Forum Archive Index - February 2002

["tennyson@caverock.net.nz" <tennyson@caverock.net.nz>]

Hi nick,
>
>
>The stocks picked by only one person haven't started to well
>either though. Were these added more in hope? ie wouldn't hold 
>in real life but need an outsider to try and win competition. 
>Whereas the ones held by two people have at least had their 
>potential confirmed by another entrant.
>
>
Not necessarily.  It is possible that two people made the same wild 
guess on the same outsider.  Just because two people do something 
doesn't necessarily mean it has credibility, even if the choices are 
apparently independent.  Likewise I am sure there are some very 
'sensible' companies that only one person, or no-one has picked.
>
>  
>If the popular ones really are overpriced due to popularity how 
>long will this effect last? 
>
>
As long as the overall market is overpriced.  Which I believe it just 
might be....
>
>
>Because these are the most popular stocks in the competition
>doesn't necessarily mean they are the stocks that people would most
>likely hold in real life,but ones they would risk to try and win.
>(explains wild card like ITC).
>
>
Sure, everyone will have their own motives to enter the competition.
If someone dishes up a hand of 'wildcards', that is fine with me.  If 
someone wants to choose some shares on the basis that they might 
really hold them (taking into account downside risk) that is fine 
too.  I don't think it is good, to limit the stocks selectable in the 
competition, on the assumption that that the competition organizers 
can judge a 'poor quality' entry from a 'good one'.

Personally I wouldn't invest in the sharemarket any money I 
definitely needed a only year later.  You might interpret from that,  
that I regard the competition is silly.  No so.  I am of the view 
that most New Zealanders would be much better off if they invested 
their term deposit money in the sharemarket in good income producing 
shares, not blindly following the index or chasing the latest fad.

So my entry is constructed to show that holding a portfolio of income 
producing shares (excluding property, because in my view many New 
Zealanders adults have equity in their own home, so property in 
shares is not really adding sufficient diversification to an 
investment portfolio) can be a good way of saving.  Also I wanted to 
show that it is not necessary to buy and sell shares all the time 
(four out of my five entries are the same in this years competition 
as last years competition) to be a successful investor.  In other 
words, it is not necessary to keep an eagle eye on the business pages 
of the newspaper each day.

This is a slightly different angle to the 'Focus Investment Group' 
selection method.  I think many New Zealanders are too impatient 
for that approach.  However, if they can see a good regular income 
coming in from their share investments (roughly equivalent to what 
you would get with term deposits) then this can provide the incentive 
to stick with such a savings plan.
>
>
>If the competition meant you were killed at years end if your
>portfolio wasn't in profit im sure most would have chosen 
>different stocks. Maybe an idea for next year :-)
>
>
Even 'conservative' investors will have years when their total share 
portfolio is down.

I think, Nick,  you are taking the competition far too seriously ;-). 

SNOOPY






  
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