Forum Archive Index - February 2002

[hugh webber <hugh.webber@clear.net.nz>]

I would be a bit more upbeat than that after reading the Press report. I don't 
hold WHS shares
myself but wish I had invested some time ago. They say that in Australia 
property developers are
now offering them Warehouses in new shopping malls whereas they have to build 
themselves, sell and
leaseback in NZ.
They also say there are 5 new Warehouse stores a year opening in Australia and 
that Australian
costs are now declining and they have reached breakeven over there. They also 
note that the small
older Warehouses ex the two Australian chains they took over - Sollys and some 
other outfit - are
being sales impacted by the new Australian Warehouses so presumably they will 
start closing down
the smaller older ones. The Warehouse profit was kept down by the Australian 
costs but that now
seems to be out of the way.
I think one point is that even if sales overall in NZ only go up 9 - 10% a year 
that's still much
better than the competition and with tight cost control profitability will 
increase. And of course
the sky's the limit if you bring in future strong Australian growth.
One lesson from Buffett is that well positioned outfits with a successful 
formula and consistently
strong growth soon make shareprices that are "too expensive" look amazingly 
cheap in hindsight.
Take Auckland Airport. 

Pity some of the smaller successful stories that the Press writes about - BK 
Registries, and South
Island Organs, Replica Homes, N Z wool Services International for example 
aren't available to share
investors. There's other real world news stories as well.
I try to make a practice of reading every business story in the daily newspaper 
and Sunday Times
each week and have been doing that since my teens. Gives you a feel for what's 
going on, plus
scanning the share tables gross yield and p/e columns to see if one can explain 
all the cases that
look like a bargain - and if you can't you do some more investigation and 
Bingo! you may have a
bargain.

Gets rid of momentum and fashion investing and puts your portfolio on a sound 
footing.

cheers,
Hugh


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