Forum Archive Index - January 2002

["Viewpoint ." <viewpoint_@hotmail.com>]

The Carter Holt Harvey shareprice has recorded a solid price rise over the 
past few months even though the company continues to destroy millions of 
shareholder wealth. The last financial years performance tells all. Another 
desirory result for a company with assets in excess of $7 billion.

What drives such increases in their share price?

The answer was given by Terry Hall in the Sunday Star Times under the banner 
  "It's analysts who have the power". Terry reminded us that analysts are 
the real powerbrokers in today's market.

Terry also made the point that while Carter Holt Harvey is cautious about 
the outlook most analysts believe the trends point to better times.  
Analyst's valuations vary from $1.96 to $2.41.

I ask does it really matter what analyst valuations comes out as? As long as 
it is sufficient to warrant a buy the jobs been done. Just add enough to the 
predicted price of logs and they will get the answer they want.

One should note that even at $2.41 the broker concerned is forecasting 
continuing destruction of shareholder wealth.

Not surprising institutions have been buying lately. - those that have been 
recently undeweight in this stock. Isn't it ironic that those fund managers 
who have previously thought little of Carter Holt harvey's fundamentals now 
need to buy  (even though they most likely think that the stock is still a 
dog) for no other reason other than that they are afraid of being 
'outperformed' by other fund managers. I am afraid that is what beating the 
benchmark is all about

The last word belongs to Shoeshine in the NBR who in usual honest way put 
the rise down to 'the perennial chirpiness of sharebroking analysts. Carter 
is the local market's second-largest stock. Like leader Telecom, it 
generates a big proportion of the turnover that puts panini on brokers' 
tables so "never say sell" is the watchword'

And Shoeshine is probably right when he say's  'It's tempting to cross your 
fingers and hope a momentum is building out of which one of the biggest 
owners of our economy's resources will eventually burst, showering 
added-value wealth on its shareholders. Those buying up the shares in recent 
days must have succumbed to that temptation'

Never mind what the stock is really worth. Just join in the party and take 
the trading opportunities when they come about, and prosper.

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