Forum Archive Index - August 2002

["Gerald Dreaver" <gdreaver@paradise.net.nz>]

Bernard Bourke - quite like your "virus" analogy - it is shocking how much
value NZ companies have lost over the last decade or so.

However, when you say:
"I dont care how one looks at it,  A $250,000 investment in 1994 (in an
industry that hasn't had major shocks and it is claimed that the market is
short of the basic product) that is now worth $22,000 is a disaster by what
ever means is used to measure it. There is no excuse or reason that can
justify this level of shareholder wealth destruction. Nor is there any
reason to think that the board (whichever one) can make growth decisions."
...I do think this is a tad unreasonable, given that the current board seems
to have performed rather well. My guess is that with forest fires overseas,
the growing Asian market, increasing freedom in world trade, and some great
new processing technologies, our natural advantages in forestry will pay off
over the next decade.

I think Ian Andrew makes some excellent points (unsurprisingly, since he
seems to broadly agree with me), one of which Snoopy appears to agree with:
it's silly to judge a level of debt just by looking at the debt. Something
that bothered me about the Shareholders Association's tirades was that they
seemed to think that increasing debt by 5 times actually meant something. If
my debt of $10 goes up to $50 it means nothing. You have to look at
debt/equity ratios, anticipated revenues, the recent debt management history
of the company (which as Ian points out has been excellent), and how the
company would cope in the event of unexpectedly inadequate revenues (sell
peripheral forests, in the case of FFS).

Laura and Richard - to explain why I highlighted the 5% figure - this was
the shortfall in votes for the deal. It is a figure that might well have
been influenced by the Shareholders' Association. Are we convinced that the
Shareholders' Association is suitably qualified to advise shareholders on
important matters usch as this? Their corporate supporters appear few and
appeared to have motives not necessarily consistent with the interests of
all other shareholders.

Snoopy - I start to think that you're munching on too many red herrings.
Just because Selwyn Cushing said Air New Zealand could cope with its debt
(and it didn't) doesn't mean FFS is wrong in its promises. Lots of people
break their marriage vows - that doesn't mean that you should never marry.
You need to look at factors such as those I've mentioned above.



----------------------------------------------------------------------------
To remove yourself from this list, please use the form at
http://www.sharechat.co.nz/chat/forum/