Picking great companies for the long run

[Valuegrowth]

I want to buy at least one great business in each country in the following list using my Kiwi saver fund.

1. NZ
2. Australia
3. Asia which include Singapore,Malaysia or Hongkong
4. USA
5. UK


My criteria

Good Projected profitability(Future earnings)
Instrinsic value
Favorable asset allocation
Capital structue
Long term growth or going concern

What would be your choice? Highly appreciate your analysis.Thank you in advance.

[Antipodean]

Not to sound to churlish... but to save myself reseaching essentially the entire world. I would go:

1. NZX50
2. ASX200
3. SPDR S&P Emerging Asia Pacific
4. S&P500
5. FTSE100

[Valuegrowth]

Thank you Antipodean. Nice choice.
Not to sound to churlish... but to save myself reseaching essentially the entire world. I would go:

1. NZX50
2. ASX200
3. SPDR S&P Emerging Asia Pacific
4. S&P500
5. FTSE100

[Valuegrowth]

I want to add few more for my criteria.

Socially responsible business
Environmentally friendly business


I want to buy at least one great business in each country in the following list using my Kiwi saver fund.

1. NZ
2. Australia
3. Asia which include Singapore,Malaysia or Hongkong
4. USA
5. UK


My criteria

Good Projected profitability(Future earnings)
Instrinsic value
Favorable asset allocation
Capital structue
Long term growth or going concern

What would be your choice? Highly appreciate your analysis.Thank you in advance.

[ValueNZ]

I want to add few more for my criteria.

Socially responsible business
Environmentally friendly business
The only social responsibility of businesses is to produce a profit for their shareholders

[justakiwi]

And quality products and services for their customers.


The only social responsibility of businesses is to produce a profit for their shareholders

[Perky]

NZ. MFT or EBO
Aus: MQG
HK: PRudential or HSBC
US. Berkshire
London. Shell

chose to ignore your esg criteria.

[Valuegrowth]

And quality products and services for their customers.
I admire companies that produce quality stuff and provide
excellent customer service.

[Valuegrowth]

NZ. MFT or EBO
Aus: MQG
HK: PRudential or HSBC
US. Berkshire
London. Shell

chose to ignore your esg criteria.
Thank you for posting some top companies.

[SailorRob]

The only social responsibility of businesses is to produce a profit for their shareholders


I must say I am pretty impressed with your posts ValueNZ, particularly considering your age.

You are exactly right. Justakiwis response is a part of how the company will produce a profit. But not their responsibility.

What virtually everyone forgets in this woke world is that 'Profit' far from being a dirty word, is in fact the best word in the English language.

And that is because it is simply a measure of how efficiently resources are used to create goods and services that people want to buy (or really swap what they produce for).

The more billionaires there are means the more cool stuff has been created and produced for the masses to enjoy.

[SailorRob]

Not to sound to churlish... but to save myself reseaching essentially the entire world. I would go:

1. NZX50
2. ASX200
3. SPDR S&P Emerging Asia Pacific
4. S&P500
5. FTSE100


Will probably beat everyone elses picks.

[SailorRob]

I want to buy at least one great business in each country in the following list using my Kiwi saver fund.

1. NZ
2. Australia
3. Asia which include Singapore,Malaysia or Hongkong
4. USA
5. UK


My criteria

Good Projected profitability(Future earnings)
Instrinsic value
Favorable asset allocation
Capital structue
Long term growth or going concern

What would be your choice? Highly appreciate your analysis.Thank you in advance.



1. OCA
2. Don't know
3. C K Hutchinson
4. Berkshire Hathaway
5. Unilever

[davflaws]

The only social responsibility of businesses is to produce a profit for their shareholders

And to scream blue murder when society (in the form of Government) regulates their activities for the common good.

[SailorRob]

And to scream blue murder when society (in the form of Government) regulates their activities for the common good.


No, that is a critical part of the equation as well.

They must produce profit while abiding by the laws they operate under.

Mostly the government (specially ours) regulates against the common good.

The common good is to produce as many goods and services as possible (think operations and medical equipment, housing and transport) and make sure they are distributed fairly (note I did not say equally).

We need a massive abundance of everything.

[davflaws]

I must say I am pretty impressed with your posts ValueNZ, particularly considering your age.

You are exactly right. Justakiwis response is a part of how the company will produce a profit. But not their responsibility.

What virtually everyone forgets in this woke world is that 'Profit' far from being a dirty word, is in fact the best word in the English language.

And that is because it is simply a measure of how efficiently resources are used to create goods and services that people want to buy (or really swap what they produce for).

The more billionaires there are means the more cool stuff has been created and produced for the masses to enjoy.

Capitalism is incredibly efficient at producing goods and services, but unregulated capitalism is crap at ensuring an equitable distribution of the goods and services produced. Unregulated capitalism inevitably produces and exacerbates inequality and everyone (not only those on the bottom) loses out.

For me, the issue is not whether capitalism should be regulated, but rahter how and how much.

[ValueNZ]

I must say I am pretty impressed with your posts ValueNZ, particularly considering your age.

You are exactly right. Justakiwis response is a part of how the company will produce a profit. But not their responsibility.

What virtually everyone forgets in this woke world is that 'Profit' far from being a dirty word, is in fact the best word in the English language.

And that is because it is simply a measure of how efficiently resources are used to create goods and services that people want to buy (or really swap what they produce for).

The more billionaires there are means the more cool stuff has been created and produced for the masses to enjoy.
Thanks SailorRob. My post was as a result of countless hours watching Milton Friedman videos on youtube haha. I get my political views from libertarian sources like ReasonTV and John Stossel videos, where as I get my views on investing from videos of shareholder meetings from Berkshire Hathaway, reading the intelligent investor, and reading various sources online. I don't agree with Warren Buffetts view on taxation and the role of government, but he is a legendary investor that I admire.

[SailorRob]

Thanks SailorRob. My post was as a result of countless hours watching Milton Friedman videos on youtube haha. I get my political views from libertarian sources like ReasonTV and John Stossel videos, where as I get my views on investing from videos of shareholder meetings from Berkshire Hathaway, reading the intelligent investor, and reading various sources online. I don't agree with Warren Buffetts view on taxation and the role of government, but he is a legendary investor that I admire.


What are your views on the role of government and taxation?

Remember Mungers wise words, he tells young people to avoid intense ideology. Why?There’s a limit to how much you can truly understand vicariously, even for those who really try.

Life experience punches you in the face in a way that reading biographies does not.You don’t know enough about the world at 25 or 30 to be sure of anything let alone 18.

Pick your absolutist political position and as the years go by you’ll see examples and edge cases where absolutism does not work.If you tie your identity to a political philosophy too early, when you’re punched in the face you’ll rationalize it rather than learn from it.

I’m not mentioning any specific political positions but most of the absolutist positions on hot button issues do not survive being punched in the face.

[justakiwi]

But if a company’s responsibility to shareholders is to (eventually) make a profit, then how they may the profit is part of that responsibility - isn’t it?


Justakiwis response is a part of how the company will produce a profit. But not their responsibility.

[SailorRob]

But if a company’s responsibility to shareholders is to (eventually) make a profit, then how they may the profit is part of that responsibility - isn’t it?

Semantics, yes you are right.

[ValueNZ]

What are your views on the role of government and taxation?

Remember Mungers wise words, he tells young people to avoid intense ideology. Why?There’s a limit to how much you can truly understand vicariously, even for those who really try.

Life experience punches you in the face in a way that reading biographies does not.You don’t know enough about the world at 25 or 30 to be sure of anything let alone 18.

Pick your absolutist political position and as the years go by you’ll see examples and edge cases where absolutism does not work.If you tie your identity to a political philosophy too early, when you’re punched in the face you’ll rationalize it rather than learn from it.

I’m not mentioning any specific political positions but most of the absolutist positions on hot button issues do not survive being punched in the face.
The role of government should be limited to upholding the rights of individuals such as private property, free speech, liberty ect. Taxation should be limited to ensuring these rights are upheld. I'm not the type to call taxation "theft" rather than a necessary evil.

Warren Buffett doesn't believe the rich are taxed enough in the US, despite the top 1% paying 42.3% of income taxes in 2020. I believe that the wealthy in aggregate pay more than their fair share. That isn't to say there aren't cases where rich people are able to work the tax system to their favour, and pay an amount which is unfair to the rest of society. The tax rules should be simplified as much as possible to avoid this happening.

I don't believe I'm absolutist in my views about much, rather I attempt to examine arguments by their merit. I agree it is something to be mindful at all times however, since people are subject to cognitive biases and falling for logical fallacies.

[SailorRob]

The role of government should be limited to upholding the rights of individuals such as private property, free speech, liberty ect. Taxation should be limited to ensuring these rights are upheld. I'm not the type to call taxation "theft" rather than a necessary evil.

Warren Buffett doesn't believe the rich are taxed enough in the US, despite the top 1% paying 42.3% of income taxes in 2020. I believe that the wealthy in aggregate pay more than their fair share. That isn't to say there aren't cases where rich people are able to work the tax system to their favour, and pay an amount which is unfair to the rest of society. The tax rules should be simplified as much as possible to avoid this happening.

I don't believe I'm absolutist in my views about much, rather I attempt to examine arguments by their merit. I agree it is something to be mindful at all times however, since people are subject to cognitive biases and falling for logical fallacies.

Strongly agree with all that.

To think that most people want the state to educate their children is mind blowing to me. Let alone provide other services.

[mistaTea]

Strongly agree with all that.

To think that most people want the state to educate their children is mind blowing to me. Let alone provide other services.

Aye, as a general principle - when it comes to governments… I think a lot of people agree with the idea of ‘the smaller the better’.

You’ve got two extremes though - what we currently have with government just getting bigger and bigger over the years, constantly finding new ways to take more money from people (raise existing taxes, dreaming up new ones) so that they can become even bigger…

Then the other extreme is where you have this tiny government that literally is there to enforce a few basic laws, but other than that it is everyone for themself. Super low taxes, so if you get out there and work hard you can keep almost all of your money and then it’s up to you to invest that money or p1ss it away at the pub - but, whatever you do, don’t come crying to the government if you fall on hard times because there ain’t no dole, sickness benefit etc buddy.

Personally, I think there is a balance somewhere between those extremes.

I do think government is too big and we should be finding ways to reduce taxes and constrain government. If we let them, they will enter every facet of our lives.

But then I think of things like the health service, and do like the idea that people with grave illnesses like cancer etc can receive treatment regardless of their economic status.

Good thing we do not have to be too ‘ideological’ on these matters.

[Snoopy]

I want to add few more for my criteria.

Socially responsible business
Environmentally friendly business


There areas where I would not invest for moral reasons. I would not join a drug lord cartel as an example. But step down from the criminal level and 'being moral' becomes more nuanced.

I am an investor in Sky City, as an example. Sure I think that problem gambling is an issue and a serious one. But would banning casinos solve the issue? I would suggest not. Before there were any casinos, there were other ways to 'have a flutter'. There was the TAB, and of course going to the horses and the dogs live. I think there is a tendency to look for someone or something 'to blame' for societal problems, when in fact the issues are far more complex.

The 'correct' way to look at a night out at the casino is IMV to regard it as just that 'a night out', set a dollar amount beforehand that you are prepared to spend and if you blow it all, well you have had an - hopefully entertaining - night out. Oh and it helps if you were able to study a little probability theory in school too. I think there is some truth to the theory that gambling at the TAB or casino is an 'extra tax' levied on those in the population that are not good with maths. Finally, if you come out of a casino with a few extra dollars in your pocket, treat that as a 'one off' bonus. Not an expectation of further 'success' to come.

I know that if you are a 'problem gambler' the idea of setting a gambling budget is 'pie in the sky'. But the Sky City business is not built on problem gambling. Problem gamblers go broke. And there is no successful business model in the world that 'succeeds' by sending their customers broke. In fact Sky City has policies in place that aim to avoid this. Workers on the floor are trained to look for people that may be exhibiting problem gambling behaviour. It is even possible for a problem gambler, in a moment of gambling sobriety, to get themselves banned from the gambling premises altogether. Neither of those safeguards are present in the gambling machine dens in pubs and clubs. The fact that Sky City continues to flourish would suggest that most of their profits are not from problem gambling.

Sky City is not only a 'gambling business'. It is also a hotel and hospitality business. I have never gambled at the Sky City Auckland casino myself, although I have walked the floors to have a look. But I have stayed there, and I have eaten there. Both experiences I thought were good value. There is an argument to say that the 'gambling' side of the business, cross subsidizes the sleeping and eating side of the business. For those 'in the know' about this, it makes the casino complex 'the place to go' for the non-gambler. I remember one non-gambler who no longer frequents this forum regaling us on his profitable dining out at a Sky City all you can eat buffet! And good on him for doing that, even if it did me no good as a shareholder. Then some have forgotten Sky City was also the first NZX50 listed company to pay all of their workers 'a living wage'. Surely that is something to be admired?

OTOH I have put my foot in the door of a casino in Macau, which seemed a much more 'serious' gambling establishment and not in a good way. So I am not saying all casinos are good as a rule. But as an investor you can pick and choose, and for me owning shares in Sky City is a good way to have an investment foot in one of our biggest industries, the tourism sector.

In summary, I regard those fund managers who refuse to invest in casinos (and Sky City in particular) for 'moral' reasons as perpetrators of 'selective woke-ism', touting for business on a very shallow investment world view where 'a veneer of moral standing' can be easily marketed. Some don't see Sky City as a moral business. But I would suggest that holding up a business to blame for immoral behaviour from a small minority of our society is not a reason to get rid of the likes of Sky City. And of course not investing in Sky City doesn't close it down. It just means the shares are held by less moral shareholders. And I can't see that as being a good thing.

SNOOPY

[Valuegrowth]

Thank you for the information.
There areas where I would not invest for moral reasons. I would not join a drug lord cartel as an example. But step down from the criminal level and 'being moral' becomes more nuanced.

I am an investor in Sky City, as an example. Sure I think that problem gambling is an issue and a serious one. But would banning casinos solve the issue? I would suggest not. Before there were any casinos, there were other ways to 'have a flutter'. There was the TAB, and of course going to the horses and the dogs live. I think there is a tendency to look for someone or something 'to blame' for societal problems, when in fact the issues are far more complex.

The 'correct' way to look at a night out at the casino is IMV to regard it as just that 'a night out', set a dollar amount beforehand that you are prepared to spend and if you blow it all, well you have had an - hopefully entertaining - night out. Oh and it helps if you were able to study a little probability theory in school too. I think there is some truth to the theory that gambling at the TAB or casino is an 'extra tax' levied on those in the population that are not good with maths. Finally, if you come out of a casino with a few extra dollars in your pocket, treat that as a 'one off' bonus. Not an expectation of further 'success' to come.

I know that if you are a 'problem gambler' the idea of setting a gambling budget is 'pie in the sky'. But the Sky City business is not built on problem gambling. Problem gamblers go broke. And there is no successful business model in the world that 'succeeds' by sending their customers broke. In fact Sky City has policies in place that aim to avoid this. Workers on the floor are trained to look for people that may be exhibiting problem gambling behaviour. It is even possible for a problem gambler, in a moment of gambling sobriety, to get themselves banned from the gambling premises altogether. Neither of those safeguards are present in the gambling machine dens in pubs and clubs. The fact that Sky City continues to flourish would suggest that most of their profits are not from problem gambling.

Sky City is not only a 'gambling business'. It is also a hotel and hospitality business. I have never gambled at the Sky City Auckland casino myself, although I have walked the floors to have a look. But I have stayed there, and I have eaten there. Both experiences I thought were good value. There is an argument to say that the 'gambling' side of the business, cross subsidizes the sleeping and eating side of the business. For those 'in the know' about this, it makes the casino complex 'the place to go' for the non-gambler. I remember one non-gambler who no longer frequents this forum regaling us on his profitable dining out at a Sky City all you can eat buffet! And good on him for doing that, even if it did me no good as a shareholder. Then some have forgotten Sky City was also the first NZX50 listed company to pay all of their workers 'a living wage'. Surely that is something to be admired?

OTOH I have put my foot in the door of a casino in Macau, which seemed a much more 'serious' gambling establishment and not in a good way. So I am not saying all casinos are good as a rule. But as an investor you can pick and choose, and for me owning shares in Sky City is a good way to have an investment foot in one of our biggest industries, the tourism sector.

In summary, I regard those fund managers who refuse to invest in casinos (and Sky City in particular) for 'moral' reasons as perpetrators of 'selective woke-ism', touting for business on a very shallow investment world view where 'a veneer of moral standing' can be easily marketed. Some don't see Sky City as a moral business. But I would suggest that holding up a business to blame for immoral behaviour from a small minority of our society is not a reason to get rid of the likes of Sky City. And of course not investing in Sky City doesn't close it down. It just means the shares are held by less moral shareholders. And I can't see that as being a good thing.

SNOOPY

[Snoopy]

I want to add few more for my criteria.

Socially responsible business
Environmentally friendly business.


For my next rant I will talk about Genesis Energy. A real moral 'bad boy' as they produce maximum carbon dioxide for electric power output by burning coal and turbocharging the evil effects of climate change in the process. That is enough to put Genesis Energy on the sooty black list of many fund managers. Except these fund managers obviously have no idea how the electric power system in New Zealand works.

The NZ electric power generation system runs in 30 minute auction blocks. Power from all the generators is offered up on a sliding price scale with the lowest bids being accepted first and progressively higher bids accepted until demand is fulfilled. Then all the power is paid for at the highest bid offer price that is accepted. Wind energy is generally tendered at the lowest price because it cannot be stored. Then the price increases steadily for other forms of energy until fossil fuel generation kicks in as the final backstop at a high price, boosted by the company having to buy carbon credits for fossil fuel burned as well. This means that fossil fuelled electricity is often only accepted into the market as a 'supply tender of last resort'. Thus fossil fuelled electricity has its biggest place in the market when no form of renewable energy alternative is available. Thus the choice is not between coal and hydro (for example) as an energy source. The choice is between coal fired energy or nothing. And no coal burning means granny drinking cold soup for dinner and going to bed early with a cold water bottle to avoid the worst of the winter chills. These moralising managers who won't invest in Genesis Energy are nothing more than 'granny haters' in my view.

Personally I don't invest in Genesis Energy. But this isn't for moral reasons. The reason is I prefer my gentailer investments to own their generation assets, not exist as 'middle men'. And Genesis is going down a path of buying power from generation stations owned by others - not funding their own power stations. But I digress as that point has nothing to do with morality or environmental sustainability.

SNOOPY

[SailorRob]

Aye, as a general principle - when it comes to governments… I think a lot of people agree with the idea of ‘the smaller the better’.

You’ve got two extremes though - what we currently have with government just getting bigger and bigger over the years, constantly finding new ways to take more money from people (raise existing taxes, dreaming up new ones) so that they can become even bigger…

Then the other extreme is where you have this tiny government that literally is there to enforce a few basic laws, but other than that it is everyone for themself. Super low taxes, so if you get out there and work hard you can keep almost all of your money and then it’s up to you to invest that money or p1ss it away at the pub - but, whatever you do, don’t come crying to the government if you fall on hard times because there ain’t no dole, sickness benefit etc buddy.

Personally, I think there is a balance somewhere between those extremes.

I do think government is too big and we should be finding ways to reduce taxes and constrain government. If we let them, they will enter every facet of our lives.

But then I think of things like the health service, and do like the idea that people with grave illnesses like cancer etc can receive treatment regardless of their economic status.

Good thing we do not have to be too ‘ideological’ on these matters.


Well said yes.

[SailorRob]

There areas where I would not invest for moral reasons. I would not join a drug lord cartel as an example. But step down from the criminal level and 'being moral' becomes more nuanced.

I am an investor in Sky City, as an example. Sure I think that problem gambling is an issue and a serious one. But would banning casinos solve the issue? I would suggest not. Before there were any casinos, there were other ways to 'have a flutter'. There was the TAB, and of course going to the horses and the dogs live. I think there is a tendency to look for someone or something 'to blame' for societal problems, when in fact the issues are far more complex.

The 'correct' way to look at a night out at the casino is IMV to regard it as just that 'a night out', set a dollar amount beforehand that you are prepared to spend and if you blow it all, well you have had an - hopefully entertaining - night out. Oh and it helps if you were able to study a little probability theory in school too. I think there is some truth to the theory that gambling at the TAB or casino is an 'extra tax' levied on those in the population that are not good with maths. Finally, if you come out of a casino with a few extra dollars in your pocket, treat that as a 'one off' bonus. Not an expectation of further 'success' to come.

I know that if you are a 'problem gambler' the idea of setting a gambling budget is 'pie in the sky'. But the Sky City business is not built on problem gambling. Problem gamblers go broke. And there is no successful business model in the world that 'succeeds' by sending their customers broke. In fact Sky City has policies in place that aim to avoid this. Workers on the floor are trained to look for people that may be exhibiting problem gambling behaviour. It is even possible for a problem gambler, in a moment of gambling sobriety, to get themselves banned from the gambling premises altogether. Neither of those safeguards are present in the gambling machine dens in pubs and clubs. The fact that Sky City continues to flourish would suggest that most of their profits are not from problem gambling.

Sky City is not only a 'gambling business'. It is also a hotel and hospitality business. I have never gambled at the Sky City Auckland casino myself, although I have walked the floors to have a look. But I have stayed there, and I have eaten there. Both experiences I thought were good value. There is an argument to say that the 'gambling' side of the business, cross subsidizes the sleeping and eating side of the business. For those 'in the know' about this, it makes the casino complex 'the place to go' for the non-gambler. I remember one non-gambler who no longer frequents this forum regaling us on his profitable dining out at a Sky City all you can eat buffet! And good on him for doing that, even if it did me no good as a shareholder. Then some have forgotten Sky City was also the first NZX50 listed company to pay all of their workers 'a living wage'. Surely that is something to be admired?

OTOH I have put my foot in the door of a casino in Macau, which seemed a much more 'serious' gambling establishment and not in a good way. So I am not saying all casinos are good as a rule. But as an investor you can pick and choose, and for me owning shares in Sky City is a good way to have an investment foot in one of our biggest industries, the tourism sector.

In summary, I regard those fund managers who refuse to invest in casinos (and Sky City in particular) for 'moral' reasons as perpetrators of 'selective woke-ism', touting for business on a very shallow investment world view where 'a veneer of moral standing' can be easily marketed. Some don't see Sky City as a moral business. But I would suggest that holding up a business to blame for immoral behaviour from a small minority of our society is not a reason to get rid of the likes of Sky City. And of course not investing in Sky City doesn't close it down. It just means the shares are held by less moral shareholders. And I can't see that as being a good thing.

SNOOPY


Great post thanks.

[Bjauck]

The role of government should be limited to upholding the rights of individuals such as private property, free speech, liberty ect. Taxation should be limited to ensuring these rights are upheld. I'm not the type to call taxation "theft" rather than a necessary evil.

Warren Buffett doesn't believe the rich are taxed enough in the US, despite the top 1% paying 42.3% of income taxes in 2020. I believe that the wealthy in aggregate pay more than their fair share. That isn't to say there aren't cases where rich people are able to work the tax system to their favour, and pay an amount which is unfair to the rest of society. The tax rules should be simplified as much as possible to avoid this happening.

I don't believe I'm absolutist in my views about much, rather I attempt to examine arguments by their merit. I agree it is something to be mindful at all times however, since people are subject to cognitive biases and falling for logical fallacies.
The Role of government is to confer private property rights too. Without the social legal structure of “the state” there would be no private rights.

You soon understand that the state has full ultimate rights over your “private property” when they can compulsorily take it, subject to whatever conditions the state has enacted.

[Bjauck]

I want to buy at least one great business in each country in the following list using my Kiwi saver fund.

1. NZ
2. Australia
3. Asia which include Singapore,Malaysia or Hongkong
4. USA
5. UK


My criteria

Good Projected profitability(Future earnings)
Instrinsic value
Favorable asset allocation
Capital structue
Long term growth or going concern

What would be your choice? Highly appreciate your analysis.Thank you in advance.

How can you choose individual companies with your KiwiSaver? Which provider are you with?

[Valuegrowth]

Thank you.
Perky[/B];1005076]NZ.
MFT or EBO
Aus: MQG
HK: PRudential or HSBC
US. Berkshire
London. Shell
chose to ignore your esg criteria.


SailorRob[/B];1005082]
1. OCA
2. Don't know
3. C K Hutchinson
4. Berkshire Hathaway
5. Unilever

[Valuegrowth]

Still I am in 100% cash fund. Looking forward to find a kiwi saver provider who will allow me to pick individual stocks.
How can you choose individual companies with your KiwiSaver? Which provider are you with?

[Valuegrowth]

Very interesting. I think I have to learn lot of things. Thank you for educating me.
For my next rant I will talk about Genesis Energy. A real moral 'bad boy' as they produce maximum carbon dioxide for electric power output by burning coal and turbocharging the evil effects of climate change in the process. That is enough to put Genesis Energy on the sooty black list of many fund managers. Except these fund managers obviously have no idea how the electric power system in New Zealand works.

The NZ electric power generation system runs in 30 minute auction blocks. Power from all the generators is offered up on a sliding price scale with the lowest bids being accepted first and progressively higher bids accepted until demand is fulfilled. Then all the power is paid for at the highest bid offer price that is accepted. Wind energy is generally tendered at the lowest price because it cannot be stored. Then the price increases steadily for other forms of energy until fossil fuel generation kicks in as the final backstop at a high price, boosted by the company having to buy carbon credits for fossil fuel burned as well. This means that fossil fuelled electricity is often only accepted into the market as a 'supply tender of last resort'. Thus fossil fuelled electricity has its biggest place in the market when no form of renewable energy alternative is available. Thus the choice is not between coal and hydro (for example) as an energy source. The choice is between coal fired energy or nothing. And no coal burning means granny drinking cold soup for dinner and going to bed early with a cold water bottle to avoid the worst of the winter chills. These moralising managers who won't invest in Genesis Energy are nothing more than 'granny haters' in my view.

Personally I don't invest in Genesis Energy. But this isn't for moral reasons. The reason is I prefer my gentailer investments to own their generation assets, not exist as 'middle men'. And Genesis is going down a path of buying power from generation stations owned by others - not funding their own power stations. But I digress as that point has nothing to do with morality or environmental sustainability.

SNOOPY

[Bjauck]

Still I am in 100% cash fund. Looking forward to find a kiwi saver provider who will allow me to pick individual stocks.
That would be great. I will add to my wish-list with respect to the KiwiSaver regime.

[SailorRob]

The Role of government is to confer private property rights too. Without the social legal structure of “the state” there would be no private rights.

You soon understand that the state has full ultimate rights over your “private property” when they can compulsorily take it, subject to whatever conditions the state has enacted.


Very true...

[Valuegrowth]

If I am correct Craigs is allowing members to pick stocks. Shareshie could be next.
That would be great. I will add to my wish-list with respect to the KiwiSaver regime.

[SailorRob]

Man I've told you guys before...

Craigs lets you pick individual stocks...

They have a list but it's reasonably extensive.

[Valuegrowth]

Long term investment is good as well as bad.

I own stocks of Sea legs. After their poor performance even I didn’t bother to look at their share prices and what is happening to them etc. As my broker closed the business I tried to transfer shares of sea legs to another broker and process involved was very complex. Hence I decided to write- off it without doing anything. Later I found their name has changed as “Future Mobility Solutions Limited(FMS)”. When I bought long time ago I got excited about their amphibious marine craft technology.

Lesson 1 : Not to invest in business that I can’t understand and not to buy stocks without doing home work.

Lesson 2: Invested in Dominion Finance as it had a good balance sheet compare with other Finance companies. I can understand finance companies some what.But I didn’t expect that much of tsunami type of hit on the sector. Fortunately, I was able to sell two thirds of my Dominion Finance. Some analysts said if something happen to DF, the last one to go. Now I know what types of companies I should own and at what price and what should I do before buying stocks.

Rule number one: Never make losses again.

https://www.fma.govt.nz/about-us/enforcement/cases/finance-company-collapses/ (https://www.fma.govt.nz/about-us/enforcement/cases/finance-company-collapses/)
https://www.scoop.co.nz/stories/BU1410/S00848/finance-company-failure-in-new-zealand-was-predictable.htm (https://www.scoop.co.nz/stories/BU1410/S00848/finance-company-failure-in-new-zealand-was-predictable.htm)

[Valuegrowth]

Perky[/B];1005076]
NZ. MFT or EBO
Aus: MQG
HK: PRudential or HSBC
US. Berkshire
London. Shell
chose to ignore your esg criteria.


SailorRob[/COLOR];1005082]1. OCA
2. Don't know
3. C K Hutchinson
4. Berkshire Hathaway
5. Unilever

chose to ignore your esg criteria.[/QUOTE]

I looked at Berkshire Hathaway Inc Class A stocks.

Current trading price: around 487,000.00 USD
Traded in 1995: around 17000 USD
Traded in 2000: around 60000 USD
Traded in 2020: around 300,000.00 USD
Line is straight up From 2020 to 2022 and smashed 500,000 USD

Curent PE ratio: 93.52

Good companies have appreciated behind their true business value. As value investors we should find out stocks which are trading below the intrinsic value. It is true Berkshire Hathaway is a great business but it’s extremely over valued for me now.

I believe there could be pull back or correction in this stock. Even if it drops I can only buy very tiny fraction of that company as 100 shares of Berkshire cost lot. Rather better try another strong company.Next decade is belongs to the long-term investor and value investor.

[Valuegrowth]

chose to ignore your esg criteria.

I looked at Berkshire Hathaway Inc Class A stocks.

Current trading price: around 487,000.00 USD
Traded in 1995: around 17000 USD
Traded in 2000: around 60000 USD
Traded in 2020: around 300,000.00 USD
Line is straight up From 2020 to 2022 and smashed 500,000 USD

Curent PE ratio: 93.52

Good companies have appreciated behind their true business value. As value investors we should find out stocks which are trading below the intrinsic value. It is true Berkshire Hathaway is a great business but it’s extremely over valued for me now.

I believe there could be pull back or correction in this stock. Even if it drops I can only buy very tiny fraction of that company as 100 shares of Berkshire cost lot. Rather better try another strong company. Next decade is belongs to the long-term investor and value investor.[/QUOTE]

[mistaTea]

I looked at Berkshire Hathaway Inc Class A stocks.

Current trading price: around 487,000.00 USD
Traded in 1995: around 17000 USD
Traded in 2000: around 60000 USD
Traded in 2020: around 300,000.00 USD
Line is straight up From 2020 to 2022 and smashed 500,000 USD

Curent PE ratio: 93.52

Good companies have appreciated behind their true business value. As value investors we should find out stocks which are trading below the intrinsic value. It is true Berkshire Hathaway is a great business but it’s extremely over valued for me now.

I believe there could be pull back or correction in this stock. Even if it drops I can only buy very tiny fraction of that company as 100 shares of Berkshire cost lot. Rather better try another strong company. Next decade is belongs to the long-term investor and value investor.[/QUOTE]

Here I was thinking BRK was undervalued when you consider owner earnings.

[SailorRob]

I looked at Berkshire Hathaway Inc Class A stocks.

Current trading price: around 487,000.00 USD
Traded in 1995: around 17000 USD
Traded in 2000: around 60000 USD
Traded in 2020: around 300,000.00 USD
Line is straight up From 2020 to 2022 and smashed 500,000 USD

Curent PE ratio: 93.52

Good companies have appreciated behind their true business value. As value investors we should find out stocks which are trading below the intrinsic value. It is true Berkshire Hathaway is a great business but it’s extremely over valued for me now.

I believe there could be pull back or correction in this stock. Even if it drops I can only buy very tiny fraction of that company as 100 shares of Berkshire cost lot. Rather better try another strong company. Next decade is belongs to the long-term investor and value investor.[/QUOTE]

Jesus christ Valuegrowth,

You are taking the piss right?

Berkshire PE is around 12.5

Cheapest it basically ever gets and at least 20% below intrinsic value.

The share price is a little over $300.

I honestly don't know if you are a serious poster or not, I have no clue.

[SailorRob]

Here I was thinking BRK was undervalued when you consider owner earnings.[/QUOTE]


Do you think he/she is serious??

If so, WOW. I mean WOW.

No wonder we can make money in the markets!

[mistaTea]

Do you think he/she is serious??

If so, WOW. I mean WOW.

No wonder we can make money in the markets!

I assume the post was serious!

I just pray it goes even lower from here.

[Valuegrowth]

https://www.investopedia.com/ask/answers/021615/what-difference-between-berkshire-hathaways-class-and-class-b-shares.asp#:~:text=Berkshire%20Hathaway%20Class%20 A%20is,equity%20value%20in%20the%20company.


What's the Difference Between Berkshire Hathaway's Class A and Class B Shares?

Class B shares

Current trading price: around 320 USD
Traded in 1996: around 20 USD
Traded in 2010: around 80 USD
Traded in 2020: around 200 USD

Line is straight up From 2020 to 2022 and smashed 350 USD

[SailorRob]

https://www.investopedia.com/ask/answers/021615/what-difference-between-berkshire-hathaways-class-and-class-b-shares.asp#:~:text=Berkshire%20Hathaway%20Class%20 A%20is,equity%20value%20in%20the%20company.


What's the Difference Between Berkshire Hathaway's Class A and Class B Shares?

Class B shares

Current trading price: around 320 USD
Traded in 1996: around 20 USD
Traded in 2010: around 80 USD
Traded in 2020: around 200 USD

Line is straight up From 2020 to 2022 and smashed 350 USD



Actually been straight up from 1965 Sport.

[SailorRob]

https://www.investopedia.com/ask/answers/021615/what-difference-between-berkshire-hathaways-class-and-class-b-shares.asp#:~:text=Berkshire%20Hathaway%20Class%20 A%20is,equity%20value%20in%20the%20company.


What's the Difference Between Berkshire Hathaway's Class A and Class B Shares?

Class B shares

Current trading price: around 320 USD
Traded in 1996: around 20 USD
Traded in 2010: around 80 USD
Traded in 2020: around 200 USD

Line is straight up From 2020 to 2022 and smashed 350 USD



Now give us an analysis of the PE ratio.

If it's 93, what was it in 2018, 2019, 2020, 2021 and 2022.

[Valuegrowth]

I got the follwoing link. Made me easy.

https://www.macrotrends.net/stocks/charts/BRK.A/berkshire-hathaway/pe-ratio



Berkshire Hathaway PE Ratio Historical Data


Date
Stock Price
TTM Net EPS
PE Ratio


2023-05-26
320.60

92.66


2023-03-31
308.77
$3.46
89.24


2022-12-31
308.90
$-10.32
0.00


2022-09-30
267.02
$-0.80
0.00


2022-06-30
273.02
$5.01
54.50


2022-03-31
352.91
$37.18
9.49


2021-12-31
299.00
$39.80
7.51


2021-09-30
272.94
$37.35
7.31


2021-06-30
277.92
$45.42
6.12


2021-03-31
255.47
$43.97
5.81


2020-12-31
231.87
$18.44
12.57


2020-09-30
212.94
$15.04
14.16


2020-06-30
178.51
$9.13
19.55


2020-03-31
182.83
$3.99
45.82


2019-12-31
226.50
$33.24
6.81


2019-09-30
208.02
$10.99
18.93


2019-06-30
213.17
$11.76
18.13


2019-03-31
200.89
$10.89
18.45


2018-12-31
204.18
$1.62
126.04


2018-09-30
214.11
$25.12
8.52


2018-06-30
186.65
$19.25
9.70


2018-03-31
199.48
$16.11
12.38


2017-12-31
198.22
$18.22
10.88


2017-09-30
183.32
$7.58
24.18


2017-06-30
169.37
$8.85
19.14


2017-03-31
166.68
$9.15
18.22


2016-12-31
162.98
$9.77
16.68


2016-09-30
144.47
$9.44
15.30


2016-06-30
144.79
$10.34
14.00


2016-03-31
141.88
$9.94
14.27


2015-12-31
132.04
$9.77
13.51


2015-09-30
130.40
$9.24
14.11


2015-06-30
136.11
$7.29
18.67


2015-03-31
144.32
$7.57
19.06


2014-12-31
150.15
$7.49
20.05


2014-09-30
138.14
$7.85
17.60


2014-03-31
124.97
$7.82
15.98


2013-12-31
118.56
$7.89
15.03


2013-09-30
113.51
$7.71
14.72


2013-06-30
111.92
$8.25
13.57


2013-03-31
104.20
$7.99
13.04


2012-12-31
89.70
$7.26
12.36


2014-06-30
126.56
$6.73
18.81


2012-09-30
88.20
$5.37
16.42


2012-06-30
83.33
$4.71
17.69


2012-03-31
81.15
$4.84
16.77


2011-12-31
76.30
$4.14
18.43


2011-09-30
71.04
$4.69
15.15


2011-06-30
77.39
$4.98
15.54


2011-03-31
83.63
$4.40
19.01


2010-12-31
80.11
$5.30
15.12


2010-09-30
82.68
$4.83
17.12


2010-06-30
79.69
$5.01
15.91


2010-03-31
81.27
$5.63
14.44


2009-12-31
65.72
$3.46
18.99

[SailorRob]

I got the follwoing link. Made me easy.

https://www.macrotrends.net/stocks/charts/BRK.A/berkshire-hathaway/pe-ratio



Berkshire Hathaway PE Ratio Historical Data


Date
Stock Price
TTM Net EPS
PE Ratio


2023-05-26
320.60

92.66


2023-03-31
308.77
$3.46
89.24


2022-12-31
308.90
$-10.32
0.00


2022-09-30
267.02
$-0.80
0.00


2022-06-30
273.02
$5.01
54.50


2022-03-31
352.91
$37.18
9.49


2021-12-31
299.00
$39.80
7.51


2021-09-30
272.94
$37.35
7.31


2021-06-30
277.92
$45.42
6.12


2021-03-31
255.47
$43.97
5.81


2020-12-31
231.87
$18.44
12.57


2020-09-30
212.94
$15.04
14.16


2020-06-30
178.51
$9.13
19.55


2020-03-31
182.83
$3.99
45.82


2019-12-31
226.50
$33.24
6.81


2019-09-30
208.02
$10.99
18.93


2019-06-30
213.17
$11.76
18.13


2019-03-31
200.89
$10.89
18.45


2018-12-31
204.18
$1.62
126.04


2018-09-30
214.11
$25.12
8.52


2018-06-30
186.65
$19.25
9.70


2018-03-31
199.48
$16.11
12.38


2017-12-31
198.22
$18.22
10.88


2017-09-30
183.32
$7.58
24.18


2017-06-30
169.37
$8.85
19.14


2017-03-31
166.68
$9.15
18.22


2016-12-31
162.98
$9.77
16.68


2016-09-30
144.47
$9.44
15.30


2016-06-30
144.79
$10.34
14.00


2016-03-31
141.88
$9.94
14.27


2015-12-31
132.04
$9.77
13.51


2015-09-30
130.40
$9.24
14.11


2015-06-30
136.11
$7.29
18.67


2015-03-31
144.32
$7.57
19.06


2014-12-31
150.15
$7.49
20.05


2014-09-30
138.14
$7.85
17.60


2014-03-31
124.97
$7.82
15.98


2013-12-31
118.56
$7.89
15.03


2013-09-30
113.51
$7.71
14.72


2013-06-30
111.92
$8.25
13.57


2013-03-31
104.20
$7.99
13.04


2012-12-31
89.70
$7.26
12.36


2014-06-30
126.56
$6.73
18.81


2012-09-30
88.20
$5.37
16.42


2012-06-30
83.33
$4.71
17.69


2012-03-31
81.15
$4.84
16.77


2011-12-31
76.30
$4.14
18.43


2011-09-30
71.04
$4.69
15.15


2011-06-30
77.39
$4.98
15.54


2011-03-31
83.63
$4.40
19.01


2010-12-31
80.11
$5.30
15.12


2010-09-30
82.68
$4.83
17.12


2010-06-30
79.69
$5.01
15.91


2010-03-31
81.27
$5.63
14.44


2009-12-31
65.72
$3.46
18.99




Interesting.

Went from 5 to 0 to 9 and then to 92.

All in the last 3 years.

Very interesting.

So it's gone from a supreme value stock to one of most overpriced companies in the world and everywhere in between all within 3 years.

I am perplexed.

[Valuegrowth]

In my view, next 8 quartes are going to be very cruical for assets markets. The best place to park money now is overlooked undervalued stocks(not value traps).Besides I prefer to be in the market all the time unless I need some funds for urgent matters.
Interesting.

Went from 5 to 0 to 9 and then to 92.

All in the last 3 years.

Very interesting.

So it's gone from a supreme value stock to one of most overpriced companies in the world and everywhere in between all within 3 years.

I am perplexed.

[ValueNZ]

Interesting.

Went from 5 to 0 to 9 and then to 92.

All in the last 3 years.

Very interesting.

So it's gone from a supreme value stock to one of most overpriced companies in the world and everywhere in between all within 3 years.

I am perplexed.
Lol I noticed that too. At a P/E of 0 its being given away for free! Not to be rude Valuegrowth but perhaps you should consider allocating a large proportion of your portfolio towards low cost index funds if you cannot see stuff like this straight away.

[SailorRob]

In my view, next 8 quartes are going to be very cruical for assets markets. The best place to park money now is overlooked undervalued stocks(not value traps).Besides I prefer to be in the market all the time unless I need some funds for urgent matters.


Says the person who's 100% in cash kiwisaver.


The best financial advice you will ever get in your life is what ValueNZ just said.

I'm not kidding.

[SailorRob]

I must first tell you about a new accounting rule – a generally accepted accountingprinciple (GAAP) – that in future quarterly and annual reports will severely distort Berkshire’s net income figures andvery often mislead commentators and investors.

The new rule says that the net change in unrealized investment gains and losses in stocks we hold must beincluded in all net income figures we report to you. That requirement will produce some truly wild and capriciousswings in our GAAP bottom-line. Berkshire owns $170 billion of marketable stocks (not including our shares of KraftHeinz), and the value of these holdings can easily swing by $10 billion or more within a quarterly reporting period.

Including gyrations of that magnitude in reported net income will swamp the truly important numbers that describe ouroperating performance. For analytical purposes, Berkshire’s “bottom-line” will be useless.The new rule compounds the communication problems we have long had in dealing with the realized gains(or losses) that accounting rules compel us to include in our net income.

In past quarterly and annual press releases,we have regularly warned you not to pay attention to these realized gains, because they – just like our unrealized gains– fluctuate randomly.That’s largely because we sell securities when that seems the intelligent thing to do, not because we are tryingto influence earnings in any way. As a result, we sometimes have reported substantial realized gains for a period whenour portfolio, overall, performed poorly (or the converse). With the new rule about unrealized gains exacerbating the distortion caused by the existing rules applying torealized gains, we will take pains every quarter to explain the adjustments you need in order to make sense of ournumbers.

But televised commentary on earnings releases is often instantaneous with their receipt, and newspaperheadlines almost always focus on the year-over-year change in GAAP net income. Consequently, media reportssometimes highlight figures that unnecessarily frighten or encourage many readers or viewers.We will attempt to alleviate this problem by continuing our practice of publishing financial reports late onFriday, well after the markets close, or early on Saturday morning. That will allow you maximum time for analysisand give investment professionals the opportunity to deliver informed commentary before markets open on Monday.Nevertheless, I expect considerable confusion among shareholders for whom accounting is a foreign language.

[Valuegrowth]

Says the person who's 100% in cash kiwisaver.


The best financial advice you will ever get in your life is what ValueNZ just said.

I'm not kidding.

I don't want to play retirment funds with assets, when they are very over valued. My first step is doing home work.


https://www.youtube.com/watch?v=K6OIu-Vzkic

[SailorRob]

I don't want to play retirment funds with assets, when they are very over valued. My first step is doing home work.


https://www.youtube.com/watch?v=K6OIu-Vzkic


You are either a Chinese student or a AI Bot.

I suggest you get on with that first step then!

[SailorRob]

I seriously think Valuegrowth is a ChatGTP driven AI Bot.

[SailorRob]

Chinese student would act more Human

[Valuegrowth]

You are wrong SB. I was a external student for one e-campus where I had to select one company to study and write an assingment. It's under my watch and waiting for a pull back or until It comes to my value to buy.

[SailorRob]

You are wrong SB. I was a external student for one e-campus where I had to select one company to study and write an assingment. It's under my watch and waiting for a pull back or until It comes to my value to buy.


So you are or were a foreign student?

[Valuegrowth]

No. NZ citizen. Immigrated 20 years ago.
So you are or were a foreign student?

[Mafman]

It bothers me that this forum is getting hijacked by name-callers and egotistical types that seem to need to try and humiliate others. Is it not enough to simply disagree? Must we be reduced to personal insults? Boring, but clearly fulfilling for some.

[SailorRob]

It bothers me that this forum is getting hijacked by name-callers and egotistical types that seem to need to try and humiliate others. Is it not enough to simply disagree? Must we be reduced to personal insults? Boring, but clearly fulfilling for some.


Are you saying that you think someone is less of a person if they are a foreign student or Chinese?

Do you have anything of interest Mafman to add to investment discussions?

Let's hear it.

Link me to your best post on ST to date.

[SBQ]

As a Berkshire Hathaway shareholder since 2002, I have some comments to share that from a NZ perspective, does not match well.

@Valuegrowth: Buffett is very clear about the problems of mark to market accounting disclosures and the problems of EBITDA reporting. GAAP accounting rules will never show the full extent of the company's operation. So you can basically throw out the window all those PE ratios from year to year.

The metric investors need to understand is stop listening to financial advisors. In NZ they work for the financial markets and are bound by the FMA. They only do the easy route by just doing what Charlie Munger says "Di-Worse-sification" - and that is is mimic the index ETF returns. Buffett himself have been critical of the problems that retail investors face in industry and in NZ, the gaming of commissions and mgt fees is utter horrible compared to managed funds in N. America. He shares his comments here (by far the most important 12 minutes any person in NZ should watch it entirely if they want to understand the problem with managed funds trying to beat the market):

https://youtu.be/xp9KUCel778

The 2nd most critical aspect in NZ is we have a problem with taxation. Under Kiwi Saver the minute you choose to buy shares abroad such as the ones listed in the NYSE/Nasdaq, then you're subjected to taxing of paper gains under FIF. No one has been more critical about preserving compound gains than the father of ETF investing, the founder of Vanguard Funds, Jack Bogel (RIP):

https://www.youtube.com/watch?v=0aegXd0Q1CI

He refers the term "Financial Intermediation" meaning the loss investors face through all sorts of inefficiencies, management fees, and ultimately in NZ's case - IRD's FIF taxation. So if the average market return is 8% but Kiwi Saver investors are only seeing 6% (because 2% of it is loss through this Financial Intermediation), over the LONG term (and he's cited a 50 year time frame), the investor only sees about 30% of the total gain compared to the portfolio that compounds at 8%. Now one can argue that the employer matching of 3% contributions will negate these losses, my argument is that this 3% matching is pretty much loss through mgt fees and taxation ; simply a transfer to what Buffett says, 'the helpers'.

Now I have to look when was the last time I purchased BRKA:


Sat, Aug 20, 2011 at 7:55 a.m
TD Ameritrade, Inc. Courtesy Fill Notification


For your order to buy 1 share of BRK A at 103000 limit, good for today:


You bought 1 share of BRK A at $102864 on 08/19/2011.



As a matter of interest, my portfolio is held under NON-NZ residence status under joint with my father who resides abroad.

[SailorRob]

It bothers me that this forum is getting hijacked by name-callers and egotistical types that seem to need to try and humiliate others. Is it not enough to simply disagree? Must we be reduced to personal insults? Boring, but clearly fulfilling for some.

You have the audacity to come on this thread and read everything, contribute nothing and then complain!

Why don't you post to answer Valuegrowth original question about companies from the various countries?

Boring! Bloody hell. Some people.

[SailorRob]

As a Berkshire Hathaway shareholder since 2002, I have some comments to share that from a NZ perspective, does not match well.

@Valuegrowth: Buffett is very clear about the problems of mark to market accounting disclosures and the problems of EBITDA reporting. GAAP accounting rules will never show the full extent of the company's operation. So you can basically throw out the window all those PE ratios from year to year.

The metric investors need to understand is stop listening to financial advisors. In NZ they work for the financial markets and are bound by the FMA. They only do the easy route by just doing what Charlie Munger says "Di-Worse-sification" - and that is is mimic the index ETF returns. Buffett himself have been critical of the problems that retail investors face in industry and in NZ, the gaming of commissions and mgt fees is utter horrible compared to managed funds in N. America. He shares his comments here (by far the most important 12 minutes any person in NZ should watch it entirely if they want to understand the problem with managed funds trying to beat the market):

https://youtu.be/xp9KUCel778

The 2nd most critical aspect in NZ is we have a problem with taxation. Under Kiwi Saver the minute you choose to buy shares abroad such as the ones listed in the NYSE/Nasdaq, then you're subjected to taxing of paper gains under FIF. No one has been more critical about preserving compound gains than the father of ETF investing, the founder of Vanguard Funds, Jack Bogel (RIP):

https://www.youtube.com/watch?v=0aegXd0Q1CI

He refers the term "Financial Intermediation" meaning the loss investors face through all sorts of inefficiencies, management fees, and ultimately in NZ's case - IRD's FIF taxation. So if the average market return is 8% but Kiwi Saver investors are only seeing 6% (because 2% of it is loss through this Financial Intermediation), over the LONG term (and he's cited a 50 year time frame), the investor only sees about 30% of the total gain compared to the portfolio that compounds at 8%. Now one can argue that the employer matching of 3% contributions will negate these losses, my argument is that this 3% matching is pretty much loss through mgt fees and taxation ; simply a transfer to what Buffett says, 'the helpers'.

Now I have to look when was the last time I purchased BRKA:


Sat, Aug 20, 2011 at 7:55 a.m
TD Ameritrade, Inc. Courtesy Fill Notification


For your order to buy 1 share of BRK A at 103000 limit, good for today:


You bought 1 share of BRK A at $102864 on 08/19/2011.



As a matter of interest, my portfolio is held under NON-NZ residence status under joint with my father who resides abroad.

2002.

I am very impressed.

Now I know why you refused my bet of Auckland property vs Berkshire!

You actually understand Berkshire.

[Valuegrowth]

Thank you for the information SBQ.
As a Berkshire Hathaway shareholder since 2002, I have some comments to share that from a NZ perspective, does not match well.

@Valuegrowth: Buffett is very clear about the problems of mark to market accounting disclosures and the problems of EBITDA reporting. GAAP accounting rules will never show the full extent of the company's operation. So you can basically throw out the window all those PE ratios from year to year.

The metric investors need to understand is stop listening to financial advisors. In NZ they work for the financial markets and are bound by the FMA. They only do the easy route by just doing what Charlie Munger says "Di-Worse-sification" - and that is is mimic the index ETF returns. Buffett himself have been critical of the problems that retail investors face in industry and in NZ, the gaming of commissions and mgt fees is utter horrible compared to managed funds in N. America. He shares his comments here (by far the most important 12 minutes any person in NZ should watch it entirely if they want to understand the problem with managed funds trying to beat the market):

https://youtu.be/xp9KUCel778

The 2nd most critical aspect in NZ is we have a problem with taxation. Under Kiwi Saver the minute you choose to buy shares abroad such as the ones listed in the NYSE/Nasdaq, then you're subjected to taxing of paper gains under FIF. No one has been more critical about preserving compound gains than the father of ETF investing, the founder of Vanguard Funds, Jack Bogel (RIP):

https://www.youtube.com/watch?v=0aegXd0Q1CI

He refers the term "Financial Intermediation" meaning the loss investors face through all sorts of inefficiencies, management fees, and ultimately in NZ's case - IRD's FIF taxation. So if the average market return is 8% but Kiwi Saver investors are only seeing 6% (because 2% of it is loss through this Financial Intermediation), over the LONG term (and he's cited a 50 year time frame), the investor only sees about 30% of the total gain compared to the portfolio that compounds at 8%. Now one can argue that the employer matching of 3% contributions will negate these losses, my argument is that this 3% matching is pretty much loss through mgt fees and taxation ; simply a transfer to what Buffett says, 'the helpers'.

Now I have to look when was the last time I purchased BRKA:

Sat, Aug 20, 2011 at 7:55 a.m
TD Ameritrade, Inc. Courtesy Fill Notification


For your order to buy 1 share of BRK A at 103000 limit, good for today:


You bought 1 share of BRK A at $102864 on 08/19/2011.



As a matter of interest, my portfolio is held under NON-NZ residence status under joint with my father who resides abroad.

[justakiwi]

Ahem, with all due respect, I am going to pull you up on this statement. There is no obligation for people to contribute anything on these forums. There are many members here who have never posted, but regularly log in to read posts. Some of us are not in the same league as some of the more experienced investors here, so do not always nfeel we have anything useful to contribute. Some people may also feel well and truly intimidated and too damned scared to post. It took me a long time to get brave enough to post, especially when some of the responses to posts, are downright rude and disrespectful.

You have much to contribute and I have a lot of respect for your knowledge and much of what you post. But you have admitted to being a nasty piece of work at times, and this is one of them. So take a step back, be an adult, think before you react, and stop scaring off the newbies! ;)


You have the audacity to come on this thread and read everything, contribute nothing and then complain!

Why don't you post to answer Valuegrowth original question about companies from the various countries?

Boring! Bloody hell. Some people.

[SailorRob]

Ahem, with all due respect, I am going to pull you up on this statement. There is no obligation for people to contribute anything on these forums. There are many members here who have never posted, but regularly log in to read posts. Some of us are not in the same league as some of the more experienced investors here, so do not always nfeel we have anything useful to contribute. Some people may also feel well and truly intimidated and too damned scared to post. It took me a long time to get brave enough to post, especially when some of the responses to posts, are downright rude and disrespectful.

You have much to contribute and I have a lot of respect for your knowledge and much of what you post. But you have admitted to being a nasty piece of work at times, and this is one of them. So take a step back, be an adult, think before you react, and stop scaring off the newbies! ;)

Where did I suggest there was an obligation JAK?

I said that anyone who doesn't contribute and then has the audacity to complain, has to take a long hard look at themselves.

There is no obligation to contribute.

But if you don't.

Don't try to control what's posted.

[SailorRob]

As a Berkshire Hathaway shareholder since 2002, I have some comments to share that from a NZ perspective, does not match well.

@Valuegrowth: Buffett is very clear about the problems of mark to market accounting disclosures and the problems of EBITDA reporting. GAAP accounting rules will never show the full extent of the company's operation. So you can basically throw out the window all those PE ratios from year to year.

The metric investors need to understand is stop listening to financial advisors. In NZ they work for the financial markets and are bound by the FMA. They only do the easy route by just doing what Charlie Munger says "Di-Worse-sification" - and that is is mimic the index ETF returns. Buffett himself have been critical of the problems that retail investors face in industry and in NZ, the gaming of commissions and mgt fees is utter horrible compared to managed funds in N. America. He shares his comments here (by far the most important 12 minutes any person in NZ should watch it entirely if they want to understand the problem with managed funds trying to beat the market):

https://youtu.be/xp9KUCel778

The 2nd most critical aspect in NZ is we have a problem with taxation. Under Kiwi Saver the minute you choose to buy shares abroad such as the ones listed in the NYSE/Nasdaq, then you're subjected to taxing of paper gains under FIF. No one has been more critical about preserving compound gains than the father of ETF investing, the founder of Vanguard Funds, Jack Bogel (RIP):

https://www.youtube.com/watch?v=0aegXd0Q1CI

He refers the term "Financial Intermediation" meaning the loss investors face through all sorts of inefficiencies, management fees, and ultimately in NZ's case - IRD's FIF taxation. So if the average market return is 8% but Kiwi Saver investors are only seeing 6% (because 2% of it is loss through this Financial Intermediation), over the LONG term (and he's cited a 50 year time frame), the investor only sees about 30% of the total gain compared to the portfolio that compounds at 8%. Now one can argue that the employer matching of 3% contributions will negate these losses, my argument is that this 3% matching is pretty much loss through mgt fees and taxation ; simply a transfer to what Buffett says, 'the helpers'.

Now I have to look when was the last time I purchased BRKA:


Sat, Aug 20, 2011 at 7:55 a.m
TD Ameritrade, Inc. Courtesy Fill Notification


For your order to buy 1 share of BRK A at 103000 limit, good for today:


You bought 1 share of BRK A at $102864 on 08/19/2011.



As a matter of interest, my portfolio is held under NON-NZ residence status under joint with my father who resides abroad.

FIF tax shouldn't be singled out. Tax is tax, FIF no difference to nz tax for a company paying 5% out.

If your name on the joint account or the economic interest applies to you then you are evading tax.

Don't post about that in public!

[SBQ]

FIF tax shouldn't be singled out. Tax is tax, FIF no difference to nz tax for a company paying 5% out.

If your name on the joint account or the economic interest applies to you then you are evading tax.

Don't post about that in public!

There's a big difference to taxation around the world. Corporate tax in NZ is 30%, compare that to in America at 22% or in Canada (IRC 18%). This is why Munger despises the crap they teach in business schools on terms like EBITDA. The worse thing about FIF is the compounding of loss returns that occur after a year of negative returns. If the fund has already paid FIF in the prior year, and the following year has a massive negative return (like we experienced in 2022 where the S&P500 had -20%) why should gains in 2023 or future years be FIF taxed AGAIN? To be a fair level of taxation, the FIF should not kick in until the previous year's high has been reached, and then sums above that figure should have FIF applied. In a straight corporate tax sense, FIF is nothing like a flat rate tax where losses in 1 year can be offset in future year profits.

I refuse to play along with IRD's FIF by preserving full compound returns and having the tax liability applied upon disposing the assets. Where my dad resides abroad, this means capital gains tax and when you pay the tax at time of disposition, you can structure the amount of tax paid in years YOU CHOOSE (where typically seniors have little or no employment income so it's more efficient to pay the taxes from investment gains, than paying taxes up front with FIF based on years when you're most productive in the young to pre-retirement age).

Though the most important aspect is to follow John Bogle's advice and that is I prefer to have a portfolio that see's 2/3rds of the gains (net after paying CGT), than a portfolio holding the same investment from a NZ perspective that would only see 1/3rd of the portfolio gains.

[traineeinvestor]

I'll throw a few observations out there.

As a retiree, I want an income stream from my investments which (i) is enough for my daily needs (ii) provides a buffer for contingencies (iii) will grow over time to at least offset inflation and (iv) comes from sufficiently diverse streams to provide protection against individual assets (or even whole sectors of the investment universe) being impacted by adverse events.


I'm fully aware that chasing yield has often (not always) either been a bad strategy or has produced results which result in quality growth companies being overlooked. I don't insist on high yields from the time of investment but I like most (not necessarily all) of my investments to produce at least some income in the near future.


As an expat living in Hong Kong my tax position is different from what it would be if I became NZ resident again.


As far as NZX listed equities are concerned, my view is that the four best companies in terms of shareholder returns/blue chip status are AIA, EBO, MFT and POT. The issue with all of these is that every time I've looked at them, they have either been fully priced, expensive or very expensive and I am, at heart, a cheapskate which is why I've only got a small allocation to three of them (to my detriment I will acknowledge).


Also, I've been around long enough to know that history is littered with companies that were superb investments for many years (in some cases decades) before faltering. Companies like BIL in New Zealand, IEL and FAI in Australia produced stellar compound returns over (maybe) a couple of decades before going to zero (or close enough as makes little difference for present purposes). This leads to the question of sustainability – or a defensive moat as Buffett/Munger would describe it. Of the four NZ companies I mentioned above, EBO and MFT operate in industries where they are subject to meaningful competition both domestically and internationally. They've done a superb job of delivering for shareholders but neither can be said to have a truly robust defensive moat. In contrast, both AIA and POT have high degrees of protection from competition but they are (IMHO) dreadfully expensive. I'm not keen at current prices.


This is not to say there are not other companies in NZ which I am happy to invest in (SKL is my biggest NZ holding) but if I had to shut my eyes and put all my retirement savings into one single stock in the bottom drawer and forget about it for a very long time, I'd be looking at either POT or AIA. As a side note, I've a small hope that if the sell down of AIA shares goes ahead it will result in some weakness in the share price.


Needless to say, this is not something I would do in practice. If I had to look up my money for a very long period of time, it would be low cost index funds.

[kiora]

I am left wondering why NZ investors worry about exchange rates & FIF ???
https://finance.yahoo.com/quote/BRK-A/chart?p=BRK-A#eyJpbnRlcnZhbCI6Im1vbnRoIiwicGVyaW9kaWNpdHkiOjEs InRpbWVVbml0IjpudWxsLCJjYW5kbGVXaWR0aCI6Ni41ODE1Nj AyODM2ODc5NDMsImZsaXBwZWQiOmZhbHNlLCJ2b2x1bWVVbmRl cmxheSI6dHJ1ZSwiYWRqIjp0cnVlLCJjcm9zc2hhaXIiOnRydW UsImNoYXJ0VHlwZSI6ImxpbmUiLCJleHRlbmRlZCI6ZmFsc2Us Im1hcmtldFNlc3Npb25zIjp7fSwiYWdncmVnYXRpb25UeXBlIj oib2hsYyIsImNoYXJ0U2NhbGUiOiJwZXJjZW50Iiwic3R1ZGll cyI6eyLigIx2b2wgdW5kcuKAjCI6eyJ0eXBlIjoidm9sIHVuZH IiLCJpbnB1dHMiOnsiaWQiOiLigIx2b2wgdW5kcuKAjCIsImRp c3BsYXkiOiLigIx2b2wgdW5kcuKAjCJ9LCJvdXRwdXRzIjp7Il VwIFZvbHVtZSI6IiMwMGIwNjEiLCJEb3duIFZvbHVtZSI6IiNm ZjMzM2EifSwicGFuZWwiOiJjaGFydCIsInBhcmFtZXRlcnMiOn sid2lkdGhGYWN0b3IiOjAuNDUsImNoYXJ0TmFtZSI6ImNoYXJ0 In19fSwicGFuZWxzIjp7ImNoYXJ0Ijp7InBlcmNlbnQiOjEsIm Rpc3BsYXkiOiJCUkstQSIsImNoYXJ0TmFtZSI6ImNoYXJ0Iiwi aW5kZXgiOjAsInlBeGlzIjp7Im5hbWUiOiJjaGFydCIsInBvc2 l0aW9uIjpudWxsfSwieWF4aXNMSFMiOltdLCJ5YXhpc1JIUyI6 WyJjaGFydCIsIuKAjHZvbCB1bmRy4oCMIl19fSwibGluZVdpZH RoIjoyLCJzdHJpcGVkQmFja2dyb3VuZCI6dHJ1ZSwiZXZlbnRz Ijp0cnVlLCJjb2xvciI6IiMwMDgxZjIiLCJzdHJpcGVkQmFja2 dyb3VkIjp0cnVlLCJldmVudE1hcCI6eyJjb3Jwb3JhdGUiOnsi ZGl2cyI6dHJ1ZSwic3BsaXRzIjp0cnVlfSwic2lnRGV2Ijp7fX 0sInJhbmdlIjp7ImR0TGVmdCI6IjIwMTEtMDgtMThUMTI6MDA6 MDAuMDAwWiIsImR0UmlnaHQiOiIyMDIzLTA1LTI5VDExOjU5Oj AwLjk0N1oiLCJwZXJpb2RpY2l0eSI6eyJpbnRlcnZhbCI6Im1v bnRoIiwicGVyaW9kIjoxfSwicGFkZGluZyI6MH0sImN1c3RvbV JhbmdlIjp7InN0YXJ0IjoxMzE0NzkyMDAwMDAwLCJlbmQiOjE2 ODA0MzY4MDAwMDB9LCJzeW1ib2xzIjpbeyJzeW1ib2wiOiJCUk stQSIsInN5bWJvbE9iamVjdCI6eyJzeW1ib2wiOiJCUkstQSIs InF1b3RlVHlwZSI6IkVRVUlUWSIsImV4Y2hhbmdlVGltZVpvbm UiOiJBbWVyaWNhL05ld19Zb3JrIn0sInBlcmlvZGljaXR5Ijox LCJpbnRlcnZhbCI6Im1vbnRoIiwidGltZVVuaXQiOm51bGx9LH sic3ltYm9sIjoiSUZULk5aIiwic3ltYm9sT2JqZWN0Ijp7InN5 bWJvbCI6IklGVC5OWiJ9LCJwZXJpb2RpY2l0eSI6MSwiaW50ZX J2YWwiOiJtb250aCIsInRpbWVVbml0IjpudWxsLCJpZCI6IklG VC5OWiIsInBhcmFtZXRlcnMiOnsiY29sb3IiOiIjNzJkM2ZmIi wid2lkdGgiOjQsImlzQ29tcGFyaXNvbiI6dHJ1ZSwic2hhcmVZ QXhpcyI6dHJ1ZSwiY2hhcnROYW1lIjoiY2hhcnQiLCJzeW1ib2 xPYmplY3QiOnsic3ltYm9sIjoiSUZULk5aIn0sInBhbmVsIjoi Y2hhcnQiLCJmaWxsR2FwcyI6ZmFsc2UsImFjdGlvbiI6ImFkZC 1zZXJpZXMiLCJzeW1ib2wiOiJJRlQuTloiLCJnYXBEaXNwbGF5 U3R5bGUiOiJ0cmFuc3BhcmVudCIsIm5hbWUiOiJJRlQuTloiLC JvdmVyQ2hhcnQiOnRydWUsInVzZUNoYXJ0TGVnZW5kIjp0cnVl LCJoZWlnaHRQZXJjZW50YWdlIjowLjcsIm9wYWNpdHkiOjEsIm hpZ2hsaWdodGFibGUiOnRydWUsInR5cGUiOiJsaW5lIiwic3R5 bGUiOiJzdHhfbGluZV9jaGFydCJ9fV19
https://finance.yahoo.com/quote/BRK-A/chart?p=BRK-A#eyJpbnRlcnZhbCI6Im1vbnRoIiwicGVyaW9kaWNpdHkiOjEs ImNhbmRsZVdpZHRoIjoyLjg3MzQ5Mzk3NTkwMzYxNDcsImZsaX BwZWQiOmZhbHNlLCJ2b2x1bWVVbmRlcmxheSI6dHJ1ZSwiYWRq Ijp0cnVlLCJjcm9zc2hhaXIiOnRydWUsImNoYXJ0VHlwZSI6Im xpbmUiLCJleHRlbmRlZCI6ZmFsc2UsIm1hcmtldFNlc3Npb25z Ijp7fSwiYWdncmVnYXRpb25UeXBlIjoib2hsYyIsImNoYXJ0U2 NhbGUiOiJwZXJjZW50IiwicGFuZWxzIjp7ImNoYXJ0Ijp7InBl cmNlbnQiOjEsImRpc3BsYXkiOiJCUkstQSIsImNoYXJ0TmFtZS I6ImNoYXJ0IiwiaW5kZXgiOjAsInlBeGlzIjp7Im5hbWUiOiJj aGFydCIsInBvc2l0aW9uIjpudWxsfSwieWF4aXNMSFMiOltdLC J5YXhpc1JIUyI6WyJjaGFydCIsIuKAjHZvbCB1bmRy4oCMIl19 fSwibGluZVdpZHRoIjoyLCJzdHJpcGVkQmFja2dyb3VuZCI6dH J1ZSwiZXZlbnRzIjp0cnVlLCJjb2xvciI6IiMwMDgxZjIiLCJz dHJpcGVkQmFja2dyb3VkIjp0cnVlLCJldmVudE1hcCI6eyJjb3 Jwb3JhdGUiOnsiZGl2cyI6dHJ1ZSwic3BsaXRzIjp0cnVlfSwi c2lnRGV2Ijp7fX0sImN1c3RvbVJhbmdlIjp7InN0YXJ0Ijo4MD k4NzA0MDAwMDAsImVuZCI6MTY4MDI2MDQwMDAwMH0sInN5bWJv bHMiOlt7InN5bWJvbCI6IkJSSy1BIiwic3ltYm9sT2JqZWN0Ij p7InN5bWJvbCI6IkJSSy1BIiwicXVvdGVUeXBlIjoiRVFVSVRZ IiwiZXhjaGFuZ2VUaW1lWm9uZSI6IkFtZXJpY2EvTmV3X1lvcm sifSwicGVyaW9kaWNpdHkiOjEsImludGVydmFsIjoibW9udGgi fSx7InN5bWJvbCI6IklGVC5OWiIsInN5bWJvbE9iamVjdCI6ey JzeW1ib2wiOiJJRlQuTloifSwicGVyaW9kaWNpdHkiOjEsImlu dGVydmFsIjoibW9udGgiLCJpZCI6IklGVC5OWiIsInBhcmFtZX RlcnMiOnsiY29sb3IiOiIjNzJkM2ZmIiwid2lkdGgiOjQsImlz Q29tcGFyaXNvbiI6dHJ1ZSwic2hhcmVZQXhpcyI6dHJ1ZSwiY2 hhcnROYW1lIjoiY2hhcnQiLCJzeW1ib2xPYmplY3QiOnsic3lt Ym9sIjoiSUZULk5aIn0sInBhbmVsIjoiY2hhcnQiLCJmaWxsR2 FwcyI6ZmFsc2UsImFjdGlvbiI6ImFkZC1zZXJpZXMiLCJzeW1i b2wiOiJJRlQuTloiLCJnYXBEaXNwbGF5U3R5bGUiOiJ0cmFuc3 BhcmVudCIsIm5hbWUiOiJJRlQuTloiLCJvdmVyQ2hhcnQiOnRy dWUsInVzZUNoYXJ0TGVnZW5kIjp0cnVlLCJoZWlnaHRQZXJjZW 50YWdlIjowLjcsIm9wYWNpdHkiOjEsImhpZ2hsaWdodGFibGUi OnRydWUsInR5cGUiOiJsaW5lIiwic3R5bGUiOiJzdHhfbGluZV 9jaGFydCIsImhpZ2hsaWdodCI6ZmFsc2V9fV0sInN0dWRpZXMi Onsi4oCMdm9sIHVuZHLigIwiOnsidHlwZSI6InZvbCB1bmRyIi wiaW5wdXRzIjp7ImlkIjoi4oCMdm9sIHVuZHLigIwiLCJkaXNw bGF5Ijoi4oCMdm9sIHVuZHLigIwifSwib3V0cHV0cyI6eyJVcC BWb2x1bWUiOiIjMDBiMDYxIiwiRG93biBWb2x1bWUiOiIjZmYz MzNhIn0sInBhbmVsIjoiY2hhcnQiLCJwYXJhbWV0ZXJzIjp7In dpZHRoRmFjdG9yIjowLjQ1LCJjaGFydE5hbWUiOiJjaGFydCIs InBhbmVsTmFtZSI6ImNoYXJ0In19fSwicmFuZ2UiOnsiZHRMZW Z0IjoiMTk5NS0wOC0yOVQxMjowMDowMC4wMDBaIiwiZHRSaWdo dCI6IjIwMjMtMDQtMDJUMTE6NTk6MDAuMDAwWiIsInBlcmlvZG ljaXR5Ijp7ImludGVydmFsIjoibW9udGgiLCJwZXJpb2QiOjF9 LCJwYWRkaW5nIjowfX0-

Their advisers advice?
Oh of course investor could invest in underlying assets without the fees
The fees?
The risk?
The volatility?

Then again some management are profit centers aren't they?
Why wouldn't an investor want to double their returns & not worry about exchange rate risk, fees, FIF & volatility

Shake ,shake, shake my head

[Bjauck]

Interesting.

Went from 5 to 0 to 9 and then to 92.

All in the last 3 years.

Very interesting.

So it's gone from a supreme value stock to one of most overpriced companies in the world and everywhere in between all within 3 years.

I am perplexed.

Listed Investment trusts or companies as a result of disposals etc. can have erratic net incomes. In addition fluctuating investor sentiment can affect the price premium/discount to NAV.

[bull....]

of course with the un leashing of AI which could end up being as big as the discovery of say electricity etc etc in time a lot of companies will be disrupted again in time so people need to consider if there company can survive long term the AI

as for berkshire once buffett and munger are gone do you really believe this fund can outperform ? maybe they will have inserted buffett brain into an AI , then maybe eh

[SailorRob]

There's a big difference to taxation around the world. Corporate tax in NZ is 30%, compare that to in America at 22% or in Canada (IRC 18%). This is why Munger despises the crap they teach in business schools on terms like EBITDA. The worse thing about FIF is the compounding of loss returns that occur after a year of negative returns. If the fund has already paid FIF in the prior year, and the following year has a massive negative return (like we experienced in 2022 where the S&P500 had -20%) why should gains in 2023 or future years be FIF taxed AGAIN? To be a fair level of taxation, the FIF should not kick in until the previous year's high has been reached, and then sums above that figure should have FIF applied. In a straight corporate tax sense, FIF is nothing like a flat rate tax where losses in 1 year can be offset in future year profits.

I refuse to play along with IRD's FIF by preserving full compound returns and having the tax liability applied upon disposing the assets. Where my dad resides abroad, this means capital gains tax and when you pay the tax at time of disposition, you can structure the amount of tax paid in years YOU CHOOSE (where typically seniors have little or no employment income so it's more efficient to pay the taxes from investment gains, than paying taxes up front with FIF based on years when you're most productive in the young to pre-retirement age).

Though the most important aspect is to follow John Bogle's advice and that is I prefer to have a portfolio that see's 2/3rds of the gains (net after paying CGT), than a portfolio holding the same investment from a NZ perspective that would only see 1/3rd of the portfolio gains.


Some good points, agreed on the FIF flaw you point out.

US tax rate was higher previously, only been at 22% for a few years, but yes there is a big difference as you say.

Munger more rallies against the DA in EBITDA, they are happy with EBIT and that's actually their preferred metric. Unlevered pre tax earnings.

[SailorRob]

I'll throw a few observations out there.

As a retiree, I want an income stream from my investments which (i) is enough for my daily needs (ii) provides a buffer for contingencies (iii) will grow over time to at least offset inflation and (iv) comes from sufficiently diverse streams to provide protection against individual assets (or even whole sectors of the investment universe) being impacted by adverse events.


I'm fully aware that chasing yield has often (not always) either been a bad strategy or has produced results which result in quality growth companies being overlooked. I don't insist on high yields from the time of investment but I like most (not necessarily all) of my investments to produce at least some income in the near future.


As an expat living in Hong Kong my tax position is different from what it would be if I became NZ resident again.


As far as NZX listed equities are concerned, my view is that the four best companies in terms of shareholder returns/blue chip status are AIA, EBO, MFT and POT. The issue with all of these is that every time I've looked at them, they have either been fully priced, expensive or very expensive and I am, at heart, a cheapskate which is why I've only got a small allocation to three of them (to my detriment I will acknowledge).


Also, I've been around long enough to know that history is littered with companies that were superb investments for many years (in some cases decades) before faltering. Companies like BIL in New Zealand, IEL and FAI in Australia produced stellar compound returns over (maybe) a couple of decades before going to zero (or close enough as makes little difference for present purposes). This leads to the question of sustainability – or a defensive moat as Buffett/Munger would describe it. Of the four NZ companies I mentioned above, EBO and MFT operate in industries where they are subject to meaningful competition both domestically and internationally. They've done a superb job of delivering for shareholders but neither can be said to have a truly robust defensive moat. In contrast, both AIA and POT have high degrees of protection from competition but they are (IMHO) dreadfully expensive. I'm not keen at current prices.


This is not to say there are not other companies in NZ which I am happy to invest in (SKL is my biggest NZ holding) but if I had to shut my eyes and put all my retirement savings into one single stock in the bottom drawer and forget about it for a very long time, I'd be looking at either POT or AIA. As a side note, I've a small hope that if the sell down of AIA shares goes ahead it will result in some weakness in the share price.


Needless to say, this is not something I would do in practice. If I had to look up my money for a very long period of time, it would be low cost index funds.


Great insightful post, thanks for sharing.

[SailorRob]

Listed Investment trusts or companies as a result of disposals etc. can have erratic net incomes. In addition fluctuating investor sentiment can affect the price premium/discount to NAV.


Yes, it's nothing to do with that. I posed the explanation earlier in the thread from the man himself.

[SailorRob]

of course with the un leashing of AI which could end up being as big as the discovery of say electricity etc etc in time a lot of companies will be disrupted again in time so people need to consider if there company can survive long term the AI

as for berkshire once buffett and munger are gone do you really believe this fund can outperform ? maybe they will have inserted buffett brain into an AI , then maybe eh


I believe it is virtually impossible that they don't.

Math is math.

When your starting valuation is a fraction of the index and your earnings per share growth far exceeds the index and the runway for reinvesting capital at the ROE is very long and you don't give away stock to employees and do very little in the way of write downs, then bobs your uncle.

As I've said, I've got 100k that says they will outperform over the next decade, free money for you.

Bloomstran has a million but not sure he would bet without you posting collateral.

[Relaxed]

There's a big difference to taxation around the world. Corporate tax in NZ is 30%, compare that to in America at 22% or in Canada (IRC 18%). This is why Munger despises the crap they teach in business schools on terms like EBITDA. The worse thing about FIF is the compounding of loss returns that occur after a year of negative returns. If the fund has already paid FIF in the prior year, and the following year has a massive negative return (like we experienced in 2022 where the S&P500 had -20%) why should gains in 2023 or future years be FIF taxed AGAIN? To be a fair level of taxation, the FIF should not kick in until the previous year's high has been reached, and then sums above that figure should have FIF applied. In a straight corporate tax sense, FIF is nothing like a flat rate tax where losses in 1 year can be offset in future year profits.

I refuse to play along with IRD's FIF by preserving full compound returns and having the tax liability applied upon disposing the assets. Where my dad resides abroad, this means capital gains tax and when you pay the tax at time of disposition, you can structure the amount of tax paid in years YOU CHOOSE (where typically seniors have little or no employment income so it's more efficient to pay the taxes from investment gains, than paying taxes up front with FIF based on years when you're most productive in the young to pre-retirement age).

Though the most important aspect is to follow John Bogle's advice and that is I prefer to have a portfolio that see's 2/3rds of the gains (net after paying CGT), than a portfolio holding the same investment from a NZ perspective that would only see 1/3rd of the portfolio gains.

I agree as well because I have to calculate it every year and this last year created an anomaly of zero tax to pay even though overseas dividends were received.
I would rather declare the overseas dividends and not have to calculate the FIF amounts

The shorter way to describe the FIF regime is that it is a wealth tax not a gains tax

[causecelebre]

It bothers me that this forum is getting hijacked by name-callers and egotistical types that seem to need to try and humiliate others. Is it not enough to simply disagree? Must we be reduced to personal insults? Boring, but clearly fulfilling for some.

Not everyone here is a tool. There are many that have varying opinions which is great - that is why we are here: to get different points of view and to learn. However, there are some (we all know who they are) that see this forum as a dick measuring competition and while they may have some valid and valuable views from time to time its not worth trawling through the vitriol to read them. Ignore list is your friend :)

[kiwikeith]

I agree as well because I have to calculate it every year and this last year created an anomaly of zero tax to pay even though overseas dividends were received.
I would rather declare the overseas dividends and not have to calculate the FIF amounts

The shorter way to describe the FIF regime is that it is a wealth tax not a gains tax

I totally agree. It would be so much easier if you just declared your overseas dividends and paid NZ tax on that ( with an offset for the amount of tax already paid in foreign jurisdictions)

[SBQ]

I'll throw a few observations out there.

As a retiree, I want an income stream from my investments which (i) is enough for my daily needs (ii) provides a buffer for contingencies (iii) will grow over time to at least offset inflation and (iv) comes from sufficiently diverse streams to provide protection against individual assets (or even whole sectors of the investment universe) being impacted by adverse events.


I'm fully aware that chasing yield has often (not always) either been a bad strategy or has produced results which result in quality growth companies being overlooked. I don't insist on high yields from the time of investment but I like most (not necessarily all) of my investments to produce at least some income in the near future.


As an expat living in Hong Kong my tax position is different from what it would be if I became NZ resident again.


As far as NZX listed equities are concerned, my view is that the four best companies in terms of shareholder returns/blue chip status are AIA, EBO, MFT and POT. The issue with all of these is that every time I've looked at them, they have either been fully priced, expensive or very expensive and I am, at heart, a cheapskate which is why I've only got a small allocation to three of them (to my detriment I will acknowledge).


Also, I've been around long enough to know that history is littered with companies that were superb investments for many years (in some cases decades) before faltering. Companies like BIL in New Zealand, IEL and FAI in Australia produced stellar compound returns over (maybe) a couple of decades before going to zero (or close enough as makes little difference for present purposes). This leads to the question of sustainability – or a defensive moat as Buffett/Munger would describe it. Of the four NZ companies I mentioned above, EBO and MFT operate in industries where they are subject to meaningful competition both domestically and internationally. They've done a superb job of delivering for shareholders but neither can be said to have a truly robust defensive moat. In contrast, both AIA and POT have high degrees of protection from competition but they are (IMHO) dreadfully expensive. I'm not keen at current prices.


This is not to say there are not other companies in NZ which I am happy to invest in (SKL is my biggest NZ holding) but if I had to shut my eyes and put all my retirement savings into one single stock in the bottom drawer and forget about it for a very long time, I'd be looking at either POT or AIA. As a side note, I've a small hope that if the sell down of AIA shares goes ahead it will result in some weakness in the share price.


Needless to say, this is not something I would do in practice. If I had to look up my money for a very long period of time, it would be low cost index funds.

As Buffett said, you can produce income streams like collecting dividends by selling a portion of your shares. You choose your tax liability, and not when the company declares a dividend. What about years where you don't need much income? or more importantly, what about years when you want to make a significant purchase such as a new car or boat? Dividends are too static compared to selling shares where you can lock in tax free capital gain.

On a different note, I should mentioned that individuals can allocate up to $50K and not worry about any FIF. The gains will grow 100% tax free which is a freebee from IRD. When you are talking about Kiwi Saver balances that are barely around $30K (a pitiful amount since the start of KS in 2007), one is always better to self managed their own investments because any amounts that go into KS would be subjected to all sorts of expenses.

[Muse]

Not everyone here is a tool. There are many that have varying opinions which is great - that is why we are here: to get different points of view and to learn. However, there are some (we all know who they are) that see this forum as a dick measuring competition and while they may have some valid and valuable views from time to time its not worth trawling through the vitriol to read them. Ignore list is your friend :)

Agree - have used the ignore button. Wish everyone would.

[SBQ]

I totally agree. It would be so much easier if you just declared your overseas dividends and paid NZ tax on that ( with an offset for the amount of tax already paid in foreign jurisdictions)

The reason why FIF was introduced was to address that stock investment returns overseas like in N. America mostly come in the form of capital gains. Since NZ has no CGT, it would create a disadvantage to buying NZ listed companies that pay most of their profits in dividends and have little or no capital gains (ie TWG).

[traineeinvestor]

As Buffett said, you can produce income streams like collecting dividends by selling a portion of your shares. You choose your tax liability, and not when the company declares a dividend. What about years where you don't need much income? or more importantly, what about years when you want to make a significant purchase such as a new car or boat? Dividends are too static compared to selling shares where you can lock in tax free capital gain.

On a different note, I should mentioned that individuals can allocate up to $50K and not worry about any FIF. The gains will grow 100% tax free which is a freebee from IRD. When you are talking about Kiwi Saver balances that are barely around $30K (a pitiful amount since the start of KS in 2007), one is always better to self managed their own investments because any amounts that go into KS would be subjected to all sorts of expenses.




That is very true for those who live somewhere which imposes taxes like the USA. It's a widely accepted stance adopted my many on the bogleheads and earlyretirement forums. If I was facing that kind of tax regulation, I'd be doing exactly that.

But, living in Hong Kong where there is no capital gains taxes and the only taxes on dividends are non-resident withholding taxes on dividends from some countries the reverse is true - the regular infusion of dividends is preferable to selling assets because I avoid being forced to time the market in the short term. I don't have to think about it too much (although there is some seasonality to my dividend receipts which requires a cash buffer to be kept some months of the year).

If I don't need some of the income when it comes in I can reinvest.

If I have a lump sum expenditure like replacing the car, I'll wait until enough cash builds up.

[Entrep]

I am left wondering why NZ investors worry about exchange rates & FIF ???
https://finance.yahoo.com/quote/BRK-A/chart?p=BRK-A#eyJpbnRlcnZhbCI6Im1vbnRoIiwicGVyaW9kaWNpdHkiOjEs InRpbWVVbml0IjpudWxsLCJjYW5kbGVXaWR0aCI6Ni41ODE1Nj AyODM2ODc5NDMsImZsaXBwZWQiOmZhbHNlLCJ2b2x1bWVVbmRl cmxheSI6dHJ1ZSwiYWRqIjp0cnVlLCJjcm9zc2hhaXIiOnRydW UsImNoYXJ0VHlwZSI6ImxpbmUiLCJleHRlbmRlZCI6ZmFsc2Us Im1hcmtldFNlc3Npb25zIjp7fSwiYWdncmVnYXRpb25UeXBlIj oib2hsYyIsImNoYXJ0U2NhbGUiOiJwZXJjZW50Iiwic3R1ZGll cyI6eyLigIx2b2wgdW5kcuKAjCI6eyJ0eXBlIjoidm9sIHVuZH IiLCJpbnB1dHMiOnsiaWQiOiLigIx2b2wgdW5kcuKAjCIsImRp c3BsYXkiOiLigIx2b2wgdW5kcuKAjCJ9LCJvdXRwdXRzIjp7Il VwIFZvbHVtZSI6IiMwMGIwNjEiLCJEb3duIFZvbHVtZSI6IiNm ZjMzM2EifSwicGFuZWwiOiJjaGFydCIsInBhcmFtZXRlcnMiOn sid2lkdGhGYWN0b3IiOjAuNDUsImNoYXJ0TmFtZSI6ImNoYXJ0 In19fSwicGFuZWxzIjp7ImNoYXJ0Ijp7InBlcmNlbnQiOjEsIm Rpc3BsYXkiOiJCUkstQSIsImNoYXJ0TmFtZSI6ImNoYXJ0Iiwi aW5kZXgiOjAsInlBeGlzIjp7Im5hbWUiOiJjaGFydCIsInBvc2 l0aW9uIjpudWxsfSwieWF4aXNMSFMiOltdLCJ5YXhpc1JIUyI6 WyJjaGFydCIsIuKAjHZvbCB1bmRy4oCMIl19fSwibGluZVdpZH RoIjoyLCJzdHJpcGVkQmFja2dyb3VuZCI6dHJ1ZSwiZXZlbnRz Ijp0cnVlLCJjb2xvciI6IiMwMDgxZjIiLCJzdHJpcGVkQmFja2 dyb3VkIjp0cnVlLCJldmVudE1hcCI6eyJjb3Jwb3JhdGUiOnsi ZGl2cyI6dHJ1ZSwic3BsaXRzIjp0cnVlfSwic2lnRGV2Ijp7fX 0sInJhbmdlIjp7ImR0TGVmdCI6IjIwMTEtMDgtMThUMTI6MDA6 MDAuMDAwWiIsImR0UmlnaHQiOiIyMDIzLTA1LTI5VDExOjU5Oj AwLjk0N1oiLCJwZXJpb2RpY2l0eSI6eyJpbnRlcnZhbCI6Im1v bnRoIiwicGVyaW9kIjoxfSwicGFkZGluZyI6MH0sImN1c3RvbV JhbmdlIjp7InN0YXJ0IjoxMzE0NzkyMDAwMDAwLCJlbmQiOjE2 ODA0MzY4MDAwMDB9LCJzeW1ib2xzIjpbeyJzeW1ib2wiOiJCUk stQSIsInN5bWJvbE9iamVjdCI6eyJzeW1ib2wiOiJCUkstQSIs InF1b3RlVHlwZSI6IkVRVUlUWSIsImV4Y2hhbmdlVGltZVpvbm UiOiJBbWVyaWNhL05ld19Zb3JrIn0sInBlcmlvZGljaXR5Ijox LCJpbnRlcnZhbCI6Im1vbnRoIiwidGltZVVuaXQiOm51bGx9LH sic3ltYm9sIjoiSUZULk5aIiwic3ltYm9sT2JqZWN0Ijp7InN5 bWJvbCI6IklGVC5OWiJ9LCJwZXJpb2RpY2l0eSI6MSwiaW50ZX J2YWwiOiJtb250aCIsInRpbWVVbml0IjpudWxsLCJpZCI6IklG VC5OWiIsInBhcmFtZXRlcnMiOnsiY29sb3IiOiIjNzJkM2ZmIi wid2lkdGgiOjQsImlzQ29tcGFyaXNvbiI6dHJ1ZSwic2hhcmVZ QXhpcyI6dHJ1ZSwiY2hhcnROYW1lIjoiY2hhcnQiLCJzeW1ib2 xPYmplY3QiOnsic3ltYm9sIjoiSUZULk5aIn0sInBhbmVsIjoi Y2hhcnQiLCJmaWxsR2FwcyI6ZmFsc2UsImFjdGlvbiI6ImFkZC 1zZXJpZXMiLCJzeW1ib2wiOiJJRlQuTloiLCJnYXBEaXNwbGF5 U3R5bGUiOiJ0cmFuc3BhcmVudCIsIm5hbWUiOiJJRlQuTloiLC JvdmVyQ2hhcnQiOnRydWUsInVzZUNoYXJ0TGVnZW5kIjp0cnVl LCJoZWlnaHRQZXJjZW50YWdlIjowLjcsIm9wYWNpdHkiOjEsIm hpZ2hsaWdodGFibGUiOnRydWUsInR5cGUiOiJsaW5lIiwic3R5 bGUiOiJzdHhfbGluZV9jaGFydCJ9fV19
https://finance.yahoo.com/quote/BRK-A/chart?p=BRK-A#eyJpbnRlcnZhbCI6Im1vbnRoIiwicGVyaW9kaWNpdHkiOjEs ImNhbmRsZVdpZHRoIjoyLjg3MzQ5Mzk3NTkwMzYxNDcsImZsaX BwZWQiOmZhbHNlLCJ2b2x1bWVVbmRlcmxheSI6dHJ1ZSwiYWRq Ijp0cnVlLCJjcm9zc2hhaXIiOnRydWUsImNoYXJ0VHlwZSI6Im xpbmUiLCJleHRlbmRlZCI6ZmFsc2UsIm1hcmtldFNlc3Npb25z Ijp7fSwiYWdncmVnYXRpb25UeXBlIjoib2hsYyIsImNoYXJ0U2 NhbGUiOiJwZXJjZW50IiwicGFuZWxzIjp7ImNoYXJ0Ijp7InBl cmNlbnQiOjEsImRpc3BsYXkiOiJCUkstQSIsImNoYXJ0TmFtZS I6ImNoYXJ0IiwiaW5kZXgiOjAsInlBeGlzIjp7Im5hbWUiOiJj aGFydCIsInBvc2l0aW9uIjpudWxsfSwieWF4aXNMSFMiOltdLC J5YXhpc1JIUyI6WyJjaGFydCIsIuKAjHZvbCB1bmRy4oCMIl19 fSwibGluZVdpZHRoIjoyLCJzdHJpcGVkQmFja2dyb3VuZCI6dH J1ZSwiZXZlbnRzIjp0cnVlLCJjb2xvciI6IiMwMDgxZjIiLCJz dHJpcGVkQmFja2dyb3VkIjp0cnVlLCJldmVudE1hcCI6eyJjb3 Jwb3JhdGUiOnsiZGl2cyI6dHJ1ZSwic3BsaXRzIjp0cnVlfSwi c2lnRGV2Ijp7fX0sImN1c3RvbVJhbmdlIjp7InN0YXJ0Ijo4MD k4NzA0MDAwMDAsImVuZCI6MTY4MDI2MDQwMDAwMH0sInN5bWJv bHMiOlt7InN5bWJvbCI6IkJSSy1BIiwic3ltYm9sT2JqZWN0Ij p7InN5bWJvbCI6IkJSSy1BIiwicXVvdGVUeXBlIjoiRVFVSVRZ IiwiZXhjaGFuZ2VUaW1lWm9uZSI6IkFtZXJpY2EvTmV3X1lvcm sifSwicGVyaW9kaWNpdHkiOjEsImludGVydmFsIjoibW9udGgi fSx7InN5bWJvbCI6IklGVC5OWiIsInN5bWJvbE9iamVjdCI6ey JzeW1ib2wiOiJJRlQuTloifSwicGVyaW9kaWNpdHkiOjEsImlu dGVydmFsIjoibW9udGgiLCJpZCI6IklGVC5OWiIsInBhcmFtZX RlcnMiOnsiY29sb3IiOiIjNzJkM2ZmIiwid2lkdGgiOjQsImlz Q29tcGFyaXNvbiI6dHJ1ZSwic2hhcmVZQXhpcyI6dHJ1ZSwiY2 hhcnROYW1lIjoiY2hhcnQiLCJzeW1ib2xPYmplY3QiOnsic3lt Ym9sIjoiSUZULk5aIn0sInBhbmVsIjoiY2hhcnQiLCJmaWxsR2 FwcyI6ZmFsc2UsImFjdGlvbiI6ImFkZC1zZXJpZXMiLCJzeW1i b2wiOiJJRlQuTloiLCJnYXBEaXNwbGF5U3R5bGUiOiJ0cmFuc3 BhcmVudCIsIm5hbWUiOiJJRlQuTloiLCJvdmVyQ2hhcnQiOnRy dWUsInVzZUNoYXJ0TGVnZW5kIjp0cnVlLCJoZWlnaHRQZXJjZW 50YWdlIjowLjcsIm9wYWNpdHkiOjEsImhpZ2hsaWdodGFibGUi OnRydWUsInR5cGUiOiJsaW5lIiwic3R5bGUiOiJzdHhfbGluZV 9jaGFydCIsImhpZ2hsaWdodCI6ZmFsc2V9fV0sInN0dWRpZXMi Onsi4oCMdm9sIHVuZHLigIwiOnsidHlwZSI6InZvbCB1bmRyIi wiaW5wdXRzIjp7ImlkIjoi4oCMdm9sIHVuZHLigIwiLCJkaXNw bGF5Ijoi4oCMdm9sIHVuZHLigIwifSwib3V0cHV0cyI6eyJVcC BWb2x1bWUiOiIjMDBiMDYxIiwiRG93biBWb2x1bWUiOiIjZmYz MzNhIn0sInBhbmVsIjoiY2hhcnQiLCJwYXJhbWV0ZXJzIjp7In dpZHRoRmFjdG9yIjowLjQ1LCJjaGFydE5hbWUiOiJjaGFydCIs InBhbmVsTmFtZSI6ImNoYXJ0In19fSwicmFuZ2UiOnsiZHRMZW Z0IjoiMTk5NS0wOC0yOVQxMjowMDowMC4wMDBaIiwiZHRSaWdo dCI6IjIwMjMtMDQtMDJUMTE6NTk6MDAuMDAwWiIsInBlcmlvZG ljaXR5Ijp7ImludGVydmFsIjoibW9udGgiLCJwZXJpb2QiOjF9 LCJwYWRkaW5nIjowfX0-

Their advisers advice?
Oh of course investor could invest in underlying assets without the fees
The fees?
The risk?
The volatility?

Then again some management are profit centers aren't they?
Why wouldn't an investor want to double their returns & not worry about exchange rate risk, fees, FIF & volatility

Shake ,shake, shake my head

Can't tell if you saying to buy direct and be subject to FIF/FX or find another instrument/fund to get exposure...


I agree as well because I have to calculate it every year and this last year created an anomaly of zero tax to pay even though overseas dividends were received.
I would rather declare the overseas dividends and not have to calculate the FIF amounts

The shorter way to describe the FIF regime is that it is a wealth tax not a gains tax

It's essentially a wealth tax.

[Relaxed]

The reason why FIF was introduced was to address that stock investment returns overseas like in N. America mostly come in the form of capital gains. Since NZ has no CGT, it would create a disadvantage to buying NZ listed companies that pay most of their profits in dividends and have little or no capital gains (ie TWG).

You are correct. That was the reason given when it was introduced.
However, what they actually enacted was a tax on the total value held, not any capital gains.
and as mentioned by another poster above, it resets every year, so a capital loss is not credited against your account. ie the last financial year.
and it is on unrealised values.

and the FIF calculations are complicated. My uncle is a tax accountant and he estimated that the FIF regime added $500 to $1000 cost to prepare every set of accounts that required it.
as an aside, he reckons the new IRD trust disclosure rules are adding between $1000 and $2000 cost to prepare every set of trust accounts

[kiora]

IFT share performance is double the return from Berkshire Hathaway from 1995 when IFT listed to the present
IFT outperformance by quite a stretch +++ IFT pays dividends on top of these long term gains so why wouldn't an investor stick with IFT ?

https://finance.yahoo.com/quote/BRK-A/chart?p=BRK-A#eyJpbnRlcnZhbCI6Im1vbnRoIiwicGVyaW9kaWNpdHkiOjEs ImNhbmRsZVdpZHRoIjoyLjg4ODU1NDIxNjg2NzQ3LCJmbGlwcG VkIjpmYWxzZSwidm9sdW1lVW5kZXJsYXkiOnRydWUsImFkaiI6 dHJ1ZSwiY3Jvc3NoYWlyIjp0cnVlLCJjaGFydFR5cGUiOiJsaW 5lIiwiZXh0ZW5kZWQiOmZhbHNlLCJtYXJrZXRTZXNzaW9ucyI6 e30sImFnZ3JlZ2F0aW9uVHlwZSI6Im9obGMiLCJjaGFydFNjYW xlIjoicGVyY2VudCIsInBhbmVscyI6eyJjaGFydCI6eyJwZXJj ZW50IjoxLCJkaXNwbGF5IjoiQlJLLUEiLCJjaGFydE5hbWUiOi JjaGFydCIsImluZGV4IjowLCJ5QXhpcyI6eyJuYW1lIjoiY2hh cnQiLCJwb3NpdGlvbiI6bnVsbH0sInlheGlzTEhTIjpbXSwieW F4aXNSSFMiOlsiY2hhcnQiLCLigIx2b2wgdW5kcuKAjCJdfX0s ImxpbmVXaWR0aCI6Miwic3RyaXBlZEJhY2tncm91bmQiOnRydW UsImV2ZW50cyI6dHJ1ZSwiY29sb3IiOiIjMDA4MWYyIiwic3Ry aXBlZEJhY2tncm91ZCI6dHJ1ZSwicmFuZ2UiOnsicGVyaW9kaW NpdHkiOnsiaW50ZXJ2YWwiOiJtb250aCIsInBlcmlvZCI6MX0s ImR0TGVmdCI6IjE5OTUtMDgtMzFUMTI6MDA6MDAuMDAwWiIsIm R0UmlnaHQiOiIyMDIzLTAzLTMxVDExOjAwOjAwLjAwMFoiLCJw YWRkaW5nIjowfSwiZXZlbnRNYXAiOnsiY29ycG9yYXRlIjp7Im RpdnMiOnRydWUsInNwbGl0cyI6dHJ1ZX0sInNpZ0RldiI6e319 LCJjdXN0b21SYW5nZSI6eyJzdGFydCI6ODA5ODcwNDAwMDAwLC JlbmQiOjE2Nzc1ODIwMDAwMDB9LCJzeW1ib2xzIjpbeyJzeW1i b2wiOiJCUkstQSIsInN5bWJvbE9iamVjdCI6eyJzeW1ib2wiOi JCUkstQSIsInF1b3RlVHlwZSI6IkVRVUlUWSIsImV4Y2hhbmdl VGltZVpvbmUiOiJBbWVyaWNhL05ld19Zb3JrIn0sInBlcmlvZG ljaXR5IjoxLCJpbnRlcnZhbCI6Im1vbnRoIn0seyJzeW1ib2wi OiJJRlQuTloiLCJzeW1ib2xPYmplY3QiOnsic3ltYm9sIjoiSU ZULk5aIn0sInBlcmlvZGljaXR5IjoxLCJpbnRlcnZhbCI6Im1v bnRoIiwiaWQiOiJJRlQuTloiLCJwYXJhbWV0ZXJzIjp7ImNvbG 9yIjoiIzcyZDNmZiIsIndpZHRoIjo0LCJpc0NvbXBhcmlzb24i OnRydWUsInNoYXJlWUF4aXMiOnRydWUsImNoYXJ0TmFtZSI6Im NoYXJ0Iiwic3ltYm9sT2JqZWN0Ijp7InN5bWJvbCI6IklGVC5O WiJ9LCJwYW5lbCI6ImNoYXJ0IiwiZmlsbEdhcHMiOmZhbHNlLC JhY3Rpb24iOiJhZGQtc2VyaWVzIiwic3ltYm9sIjoiSUZULk5a IiwiZ2FwRGlzcGxheVN0eWxlIjoidHJhbnNwYXJlbnQiLCJuYW 1lIjoiSUZULk5aIiwib3ZlckNoYXJ0Ijp0cnVlLCJ1c2VDaGFy dExlZ2VuZCI6dHJ1ZSwiaGVpZ2h0UGVyY2VudGFnZSI6MC43LC JvcGFjaXR5IjoxLCJoaWdobGlnaHRhYmxlIjp0cnVlLCJ0eXBl IjoibGluZSIsInN0eWxlIjoic3R4X2xpbmVfY2hhcnQiLCJoaW dobGlnaHQiOmZhbHNlfX1dLCJzdHVkaWVzIjp7IuKAjHZvbCB1 bmRy4oCMIjp7InR5cGUiOiJ2b2wgdW5kciIsImlucHV0cyI6ey JpZCI6IuKAjHZvbCB1bmRy4oCMIiwiZGlzcGxheSI6IuKAjHZv bCB1bmRy4oCMIn0sIm91dHB1dHMiOnsiVXAgVm9sdW1lIjoiIz AwYjA2MSIsIkRvd24gVm9sdW1lIjoiI2ZmMzMzYSJ9LCJwYW5l bCI6ImNoYXJ0IiwicGFyYW1ldGVycyI6eyJ3aWR0aEZhY3Rvci I6MC40NSwiY2hhcnROYW1lIjoiY2hhcnQiLCJwYW5lbE5hbWUi OiJjaGFydCJ9fX19

[SailorRob]

IFT share performance is double the return from Berkshire Hathaway from 1995 when IFT listed to the present
IFT outperformance by quite a stretch +++ IFT pays dividends on top of these long term gains so why wouldn't an investor stick with IFT ?

Will respond properly later but answer is obvious.

There are hundreds of companies which have outperformed Berkshire from the mid 90's. But of course this is totally irrelevant.

Monster Beverage has outperformed almost everything in the world. Why doesn't an investor just buy monster beverage.

[Valuegrowth]

Thank you for the information and analysing some NZ stocks.
I'll throw a few observations out there.

As a retiree, I want an income stream from my investments which (i) is enough for my daily needs (ii) provides a buffer for contingencies (iii) will grow over time to at least offset inflation and (iv) comes from sufficiently diverse streams to provide protection against individual assets (or even whole sectors of the investment universe) being impacted by adverse events.


I'm fully aware that chasing yield has often (not always) either been a bad strategy or has produced results which result in quality growth companies being overlooked. I don't insist on high yields from the time of investment but I like most (not necessarily all) of my investments to produce at least some income in the near future.


As an expat living in Hong Kong my tax position is different from what it would be if I became NZ resident again.


As far as NZX listed equities are concerned, my view is that the four best companies in terms of shareholder returns/blue chip status are AIA, EBO, MFT and POT. The issue with all of these is that every time I've looked at them, they have either been fully priced, expensive or very expensive and I am, at heart, a cheapskate which is why I've only got a small allocation to three of them (to my detriment I will acknowledge).


Also, I've been around long enough to know that history is littered with companies that were superb investments for many years (in some cases decades) before faltering. Companies like BIL in New Zealand, IEL and FAI in Australia produced stellar compound returns over (maybe) a couple of decades before going to zero (or close enough as makes little difference for present purposes). This leads to the question of sustainability – or a defensive moat as Buffett/Munger would describe it. Of the four NZ companies I mentioned above, EBO and MFT operate in industries where they are subject to meaningful competition both domestically and internationally. They've done a superb job of delivering for shareholders but neither can be said to have a truly robust defensive moat. In contrast, both AIA and POT have high degrees of protection from competition but they are (IMHO) dreadfully expensive. I'm not keen at current prices.


This is not to say there are not other companies in NZ which I am happy to invest in (SKL is my biggest NZ holding) but if I had to shut my eyes and put all my retirement savings into one single stock in the bottom drawer and forget about it for a very long time, I'd be looking at either POT or AIA. As a side note, I've a small hope that if the sell down of AIA shares goes ahead it will result in some weakness in the share price.


Needless to say, this is not something I would do in practice. If I had to look up my money for a very long period of time, it would be low cost index funds.

[Sideshow Bob]

If everyone only picked great companies, there'd be no posts on ST.

It is the inverse of what you'd expect - the worse the company, the greater the number of posts....

[dibble]

As Buffett said, you can produce income streams like collecting dividends by selling a portion of your shares. You choose your tax liability, and not when the company declares a dividend. What about years where you don't need much income? or more importantly, what about years when you want to make a significant purchase such as a new car or boat? Dividends are too static compared to selling shares where you can lock in tax free capital gain.



You can do all that but there are trading expenses and risk (timing) attached and Im not sure too many people give some of their static salary back when it is excessive.
And if it were as simple as waiting for capital growth that is somehow guaranteed to happen everyone would be retired at 30.

Unless you're a trader or somehow know more than everyone else about when to buy or sell, holding enough divvy shares in retirement to cover the basics makes good stress-reducing sense to me, certainly allows one to ride out the moody share price swings that appear to be back in vogue. And a quality dividend payer with quiet dividend growth is likely to quietly go up in value so you still may get a bit of capital growth for the new hoverboard.

Not sure I'd use tax as an underlying investment basis over quality of company altho the current CGT rules certainly offer a good opportunity so I guess the notion is hardly without merit.

[SBQ]

You can do all that but there are trading expenses and risk (timing) attached and Im not sure too many people give some of their static salary back when it is excessive.
And if it were as simple as waiting for capital growth that is somehow guaranteed to happen everyone would be retired at 30.

Unless you're a trader or somehow know more than everyone else about when to buy or sell, holding enough divvy shares in retirement to cover the basics makes good stress-reducing sense to me, certainly allows one to ride out the moody share price swings that appear to be back in vogue. And a quality dividend payer with quiet dividend growth is likely to quietly go up in value so you still may get a bit of capital growth for the new hoverboard.

Not sure I'd use tax as an underlying investment basis over quality of company altho the current CGT rules certainly offer a good opportunity so I guess the notion is hardly without merit.

That's a weak response. 'Trading expenses" ?? Dividends are usually paid 4 times a year, one would not have to sell that often if they choose to sell a portion of the shares. The key benefit is you choose when to sell and not when ex-dividend date is declared (which is normally out of the control of the shareholder).

There's also another way to generate income streams by selling call options. Basically you get paid, for the chance, to sell the stock at a higher price that you specify. But as I recall, the FMA stance is brokerage firms the offer these services to NZ resident are doing so 'illegally' unless they are licensed by the FMA. Yep, imagine a large brokerage firm like Goldman Sacs or Charles Schwab, having to pay the FMA a special fee so NZ clients can use their options trading platform. It's by no surprise almost every major broker has closed out NZ clients over this moronic regulation that has no bearing on the sovereignty of foreign laws.

[traineeinvestor]

Adding a few more thoughts.

Picking good companies to hold for the long term is one thing but picking which countries (or industries) to invest in is something else. All other things being equal, it's easier for a company to do well if it's operating amidst economic tailwinds than battling economic headwinds.

For my sins I am a long term holder of shares in Challenger (ASX: CGF). In the slides used for today's investor day, there is a bar chart which shows Australia's superannuation assets growing from AUD3.3 trillion in 2022 to AUD9+ trillion by 2042. Over a 20 year time period the amount of money in retirement savings will nearly triple (from their already impressive levels). The wealth accumulation arising from Australia's compulsory super scheme has a number of implications including (i) a lot of that money will end up being allocated to securities listed on the ASX (ii) it creates a wealth effect and people who feel financially secure are more inclined to spend money which supports the economy. Add to this the demographic element (Australia's population is expected to keep growing) and I find myself more comfortable backing Australia for the longer term. And, yes, I'm aware that the resources industry can be very cyclical and that both the federal and state governments haven't been shy about increasing taxes.

Putting my money on the table: I've just dumped the money I received selling out of MYR in March into STW (an ASX200 index fund).

[Swala]

Interesting post. I have also been evaluating which countries to invest in for the long term. I don't see the local market offering too many good growth opportunities (IFT and MFT are my main picks) although it obviously has good dividend plays. I am settling on the US which, I believe ,has exceptional growth companies and also a huge domestic market which I see as a benefit, particularly in the current turbulent international times.

[Relaxed]

Adding a few more thoughts.

Picking good companies to hold for the long term is one thing but picking which countries (or industries) to invest in is something else. All other things being equal, it's easier for a company to do well if it's operating amidst economic tailwinds than battling economic headwinds.

For my sins I am a long term holder of shares in Challenger (ASX: CGF).


Interesting post. I have also been evaluating which countries to invest in for the long term. I don't see the local market offering too many good growth opportunities (IFT and MFT are my main picks) although it obviously has good dividend plays. I am settling on the US which, I believe ,has exceptional growth companies and also a huge domestic market which I see as a benefit, particularly in the current turbulent international times.

I've gone for all three
NZ, AUS and USA.

one of the issues in NZ is liquidity. as you get older, the amount you are investing goes up. this can lock you out of some shares because they don't trade very much each day.
If I want to sell for any reason, I don't want to be the entire days trade for a company the trades lightly.
$2k was a lot to invest in one company when I started, not so much now.

AIA, FPH, MFT, POT in NZ but most are really expensive at the moment

XRO in Aus and CGF. I agree there will be huge benefits as the economy turns

BRK, MKL, GOOGL and AMZN in US

[Ggcc]

You can do all that but there are trading expenses and risk (timing) attached and Im not sure too many people give some of their static salary back when it is excessive.
And if it were as simple as waiting for capital growth that is somehow guaranteed to happen everyone would be retired at 30.

Unless you're a trader or somehow know more than everyone else about when to buy or sell, holding enough divvy shares in retirement to cover the basics makes good stress-reducing sense to me, certainly allows one to ride out the moody share price swings that appear to be back in vogue. And a quality dividend payer with quiet dividend growth is likely to quietly go up in value so you still may get a bit of capital growth for the new hoverboard.

Not sure I'd use tax as an underlying investment basis over quality of company altho the current CGT rules certainly offer a good opportunity so I guess the notion is hardly without merit.

You will be surprised at the lack of people who don't declare capital gains tax. I am not a trader, but I have people I have spoken to who boast about their $80,000 trade they did over a 12 month period and don't pay any tax. Don't get me wrong they might be boasting and not telling the whole truth, but they think making an $80,000 profit trade is ok and they don't declare it is ok behaviour...

[SBQ]

You will be surprised at the lack of people who don't declare capital gains tax. I am not a trader, but I have people I have spoken to who boast about their $80,000 trade they did over a 12 month period and don't pay any tax. Don't get me wrong they might be boasting and not telling the whole truth, but they think making an $80,000 profit trade is ok and they don't declare it is ok behaviour...

Why would not declaring CGT be an issue from a NZ resident perspective? NZ has no formal CGT and any such gains from abroad are addressed under FIF. Now if you're referring to tax evasion, then that's a horse of a different colour. I hear lots of people boasting about gains but they never mention their losses (that would be the more likely case for those that trade too frequent). Many studies have proven that those that do more frequent trades tend to under-perform or lose $.

$80,000 tells nothing. What was the person's % return on the amount invested? When I do options trades, I aim for annualised return of 50%.

[kiwikeith]

That's a weak response. 'Trading expenses" ?? Dividends are usually paid 4 times a year, one would not have to sell that often if they choose to sell a portion of the shares. The key benefit is you choose when to sell and not when ex-dividend date is declared (which is normally out of the control of the shareholder).

There's also another way to generate income streams by selling call options. Basically you get paid, for the chance, to sell the stock at a higher price that you specify. But as I recall, the FMA stance is brokerage firms the offer these services to NZ resident are doing so 'illegally' unless they are licensed by the FMA. Yep, imagine a large brokerage firm like Goldman Sacs or Charles Schwab, having to pay the FMA a special fee so NZ clients can use their options trading platform. It's by no surprise almost every major broker has closed out NZ clients over this moronic regulation that has no bearing on the sovereignty of foreign laws.

Yes I was a customer of Charlie Schwab until 5-6 years ago when they wrote to me to say they were closing down NZ based accounts. Such a shame as I loved their platform and reports.

[SBQ]

Yes I was a customer of Charlie Schwab until 5-6 years ago when they wrote to me to say they were closing down NZ based accounts. Such a shame as I loved their platform and reports.

and just to show that i'm not talking nonsense, i've managed to hunt down the exact regulations from the horse's mouth (highlighted in red):

https://i.imgur.com/taztgbg.png

I had to use Wayback Archive as the FMA website has taken this down and mentions nothing about this in it's current form. Though i'm very certain nothing has changed since these rules were put in place 5+ years ago.

[Valuegrowth]

Thank you all for posting some different views and analysis on investment. I am really getting some great ideas. I am not a believer of diversification.Over diversification could lead to poor results. I prefer to invest only in less than five companies. However, maximum number of companies I will deal with is around 10. In short, they would be concentrated investments. I believe we can get above average returns by concentrating on few investments. No need to stay all the time in the market. One great win not only will recover losses made in the market but also above average income for comfortable retirement life. However, I would like to do some trading as well. By trading some stocks not only I can get some ideas about market psychology but also investment opportunity.

https://rutherfordrede.co.nz/latest-news/httpsawealthofcommonsensecom202207stocks-for-the-long-run

[kiora]

VG I am not a believer in diversification for investors over long time periods.
Over the last 40 years of investing I have participated in every listing then sold the "losser's" and added to what I think are the "winners"
There has been a noticeable lack of new listings over recent years.
My "share portfolio' has been pared back over time to 2 stock holdings(IFT & FPH) that I am relaxed that the next generation that knows squat all about investing can hold for the long term. Both of them have management that have long term horizons.
If I knew back then what I know now the "portfolio" could have another 2 companies(MFT & EBOS) that I rate very highly because their management have added a lot of value over the long term.
Over long time periods "Trading" for me is just a lot of wasted time and energy . Yes there maybe some "good traders" but is it worth it time & energy wise?
Isn't there other things you would rather be doing?
Maybe its fun to do for the thrill if it comes up a winner but how often does that happen?.
What companies shares do share owners trade?
Ones that have a volatile share prices?
But then why has it got a volatile share price?


https://rutherfordrede.co.nz/latest-news/httpsawealthofcommonsensecom202207stocks-for-the-long-run
"Stocks For the Long Run" has some insight full ideas.

[kiora]

Comparisons graphed 1995-2023
Doesn't include dividends
Allow it time to load fully
https://finance.yahoo.com/quote/%5EGSPC/chart?p=%5EGSPC#eyJpbnRlcnZhbCI6Im1vbnRoIiwicGVyaW 9kaWNpdHkiOjEsImNhbmRsZVdpZHRoIjoyLjkzMjcyMTcxMjUz ODIyNiwiZmxpcHBlZCI6ZmFsc2UsInZvbHVtZVVuZGVybGF5Ij p0cnVlLCJhZGoiOnRydWUsImNyb3NzaGFpciI6dHJ1ZSwiY2hh cnRUeXBlIjoibGluZSIsImV4dGVuZGVkIjpmYWxzZSwibWFya2 V0U2Vzc2lvbnMiOnt9LCJhZ2dyZWdhdGlvblR5cGUiOiJvaGxj IiwiY2hhcnRTY2FsZSI6InBlcmNlbnQiLCJwYW5lbHMiOnsiY2 hhcnQiOnsicGVyY2VudCI6MSwiZGlzcGxheSI6Il5HU1BDIiwi Y2hhcnROYW1lIjoiY2hhcnQiLCJpbmRleCI6MCwieUF4aXMiOn sibmFtZSI6ImNoYXJ0IiwicG9zaXRpb24iOm51bGx9LCJ5YXhp c0xIUyI6W10sInlheGlzUkhTIjpbImNoYXJ0Iiwi4oCMdm9sIH VuZHLigIwiXX19LCJsaW5lV2lkdGgiOjIsInN0cmlwZWRCYWNr Z3JvdW5kIjp0cnVlLCJldmVudHMiOnRydWUsImNvbG9yIjoiIz AwODFmMiIsInN0cmlwZWRCYWNrZ3JvdWQiOnRydWUsInJhbmdl Ijp7InBlcmlvZGljaXR5Ijp7ImludGVydmFsIjoibW9udGgiLC JwZXJpb2QiOjF9LCJkdExlZnQiOiIxOTk1LTA4LTMxVDEyOjAw OjAwLjAwMFoiLCJkdFJpZ2h0IjoiMjAyMi0xMC0zMVQxMTowMD owMC4wMDBaIiwicGFkZGluZyI6MH0sImV2ZW50TWFwIjp7ImNv cnBvcmF0ZSI6W10sInNpZ0RldiI6e319LCJjdXN0b21SYW5nZS I6eyJzdGFydCI6ODA5ODcwNDAwMDAwLCJlbmQiOjE2NjQ1MzU2 MDAwMDB9LCJzeW1ib2xzIjpbeyJzeW1ib2wiOiJeR1NQQyIsIn N5bWJvbE9iamVjdCI6eyJzeW1ib2wiOiJeR1NQQyIsInF1b3Rl VHlwZSI6IklOREVYIiwiZXhjaGFuZ2VUaW1lWm9uZSI6IkFtZX JpY2EvTmV3X1lvcmsifSwicGVyaW9kaWNpdHkiOjEsImludGVy dmFsIjoibW9udGgifSx7InN5bWJvbCI6IklGVC5OWiIsInN5bW JvbE9iamVjdCI6eyJzeW1ib2wiOiJJRlQuTloifSwicGVyaW9k aWNpdHkiOjEsImludGVydmFsIjoibW9udGgiLCJpZCI6IklGVC 5OWiIsInBhcmFtZXRlcnMiOnsiY29sb3IiOiIjNzJkM2ZmIiwi d2lkdGgiOjQsImlzQ29tcGFyaXNvbiI6dHJ1ZSwic2hhcmVZQX hpcyI6dHJ1ZSwiY2hhcnROYW1lIjoiY2hhcnQiLCJzeW1ib2xP YmplY3QiOnsic3ltYm9sIjoiSUZULk5aIn0sInBhbmVsIjoiY2 hhcnQiLCJmaWxsR2FwcyI6ZmFsc2UsImFjdGlvbiI6ImFkZC1z ZXJpZXMiLCJzeW1ib2wiOiJJRlQuTloiLCJnYXBEaXNwbGF5U3 R5bGUiOiJ0cmFuc3BhcmVudCIsIm5hbWUiOiJJRlQuTloiLCJv dmVyQ2hhcnQiOnRydWUsInVzZUNoYXJ0TGVnZW5kIjp0cnVlLC JoZWlnaHRQZXJjZW50YWdlIjowLjcsIm9wYWNpdHkiOjEsImhp Z2hsaWdodGFibGUiOnRydWUsInR5cGUiOiJsaW5lIiwic3R5bG UiOiJzdHhfbGluZV9jaGFydCIsImhpZ2hsaWdodCI6ZmFsc2V9 fSx7InN5bWJvbCI6IkJSSy1CIiwic3ltYm9sT2JqZWN0Ijp7In N5bWJvbCI6IkJSSy1CIn0sInBlcmlvZGljaXR5IjoxLCJpbnRl cnZhbCI6Im1vbnRoIiwiaWQiOiJCUkstQiIsInBhcmFtZXRlcn MiOnsiY29sb3IiOiIjZmY4MGM1Iiwid2lkdGgiOjIsImlzQ29t cGFyaXNvbiI6dHJ1ZSwic2hhcmVZQXhpcyI6dHJ1ZSwiY2hhcn ROYW1lIjoiY2hhcnQiLCJzeW1ib2xPYmplY3QiOnsic3ltYm9s IjoiQlJLLUIifSwicGFuZWwiOiJjaGFydCIsImZpbGxHYXBzIj pmYWxzZSwiYWN0aW9uIjoiYWRkLXNlcmllcyIsInN5bWJvbCI6 IkJSSy1CIiwiZ2FwRGlzcGxheVN0eWxlIjoidHJhbnNwYXJlbn QiLCJuYW1lIjoiQlJLLUIiLCJvdmVyQ2hhcnQiOnRydWUsInVz ZUNoYXJ0TGVnZW5kIjp0cnVlLCJoZWlnaHRQZXJjZW50YWdlIj owLjcsIm9wYWNpdHkiOjEsImhpZ2hsaWdodGFibGUiOnRydWUs InR5cGUiOiJsaW5lIiwic3R5bGUiOiJzdHhfbGluZV9jaGFydC IsImhpZ2hsaWdodCI6ZmFsc2V9fSx7InN5bWJvbCI6Ik1GVC5O WiIsInN5bWJvbE9iamVjdCI6eyJzeW1ib2wiOiJNRlQuTloifS wicGVyaW9kaWNpdHkiOjEsImludGVydmFsIjoibW9udGgiLCJp ZCI6Ik1GVC5OWiIsInBhcmFtZXRlcnMiOnsiY29sb3IiOiIjZT U2MzJhIiwid2lkdGgiOjIsImlzQ29tcGFyaXNvbiI6dHJ1ZSwi c2hhcmVZQXhpcyI6dHJ1ZSwiY2hhcnROYW1lIjoiY2hhcnQiLC JzeW1ib2xPYmplY3QiOnsic3ltYm9sIjoiTUZULk5aIn0sInBh bmVsIjoiY2hhcnQiLCJmaWxsR2FwcyI6ZmFsc2UsImFjdGlvbi I6ImFkZC1zZXJpZXMiLCJzeW1ib2wiOiJNRlQuTloiLCJnYXBE aXNwbGF5U3R5bGUiOiJ0cmFuc3BhcmVudCIsIm5hbWUiOiJNRl QuTloiLCJvdmVyQ2hhcnQiOnRydWUsInVzZUNoYXJ0TGVnZW5k Ijp0cnVlLCJoZWlnaHRQZXJjZW50YWdlIjowLjcsIm9wYWNpdH kiOjEsImhpZ2hsaWdodGFibGUiOnRydWUsInR5cGUiOiJsaW5l Iiwic3R5bGUiOiJzdHhfbGluZV9jaGFydCIsImhpZ2hsaWdodC I6ZmFsc2V9fSx7InN5bWJvbCI6IkVCTy5OWiIsInN5bWJvbE9i amVjdCI6eyJzeW1ib2wiOiJFQk8uTloifSwicGVyaW9kaWNpdH kiOjEsImludGVydmFsIjoibW9udGgiLCJpZCI6IkVCTy5OWiIs InBhcmFtZXRlcnMiOnsiY29sb3IiOiIjZmYzMzNhIiwid2lkdG giOjIsImlzQ29tcGFyaXNvbiI6dHJ1ZSwic2hhcmVZQXhpcyI6 dHJ1ZSwiY2hhcnROYW1lIjoiY2hhcnQiLCJzeW1ib2xPYmplY3 QiOnsic3ltYm9sIjoiRUJPLk5aIn0sInBhbmVsIjoiY2hhcnQi LCJmaWxsR2FwcyI6ZmFsc2UsImFjdGlvbiI6ImFkZC1zZXJpZX MiLCJzeW1ib2wiOiJFQk8uTloiLCJnYXBEaXNwbGF5U3R5bGUi OiJ0cmFuc3BhcmVudCIsIm5hbWUiOiJFQk8uTloiLCJvdmVyQ2 hhcnQiOnRydWUsInVzZUNoYXJ0TGVnZW5kIjp0cnVlLCJoZWln aHRQZXJjZW50YWdlIjowLjcsIm9wYWNpdHkiOjEsImhpZ2hsaW dodGFibGUiOnRydWUsInR5cGUiOiJsaW5lIiwic3R5bGUiOiJz dHhfbGluZV9jaGFydCIsImhpZ2hsaWdodCI6ZmFsc2V9fSx7In N5bWJvbCI6IkZQSC5OWiIsInN5bWJvbE9iamVjdCI6eyJzeW1i b2wiOiJGUEguTloifSwicGVyaW9kaWNpdHkiOjEsImludGVydm FsIjoibW9udGgiLCJpZCI6IkZQSC5OWiIsInBhcmFtZXRlcnMi OnsiY29sb3IiOiIjZmZkYjQ4Iiwid2lkdGgiOjIsImlzQ29tcG FyaXNvbiI6dHJ1ZSwic2hhcmVZQXhpcyI6dHJ1ZSwiY2hhcnRO YW1lIjoiY2hhcnQiLCJzeW1ib2xPYmplY3QiOnsic3ltYm9sIj oiRlBILk5aIn0sInBhbmVsIjoiY2hhcnQiLCJmaWxsR2FwcyI6 ZmFsc2UsImFjdGlvbiI6ImFkZC1zZXJpZXMiLCJzeW1ib2wiOi JGUEguTloiLCJnYXBEaXNwbGF5U3R5bGUiOiJ0cmFuc3BhcmVu dCIsIm5hbWUiOiJGUEguTloiLCJvdmVyQ2hhcnQiOnRydWUsIn VzZUNoYXJ0TGVnZW5kIjp0cnVlLCJoZWlnaHRQZXJjZW50YWdl IjowLjcsIm9wYWNpdHkiOjEsImhpZ2hsaWdodGFibGUiOnRydW UsInR5cGUiOiJsaW5lIiwic3R5bGUiOiJzdHhfbGluZV9jaGFy dCJ9fV0sInN0dWRpZXMiOnsi4oCMdm9sIHVuZHLigIwiOnsidH lwZSI6InZvbCB1bmRyIiwiaW5wdXRzIjp7ImlkIjoi4oCMdm9s IHVuZHLigIwiLCJkaXNwbGF5Ijoi4oCMdm9sIHVuZHLigIwifS wib3V0cHV0cyI6eyJVcCBWb2x1bWUiOiIjMDBiMDYxIiwiRG93 biBWb2x1bWUiOiIjZmYzMzNhIn0sInBhbmVsIjoiY2hhcnQiLC JwYXJhbWV0ZXJzIjp7IndpZHRoRmFjdG9yIjowLjQ1LCJjaGFy dE5hbWUiOiJjaGFydCIsInBhbmVsTmFtZSI6ImNoYXJ0In19fX 0-

[Bobdn]

Nice links. I listened (Audible) to the latest edition of Stocks for Long Run. I think I might also buy the hard copy and use as a coffee table book. It's a beautiful thing.

[Bjauck]

and just to show that i'm not talking nonsense, i've managed to hunt down the exact regulations from the horse's mouth (highlighted in red):

https://i.imgur.com/taztgbg.png

I had to use Wayback Archive as the FMA website has taken this down and mentions nothing about this in it's current form. Though i'm very certain nothing has changed since these rules were put in place 5+ years ago.
The horse’s mouth doesn’t use a spell check. “Servises”? It’s not even an American spelling variant. It is a minor thing I know yet….

[Valuegrowth]

Thank you Kiora. Some market gurus say we should not time the market. I don’t agree with it. With my experience, I will avoid buying stocks when markets are hot. I am pretty sure Markets are going to hit hard.

I used to participate actively in a stock market forum based in the USA. Surprisingly, I never owned a stock listed in the USA. Hopefully, I will be able to find a good company to invest in the USA.This year will be my learning period as I have forgotten lot about the USA stock market. Finally, I came to conclusion. Out of 10 companies, 5 will be in NZ. I am not hurry to buy stocks yet.

Risks involved in stock markets:

Currency risk
Wars
Different types of crises
Fluctuation of commodity prices
Industry risk

VG I am not a believer in diversification for investors over long time periods.
Over the last 40 years of investing I have participated in every listing then sold the "losser's" and added to what I think are the "winners"
There has been a noticeable lack of new listings over recent years.
My "share portfolio' has been pared back over time to 2 stock holdings(IFT & FPH) that I am relaxed that the next generation that knows squat all about investing can hold for the long term. Both of them have management that have long term horizons.
If I knew back then what I know now the "portfolio" could have another 2 companies(MFT & EBOS) that I rate very highly because their management have added a lot of value over the long term.
Over long time periods "Trading" for me is just a lot of wasted time and energy . Yes there maybe some "good traders" but is it worth it time & energy wise?
Isn't there other things you would rather be doing?
Maybe its fun to do for the thrill if it comes up a winner but how often does that happen?.
What companies shares do share owners trade?
Ones that have a volatile share prices?
But then why has it got a volatile share price?


https://rutherfordrede.co.nz/latest-news/httpsawealthofcommonsensecom202207stocks-for-the-long-run
"Stocks For the Long Run" has some insight full ideas.

[kiora]

VG
Will they be essential service companies for the long haul that you invest in?

[Valuegrowth]

Good Morning Kiora
Definitely, essentials will be part of my portfolio. They need even during period of war, recession and great depression.

[kiora]

Some wise words
https://www.livewiremarkets.com/wires/meet-jackson-the-25-year-old-generating-over-17-pa-in-compound-returns?utm_medium=email&utm_campaign=Trending%20on%20Livewire%20-%20Friday%20June%202%202023&utm_content=Trending%20on%20Livewire%20-%20Friday%20June%202%202023+CID_017a581268e0e43588 c276bac8f3a4bb&utm_source=campaign%20monitor&utm_term=MEET%20JACKSON
"In my opinion, intelligence is a lousy predictor of investor success. What I believe most important, is the ability to regulate our emotions and stay calm - letting the investment strategy we set for ourselves play out, without getting in our own way," Jackson says."
"In my opinion, intelligence is a lousy predictor of investor success. What I believe most important, is the ability to regulate our emotions and stay calm - letting the investment strategy we set for ourselves play out, without getting in our own way. "
"If there was one thing I'd also like investors to understand, it's that sometimes it's riskier not to invest than to invest"
.

[Valuegrowth]

Some wise words
https://www.livewiremarkets.com/wires/meet-jackson-the-25-year-old-generating-over-17-pa-in-compound-returns?utm_medium=email&utm_campaign=Trending%20on%20Livewire%20-%20Friday%20June%202%202023&utm_content=Trending%20on%20Livewire%20-%20Friday%20June%202%202023+CID_017a581268e0e43588 c276bac8f3a4bb&utm_source=campaign%20monitor&utm_term=MEET%20JACKSON
"In my opinion, intelligence is a lousy predictor of investor success. What I believe most important, is the ability to regulate our emotions and stay calm - letting the investment strategy we set for ourselves play out, without getting in our own way," Jackson says."
"In my opinion, intelligence is a lousy predictor of investor success. What I believe most important, is the ability to regulate our emotions and stay calm - letting the investment strategy we set for ourselves play out, without getting in our own way. "
"If there was one thing I'd also like investors to understand, it's that sometimes it's riskier not to invest than to invest"
.

Thank you. Very informative.Currently, I have invested in a subsidery company of a large food related company in Singapore. It,s a debt free and cash rich. It also has a strong balance sheet. I have kept it nearly 15 years. I see at least another 10 years of growth thanks to rising population in Asia.

[kiora]

Great companies to invest in often have a large addressable market and leaders that plan for growth

"Growth begins with the core, however, growth leaders expand beyond the core to drive growth.

https://www.mckinsey.com/capabilities/growth-marketing-and-sales/our-insights/choosing-to-grow-the-leaders-blueprint

[Valuegrowth]

It was a very interesting and very useful reading for me. Thank you.

"About a quarter of companies don’t grow at all, and between 2010 and 2019, only one in eight achieved more than 10 percent revenue growth annually.

With only one in ten S&P 500 companies reporting growth above GDP for more than 30 years, sustained, profitable growth may seem difficult."

Great companies to invest in often have a large addressable market and leaders that plan for growth

"Growth begins with the core, however, growth leaders expand beyond the core to drive growth.

https://www.mckinsey.com/capabilities/growth-marketing-and-sales/our-insights/choosing-to-grow-the-leaders-blueprint

[Rawz]

Picking great companies for the long run.. you need to pick the companies with CEOs/management teams that are GREAT capital allocators, here are the top four on the NZX:

EBO
MFT
FPH
MHJ

[SailorRob]

Picking great companies for the long run.. you need to pick the companies with CEOs/management teams that are GREAT capital allocators, here are the top four on the NZX:

EBO
MFT
FPH
MHJ


Very true, many don't know/can't tell you who the capital allocator is within the company.

[Valuegrowth]

Some good choices. Thank you.
Picking great companies for the long run.. you need to pick the companies with CEOs/management teams that are GREAT capital allocators, here are the top four on the NZX:

EBO
MFT
FPH
MHJ

[JBmurc]

VG I am not a believer in diversification for investors over long time periods.
Over the last 40 years of investing I have participated in every listing then sold the "losser's" and added to what I think are the "winners"
There has been a noticeable lack of new listings over recent years.
My "share portfolio' has been pared back over time to 2 stock holdings(IFT & FPH) that I am relaxed that the next generation that knows squat all about investing can hold for the long term. Both of them have management that have long term horizons.
If I knew back then what I know now the "portfolio" could have another 2 companies(MFT & EBOS) that I rate very highly because their management have added a lot of value over the long term.
Over long time periods "Trading" for me is just a lot of wasted time and energy . Yes there maybe some "good traders" but is it worth it time & energy wise?
Isn't there other things you would rather be doing?
Maybe its fun to do for the thrill if it comes up a winner but how often does that happen?.
What companies shares do share owners trade?
Ones that have a volatile share prices?
But then why has it got a volatile share price?


https://rutherfordrede.co.nz/latest-news/httpsawealthofcommonsensecom202207stocks-for-the-long-run
"Stocks For the Long Run" has some insight full ideas.

Nothing on the NZX

[kiora]

Picking great companies for the long run.. you need to pick the companies with CEOs/management teams that are GREAT capital allocators, here are the top four on the NZX:

EBO
MFT
FPH
MHJ

Why MHJ ?
https://www.marketscreener.com/quote/stock/MICHAEL-HILL-INTERNATIONA-29688133/financials/
https://www.marketscreener.com/quote/stock/MICHAEL-HILL-INTERNATIONA-29688133/

I picked MHJ up in the float but they didn't stay in the portfolio long.

[kiora]

Comparisons graphed 1995-2023
Doesn't include dividends
Allow it time to load fully
https://finance.yahoo.com/quote/%5EGSPC/chart?p=%5EGSPC#eyJpbnRlcnZhbCI6Im1vbnRoIiwicGVyaW 9kaWNpdHkiOjEsImNhbmRsZVdpZHRoIjoyLjkzMjcyMTcxMjUz ODIyNiwiZmxpcHBlZCI6ZmFsc2UsInZvbHVtZVVuZGVybGF5Ij p0cnVlLCJhZGoiOnRydWUsImNyb3NzaGFpciI6dHJ1ZSwiY2hh cnRUeXBlIjoibGluZSIsImV4dGVuZGVkIjpmYWxzZSwibWFya2 V0U2Vzc2lvbnMiOnt9LCJhZ2dyZWdhdGlvblR5cGUiOiJvaGxj IiwiY2hhcnRTY2FsZSI6InBlcmNlbnQiLCJwYW5lbHMiOnsiY2 hhcnQiOnsicGVyY2VudCI6MSwiZGlzcGxheSI6Il5HU1BDIiwi Y2hhcnROYW1lIjoiY2hhcnQiLCJpbmRleCI6MCwieUF4aXMiOn sibmFtZSI6ImNoYXJ0IiwicG9zaXRpb24iOm51bGx9LCJ5YXhp c0xIUyI6W10sInlheGlzUkhTIjpbImNoYXJ0Iiwi4oCMdm9sIH VuZHLigIwiXX19LCJsaW5lV2lkdGgiOjIsInN0cmlwZWRCYWNr Z3JvdW5kIjp0cnVlLCJldmVudHMiOnRydWUsImNvbG9yIjoiIz AwODFmMiIsInN0cmlwZWRCYWNrZ3JvdWQiOnRydWUsInJhbmdl Ijp7InBlcmlvZGljaXR5Ijp7ImludGVydmFsIjoibW9udGgiLC JwZXJpb2QiOjF9LCJkdExlZnQiOiIxOTk1LTA4LTMxVDEyOjAw OjAwLjAwMFoiLCJkdFJpZ2h0IjoiMjAyMi0xMC0zMVQxMTowMD owMC4wMDBaIiwicGFkZGluZyI6MH0sImV2ZW50TWFwIjp7ImNv cnBvcmF0ZSI6W10sInNpZ0RldiI6e319LCJjdXN0b21SYW5nZS I6eyJzdGFydCI6ODA5ODcwNDAwMDAwLCJlbmQiOjE2NjQ1MzU2 MDAwMDB9LCJzeW1ib2xzIjpbeyJzeW1ib2wiOiJeR1NQQyIsIn N5bWJvbE9iamVjdCI6eyJzeW1ib2wiOiJeR1NQQyIsInF1b3Rl VHlwZSI6IklOREVYIiwiZXhjaGFuZ2VUaW1lWm9uZSI6IkFtZX JpY2EvTmV3X1lvcmsifSwicGVyaW9kaWNpdHkiOjEsImludGVy dmFsIjoibW9udGgifSx7InN5bWJvbCI6IklGVC5OWiIsInN5bW JvbE9iamVjdCI6eyJzeW1ib2wiOiJJRlQuTloifSwicGVyaW9k aWNpdHkiOjEsImludGVydmFsIjoibW9udGgiLCJpZCI6IklGVC 5OWiIsInBhcmFtZXRlcnMiOnsiY29sb3IiOiIjNzJkM2ZmIiwi d2lkdGgiOjQsImlzQ29tcGFyaXNvbiI6dHJ1ZSwic2hhcmVZQX hpcyI6dHJ1ZSwiY2hhcnROYW1lIjoiY2hhcnQiLCJzeW1ib2xP YmplY3QiOnsic3ltYm9sIjoiSUZULk5aIn0sInBhbmVsIjoiY2 hhcnQiLCJmaWxsR2FwcyI6ZmFsc2UsImFjdGlvbiI6ImFkZC1z ZXJpZXMiLCJzeW1ib2wiOiJJRlQuTloiLCJnYXBEaXNwbGF5U3 R5bGUiOiJ0cmFuc3BhcmVudCIsIm5hbWUiOiJJRlQuTloiLCJv dmVyQ2hhcnQiOnRydWUsInVzZUNoYXJ0TGVnZW5kIjp0cnVlLC JoZWlnaHRQZXJjZW50YWdlIjowLjcsIm9wYWNpdHkiOjEsImhp Z2hsaWdodGFibGUiOnRydWUsInR5cGUiOiJsaW5lIiwic3R5bG UiOiJzdHhfbGluZV9jaGFydCIsImhpZ2hsaWdodCI6ZmFsc2V9 fSx7InN5bWJvbCI6IkJSSy1CIiwic3ltYm9sT2JqZWN0Ijp7In N5bWJvbCI6IkJSSy1CIn0sInBlcmlvZGljaXR5IjoxLCJpbnRl cnZhbCI6Im1vbnRoIiwiaWQiOiJCUkstQiIsInBhcmFtZXRlcn MiOnsiY29sb3IiOiIjZmY4MGM1Iiwid2lkdGgiOjIsImlzQ29t cGFyaXNvbiI6dHJ1ZSwic2hhcmVZQXhpcyI6dHJ1ZSwiY2hhcn ROYW1lIjoiY2hhcnQiLCJzeW1ib2xPYmplY3QiOnsic3ltYm9s IjoiQlJLLUIifSwicGFuZWwiOiJjaGFydCIsImZpbGxHYXBzIj pmYWxzZSwiYWN0aW9uIjoiYWRkLXNlcmllcyIsInN5bWJvbCI6 IkJSSy1CIiwiZ2FwRGlzcGxheVN0eWxlIjoidHJhbnNwYXJlbn QiLCJuYW1lIjoiQlJLLUIiLCJvdmVyQ2hhcnQiOnRydWUsInVz ZUNoYXJ0TGVnZW5kIjp0cnVlLCJoZWlnaHRQZXJjZW50YWdlIj owLjcsIm9wYWNpdHkiOjEsImhpZ2hsaWdodGFibGUiOnRydWUs InR5cGUiOiJsaW5lIiwic3R5bGUiOiJzdHhfbGluZV9jaGFydC IsImhpZ2hsaWdodCI6ZmFsc2V9fSx7InN5bWJvbCI6Ik1GVC5O WiIsInN5bWJvbE9iamVjdCI6eyJzeW1ib2wiOiJNRlQuTloifS wicGVyaW9kaWNpdHkiOjEsImludGVydmFsIjoibW9udGgiLCJp ZCI6Ik1GVC5OWiIsInBhcmFtZXRlcnMiOnsiY29sb3IiOiIjZT U2MzJhIiwid2lkdGgiOjIsImlzQ29tcGFyaXNvbiI6dHJ1ZSwi c2hhcmVZQXhpcyI6dHJ1ZSwiY2hhcnROYW1lIjoiY2hhcnQiLC JzeW1ib2xPYmplY3QiOnsic3ltYm9sIjoiTUZULk5aIn0sInBh bmVsIjoiY2hhcnQiLCJmaWxsR2FwcyI6ZmFsc2UsImFjdGlvbi I6ImFkZC1zZXJpZXMiLCJzeW1ib2wiOiJNRlQuTloiLCJnYXBE aXNwbGF5U3R5bGUiOiJ0cmFuc3BhcmVudCIsIm5hbWUiOiJNRl QuTloiLCJvdmVyQ2hhcnQiOnRydWUsInVzZUNoYXJ0TGVnZW5k Ijp0cnVlLCJoZWlnaHRQZXJjZW50YWdlIjowLjcsIm9wYWNpdH kiOjEsImhpZ2hsaWdodGFibGUiOnRydWUsInR5cGUiOiJsaW5l Iiwic3R5bGUiOiJzdHhfbGluZV9jaGFydCIsImhpZ2hsaWdodC I6ZmFsc2V9fSx7InN5bWJvbCI6IkVCTy5OWiIsInN5bWJvbE9i amVjdCI6eyJzeW1ib2wiOiJFQk8uTloifSwicGVyaW9kaWNpdH kiOjEsImludGVydmFsIjoibW9udGgiLCJpZCI6IkVCTy5OWiIs InBhcmFtZXRlcnMiOnsiY29sb3IiOiIjZmYzMzNhIiwid2lkdG giOjIsImlzQ29tcGFyaXNvbiI6dHJ1ZSwic2hhcmVZQXhpcyI6 dHJ1ZSwiY2hhcnROYW1lIjoiY2hhcnQiLCJzeW1ib2xPYmplY3 QiOnsic3ltYm9sIjoiRUJPLk5aIn0sInBhbmVsIjoiY2hhcnQi LCJmaWxsR2FwcyI6ZmFsc2UsImFjdGlvbiI6ImFkZC1zZXJpZX MiLCJzeW1ib2wiOiJFQk8uTloiLCJnYXBEaXNwbGF5U3R5bGUi OiJ0cmFuc3BhcmVudCIsIm5hbWUiOiJFQk8uTloiLCJvdmVyQ2 hhcnQiOnRydWUsInVzZUNoYXJ0TGVnZW5kIjp0cnVlLCJoZWln aHRQZXJjZW50YWdlIjowLjcsIm9wYWNpdHkiOjEsImhpZ2hsaW dodGFibGUiOnRydWUsInR5cGUiOiJsaW5lIiwic3R5bGUiOiJz dHhfbGluZV9jaGFydCIsImhpZ2hsaWdodCI6ZmFsc2V9fSx7In N5bWJvbCI6IkZQSC5OWiIsInN5bWJvbE9iamVjdCI6eyJzeW1i b2wiOiJGUEguTloifSwicGVyaW9kaWNpdHkiOjEsImludGVydm FsIjoibW9udGgiLCJpZCI6IkZQSC5OWiIsInBhcmFtZXRlcnMi OnsiY29sb3IiOiIjZmZkYjQ4Iiwid2lkdGgiOjIsImlzQ29tcG FyaXNvbiI6dHJ1ZSwic2hhcmVZQXhpcyI6dHJ1ZSwiY2hhcnRO YW1lIjoiY2hhcnQiLCJzeW1ib2xPYmplY3QiOnsic3ltYm9sIj oiRlBILk5aIn0sInBhbmVsIjoiY2hhcnQiLCJmaWxsR2FwcyI6 ZmFsc2UsImFjdGlvbiI6ImFkZC1zZXJpZXMiLCJzeW1ib2wiOi JGUEguTloiLCJnYXBEaXNwbGF5U3R5bGUiOiJ0cmFuc3BhcmVu dCIsIm5hbWUiOiJGUEguTloiLCJvdmVyQ2hhcnQiOnRydWUsIn VzZUNoYXJ0TGVnZW5kIjp0cnVlLCJoZWlnaHRQZXJjZW50YWdl IjowLjcsIm9wYWNpdHkiOjEsImhpZ2hsaWdodGFibGUiOnRydW UsInR5cGUiOiJsaW5lIiwic3R5bGUiOiJzdHhfbGluZV9jaGFy dCJ9fV0sInN0dWRpZXMiOnsi4oCMdm9sIHVuZHLigIwiOnsidH lwZSI6InZvbCB1bmRyIiwiaW5wdXRzIjp7ImlkIjoi4oCMdm9s IHVuZHLigIwiLCJkaXNwbGF5Ijoi4oCMdm9sIHVuZHLigIwifS wib3V0cHV0cyI6eyJVcCBWb2x1bWUiOiIjMDBiMDYxIiwiRG93 biBWb2x1bWUiOiIjZmYzMzNhIn0sInBhbmVsIjoiY2hhcnQiLC JwYXJhbWV0ZXJzIjp7IndpZHRoRmFjdG9yIjowLjQ1LCJjaGFy dE5hbWUiOiJjaGFydCIsInBhbmVsTmFtZSI6ImNoYXJ0In19fX 0-
Picking companies companies for the long run should include succession risk. There are many companies with great long term returns but have they been through a succession change?
Many are still run by founders & are getting closer to succession risk. Have they planned for succession? Will it be seamless?
Why I rate IFT so much is they have been through the loss of the "founder" and continue to go from strength to strength.
RIP
https://en.wikipedia.org/wiki/Lloyd_Morrison

[Valuegrowth]

Very good point. In any place there should be effective and efficient leaders.
https://www.mindtools.com/a7m23wp/leadership-styles
https://www.techtello.com/effectiveness-vs-efficiency/



Picking companies companies for the long run should include succession risk. There are many companies with great long term returns but have they been through a succession change?
Many are still run by founders & are getting closer to succession risk. Have they planned for succession? Will it be seamless?
Why I rate IFT so much is they have been through the loss of the "founder" and continue to go from strength to strength.
RIP
https://en.wikipedia.org/wiki/Lloyd_Morrison

[mistaTea]

Picking companies companies for the long run should include succession risk. There are many companies with great long term returns but have they been through a succession change?
Many are still run by founders & are getting closer to succession risk. Have they planned for succession? Will it be seamless?
Why I rate IFT so much is they have been through the loss of the "founder" and continue to go from strength to strength.
RIP
https://en.wikipedia.org/wiki/Lloyd_Morrison

Yes very good point.

It’s why I also think Berkshire Hathaway is a great business to own.

[kiora]

Thanks VG. Yes it encapsulates a lot of what I'm getting at.
"Traders: like delving into Financial Accounts & "Indicators" to garner returns.

"Investors" for the long run need to be assessing the whole "ecosystem of the company". What is in the transcripts can be more important than what is reported in the Financial Accounts.
"Investment Logic Mapping"
https://www.treasury.govt.nz/information-and-services/state-sector-leadership/investment-management/better-business-cases-bbc/bbc-methods-and-tools/investment-logic-mapping
"What is mapping in trading?
What is Market Mapping? | Definition and Example | IG UK
Market mapping is a way for traders and investors to gauge the viability of a given trade or investment. Market mapping can be used to analyse different volatility levels and different prices for individual assets, or it can be used to analyse entire companies."

[Valuegrowth]

Exactly. Thanks Kiora.
[QUOTE=kiora;1007228]Thanks VG. Yes it encapsulates a lot of what I'm getting at.
"Traders: like delving into Financial Accounts & "Indicators" to garner returns.

"Investors" for the long run need to be assessing the whole "ecosystem of the company". What is in the transcripts can be more important than what is reported in the Financial Accounts.
"Investment Logic Mapping"
https://www.treasury.govt.nz/information-and-services/state-sector-leadership/investment-management/better-business-cases-bbc/bbc-methods-and-tools/investment-logic-mapping
"What is mapping in trading?
What is Market Mapping? | Definition and Example | IG UK
Market mapping is a way for traders and investors to gauge the viability of a given trade or investment. Market mapping can be used to analyse different volatility levels and different prices for individual assets, or it can be used to analyse entire companies."[/QUOTE Exactly.

[kiora]

Another aspect when picking companies for the long run is investing in companies that are able to resist takeovers(it could be argued the downside to this).
IFT have been through this when the AustralianSuper offered $7.43 in Dec 2020 when the SP was around $5.80(around a 22-26% premium)
The last thing an investor wants is a takeover happening in their "forever stock".
https://www.rnz.co.nz/news/business/432424/australiansuper-makes-infratil-takeover-bid
https://www.nzherald.co.nz/business/infratil-shares-surge-after-australiansuper-makes-5-billion-takeover-offer/ULKIMGOGNFWWMV7APMHSSOVQZA/
"But it rejected the offer because it undervalued Infratil’s assets and was unattractive to shareholders, the statement said"
https://www.stuff.co.nz/business/industries/123644947/vodafone-owner-infratil-rejects-54b-takeover-offer-from-australiansuper-shares-surge

It is a good indication of how sovereign wealth funds value IFT type of assets as opposed to "Mr Market"
https://www.tradingview.com/symbols/NZX-IFT/ideas/
https://www.tradingview.com/symbols/NZX-IFT/forecast/

The management structure of IFT would be a major obstruction to any takeover especially when Morrison & Co are significant shareholders in IFT

[dibble]

That's a weak response. 'Trading expenses" ?? Dividends are usually paid 4 times a year, one would not have to sell that often if they choose to sell a portion of the shares. The key benefit is you choose when to sell and not when ex-dividend date is declared (which is normally out of the control of the shareholder).

There's also another way to generate income streams by selling call options. Basically you get paid, for the chance, to sell the stock at a higher price that you specify. But as I recall, the FMA stance is brokerage firms the offer these services to NZ resident are doing so 'illegally' unless they are licensed by the FMA. Yep, imagine a large brokerage firm like Goldman Sacs or Charles Schwab, having to pay the FMA a special fee so NZ clients can use their options trading platform. It's by no surprise almost every major broker has closed out NZ clients over this moronic regulation that has no bearing on the sovereignty of foreign laws.

Goodness, a rude response, even on that mild post. And you pick on the trivialist bit of my post.... And you presume that fees are irrelevant to everyone. Or if you have somehow discovered fee free trading please do share.

That aside, your thesis is perhaps worth exploring a little belatedly. I supported the notion that setting up a few dividend stocks that provide a regular income (2x or) 4x a year has the effect of salary for those who require it (eg retired). That de-stressing is worth something to some.
Sure growth stocks long term have all manner of positive stats to support them if you choose the right ones (both stats and stocks) and you buy/sell at the right time. And therein lies the rub. You need superior (ie illegal) knowledge to beat the market "long term" so if "freedom of when to sell" (to realise some cash for living expenses) is your priority the whole point is that you are subject to the ups and downs of the market, ie trading when you might prefer not to. That is hardly full control.

As to your idea of derivatives, yes we probably all know what they are and the key point is they are effectively leveraged gambling. If you make a killing good on you but risks aside they have an expiry date so, again, timing is not entirely at will. Its sort of a useful antithesis to the topic of the thread though.

[Baa_Baa]

Goodness, a rude response, even on that mild post. And you pick on the trivialist bit of my post.... And you presume that fees are irrelevant to everyone. Or if you have somehow discovered fee free trading please do share.

That aside, your thesis is perhaps worth exploring a little belatedly. I supported the notion that setting up a few dividend stocks that provide a regular income (2x or) 4x a year has the effect of salary for those who require it (eg retired). That de-stressing is worth something to some.
Sure growth stocks long term have all manner of positive stats to support them if you choose the right ones (both stats and stocks) and you buy/sell at the right time. And therein lies the rub. You need superior (ie illegal) knowledge to beat the market "long term" so if "freedom of when to sell" (to realise some cash for living expenses) is your priority the whole point is that you are subject to the ups and downs of the market, ie trading when you might prefer not to. That is hardly full control.

As to your idea of derivatives, yes we probably all know what they are and the key point is they are effectively leveraged gambling. If you make a killing good on you but risks aside they have an expiry date so, again, timing is not entirely at will. It's sort of a useful antithesis to the topic of the thread though.

I agree, it's a rude response but not untypical of this arrogant person who would rather live in Canada but is trapped in NZ by virtue of their ties to family and their connections here, and apparently upset by that, constantly criticising NZ especially the financial markets. Perhaps also it is founded in this posters belief that the NZX is dominated by people who enjoy a regular dividend income, when they believe all investing should be on company growth, which at some point can only be realised by selling some or all of the golden goose. It's a narrow perspective and dismissive of the wider investment needs of the population who have the means to invest, and why they do invest.

Some fanciful notion of writing covered calls on a holding, selling that paper option and making an income or profit is fairly sophisticated (and admittedly difficult in NZ) assumes wrongly that the average investor has some notion of what strike price to write the covered call at, and the consequences of either not having the call reach the strike (expires worthless for the buyer) but worse, reaches the strike price, is exercised and the writer of the call has to transfer that number shares to the buyer of the call at the strike price, which will certainly be lower than the market. The poster who seems to have a grasp of options trading, doesn't seem to have the same perspective on options Puts, does that indicate an inclination to bull markets whereas options trading can be applied to a bear market as well? Who knows, the arrogance overrides the common sense. I suspect they will be angry about this, as they've previously expressed anger at the people that they are unable to understand or convince with their arguments.

Some investors just like to have a simple life, they put their money into stable companies that pay out profits regularly, providing an income without too seriously affecting their capital. It might not be the most efficient or effective investment to grow wealth, but some people might not realise or consider that other people are not interested in growing wealth anymore, they have enough, and a sustainable income from what they do have invested, is enough.

[Valuegrowth]

Thank you Kiora for the valuable information.
Another aspect when picking companies for the long run is investing in companies that are able to resist takeovers(it could be argued the downside to this).
IFT have been through this when the AustralianSuper offered $7.43 in Dec 2020 when the SP was around $5.80(around a 22-26% premium)
The last thing an investor wants is a takeover happening in their "forever stock".
https://www.rnz.co.nz/news/business/432424/australiansuper-makes-infratil-takeover-bid
https://www.nzherald.co.nz/business/infratil-shares-surge-after-australiansuper-makes-5-billion-takeover-offer/ULKIMGOGNFWWMV7APMHSSOVQZA/
"But it rejected the offer because it undervalued Infratil’s assets and was unattractive to shareholders, the statement said"
https://www.stuff.co.nz/business/industries/123644947/vodafone-owner-infratil-rejects-54b-takeover-offer-from-australiansuper-shares-surge

It is a good indication of how sovereign wealth funds value IFT type of assets as opposed to "Mr Market"
https://www.tradingview.com/symbols/NZX-IFT/ideas/
https://www.tradingview.com/symbols/NZX-IFT/forecast/

The management structure of IFT would be a major obstruction to any takeover especially when Morrison & Co are significant shareholders in IFT

[SailorRob]

I agree, it's a rude response but not untypical of this arrogant person who would rather live in Canada but is trapped in NZ by virtue of their ties to family and their connections here, and apparently upset by that, constantly criticising NZ especially the financial markets. Perhaps also it is founded in this posters belief that the NZX is dominated by people who enjoy a regular dividend income, when they believe all investing should be on company growth, which at some point can only be realised by selling some or all of the golden goose. It's a narrow perspective and dismissive of the wider investment needs of the population who have the means to invest, and why they do invest.

Some fanciful notion of writing covered calls on a holding, selling that paper option and making an income or profit is fairly sophisticated (and admittedly difficult in NZ) assumes wrongly that the average investor has some notion of what strike price to write the covered call at, and the consequences of either not having the call reach the strike (expires worthless for the buyer) but worse, reaches the strike price, is exercised and the writer of the call has to transfer that number shares to the buyer of the call at the strike price, which will certainly be lower than the market. The poster who seems to have a grasp of options trading, doesn't seem to have the same perspective on options Puts, does that indicate an inclination to bull markets whereas options trading can be applied to a bear market as well? Who knows, the arrogance overrides the common sense. I suspect they will be angry about this, as they've previously expressed anger at the people that they are unable to understand or convince with their arguments.

Some investors just like to have a simple life, they put their money into stable companies that pay out profits regularly, providing an income without too seriously affecting their capital. It might not be the most efficient or effective investment to grow wealth, but some people might not realise or consider that other people are not interested in growing wealth anymore, they have enough, and a sustainable income from what they do have invested, is enough.

And there are very few companies that can actually produce decent returns on capital retained.

[Valuegrowth]

I am building my capital slowly but surely. Anything we start from small and then become big. Today’s well-managed small companies are tomorrow's leaders. Today’s winners are tomorrow’s losers unless they are for the long run with long term vision.

I prefer to have at least one debt free company. Currently, I have one. Finally, I caught my eye on ISRG(Intuitive Surgical). Sadly I have to ignore it for the moment because it is a very overvalued company now. I may get an opportunity to buy it in 2024 or 2025.Stock prices never go straight up.

Rule no one: Never make losses again.
Rule no two: never pay exorbitant prices to buy assets.
Rule no three: Never follow the herd.
Rule no four: buy understandable business

https://www.retirebeforedad.com/debt-free-sp-500-companies/


“There is now only ONE debt-free company in the S&P 500.

But I can still look at a balance sheet and determine if I’m comfortable with the amount of debt held or not. Sometimes companies get too aggressive and think they can borrow lots to make more money. But business and market conditions can change.
Borrowing can get out of hand. When there isn’t enough money to cover the debt payments, that’s when bankruptcies occur.
But nobody ever went bankrupt while debt-free.”

List of Debt-Free/Lowest Debt S&P 500 Companies 2023

Debt numbers updated as of 06/07/2023. Price, market cap, and PE updated in real-time.


#
SYMBOL
COMPANY NAME
TOTAL DEBT
CURRENT PRICE
MKT CAP
P/E





















1
ISRG
Intuitive Surgical
0.00M
$312.76
10 Billion
85.62


2
MPWR
Monolithic Power Systems
07.22M
$501.87
23 Billion
51.97


6
PAYC
Paycom Software
29.00M
$304.70
17 Billion
57.28


3
MNST
Monster Beverage
38.03M
$57.25
59 Billion
38.08


4
INCY
Incyte Corporation
40.24M
$61.04
13 Billion
42.17


5
ANET
Arista Networks
55.29M
$162.52
50 Billion
33.81


7
MKTX
MarketAxess Holdings
81.32M
$276.65
10 Billion
40.15


8
ODFL
Old Dominion Freight Line
99.97M
$306.19
33 Billion
25.19


"
Intuitive Surgical, Inc. (ISRG)



52 Week Range
180.07 - 318.92



The all-time high Intuitive Surgical stock closing price was 365.42 on November 08, 2021.

Trading price in 2000 was below $2. Another multi bagger.

[kiora]

But how would you have known that IRSG was going to be a multi bagger in 2000?
I wouldn't have thought it was because it had no debt.

If you "knew" in 2000 that IRSG was going to be that multi bagger would you have borrowed money to buy more shares in it?
I would have. Even borrowed against my house.
Picking great companies for the long run to me is about buying into a business /buying part of a business, rather than buying shares in a business.
https://www.investopedia.com/articles/investing/052216/4-benefits-holding-stocks-long-term.asp#:~:text=10-,Less%20Costly,fees%20you%20have%20to%20pay.

" Buffett remarked in his 1996 annual letter to shareholders: “Our portfolio shows little change: We continue to make more money when snoring than when active.”"
https://www.fool.com.au/investing-education/trading-long-term-investing/

"Identify powerful long-term market trends and the companies best positioned to profit from them.
Narrow your list to businesses with strong competitive advantages.
Further narrow your list to companies with large addressable markets."

https://www.fool.com/investing/stock-market/types-of-stocks/growth-stocks/

PS I'm not a MF subscriber. G found those articles.

[SailorRob]

I am building my capital slowly but surely. Anything we start from small and then become big. Today’s well-managed small companies are tomorrow's leaders. Today’s winners are tomorrow’s losers unless they are for the long run with long term vision.

I prefer to have at least one debt free company. Currently, I have one. Finally, I caught my eye on ISRG(Intuitive Surgical). Sadly I have to ignore it for the moment because it is a very overvalued company now. I may get an opportunity to buy it in 2024 or 2025.Stock prices never go straight up.

Rule no one: Never make losses again.
Rule no two: never pay exorbitant prices to buy assets.
Rule no three: Never follow the herd.
Rule no four: buy understandable business

https://www.retirebeforedad.com/debt-free-sp-500-companies/


“There is now only ONE debt-free company in the S&P 500.

But I can still look at a balance sheet and determine if I’m comfortable with the amount of debt held or not. Sometimes companies get too aggressive and think they can borrow lots to make more money. But business and market conditions can change.
Borrowing can get out of hand. When there isn’t enough money to cover the debt payments, that’s when bankruptcies occur.
But nobody ever went bankrupt while debt-free.”

List of Debt-Free/Lowest Debt S&P 500 Companies 2023

Debt numbers updated as of 06/07/2023. Price, market cap, and PE updated in real-time.


#
SYMBOL
COMPANY NAME
TOTAL DEBT
CURRENT PRICE
MKT CAP
P/E





















1
ISRG
Intuitive Surgical
0.00M
$312.76
10 Billion
85.62


2
MPWR
Monolithic Power Systems
07.22M
$501.87
23 Billion
51.97


6
PAYC
Paycom Software
29.00M
$304.70
17 Billion
57.28


3
MNST
Monster Beverage
38.03M
$57.25
59 Billion
38.08


4
INCY
Incyte Corporation
40.24M
$61.04
13 Billion
42.17


5
ANET
Arista Networks
55.29M
$162.52
50 Billion
33.81


7
MKTX
MarketAxess Holdings
81.32M
$276.65
10 Billion
40.15


8
ODFL
Old Dominion Freight Line
99.97M
$306.19
33 Billion
25.19


"
Intuitive Surgical, Inc. (ISRG)



52 Week Range
180.07 - 318.92



The all-time high Intuitive Surgical stock closing price was 365.42 on November 08, 2021.

Trading price in 2000 was below $2. Another multi bagger.

Only one debt free company in the SP500 🤣🤣.

Oh man I'm so glad I have market participants like you on the other side.

What was the 50 bagger stock you had again, the one and only one you've had?

[Valuegrowth]

Kiora wrote:

"Picking great companies for the long run to me is about buying into a business /buying part of a business, rather than buying shares in a business.

But how would you have known that IRSG was going to be a multi bagger in 2000?
I wouldn't have thought it was because it had no debt.

If you "knew" in 2000 that IRSG was going to be that multi bagger would you have borrowed money to buy more shares in it?
I would have. Even borrowed against my house."

Kiora That’s how I should do. No question about it. I have noticed debt free companies tend to perform well in the long run. I also noticed value stocks tend to perform well when growth stocks fare poorly. For me it’s high time for value stocks.

[mistaTea]

https://en.wikipedia.org/wiki/Ronald_Read_(philanthropist)

If you buy great (blue chip) companies over a long period of time, dollar cost averaging to avoid using all your cash at what turns out to be 'the peak' you are going to come out just fine.

Everyone wants a 100 bagger but they are very difficult to spot and only ever look obvious in hindshight.

I mean, look at Apple - they have been making awesome products for a long time now but who would have ever thought that their market cap would be approaching US3 trillion?

When the market cap first hit US$1 trillion - I doubt many people thought they would tripple their money in a few years when they bought at that price (even though they clearly thought it would grow by virtue of buying in at that price).

[Swala]

I agree MistaTea and I have my money where my mouth is:-

Infratil, Mainfreight, Tesla, Apple, Amazon, Alphabet and Scottish Mortgage. All for holding long term. I think Warren Buffet said something along the lines of 'Hold companies that if you had to hold them for ten years you would not lose sleep at night'. I sleep very well.

[Valuegrowth]

https://en.wikipedia.org/wiki/Ronald_Read_(philanthropist) (https://en.wikipedia.org/wiki/Ronald_Read_(philanthropist))

If you buy great (blue chip) companies over a long period of time, dollar cost averaging to avoid using all your cash at what turns out to be 'the peak' you are going to come out just fine.

Everyone wants a 100 bagger but they are very difficult to spot and only ever look obvious in hindshight.

I mean, look at Apple - they have been making awesome products for a long time now but who would have ever thought that their market cap would be approaching US3 trillion?

When the market cap first hit US$1 trillion - I doubt many people thought they would tripple their money in a few years when they bought at that price (even though they clearly thought it would grow by virtue of buying in at that price).


I agree MistaTea and I have my money where my mouth is:-

Infratil, Mainfreight, Tesla, Apple, Amazon, Alphabet and Scottish Mortgage. All for holding long term. I think Warren Buffet said something along the lines of 'Hold companies that if you had to hold them for ten years you would not lose sleep at night'. I sleep very well.
I agree some market participants missed the biggest gain by becoming panic and selling early. However, some market participants have targets.

There were two occasions which led to erosion of wealth.

First is If I can remember, out of the blue one analyst came and said sell everything.

The second one is Covid-19 fear.

During last three years not only for long term investors but also mid term traders had some great opportunties in stock markets as a result of Covid-19. That situation created shortage for products and services in global markets. In fact, covid-19 was a blessing in disguise for the tech sector. The main reason for rising tech stock prices during covid-19 period(2020) was billion of people gathered in cyber space. Work from home led to surge in internet traffic and increase laptop sales.

I was late to the party. But I concentrated on other industries. Commodity stocks rocketed in 2021 beating tech stocks. First time I did my best trading by taking position in a commodity producer. As market punters were busy with covid-19 related stocks,after long time I bought few commodity stocks. One ended up with more than five baggers within one year. That trade helped me to ride out the another difficult situation. I don’t own any commodity stocks now.

[SailorRob]

I agree some market participants missed the biggest gain by becoming panic and selling early. However, some market participants have targets.

There were two occasions which led to erosion of wealth.

First is If I can remember, out of the blue one analyst came and said sell everything.

The second one is Covid-19 fear.

During last three years not only for long term investors but also mid term traders had some great opportunties in stock markets as a result of Covid-19. That situation created shortage for products and services in global markets. In fact, covid-19 was a blessing in disguise for the tech sector. The main reason for rising tech stock prices during covid-19 period(2020) was billion of people gathered in cyber space. Work from home led to surge in internet traffic and increase laptop sales.

I was late to the party. But I concentrated on other industries. Commodity stocks rocketed in 2021 beating tech stocks. First time I did my best trading by taking position in a commodity producer. As market punters were busy with covid-19 related stocks,after long time I bought few commodity stocks. One ended up with more than five baggers within one year. That trade helped me to ride out the another difficult situation. I don’t own any commodity stocks now.

Which was the company that ended up with more than 5 baggers within one year?

[Valuegrowth]

https://moneykingnz.com/emergency-funds-where-should-you-keep-your-rainy-day-money/ (https://moneykingnz.com/emergency-funds-where-should-you-keep-your-rainy-day-money/)

"Protects your long-term investments – An emergency fund can also save you from having to disturb or sell off your long-term investments (like shares or index funds) to pay for an emergency. It protects your long-term financial goals from getting derailed. That’s why it’s usually recommended to have an emergency fund before you start investing."

https://www.cnbc.com/select/why-you-shouldnt-invest-your-emergency-fund/ (https://www.cnbc.com/select/why-you-shouldnt-invest-your-emergency-fund/)

"Generally, it’s not a good idea to invest your emergency fund. Unexpected expenses, of course, are totally unpredictable and when you invest your emergency fund, you run the risk of possibly losing your initial investment if the value of your assets falls below what you purchased them for. Putting the money in a savings account (https://www.cnbc.com/select/savings-accounts-breakdown/), however, would preserve your initial deposit for when you really need it."

[kiora]

Emergency Fund is for emergencies ,right?
How often are emergency funds needed & for how long?
How soon would you need the money?

My view is that listed shares are a liquid asset than can be sold as and when required for an emergency. Money in the bank in 2 days.

Better to stay 100-100+% invested & make that money work for you.

Overdrafts/revolving credit are also handy in an emergency or if an opportunity comes along

[ValueNZ]

Emergency Fund is for emergencies ,right?
How often are emergency funds needed & for how long?
How soon would you need the money?

My view is that listed shares are a liquid asset than can be sold as and when required for an emergency. Money in the bank in 2 days.

Better to stay 100-100+% invested & make that money work for you.

Overdrafts/revolving credit are also handy in an emergency or if an opportunity comes along
You might be in a position where you have to sell your shares at a loss, vs just having some cash in a bank account for emergencies earning interest.

[kiora]

You might be in a position where you have to sell your shares at a loss, vs just having some cash in a bank account for emergencies earning interest.

And what % of your investment capital would you be selling at a loss for an emergency?

How much is enough for an emergency fund?

[SailorRob]

Emergency Fund is for emergencies ,right?
How often are emergency funds needed & for how long?
How soon would you need the money?

My view is that listed shares are a liquid asset than can be sold as and when required for an emergency. Money in the bank in 2 days.

Better to stay 100-100+% invested & make that money work for you.

Overdrafts/revolving credit are also handy in an emergency or if an opportunity comes along


My view is the same, but depends on individual circumstance I guess.

If a real emergency you not going to mind perhaps having to sell shares at the wrong time.

Over a lifetime this strategy will work way better than having a cash stash.

[SailorRob]

Emergency Fund is for emergencies ,right?
How often are emergency funds needed & for how long?
How soon would you need the money?

My view is that listed shares are a liquid asset than can be sold as and when required for an emergency. Money in the bank in 2 days.

Better to stay 100-100+% invested & make that money work for you.

Overdrafts/revolving credit are also handy in an emergency or if an opportunity comes along


Agree with the 100+% as well.

[ValueNZ]

And what % of your investment capital would you be selling at a loss for an emergency?

How much is enough for an emergency fund?
It probably doesn't need to be a lot, maybe the equivalent of a few months worth of expenses? It would suck for example if the stock market took a downturn, and you lost your job and were required to sell your investments at a large loss. Besides that it may give some people piece of mind. Really dependent on each individual.

[justakiwi]

Yes, it does depend on one’s individual circumstances. If you are a very small investor, you definitely don’t want to have to sell shares (possibly at a loss) in the event of an emergency. I have always had an emergency fund for this reason. If you have a high value portfolio, and have been investing for many years, then yes, you could probably afford to sell some shares without it having a significant impact on your holdings.


My view is the same, but depends on individual circumstance I guess.

If a real emergency you not going to mind perhaps having to sell shares at the wrong time.

Over a lifetime this strategy will work way better than having a cash stash.

[Valuegrowth]

Normally, I hardly keep money in the bank. With my past experince I deciced to keep some emergency funds. I think I will need some funds during next 5 years. However, I am ready to make use of those emergency funds If I see life time opporunity in the market.
Emergency Fund is for emergencies ,right?
How often are emergency funds needed & for how long?
How soon would you need the money?

My view is that listed shares are a liquid asset than can be sold as and when required for an emergency. Money in the bank in 2 days.

Better to stay 100-100+% invested & make that money work for you.

Overdrafts/revolving credit are also handy in an emergency or if an opportunity comes along

[iceman]

It probably doesn't need to be a lot, maybe the equivalent of a few months worth of expenses? It would suck for example if the stock market took a downturn, and you lost your job and were required to sell your investments at a large loss. Besides that it may give some people piece of mind. Really dependent on each individual.

It would also suck to lose out on big capital gains in the sharemarket to keep money in the bank for emergencies that may or may not ever happen. I'm with kiora on this. Listed shares are in most cases very liquid and easy to sell and money can be quickly realised in an emergency or an unforeseen circumstance.

[kiora]

It probably doesn't need to be a lot, maybe the equivalent of a few months worth of expenses? It would suck for example if the stock market took a downturn, and you lost your job and were required to sell your investments at a large loss. Besides that it may give some people piece of mind. Really dependent on each individual.

Mindset
If you had to sell shares for an emergency you wouldn't be selling them at a "loss".
You would be selling them for what they are worth.

It might be when an emergency comes along you would be selling them for a "profit"

What is the likelihood of a "profit" or a "loss" as you have called it

https://www.cascadefs.com/history-of-us-bear-and-bull-markets

My view is its important to remember shares are liquid assets. Money can it the bank account quicker than if you had to break a term deposit.

Maximizing Investment returns includes maximizing the size of the investment with as much of your own capital as possible and even better, outside capital, if it can be borrowed at a economic rate.

[kiora]

If borrowing through RC or OD to invest

"Borrowing money
for your company
Given a choice, it’s safer for a company to borrow
money than its shareholders.
Inland Revenue has argued, successfully, that interest
paid on money borrowed by shareholders for their
company is not a tax deductible cost for the company. This
is because the company didn’t borrow the money.
Many companies have been caught out by this and had
the unpleasant surprise of discovering interest had not been
a tax deductible cost for some years. Inland Revenue has
disallowed the expense, increased the taxable income and
collected extra tax, together with a hefty Use of Money
Interest charge.
It’s easy for an accountant not to notice the money has
been borrowed by the wrong people.
So if your company needs to borrow money, make sure
it’s indeed the company that does the borrowing.
If you find a loan is in your name, you can still do
something about it.
● Lend the money to the company and charge interest
for the loan. The interest charged needs to be based on
market and charging the same as the bank is charging is
acceptable and the simplest. Unfortunately if the interest
the company pays (excluding interest to banks) exceeds
$5,000 in an income year RWT will have to be deducted
and paid.
● An alternative is the money could have been borrowed
as agent for the company.
In both cases the paperwork matters. Get professional help
and get it right."

The borrower needs to be the entity investing

https://59980eee-9c21-4822-bb0f-d8f95136ea02.usrfiles.com/ugd/59980e_f979a3e3288348d9a752ea5971b05412.pdf

[ratkin]

I always keep 20k in normal day to day bank account, but am struggling to think what sort of emergency would urgently need it for. Nice to have a bit of a float though.
As for term deposits etc, I like to have lots of smaller ones so that One is never far from maturing. While shares are very liquid anyway.

[ValueNZ]

Mindset
If you had to sell shares for an emergency you wouldn't be selling them at a "loss".
You would be selling them for what they are worth.

It might be when an emergency comes along you would be selling them for a "profit"

What is the likelihood of a "profit" or a "loss" as you have called it

https://www.cascadefs.com/history-of-us-bear-and-bull-markets

My view is its important to remember shares are liquid assets. Money can it the bank account quicker than if you had to break a term deposit.

Maximizing Investment returns includes maximizing the size of the investment with as much of your own capital as possible and even better, outside capital, if it can be borrowed at a economic rate.
Are you a believer in efficient market hypothesis? Price=value 100% all of the time?

[kiwikeith]

Are you a believer in efficient market hypothesis? Price=value 100% all of the time?

Nope - If the efficient market hypothesis was valid Warren Buffet could not outperform a monkey throwing darts at Wall Street Journal. Both would be selecting perfectly valued shares.

[davflaws]

Since my retirement, we have been gradually selling down our portfolio - little by little as large expenses crop up. I have always held OCA and HGL as long term investments and reinvested dividends. I have also had a variety of "punts" PEB, BLT, TSK, PAZ, with relatively small proportions of the total portfoliio.

When the transmission blows up, we decide on the long awaited ensuite, or a new deck (seriously), I sell a few of my "punts" - the last 200,000 BLT will be next. I think that strategy is a lot better than waiting 30 days for a Kiwibank "Notice Saver" deposit to be released.

[kiora]

Are you a believer in efficient market hypothesis? Price=value 100% all of the time?

No as KK says.

[ValueNZ]

No as KK says.
"If you had to sell shares for an emergency you wouldn't be selling them at a "loss".You would be selling them for what they are worth".

This statement implies you believe in EMH, since if you are made to sell at a point you could be selling them when they are undervalued.

[kiora]

"If you had to sell shares for an emergency you wouldn't be selling them at a "loss".You would be selling them for what they are worth".

This statement implies you believe in EMH, since if you are made to sell at a point you could be selling them when they are undervalued.

No it doesn't imply I believe in EMH.I would be selling them for the emergency. The market value is what it is: undervalued /overvalued doesn't come into it. It is their value on the day.

[SBQ]

As the recent discussion about selling shares in case of an emergency expense, more often there's flip side. What about the investors that don't want a dividend because they don't feel they need the cash flow? What if a person does not expect to upgrade or buy a new car until 2 or 3 years time, yet they've been receiving dividend payments where as Buffett says, how can you be so certain that the individual can reinvest those cash proceeds in a manner that does better than owning the shares instead?

I don't subscribe to the belief that great companies always pay a dividend. Look at the tech stocks that trade in the US exchange. It's very clear the CEOs focus is less about dividend payments and more about 'increasing shareholder value' ; the former is a draining of capital of the shareholder's equity. You can't have it both ways.

[Valuegrowth]

Good evening!

Thank you to everyone who contributed to this thread. Some fascinating replies.