To summarise then. The only tourism companies worthy of investment are those which can persuade the state to use it's power to deliver them monopolistic advantage.
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To summarise then. The only tourism companies worthy of investment are those which can persuade the state to use it's power to deliver them monopolistic advantage.
That is a most depressing thought! Although it is interesting that many people are quite compared to complain about Telecom, but never seem too concerned about the AIA and SKC monopolies!Quote:
quote:Originally posted by I.T.Ancient
To summarise then. The only tourism companies worthy of investment are those which can persuade the state to use it's power to deliver them monopolistic advantage.
I think that to make it in the hotel business, you need a distinct sustainable advantage. Perhaps the state might give it to you (SKC) or perhaps it is a local council zoning issue? One thing I did notice about Thistle is that it is not a gloabl brand.
Does this explain why the Thistle hotels have performed relatively poorly over the years? MCK are trying to build a global brand structure. Will it work for them?
SNOOPY
For what its worth I my gross return (gross divs and capital) on PFI (the only property stock I have held that long) for the last five years are
Year to 17th Feb
2002 13.45%
2003 11.23%
2004 7.58%
2005 22.1%
2006 19.6%
I don't know whether this will add anything to the debate
Snoopy, didn't Bob Jones make similar (scathing) comments about hotels as investments?
Phaedrus, your 3 yr chart favours NZX as it includes a couple of outstanding years. However, my experience on holding 5+ property shares and 8+ NZ shares over the last 4 years is that property stocks outperformed the rest. Your 3 year chart gives about 20.5% compound for the NZX. My 3 year results were 19.2% on the NZ shares and 19.3% on property. Over 4 years, 17.4% on property shares, 15.3% on NZ shares. Dividends were not reinvested - if so, property, with their greater dividend payout over the period, would have performed still better.
The main advantage for property has been a far smaller volatility in performance with standard deviation of 4.16% for property and 14.9% for NZ shares.
However, with yields now substantially lower than when I started, and having been aware of some stagnation in property share prices prior to my entry, I am currently well underweight in property shares and will be cautious in selecting new investments.
come on Phaedrus....be honest...you would love to hold a few PFI....
Don't know Lizard. I put 'Bob Jones' and 'hotels' into google.co.nz and came up with Bob's 2002 novel 'Ogg', Chapter 6. Anyone have a copy lying on the shelf from which they'd like to give us a few quotes?Quote:
quote:Originally posted by Lizard
Snoopy, didn't Bob Jones make similar (scathing) comments about hotels as investments?
SNOOPY
That is a cumulative return of (assuming all dividends reinvested) 98% over five years. Very impressive, although there are other property investments that have done almost of well.Quote:
quote:Originally posted by Tyke
For what its worth my gross return (gross divs and capital) on PFI (the only property stock I have held that long) for the last five years are
Year to 17th Feb
2002 13.45%
2003 11.23%
2004 7.58%
2005 22.1%
2006 19.6%
I don't know whether this will add anything to the debate
The only pure property investment that I have held over that time was 'Snoopy House Inc' which went up in value by something like 64% in the last three years. And that figure doesn't include any rental income, unlike your PFI shares Tyke!
Now, 'Do I have a bargain for all you property investors out there'!
If you sign a binding contract to buy my house for 58% more than my last registered valuation in three years time you will be 'saving 10%' ( 10% of 64% is 6.4%, 64%-6.4%=58% ). What a deal! Where else could you 'save 10%' and still buy such a great property!
There ends the lesson of selectively extrapolating from statistics to produce distorted expectations of returns.
Earlier in this thread I wrote:
"I concur that no words are needed Phaedrus. Your chart shows why I haven't been an enthusiastic property investor in the past. I venture to suggest that if you had drawn the same chart over a longer time period the result would have been the same."
Perhaps I was a little quick off the mark with the evidence that Phaedrus presented. For a start the NZSE50 assumes that all dividends are reinvested. Both KIP and PFI have paid substantial dividends over the duration of both charts. So what we have here is not an 'apples with apples' comparison. If we go with Tykes figures, and because he is a PFI shareholder I have no reason to doubt his word, there is every chance that PFI has outperformed many blue chip 'pure share' investments since 2002.
Does that make PFI a good investment for the next five years? The answer to that depends on many factors. But based on the return figures Tyke has given us alone, I would guess 'probably not'.
In times of 'low inflation' and 'exchange rate strangled industrial earnings', it is hard to believe that the industrial companies that have PFI as their landlord will double their profits in five years. And those tenant companies will need to double their profits if they are to sustain a doubling in rent payments! Far more likely IMO, is a stagnation in rents, and maybe a decline if certain key tenants go bust. This is the 'reversion to the mean' argument. An argument which has been shown to be a much more accurate predictor of business cycle returns than drawing a trendline on the most recent earnings figures.
What I don't think there is any debate about is that property will provide a better long term return than cash. And shares will provide a better long term return than property, *provided all are ungeared investments* and *provided no-one takes silly amounts of fees from you for managing your share investments*. That doesn't mean it isn't possible to find single example investments that break these general rules- you can. I am speaking from the general long term (ten year plus) viewpoint.
So well done Tyke, although on the basis of your figures alone I wouldn't invest in PFI. Then again if I already owned PFI shares, I'm not saying that I would sell them either!
SNOOPY
discl: Will continue to hold 'Snoopy House Inc.'
Well found! Yes, pages 45-50. I was looking through it last night and couldn't find the spot. A bit lengthy to quote, but he does make the comparison to airlines too...happy to loan it to you...Quote:
quote:Originally posted by Snoopy
Don't know Lizard. I put 'Bob Jones' and 'hotels' into google.co.nz and came up with Bob's 2002 novel 'Ogg', Chapter 6. Anyone have a copy lying on the shelf from which they'd like to give us a few quotes?Quote:
quote:Originally posted by Lizard
Snoopy, didn't Bob Jones make similar (scathing) comments about hotels as investments?
SNOOPY
(Though I'm not sure Bob Jones opinions should be considered gospel...especially his ones on women!)
...and material disclosures.
Snoopy and MacDunk,
So long as a Gross index is used, and if stock prices are properly corrected for dividends, in fact you ARE comparing apples with apples. (Both plots will include dividend yield.)
I am quite willing to check my data if Tyke or anyone else would like to email me their dividend figures. I need the date the stock went "ex" and the actual cents/share paid out.
I must say that I think some of you are grasping at straws though. Any dividend yield however applied is not going to alter the fact that since the NZSE50 Index began, these 2 stocks have under-performed the NZ average by a huge margin.