Forum Archive Index - April 2001

["Peter Maiden" <pmaiden@xtra.co.nz>]

Marilyn - good question and reading between the lines I take it that like me you are a bit cynical of  'institutional investors' and their performance.

 

In the post about Nufarm maybe I should have said '...analysts and institutional investors.....' because for Nick, myself  and other investors in Nufarm they need this 'analyst and institutional support' for the Nufarm price to head north. However because of many  non-financial aspects of Nufarm I don't think this will happen - David Ling clearly spelt out why that happen.

 

A recent bit of Ernst & Young research in the States has found that the majority of 'institutional investors' are now using non-financial performance measures to a greater degree than they had in the past. I think the numbers were something like on the average 40% of the decision was based on non-financial factors - as opposed to straight financials. It's amazing what stuff you read when bored out of your skull on a long plane trip.

 

When these non-financials include such things as executive credibility, execution of strategy, innovation, market share, business processes etc the findings were not surprising - except it highlights how far from the real world analysts and institutional investors sometimes are.

 

Successful companies manage to those measures anyway - as generally good financial results will follow if a credible executive team executes a strong startegy that leads to increasing market share etc.

 

Marilyn - what you put so expressively is all too true. Even if they are thinking about thier investment decisions from different angles their overall performance doesn't appear to get any better.

 

Collecting exorbitant management fees that a fair proportion goes on expounding their own abilities and success in newspapers and TV (and then returning pretty poor returns for their clients) is most likely what you mean by 'their old habit of urinating investors funds against the wall. 

 

The answer to your question  '...or have they cracked it this time?'  is no.

 

But no doubt they would not agree. 

 

As a matter of interest how's your own foray into the NY markets going at present?

 

Cheers

 

Peter