Headwinds & Tailwinds

[Lewylewylewy]

I thought I'd start a thread to share tips on Headwinds and tailwinds.

Hopefully there may be some that are less obvious and people end up learning about factors that effect particular companies that weren't previously expected.

I'll start things off.

Interest rates.
Low rates that could drop further are positive for companies that leverage debt for growth. In fact the property industry relies on debt to function well. REITs should do well, but I think the retirement sector is the best bet (my favorite flavour is SUM) as it's services are used no matter the state of the economy, and as someone pointed out earlier on the SUM thread, they profit even if property prices drop (though the SP could drop if that happens). Therefore a good lock up and leave investment IMO.

[Hawkeye]

Sorry lewy, I got up too early this morning to reply to this right now, I'll try to think of something to post tomorrow if my wife doesn't go into labour

[percy]

Sorry lewy, I got up too early this morning to reply to this right now, I'll try to think of something to post tomorrow if my wife doesn't go into labour

Sounds like very strong headwinds in the Nelson area...

ps.
Trust all goes well..

[percy]

Tailwinds;
Ageing population.Retirement village sector,and medical supply.
Lower NZ $, export sector and travel sector .
Headwinds,
Importers as lower NZ$ means imports cost more.
Retail sector faces not only increase cost because of the lower NZ$, but increasing competition from overseas retailers and internet retailers.

[Lewylewylewy]

Low oil prices are good for logistics companies at the moment.
Weather is good for growers... I think.

Hmmm nothing but revolutionary coming up yet.

[Lewylewylewy]

Sorry lewy, I got up too early this morning to reply to this right now, I'll try to think of something to post tomorrow if my wife doesn't go into labour

Baby = financial Headwinds haha.

Hope it goes well, let us know.

[Beagle]

Sleeping headwinds too. Best wishes.

[iceman]

Definitely tailwinds for horticulture with the likes of SCL and SEK benefitting, both as growers and providers of warehousing, packing and other services to the industry. Ongoing lowering and/or elimination of tariffs a slow and steady gain for the industry. China hungry for our fruit. Kiwifruit exports to China up 50% last year and expected 30% this year while the existing markets of Europe and Japan remain firm. The Chinese President even served NZ Kiwifruit at dinner for John Key this week. They normally only serve Chinese produce so sending a great signal.
Should the stubbornly high NZ$ give ground, the industry will benefit further.

DISCL: Hold both SCL and SEK

[skid]

Definitely tailwinds for horticulture with the likes of SCL and SEK benefitting, both as growers and providers of warehousing, packing and other services to the industry. Ongoing lowering and/or elimination of tariffs a slow and steady gain for the industry. China hungry for our fruit. Kiwifruit exports to China up 50% last year and expected 30% this year while the existing markets of Europe and Japan remain firm. The Chinese President even served NZ Kiwifruit at dinner for John Key this week. They normally only serve Chinese produce so sending a great signal.
Should the stubbornly high NZ$ give ground, the industry will benefit further.

DISCL: Hold both SCL and SEK

It would be prudent to learn and keep track of the El Ninio -Ninia weather patterns--I cant think of many things more suseptable to changes than the fruit growing industry. Weather-$Kiwi are the big ones

[stoploss]

Iceman , "NZ Kiwifruit" - Chinese Gooseberry ring any bells ?

[Lewylewylewy]

If building costs are increasing, would that push property prices upwards, I wonder?

[skid]

If building costs are increasing, would that push property prices upwards, I wonder?

Well,its one of the reasons many use to confirm they wont fall. IMO if something does cause a fall,it will be outside forces......which brings us to overseas markets..perhaps the biggest headwind/tailwind of them all,but alot harder to factor in (where they are going)than interest rates and Kiwi dollar (at present)

The retirement sector seems like a pretty good long term play(demographics)--The only wildcard (to me) is that if the market is as overbought as some say,after a correction (or possibly a bigger drop)would be a better time to start the long term hold.

[iceman]

Skid I agree it is prudent to monitor weather patterns like we do in all primary industries. I am in fishing and it is our biggest factor. But horticulture is planting ever bigger hectarage and is a growing industry


Iceman , "NZ Kiwifruit" - Chinese Gooseberry ring any bells ?

And the point is stoploss ?

This from a recent news article :
" Zespri chief operating officer Simon Limmer said: "China has been growing at a phenomenal rate, with a 50 per cent increase in volume last year".
"Most importantly, it's going to become our most valuable market in the short term - this year or soon after. It's going to be a value and volume market."
Europe and Japan continue as strong buyers, but China's growing middle class is set to dominate sales.
The Bay of Plenty-based company has the sole rights sell New Zealand kiwifruit outside of Australia or New Zealand.
Key attended the launch in Shanghai as part of a week long trip around China.
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"China is Zespri's largest market. I think that reflects the growth we see in the Chinese economy, and the size and scale of this economy," Key said.
Key said Chinese President Xi Jingping served him Zespri kiwifruit at an official dinner on Tuesday, but joked that this almost caused a diplomatic incident.
"He also served some Chinese gooseberries from Shaanxi province, but fortunately he didn't ask me to judge which was the best."

[skid]

Skid I agree it is prudent to monitor weather patterns like we do in all primary industries. I am in fishing and it is our biggest factor. But horticulture is planting ever bigger hectarage and is a growing industry



And the point is stoploss ?

This from a recent news article :
" Zespri chief operating officer Simon Limmer said: "China has been growing at a phenomenal rate, with a 50 per cent increase in volume last year".
"Most importantly, it's going to become our most valuable market in the short term - this year or soon after. It's going to be a value and volume market."
Europe and Japan continue as strong buyers, but China's growing middle class is set to dominate sales.
The Bay of Plenty-based company has the sole rights sell New Zealand kiwifruit outside of Australia or New Zealand.
Key attended the launch in Shanghai as part of a week long trip around China.
Ad Feedback
"China is Zespri's largest market. I think that reflects the growth we see in the Chinese economy, and the size and scale of this economy," Key said.
Key said Chinese President Xi Jingping served him Zespri kiwifruit at an official dinner on Tuesday, but joked that this almost caused a diplomatic incident.
"He also served some Chinese gooseberries from Shaanxi province, but fortunately he didn't ask me to judge which was the best."

Also technology improves over time with things like new ways to prevent frost damage--short term weather events we have not much controll over but the more long term (El Ninio) are worth considering--a drought or to much rain and wind doesnt care how much acreage you have (not saying dont get into this market--but it is a thread on head and tail winds):cool:

[Hawkeye]

Sounds like very strong headwinds in the Nelson area...

ps.
Trust all goes well..

Thanks everyone, my wife is due today, we had a bit of a "show" earlier but no other indicators yet. I'll let you know how it progress's.

[Hoop]

Possible scenario next week Economic tailwinds with a Equity headwind ... If I remember correctly back in September 2015 the NZRB model had this summer's El Nino effects factored in at -0.4%/Qr of output...Well the forecasters got it wrong (against the odds) with this Pacific El Nino event. With the other factors coming in as expected theoretically NZ economy should be up to 0.4% better off...so less stimulus needed ..no rate cut...NZ Equity Markets won't get stimulated either... therefore a blackish next Monday.


http://www.stats.govt.nz/%7E/media/Statistics/Browse%20for%20stats/GrossDomesticProduct/HOTPDec15qtr/gdp-dec15-quarter-annual.PNG

[DarkHorse]

Some other interesting possibilities: http://rogermontgomery.com/what-could-blow-up-next/