Forum Archive Index - August 2003

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

Two thirds of the competition has gone and a clear trend has emerged.   
The brokers have taken a clear advantage over the sharechatters.

Leading from the top is Forsyth Barr.  Their selected portfolio of 
Auckland International Airport, Fletcher Building, Fisher and Paykel 
Appliances, Hellaby and Waste Management has risen an astonishing 
34% since the competition began.   Backing this up are six more 
brokers with 10-13% portfolio gains.     Even bottom ranked broker, 
Direct Broking, is in positive territory.

Switching to the sharechatters, Nigel 's portfolio (Contact Energy, 
Dorchester Pacific, Guinness Peat Group, Independent Newspapers 
and Sky Television) at 27% is in a real contest with Johna (Contact 
Energy, Fisher and Paykel Appliances, Fisher and Paykel Healthcare, 
Guinness Peat Group and Sky City Entertainment (Casino)) on 25.5%.

Moving down the field of sharechatters, only 16 of the 27 sharechatters 
are in profit. I feel that this is a little disappointing for two reasons.   

1/ The general buoyant state of our NZX sharemarket.
2/ The fact that not too many of these entries I would describe as 
speculative.   Most sharechatters concentrated on companies with 
respectable stable businesses.

So what can we learn from this?    A casual glance at the 'negative' 
portfolios as to what companies feature prominently does give some 
insight.

Retailers Briscoe Group, Michael Hill, Pacific Retail Group and the 
Warehouse have all taken a hammering this year (down 35%, 32%, 
24% and 27% respectively).    These shares were popular with the 
sharechatters.  By contrast the brokers were relatively light weight on 
the retail sector.

Furthermore the small companies (that brokers tend to underweight 
compared to large and medium caps) have underperformed their larger 
contemporaries.   Underperformed, that is, with the sole exception of 
Cadmus, which has near doubled in price over the last month.   This is 
why Belgarian has suddenly been propelled  into the top ten.   Many of 
the sharechatters favoured the up and coming small companies and 
this year they have not outperformed their larger counterparts.

Lastly recovering underperformers Air New Zealand and Tower , very 
popular with the sharechatters, are noticable by their absence from the 
brokers picks.  I guess this is a case of:

"Don't assume what goes down must come up!"

if a company is lowly priced that may be for good reason.

There are a few lessons in there for all of us I think.

SNOOPY






--
Message sent by Snoopy 
on Pegasus Mail version 4.02
----------------------------------
"Stay on the upside of the downside, 
Anticipate the anticipation!"




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