Forum Archive Index - January 2004

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

I recall when Deutsche Bank outlaid $A35 a share for 
AMP at the float.....and some nitwits have been bruiting 
Deutsche as a really brilliant bank recently.

The point about AMP is that it is a large bloated financial 
bureaucracy paralysed by "Modern Portfolio Theory" which is 
basically in competition with yourself i.e. its carrying on a 
share portfolio.

Its never going to better the market except for short periods 
as a very limited recovery stock, the best it can hope to do 
is score well when the whole market is moving strongly upwards.
Normally, by being badly overdiversified into different asset 
classes, heaps of different stocks, and different countries, it can 
guarantee that it will only make a low weighted average return.

Its the antithesis of Warren Buffett who (a) doesn't have a bureaucracy,
his office has less than 20 staff (can't quite remember the figure, it 
may be as low as 6) (b) concentrates on a very few investments 
in shares and ignores other investments (c) is country specific.

Why invest in AMP when there are much sharper more focussed 
avenues like Hellaby and GPG? 
Although I have to say that I can't follow the GPG forest strategy 
when wood and wood products are such hopeless commodities.
Buffett stays out of commodities (which incidentally includes airlines).


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