Forum Archive Index - June 2002

["Ben Dutton" <bendutton@sharechat.co.nz>]

Snoopy,

Thanks for your illuminating post - I (and I'm sure others) had no idea WRI
was trading with such a high dividend yield.  Your analysis of the situation
is top-notch - better than most broker reports in fact.

Some people must have taken your analysis to heart because WRI's up today.
The company presents an excellent income opportunity indeed - thanks for
bringing it to our attention.

Best Regards

Ben Dutton
disc. no WRI

----- Original Message -----
From: <tennyson@caverock.net.nz>
To: <sharechat@sharechat.co.nz>
Sent: Wednesday, June 19, 2002 10:30 PM
Subject: Re: [sharechat] Wrightsons Revisited


> Hi phjones,
>
>
> >
> >
> > Looks to me as if you have missed one boat and are about
> > to sink the other.
> >
> >
>
>
> Missed the boat by not buying gold a few months ago?   Possibly, but
> there is no need to catch every boat to be a successful investor.
> There are always choices, and your choice depends on what your
> strategy is.   I wasn't out to discredit gold per se.  I made the
> 'Revisiting Wrightsons' post to show that in times of uncertainty
> there are other strategies, rather than buying gold, out there.
>
> *I* don't invest in gold for the following reason.  It is
> difficult to mount a discounted cash flow argument based on the use
> of gold as a material to justify the price of gold.  There is a
> fair amount of fear and greed built into the gold price movements.  I
> find emotions notoriously difficult to forecast.   So why invest in
> gold when, as I see it, there are far less risky strategies out
> there?
>
> Personally I have two investment strategies running side by side.
> There is my 'growth' strategy as reflected by the sort of investments
> discussed in the focus investment group.  There is my 'income'
> strategy as reflected in my entry into the stock guru competition.  I
> realise that may sound a little perverse as the stock guru
> competition is a growth competition.  But I thought it interesting to
> have have an 'anti-growth' (income) portfolio in there to keep all
> you growth guys honest ;-).
>
> For you to criticise my income startegy ( specifically re Wrightsons
> ) just because it doesn't fit with *your* idea of a good investment
> is I think a little unfair.   I topped on up WRI because of the yield
> available. In hindsight it would have been better to buy in a couple
> a years ago at 40c or so.  So why didn't I do it then?  At that stage
> it was only paying a dividend of 1c per share, giving a gross yield
> of only 3.5%.   That sort of return is of no interest to an income
> investor.  So why didn't I buy WRI as a growth share at that time?
> The management at the time had a poor track record, and there were
> better growth opportunities available (as I saw it).  And I think the
> market today is telling us the WRI management still need to prove
> themselves.   With hindsight those who jumped in at 40c earned a
> great return, but I would argue at high risk, if you take away the
> benefit of the hindsight.
>
> Summing up, I don't think that with Wrightson at $1.04, my
> suggestion of:
>
> short/medium term trader:  Don't buy.
> growth investor:  Don't buy.
> income investor:  Buy
>
> is out of line.
>
> For the long term income investor (there is no other kind of income
> investor that should be in the sharemarket as I see it), then I am
> suggesting WRI is a good buy at today's prices.  The long term income
> investor is concerned with sustainable yield and I think WRI stacks
> up well.  If you think that buying into a share with the possibility
> of a sustained yield of 15% is 'missing the boat', then I think you
> have very little knowledge of income investing.  I'm not saying *you*
> should 'income invest'.   It may not be right for you.  I am saying
> you should have some respect for those who use investment styles that
> are different to what you yourself might use.  Those people are not
> necessarily wrong.   In the investment game it's the discipline of
> sticking to your own well thought out strategy that counts, whatever
> that might be.   And in my experience those who invest in bubble type
> investments (as I believe gold is at the moment) usually don't have
> the experience to know what a good entry price is, or when to get
> out.  But if you do, then good luck to you.
>
> SNOOPY
>
>
>
> ---------------------------------
> Message sent by Snoopy
> e-mail  tennyson@caverock.net.nz
> on Pegasus Mail version 2.55
> ----------------------------------
> "Dogs have big tongues, so you can bet they don't
> bite them by accident"
>
> --------------------------------------------------------------------------
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