WHS - Warehouse Group

[Snoopy]

A chart like that is a salutatory lesson for buy and hold investors!

The chart certainly shows the folly of the mythical buy and hold at any cost investor. However, I am a buy and holds investor and did very well out of the Warehouse. Basically I bought in a $4 and sold at $5 (plus accumulated dividends) a couple of years down the track (must have been mid 2006), into the first of the stake building takeover offers. I had no plans to sell before a takeover offer came along. As it happened I would have done better holding out for the later Woolworths offer which IIRC was higher. However, that's life and I really can't complain as I still made a good profit on the deal.

I don't think it is a fair assessment of buy and hold investors to say that they never sell at any cost. Obviously if a good takeover offer comes along then you accept it. That doesn't disqualify you from being a buy and hold investor!

SNOOPY

[Silverlight]

The chart certainly shows the folly of the mythical buy and hold at any cost investor. However, I am a buy and holds investor and did very well out of the Warehouse. Basically I bought in a $4 and sold at $5 (plus accumulated dividends) a couple of years down the track (must have been mid 2006), into the first of the stake building takeover offers. I had no plans to sell before a takeover offer came along. As it happened I would have done better holding out for the later Woolworths offer which IIRC was higher. However, that's life and I really can't complain as I still made a good profit on the deal.

I don't think it is a fair assessment of buy and hold investors to say that they never sell at any cost. Obviously if a good takeover offer comes along then you accept it. That doesn't disqualify you from being a buy and hold investor!

SNOOPY

In addition, that chart looks like it also ignores over $2.80 worth of dividend and imputation credits payed since Sept 2005, so the buy and hold investor may not be as down on their luck as implied.

[Silverlight]

To me the chart on WHS just goes to show that all share market investments must be actively managed and reviewed, because even the good companies can turn sour at investors cost, unless it's PepsiCo or Coke who are both up about 3500% and 6000% respectively over the last 30 years.

To be fair on The Warehouse if you bought in the IPO at $1, you have expereienced one sharesplit and over $9.5 in dividends and imputation credits. This is over a 16% return pa since listing or a 1350%+ return over the past 17 years.

[Snoopy]

When do you take profits? Do you have a particular formula or policy that you use?

I usually sell into takeover offers that are recommended by the independent advisers.

Otherwise my grand NZX plan is to have 10 shares (at the moment I have 9) with a roughly equal amount of capital in each. However, my limit on the total amount of capital tied up in each share is quite loose. I will tolerate errors of 50%! I am a little nervous of some of my low liquidity holdings so have been managing those a bit more actively recently. But generally I trade an infrequently as practicable.

I don't buy shares unless I can be fairly sure I know where that company will be in ten years time. I find picking where that same company might be in two years time is much harder!

SNOOPY

P.S. I can only think of one case where I have a company on my sell list because it has changed so much since I invested in it.

[Balance]

To be fair on The Warehouse if you bought in the IPO at $1, you have expereienced one sharesplit and over $9.5 in dividends and imputation credits. This is over a 16% return pa since listing or a 1350%+ return over the past 17 years.

How many people bought at IPO and still kept the shares?

Many sold when WHS had computer problems a year after listing and price fell below issue price.

Most bought during run up to $9 ....

[Silverlight]

How many people bought at IPO and still kept the shares?

Pretty impossible to answer, although the registry would know, however there were just over 5,000 shareholders in the IPO and today there are over 11,000, so you could conclude that many who had bought in the IPO still hold today.

Many sold when WHS had computer problems a year after listing and price fell below issue price.

Many bought as well, looking at the figures just has many bought and sold in the 3 years after the glitch as the price moved from $1 up to $4

Year Volume
1996 84,382,022
1997 78,140,288
1998 77,279,538
1999 77,073,838

Most bought during run up to $9 ....

And equally just as many people sold, however to quantify with figures, volumes were only 30% greater than in the 90's, except 2006, which is the outlier.

Year Volume
2003 112,031,464
2004 110,333,844
2005 116,917,686
2006 165,292,951
2007 100,008,664

[Balance]

Pretty impossible to answer, although the registry would know, however there were just over 5,000 shareholders in the IPO and today there are over 11,000, so you could conclude that many who had bought in the IPO still hold today.



Many bought as well, looking at the figures just has many bought and sold in the 3 years after the glitch as the price moved from $1 up to $4

Year Volume
1996 84,382,022
1997 78,140,288
1998 77,279,538
1999 77,073,838



And equally just as many people sold, however to quantify with figures, volumes were only 30% greater than in the 90's, except 2006, which is the outlier.

Year Volume
2003 112,031,464
2004 110,333,844
2005 116,917,686
2006 165,292,951
2007 100,008,664

Point being that anyone who held from IPO has done okay if measured from IPO, but not as well as if they sold out when stock rose above $5.00.

Point also that at this price, most who bought above $2.50 and are still holding are nursing losses now.

Good on those who saw the light and got out.

WHS is toast - no strategy and a piece-meal revamp of stores which has competitors laughing and rolling in the aisles.

[BIRMANBOY]

Point being that anyone who held from IPO has done okay if measured from IPO, but not as well as if they sold out when stock rose above $5.00.

Point also that at this price, most who bought above $2.50 and are still holding are nursing losses now.

Good on those who saw the light and got out.

WHS is toast - no strategy and a piece-meal revamp of stores which has competitors laughing and rolling in the aisles.

As usual, individuals views are skewed by personal experience. I'm very happy with my WHS dividends thank you.

[Balance]

As usual, individuals views are skewed by personal experience. I'm very happy with my WHS dividends thank you.

Good man!

NZX needs more shareholders like you as there are many more companies which need capital and have shareholders who care not about the sp.

[Snoopy]

WHS is toast - no strategy and a piece-meal revamp of stores which has competitors laughing and rolling in the aisles.

I am going to make a prediction. In ten years time the Warehouse will be one of the three largest general retailers in NZ (they are number one at the moment so I think it is a fairly safe bet). Return on shareholder equity is strong and will remain so. All other observations on WHS are basically just noise. I have no idea how WHS will do over the next couple of years. As a long term investor I am not interested.

This is all the long term investor needs to know to be sure WHS will be a good investment at some point going forwards. At what point this will be I don't yet know. I do know to repeat the WHS retail footprint throughout NZ would be impossibly costly.

WHS may be slightly stale bread, but it is not toast. I don't know who the MD will be in 10 years time. But rest assured if the current management strategy doesn't work, he/she will not be following it.

Plenty of you guys get so caught up in the moment, you are blind to the big picture. All shareholders need do from here is wait for that MD who knows how to get more juice from the lemon.

SNOOPY