Forum Archive Index - July 2003

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

Hi Gooner and T100

>> 
>> Firstly I want to say how much I appreciate your analysis on
>> sharechat. 
>> 
>> I am interested to know how you arrive at some of the numbers in
>> your latest post. 
>> 
>
> I was going to ask the same question.  If Snoopy is saying he can
> guarantee 14% from this stock during the next 10 yrs then I want to
> know where he got his crystal ball from so I can shop there! 
>

Fair questions I think, and I admit the detailing in my last post may 
have been a little obscure.

You can both buy the same crystal ball as I have, for $29.95 ($29.95 
from techbooks, AKL) according to Tony.  This IIRC is at least $10 less 
than I payed for the same 'crystal ball' two years ago - darn!    Blame it 
on the exchange rate movements in the meantime.

However, before you consider this the bargain of the century this 
crystal ball does come with a few riders.    It will take you a week to 
read the instructions, another week to fully understand them and 
probably another week to implement them.   You will need patience.
Many new crystal ball owners simply give up at this point.    You will 
need the resolve to not be one of them.

Secondly, this crystal ball will tell you what is likely to happen but it will 
not tell you when.    This crystal ball will tell you if you are looking at an 
intrinsically good business.  It will show you that the quality of this 
business has been proved by their deeds and not just words.   It will 
tell you if management continue on their proven path where the 
company will be in ten years or so.   There may be a wicked witch or 
two to overcome on the path.  Unfortunately this crystal ball cannot tell 
you about those!   These witches will manifest themselves in a way 
that you do not expect and cannot prepare for:  Perhaps Apes fighting 
in Iraq?   Perhaps SARS?   But you will set off on your business 
journey via crystal ball knowing that you have a management team with 
the knowledge and track record to deal to *most* of those wicked 
witches.

Nevertheless there is always a chance you will be mortally wounded 
on such an investment journey.  Based on my own experiences  this 
chance is around one in five.   For this reason you should never only 
walk one path.  A bare minimum of five at a time is in order and I would 
recommend at least twice as many as that!

Now on the subject of the specific investment path about which you 
asked....

The 14% return I quoted is based on the Warehouse being able to 
reinvest their returned earnings and grow the business base, as they 
have done for ten years.  It is the skill and market position of WHS that 
enables this  crystal ball to see so far ahead for WHS.   For 95% of 
companies this crystal ball will not work at all!  

Oh. and there will be a trickle of dividends to keep you going along the 
way as well.  I've counted that too.

For the numerical answer, you must look to the focus investment group 
and the recent long thread on the Warehouse.    The number of 14% 
falls out of the compounding rate of return formula that 'Winner69' and 
I have worked on over the last year or so.  Good luck on *your* 
journey.

SNOOPY



--
Message sent by Snoopy 
on Pegasus Mail version 4.02
----------------------------------
"Sometimes to see the wood from the trees, 
you have to cut down all the trees."




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