Forum Archive Index - January 2002

["Mike Hudson" <mikehudson@clear.net.nz>]

As expected Chris Castle has won the Beat the Brokers competition and a bottle of Neudorf Chardonnay will shortly be winging its way to grace his dining table in his mansion or the stateroom of his luxury yacht.

This win was well deserved; not only did Chris pick two of the three top performing shares, APF and BDO, he was only competitor to have either one them in his portfolio.

Chris’s portfolio was valued at $93,536 at 31^st December a gain of 87% for the year, this was despite having two duds. His picks were APF (+432%), BDO (+112%), NTH (+40.7%), ITC(-66.5%), FOR(-83.2%)

Well done Chris,

Roley Rackley with a late SOE charge zoomed into second place with a gain for the year of 44%. Roley’s picks were SOE (+231%), Roley was the only one to pick this one, FBU (+41.3%), AIA (+15.9%), VTL (-2.2%), ITC (-66.5%). An interesting portfolio with three speculative shares and two of a more conservative nature.

Michael Yielder was third with a gain of 42%. RBD (+56.9%), SKC (+56.6%), FBU (+41.3%), HLG (+39.1%), CNZ (+16.4%). This was a portfolio that I entered (sort of Hugh Webberish) made up of high yielding stocks that had little downside and were likely to benefit from falling interest rates.

That’s the good news; the bad news is that only 28 (37%) of the 75 entrants made a positive return for the year. What is even worse is that only 14 (18.5%) of the portfolios exceeded the 13.4% return that the NZSE Top 40 Gross (including dividends) Index achieved. It tends to back up Peter Maiden’s comment the other day that Mary Holme is right in her assertion that most investors would be better off with an index fund, although of course people don’t make the same decisions in a competition of this nature that they would with their own money, or do they?

Chris and Roley are the exceptions that prove the rule. Most of those picking the techs and other flavours of the month went down the gurgler and the bulk of the successful portfolios were made up of the more conservative companies with good management and strong cash flows. The dividends generated by these companies were a significant contribution to the overall returns

As for the Brokers, the raison d'etre for this competition, well they are a sorry lot apart from ABN AMRO in fourth place and Deutsche Bank in 13th

ABM AMRO            +34.7%

Deutsche Bank        +15.1%

JB Were                  +6.9%

CSFB                      -0.6%.

ASB Securities        -1.4%

SS Barney              -2.0%

Craig and Co          -4.5%

Cavill White            -8.8%

Ord Minnett          -10.7%

Forsyth Barr         -11.2%

UBS Warburg        -32.3%

DF Mainland         -36.7%

As good an argument for using discount brokers as I have ever seen. I see they are already talking up the prospects of the NZ market for 2002, so it looks like time to be investing offshore.

The full final table will follow and also a table showing the performance of the selected shares broken down in to the capital and income components.

Thank you all for taking part, it was a bit of fun. Ben has indicated that Sharechat will be running an official competition this year with huge prizes so I will leave it up to him.

Cheers

Mike H

PS: If Bruce Grieve would like to mail me off list with his postal address I will send him a bottle also. Anyone who can turn $50,000 into $23,505 in a year deserves to drown his sorrows.