fertiliser which is the core of the argument, to the point
> where NZ's green image is an international joke.  The future of farming
> lies with getting free of these damaging chemicals and the farming
> methods that go with them. There are positive aspects of genetic
> engineering for the environment, so long as companies like NUF keep out
> of the act. ciao, Narena


mmm. Getting a bit heated, and I agree, outside the boundaries of Sharechat,
so I suspect this will be my last post on this issue.

We have arrived at an impasse, essentially because we are now arguing what
should or could be, rather than what I am arguing will be, and its
implications for the profits of, and thus shareprice of, firms like NUF. I
guess my final point, regarding the shareprice of NUF and such companies,
would be by posing the following questions:

What do you think would happen to NZ's economy / world food supplies, if
nitrogen fertiliser were withdrawn from the market today (just one chemical
product)? I guess you can figure out what my opinion would be - disastrous.
Also, given the current world population, how do you go back from this
current production postion, to an organic rural economy producing
considerably (perhaps I should say, vastly) less output than it is currently
(because organic means lower output)? After answering these, then the issue,
regarding NUF's shareprice, is what implications does that have for the
sales of such companies - my opinion is that the firm will continue to
increase sales in line with their expectations  Thus, my argument follows,
on a discounted cashflow valuation basis, NUF is undervalued.

All the best Narena (and you to Te Ranganui - and you're probably right,
there may well be too many 'fellas' on the planet, but the fact is they
exist, so how, also, do you go back from that? :)


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