Forum Archive Index - February 2003

[Chris Watson <Chris.Watson@computerland.co.nz>]

WHS price never did trade at 7.00!  Went from a low of 7.06 to a next day
opening of 6.98 plummeting to close that same day at 6.20.  A better TA
signal was the directional movement indicator (DMI) on Jan 21st and 22nd
(DMI- > DMI+) giving about a week's warning.  Beware of entering too early
again on this one - looks like a downward trendline has been established
(currently providing resistance at around 5.75).


-----Original Message-----
From: Allan Potts [mailto:ajp7079@excite.com]
Sent: Friday, 14 February 2003 8:52 a.m.
To: sharechat@sharechat.co.nz
Cc: ajp7079@aol.com
Subject: [sharechat] WHS Mystery Solved ???



It appears to me that the reason WHS had it's share price fall off a cliff
was made public yesterday by a STUFF article.  It reported that COSTCO
executives had been in NZ over the weekend using a helicopter to scout for
sites for the possible development of COSTCO stores.  The STUFF article pooh
pooh'd the threat of COSTCO competition, but I think they got it wrong.
Evidently the market also thinks they have it wrong.

COSTCO is a 900 pound gorilla and if they stick it out in NZ, I think they
will be very successful.  The article plays down COSTCO because they sell in
bulk.  Well yes and no.   Many items are in bulk, however thousands of items
are not.  Their  prices are absolutely the best I've seen in the world and
are a great boon to consumers.  The concept started out with the PRICE CLUB,
founded by a San Diego attorney turned developer/merchandiser -- Sol Price.
The concept started off very slowly, until business people  found out they
could by their goods at better  prices than they were getting at their
wholesale distributors.  Then the public caught on and gradually the concept
took off.  The individual who started COSTCO used to work for and was
trained by Sol Price.  Later on The PRICE CLUB  and COSTCO merged and was
called PRICE/COSTCO.  Finally COSTCO bought out the entire thing and renamed
it COSTCO.

Looks like the TA  guys really were ahead of the curve on this one as the
sell signal was given when it crashed through support at $7.00.  It went so
fast I didn't get out.  Finally the news comes out that evidently was known
to some select biggies somewhere.  As I said in my first post OUCH!!!

Since I'm not on the ground there I really can't judge the ability of WHS to
withstand the fierce competition that COSTCO would bring in NZ and Aussie.

Any thoughts from the troops on the ground??

Allan






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