Forum Archive Index - September 2002

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

Warren Buffett once said:

"Don't invest in any business you don't understand."

In essence this is why I don't hold MHI, but I am prepared to be 
educated.  I can't argue with the figures published in the annual 
report, and I understand those.  It is more the underlying consumer 
buying behaviour that I do not understand.  This worries me, because 
I do not have a good handle on forecasting the direction of the 
company in relation to events in the economy.

MHI is a retailer which means that sales volumes and stock turn are 
important.   But my impression is MHI tends to attract discretionary 
spending unlike many of the other retailers listed on the 
sharemarket.  Jewellery doesn't wear out (or does it, am I showing my 
ignorance here?).  So why would someone buy a fine piece of jewellery 
only to  shove it in a drawer and not wear it?   And if they were 
wearing it, why would they need to go back to MHI and 
buy another piece?  There is my question for followers of human 
nature to answer.

Why did MHI fail with their venture into shoes?  I can see a certain 
synergy between the buyer profile of the people who buy jewellery and 
the people who buy expensive shoes.  So why did "Michael Hill Shoes" 
fail?  Again I'd be interested in your opinions.

There is now a larger Asian population in New Zealand.  Clearly not 
all asian people have a 'western psychology'.   Do people from 
Taiwan, Korea and India have a different attitude to the purchase of 
jewellery?  I know there are a few people of Asian descent who peruse 
this forum, so I would be very interested if one or more of you would 
comment.

Is there some tie up between the flight to gold and the popularity of 
jewellery?  When things are uncertain, do people tend to buy 
jewellery as a sort of security hedge, or do people *not* buy it 
conserving their cash for other things?  I don't know and there may 
not be a single answer, but I think it is worth asking this 
question.

I understand there was a time, as typified in the Marilyn Munroe song 
"Diamonds are a Girl's best friend" that jewellery was very 
important, much more so than it is now.  Before the days of social 
welfare benefits, and when women were expected to stay at home 
uneducated and make babies, a woman's jewellery box doubled as a sort 
of insurance policy.  Items that could be pawned for quick cash.  But 
times have changed, or have they?

Hoping some of you out there can answer my questions.

SNOOPY



-----------------------------------------------
Message posted by Harry Tennyson
 using Pegasus Mail 2.55
I have Word 97 to read attachments
------------------------------------------------

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