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  1. #4411
    The Kid
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    Quote Originally Posted by Jantar View Post
    A lot of us who were investing back then lost heaps. On paper I lost ~$10k, but that was'nt a true reflection as shortly before the crash I pulled ~$20k and bought a new car. Most of us were expecting a correction, it was just the sheer size that caught most by suprise. Those who had investments in companies that were actually producing (Fletchers, Forest Products, Waitaki NZR etc) still came through the far side with some assets. Those who invested mainly in financials and investment companies are the ones who lost the most.

    I believe that the same would happen again in the event of another major crash. Those companies that actually produce goods and/or services would survive, while those that rely on simply moving money would be the ones most affected.
    Excuse my ignorance but isn't Heartland Bank a financial institution? I have yet to take the plunge on this one for the very reasons you have outlined.

  2. #4412
    Missed by that much
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    Quote Originally Posted by IAK View Post
    Excuse my ignorance but isn't Heartland Bank a financial institution? I have yet to take the plunge on this one for the very reasons you have outlined.
    That's why its such a small percentage of my portfolio despite the strong performance.

  3. #4413
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    Quote Originally Posted by Bobdn View Post
    I still don't actually know what HNZ does or what sort of bank it is. I only invested because of the noise on this thread. Has worked out well so far.
    Lol, nothing wrong with that, i did it with peb when they signed there first usa insurer, had just started investing and made half a years salary in a week. Had no idea at first what i was putting my money into but everyone here seemed excited.
    I did it again with ton on the asx and made decent money to before it burst.
    As long as you have a tight stoploss and take profit while its there its worked well for me.
    A lazy way to trade but if it works why the hell not i think.

  4. #4414
    percy
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    Quote Originally Posted by Jantar View Post
    That's why its such a small percentage of my portfolio despite the strong performance.
    As far as I know only one NZ listed company reports to The Reserve Bank,and that is Heartland.
    I would think that would make Heartland possibly the safest listed company to invest in.in NZ.
    For added protection Heartland has Fitch as its credit rating company.

  5. #4415
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    Quote Originally Posted by Bobdn View Post
    I still don't actually know what HNZ does or what sort of bank it is. I only invested because of the noise on this thread. Has worked out well so far.
    Heartland is a Finance Company, cunningly dressed up as a Bank. Banks go BANKrupt. Even ones who are actually Finance Companies. We could be in a bubble now, but equally be in a Black Hole, being sucked into the centre and consolidated. But the journey is pleasant and the capital growth from 50 cents amazing.

  6. #4416
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    Quote Originally Posted by mouse View Post
    Heartland is a Finance Company, cunningly dressed up as a Bank. Banks go BANKrupt. Even ones who are actually Finance Companies. We could be in a bubble now, but equally be in a Black Hole, being sucked into the centre and consolidated. But the journey is pleasant and the capital growth from 50 cents amazing.
    Well the finance guy at the time was quoted as saying getting a banking licence and calling themselves a BANK was just an marketing / advertising ploy

  7. #4417
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    Reserve bank is very happy with their operation, so is Fitch. Capital adequacy is fine, interest rates are at very low level's which is generally assistive in terms of making it easy for customers to service their loans , (lower level's of average loan delinquencies). I used to be "Thomas the doubter" but thankfully saw the light some time back...not as early as others but buying at 86 cents AFTER they'd received their investment grade credit rating upgrade last year was one of my most astute decisions for 2014. Barring a GFC Mk2 I see very little risk but what I do see is a company on a very reasonable PE ratio with a high dividend and excellent growth prospects.
    No share is completely risk free but I reckon Its a very tough gig finding stocks with a better risk reward profile than HNZ

  8. #4418
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    Quote Originally Posted by mouse View Post
    Heartland is a Finance Company, cunningly dressed up as a Bank. Banks go BANKrupt. Even ones who are actually Finance Companies. We could be in a bubble now, but equally be in a Black Hole, being sucked into the centre and consolidated. But the journey is pleasant and the capital growth from 50 cents amazing.
    Most of old Heartland is old fashioned building societies

  9. #4419
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    Quote Originally Posted by winner69 View Post
    Most of old Heartland is old fashioned building societies
    Yep, that's another point well made.

  10. #4420
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    Quote Originally Posted by winner69 View Post
    Most of old Heartland is old fashioned building societies
    Meant to add that that it appears that there has been a very high retention rate of those building society customers and a high rate of deposits rolled over when they matured.

    So most of the old building society customers seem more than happy to be dealing with a BANK. If anything they probably think they are better off belong to a NZ Bank rather than say Canterbury Society

    And a lot of those building society traditions like community involvement remain, if nit enhamced.

    Marac might be the financial company part of the overall business but the total business is more than a finance company. Would a finance company have special plans for parents to ensure that their kids get a good education?

    I think their School Fees Program is a great thing for parents and even for grandma and grandpa to make sure their lovely kids get an education - a really cool initiative

    And probably those kids will be customers for life as well, and hopefully richer than mum and dad
    Last edited by winner69; 07-02-2015 at 07:23 PM.

  11. #4421
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    Quote Originally Posted by Jantar View Post
    A lot of us who were investing back then lost heaps. On paper I lost ~$10k, but that was'nt a true reflection as shortly before the crash I pulled ~$20k and bought a new car. Most of us were expecting a correction, it was just the sheer size that caught most by suprise. Those who had investments in companies that were actually producing (Fletchers, Forest Products, Waitaki NZR etc) still came through the far side with some assets. Those who invested mainly in financials and investment companies are the ones who lost the most.

    I believe that the same would happen again in the event of another major crash. Those companies that actually produce goods and/or services would survive, while those that rely on simply moving money would be the ones most affected.
    Words of Wisdom. Yet Heartland is doing well and, providing it is not your complete investment, should be OK. I remember the 1987 crash. I used to wander over to the Christchurch stock exchange in my lunch break. The latest prices were written up on the white board. One chap turned to me, 'prices can't go any lower, can they?' I was at the HK stock market crash a few years previously and knew THEY CAN. But I kept quiet. Investing is dangerous, so is getting married or eating. A bit of care is needed.

  12. #4422
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    In any global market correction, I think NZ would always be more volatile. There is a higher degree of ownership of NZ stocks by overseas funds than in 1987. In addition the currency risk would exacerbate asset risk. International fund managers would need to draw down investments at a faster rate than "the market" as their clients would take fright and cash up. In addition there would be a flight to safe haven currencies, and NZ's being a commodity currency would be dumped.

    I am not sure what the overseas ownership percent is for HNZ. My guess is that it is less than average for a listed NZ company.

    I have several term PIE funds with Heartland and several with a big Aussie (in which I also have a shareholding). Dealing with Heartland is so much smoother and easier and the interest rate is fractionally higher too. My "personal" banker with the big Aussie can be difficult to locate with relocation, shifting days off and answerphones.

  13. #4423
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    As far as I know there are no overseas funds holding Heartland shares.
    Heartland have no overseas funding.
    You must be aware Australian Banks have European wholesale funding,large exposure to both Australian and NZ housing markets,have lower equity ratio than Heartland, and would put Australian interests before New Zealand's.
    The out look for NZ is a lot more stable than overseas.In particular Australia has rising unemployment,poor performing manufacturing,mining ,and retail is facing huge challenges.The Australian government also faces the prospects of Tony Abbott being rolled.

  14. #4424
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    Quote Originally Posted by percy View Post
    As far as I know there are no overseas funds holding Heartland shares.
    That sounds positive for SP appreciation in the future if o/s funds decide to buy into what proving to be a solid and successful company. Although greater volatility could result.

    Heartland have no overseas funding.
    One of the reasons for the higher interest rates offered on my Heartland term pies I guess.

    You must be aware Australian Banks have European wholesale funding,large exposure to both Australian and NZ housing markets,have lower equity ratio than Heartland, and would put Australian interests before New Zealand's.
    Yes...I am a long term holder of shares in an Aussie Bank as well. If the local subsidiaries relied on NZ funding for NZ mortgages... rates would be higher and the Auckland housing bubble would be smaller and would make less mess when/if it is burst.

    The out look for NZ is a lot more stable than overseas.In particular Australia has rising unemployment,poor performing manufacturing,mining ,and retail is facing huge challenges.The Australian government also faces the prospects of Tony Abbott being rolled.
    Presuming NZ's current outlook holds if there is another 1987 type scenario, do you think we could become a safe haven? My feeling is that sentiment would quickly reverse. NZ would not be a Switzerland.

  15. #4425
    percy
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    Unfortunately for us there is only one Switzerland and we would not become a second one,although some overseas people have brought land in NZ as a safe 'bolt hole.'
    That said I think NZ is a lot safer country to invest in compared to most countries,ie Japan,Europa,etc.
    NZ companies have very strong balance sheets and low gearing when compared to 1987.
    On a personnel level, I sold most of my Australian small caps,just over a year ago, and invested the funds in more EBO,HNZ,PGW and took up IPOs MELCA,GNE and ZEL.All of these companies were on more modest ratios than the Australian companies I sold.I have also benefited from higher yields that carry full imputation credits.{And the share price growth has been huge.}
    Last edited by percy; 08-02-2015 at 07:28 PM.

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