Forum Archive Index - January 2003

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

After several years of observation one can't help but observe
that several sharebrokers operating in New Zealand make 
very strange recommendations.
One looks at the list of recommendations by sector and wonders
why the best candidates are missing?
Then it strikes you that certain companies are always missing.
Then you find that it always the ones which the sharebroker does
no underwriting business for and is not willing to lend money against
although they will lend money against less profitable cases that they
act as broker for.

Then there are what are obvious "dogs" that they keep recommending.
That's quite apart from the usual silly game that they will never, or
 hardly ever make a sell recommendation so one is reduced to interpreting
"Hold" as meaning sell and "Accumulate" as "Hold".

Very occasionally do they do research on a Warren Buffett basis but
usually the research can only be described as weak. They don't understand
what commodities are, that Telecom is now a commodity firm, that airlines
are commodities, that commodities do badly. They don't understand
 Warren Buffett and value investing.

In the US stockbrokers have been fined hundreds of millions of dollars 
for these practices.Here the NZSE Market Surveillance turns a blind eye
to it as does the Government and clear cases of insider trading at most
get the slap of a wet bus ticket.
 And the result of the QANTAS NZ fiasco where the company was 
clearly trading while insolvent was that the Directors got off scot free
while the accountant was fined $3,000 for not filing the accounts on
time.

The Wild West is not in the USA folks, its in NZ. Cowboys ride supreme.

Red Baron

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