Forum Archive Index - May 2004

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

Hi Macdunk,

>
>We all have the same strategy largest return for money
>Invested with the lowest risk possible.
>

I disagree.  You might be speaking for the majority on this forum, but
some aren't prepared to tolerate any risk.  Then again, for some
shares are just play money and it doesn't matter if they blow the lot.
   Those people are prepared to tolerate massive risk in the hope of
striking it big.  You can speak for yourself, but don't claim to speak
for everyone else.

>
> However the average Investor can only win or lose the rise or fall
> In the market plus dividends.   
>

True, less trading and management costs and tax of course.

>
>If we work out that sum over a given
> period of time we will find out If we are above or below average.  
>

True in theory, although I believe that most investors chase last
years winners and underperform even the indices as a result.

>
>The  more companies we invest In the more 
>likely we are to be average with
> lesser risk of loss or total loss.      
>

What if you invest in a basket of excellent outperforming companies?

>
>we have to work to our strengths not our weaknesses 
> to be better than average. I am not
> Interested In being average 10% profit I consider dumbo 
>money not worth the risk. 
>

I wonder what Michael Cullen would say to that.   His long term goal
is 8% compounding long term for 'our' super fund.  By your reckoning
Michael Cullen is Dumbo with small ears, not even fit for the circus!

>
>One of the companies we shared an interest in
> wri you still hold I sold at $1-30 and made 60pc since after a 30pc
> rise    My strategy Is dont spend time on dogs wondering why, get
> out
>when the run Is over,
>

And your strategy for WRI was invest in it while the growth was there.
 That is a fair enough strategy, but a different strategy to me with
WRI. I want the income stream from it which is why I am holding while
you sold.   The fact that you sold and I held is not enough
information to know who made the best call as it doesn't take into
account our different investment strategies with this one.

>
> I have a practical mind other people have talents I am hopeless at,
> the Idea Is to listen and learn Wri at this moment In time I would
> sell not worth the risk now Is not the time to Invest In companies
> inventing grasses to stop cows belching.   
>

But how great is the risk with WRI really?    It is a low debt
company.   I can think of quite a few fixed interest investments out
there that are whole lot more risky than WRI.    Then you have the
fact that WRI is still 'in play' in the corporate sense.

>
>PGG run by practical people for practical people Is better.
>

I haven't run the ruler over PGG in intimate detail, but I'm not going
to argue with you.    PGG is a good alternative to WRI even though the
currently dividend yield is skewed by having 18 months worth of
dividends paid within a 12 month period.

>
>My policy Is stick to what I understand and If In doubt get out. 
>

Fair enough!

>
>The dividends I look to as a bonus my goal 
> Is 30pc return pa my first 4
> years was 25pc.pa.    
>

I have to admit you have done well.  However, 30% pa is a very 
aggressive target.  Not even Warren Buffett has been able to 
consistently beat that, or even 25%.   However, if anyone can 
outperform WB it would be a person with a maverick streak like you!

>
>I run strict stop losses at the start until well
> in profit as one In five go bad.  
>

Yes it never pays to assume that things will go 100% according to
plan!

>
>I am Inclined to get out to quick
> but never regret this as the other extreme Is much worse.
>

Is it?   What is 'the other extreme'?

>
>I know exactly what you have Snoopy as you with
>me I respect you too much to mention RBD or Lyttleton how Is
> the union port Its all good fun eh?.
>

RBD has made a good recovery in the last few months.     True the five
year buy and hold performance has not been that great.    But even
despite my 'irrational exhuberance'  of buying shares somewhere near
$2, I have bought enough shares before and since to make my 
average
entry price $1.40.  That means I am only a few cents down per share,
but that excludes the steady stream of divdends that sees me well in
profit.    Not bad for the second worst performing share in my income
portfolio.  The worst performer I quit a couple of years back ( Air NZ
).

The problems in the labour contract at LPC that I thought had been
settled have resurfaced - an unwelcome development.   However, far
more serious a threat is the councils plan to dredge and widen the
Avon river so that ships can sail right into the heart of Christchurch
city to unload.    That could really affect Lyttelton Port's
profitability, unless of course, I just made that whole last bit up 
:-)

SNOOPY

discl: hold RBD, LPC, CEN, SKC and WRI
AND happy to be holding them all.



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




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