Your $1m inheritance is locked for 10 years in one company, which one ?

[bohemian]

For one Australian company which is easier than US companies for Kiwis to hold. The one and only one for the next 10 years, CSL.

[troyvdh]

Rym...
Xro
PFI....property company with best returns of any property entity listed over past 20 years...

[JBmurc]

without a doubt one of the banks Westpac or ANZ

Printing FAT profits for decades and will continue to streamline operations lowering costs until we only have ATMs - mobile managers- etc

Strong yield

[JBmurc]

without a doubt one of the banks Westpac or ANZ

Printing FAT profits for decades and will continue to streamline operations lowering costs until we only have ATMs - mobile managers- etc

Strong yield

Protected by the Govt.. we all remember GFC where you could short everything but financial companies... then of course if they need more cash TAX payers will bailout

[Snoopy]

The intention was is that it must be one NZX listed company and that is one company only, i.e. excludes listed investment funds that invest in a number of other companies. IFT not sure ? Choose if you like it

Lets also assume for the purposes of this challenge that the net result in 10 years time makes a material difference to one's life. Wealthy people should feel free to add as many zero's to the $1,000,000 to make the challenge relevant and material as appropriate. i.e. pick one company you believe you can really trust to build wealth over time.

I would guess that the nature of this forum is self selecting for people who are more adept at planning for their retirement than average. So the idea of an extra $1m on top of what you have planned, with no return at all after investing for ten years, could provide much selective enjoyment enhancement to whatever retirement plans you had before the $1m inheritance turned up. That means I think there is sound logic in not going for 'maximum growth' (and the associated risk) and looking at a more established company that will likely provide a lower (but still good) return but with less risk. So that means picking something from the NZX50.

I am a great believer in ignoring any current trend (and avoiding the overpriced share prices associated with those) and looking for sound companies that fly a bit below the headlines. I am also a believer in 'reversion to the mean', in the sense that sound forgotten companies will eventually get their day in the sun. My pick is therefore 'Sky City Entertainment' (SKC), a share that has increased in price from around $3 to $4 over the last ten years, an investment I hold, and an investment that has been disappointing over the last ten years (what happened to ex CEO Nigel Morrison's $10 target?).

The thing I like about SKC is as follows:

1/ They operate as a legislated monopoly in the all markets they participate in.
2/ They are plugged into NZ's largest industry (tourism), but also have a strong domestic customer base for when tourism has a cyclical downturn.
3/ The full effects of synergies with the NZ Convention Centre, once commissioned, and the enhancements to the Adelaide Casino should be game changers.
4/ The America's Cup provided a big boost to Sky City when it was last held in Auckland, and I expect this to happen again. AND

5/ The current share price offers fair value based on 'historical earnings' which I expect to improve going forwards.

I don't expect SKC will be the best performer on the NZX over the next ten years. But I do expect that putting your million dollar inheritance into SKC and locking it up for ten years would be a sound gamble.

SNOOPY

P.S. 'Sin warriors' should note that Sky City can ban you from entering their premises if you own up to having a gambling problem (no pubs with pokies will do that). I intend to ask if this practice can be extended to their 'buffet restaurants' where Mr and Mrs Beagle admit to being responsible for ongoing shareholder losses due to continual overfilling of their respective dog bowls!

[couta1]

Snoopy, that's the only company in the NZX50 I refuse to invest in. PS-Im sure many punters thought they would make their million dollars there but instead ended up destitute.

[stoploss]

Snoopy how can you call it a monopoly when every corner pub has pokies . They are in the gambling business and plenty of outlets for the punters money. Online gaming / punting is massive .

[Snoopy]

Snoopy, that's the only company in the NZX50 I refuse to invest in. PS-Im sure many punters thought they would make their million dollars there but instead ended up destitute.

Couta, the business model at SKC is not to make people destitute. Bankrupting your customers is not a sound business growth strategy. There are more 'brakes' on gambling at SKC than in any pub or TAB. Plus, you have to make a deliberate decision to go downtown and visit SKC. There isn't one in your local suburban shopping area. Now, I don't doubt that some people have got into trouble gambling at SKC. But I am sure there are many many more that spent their money on a good night out at SKC and went home happy (even if they lost a modest amount of money). The key to it is, 'don't gamble more money than you can afford to lose'.

I think that if SKC closed all their casinos tomorrow, the gambling addicts would have no trouble becoming destitute by other means.

SNOOPY

[Snoopy]

Snoopy how can you call it a monopoly when every corner pub has pokies . They are in the gambling business and plenty of outlets for the punters money. Online gaming / punting is massive.

Pokies do not define a Casino 'stoploss'. The monopoly is the 'casino licence'. No one else can serve 'high rollers' or 'lower rollers' on gambling tables. In NZ, pokies outside of casinos are now shrinking in number, strengthening Sky City's position in general. Of course where pokies were greatly increased in number in the Northern Territory, the Sky City Casino there in Darwin was hit badly. But there is no sign of that happening in New Zealand, or Adelaide.

SNOOPY

[Leftfield]

Snoopy, that's the only company in the NZX50 I refuse to invest in. PS-Im sure many punters thought they would make their million dollars there but instead ended up destitute.

Same here Couta... thoroughly agree.