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  1. #2731
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    Correction Percy. What we learn is how S&P went about making up an index on the NZX
    Fact is there are very few companies on the NZX that produce true consumer staples, (staples are basic consumer goods that people are unable or unwilling to cut out of their budgets regardless of their financial situation). The absurdness of this particular index that S&P have constructed on the NZX is exemplified by not only the ludicrous weighting of ATM, which will purely be a function of its market capitalization, (not the extent to which consumer use the product relative to other index constituents) and that the vast majority of consumers would never even have heard of A2 milk let alone consider it an essential item, whereas there wouldn't be a single motorist on the road who is not aware of the essential need of fuel, (other than those who choose otherwise by using electricity).

    Consider this, how much petrol would the average consumer buy per week ? How much A2 Milk would the average consumer buy per week taking into account most consumers have never heard of A2 milk ? EVF's make up less than 1% of the national fleet so which is an absolute consumer staple with no substitute, fuel or A2 milk ?

    If you can't see it so be it...lets just agree to disagree.
    Last edited by Beagle; 16-01-2019 at 12:56 PM.

  2. #2732
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    Quote Originally Posted by Beagle View Post
    Correction Percy. What we learn is how S&P went about making up an index on the NZX
    Fact is there are very few companies on the NZX that produce true consumer staples, (staples are basic consumer goods that people are unable or unwilling to cut out of their budgets regardless of their financial situation). The absurdness of this particular index that S&P have constructed on the NZX is exemplified by not only the ludicrous weighting of ATM, which will purely be a function of its market capitalization, (not the extent to which consumer use the product relative to other index constituents) and that the vast majority of consumers would never even have heard of A2 milk let alone consider it an essential item, whereas there wouldn't be a single motorist on the road who is not aware of the essential need of fuel, (other than those who choose otherwise by using electricity).

    Consider this, how much petrol would the average consumer buy per week ? How much A2 Milk would the average consumer buy per week taking into account most consumers have never heard of A2 milk ? EVF's make up less than 1% of the national fleet so which is an absolute consumer staple with no substitute, fuel or A2 milk ?

    If you can't see it so be it...lets just agree to disagree.
    Petrol might be missing but booze isn’t ...a real consumable staple
    “In a roaring bull market, knowledge is superfluous and experience is a handicap.”

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  3. #2733
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    Consumer staples is a section of the sharemarket which is known as such,and has its own index..
    No amount of discussion is going to alter that.
    It is a fact.
    Last edited by percy; 16-01-2019 at 01:03 PM.

  4. #2734
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    Quote Originally Posted by percy View Post

    The S & P NZ Consumer Staple Index includes the following 17 NZ companies.I have included their weighting.[as of today]
    ATM...73.15%
    SML...6.19%
    SCL...4.47%
    FSF...4.22%
    SAN...3.80%
    DGL....2.61%
    PGW....1.55%
    CVT.....1.43%
    NZK.....1.09%
    GXH.....0.49%
    FWL......0.38%
    TGG......0.17%
    MOA.....0.13%
    ALF......0.06%
    SEA......0.06%
    PIL........0.01%.
    What we learn is two fold.
    a} what a consumer staple is,as it is referred to on sharemarkets..
    b} A2 milk makes up 73.15 % of the index.
    Weird that not only honey CVT salmon NZK and beer MOA and wine DGL are considered consumer staples but that PIL is included as well = it makes a supplement for joint pain!!
    So I have trouble agreeing with their choices on this index to be honest and wouldnt include A2 milk as a staple. though normal milk (FSF) would be.
    Retirement living not really a consumption thing as a whole, though I guess elderly care services may be for old people who of course are making up increasing percentages of the population.
    For clarity, nothing I say is advice....

  5. #2735
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    I was surprised RBD was not included.
    Offcourse overseas they include the likes of supermarkets,breakfast food manufacturers,Coca-cola,Procter & Gamble,Colgate-Palmolive etc.

  6. #2736
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    Quote Originally Posted by percy View Post
    Consumer staples is a section of the sharemarket which is known as such,and has its own index..
    No amount of discussion is going to alter that.
    It is a fact.
    Doesnt make it a good or useful index. Seems to me just a bunch of loosely related companies stitched to sell in an enticing package to those who cant be bothered.


    I was surprised RBD was not included.
    I would have thought that one would have the heaviest weighting.
    Last edited by minimoke; 16-01-2019 at 01:20 PM.

  7. #2737
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    Quote Originally Posted by winner69 View Post
    Petrol might be missing but booze isn’t ...a real consumable staple
    lol believe it or not you can live without booze.

  8. #2738
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    [QUOTE=minimoke;744068]Doesnt make it a good or useful index.
    Agreed,but posters now know what 17 companies make up S&P's NZ Consumer Staples index,and can correctly be called a consumer staple.
    Last edited by percy; 16-01-2019 at 01:27 PM.

  9. #2739
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    Quote Originally Posted by Beagle View Post
    lol believe it or not you can live without booze.
    LOL - where do you come up with such fanciful notions?

  10. #2740
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    Lets stop the silly nit picking of whether something meets the classic definition of a consumer staple for goodness sake...I have a view, Percy has a different view, various links I could provide support my view but lets move on because the whole point of this discussion on the OCA thread is for people to think about what is a consumer (I will take the word staple out of it) essential, product or service is to think about which companies are going to do well in good times and bad because what product they sell or what service they provide is perceived by the purchaser or user to be an "essential" item.

    For 99% of motorists fuel is an essential item...there is no debate about this, the EV stat's speak for themselves. Fuel volumes declined just 2% last time the price of fuel went truly ballistic late last decade so this tells you all you need to know about how essential this consumer product is. Whether it meets some arbitrary dictionary definition of a consumer staple, to be honest I feel this is totally irrelevant.

    Why did I raise this issue on this thread ? I maintain that quality late stage care is an "essential service" for those that can afford it but it probably isn't because there's lower standards of care the state will provide. In any event I think there's a vast tsunami of baby boomers who will want to have quality late stage care and I think OCA are well positioned to provide it to them.

    LOL Minimoke...after this debate with Percy I definitely need a drink lol
    Last edited by Beagle; 16-01-2019 at 01:41 PM.

  11. #2741
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    Quote Originally Posted by Beagle View Post

    Why did I raise this issue on this thread ? I maintain that quality late stage care is an "essential service" for those that can afford it but it probably isn't because there's lower standards of care the state will provide
    Surely an "essential" is available to all, regardless of wealth. Otherwise its a "luxury"

  12. #2742
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    Quote Originally Posted by Beagle View Post
    Lets stop the silly nit picking of whether something meets the classic definition of a consumer staple for goodness sake...I have a view, Percy has a different view, various links I could provide support my view but lets move on because the whole point of this discussion on the OCA thread is for people to think about what is a consumer (I will take the word staple out of it) essential, product or service is to think about which companies are going to do well in good times and bad because what product they sell or what service they provide is perceived by the purchaser or user to be an "essential" item.
    For 99% of motorists fuel is an essential item...there is no debate about this, the EV stat's speak for themselves. Fuel volumes declined just 2% last time fuel went truly ballistic late last decade so this tells you all you need to know about how essential this consumer product is. Whether it meets some arbitrary dictionary definition of a consumer staple, to be honest I feel this is totally irrelevant.

    Why did I raise this issue on this thread ? I maintain that quality late stage care is an "essential service" for those that can afford it but it probably isn't because there's lower standards of care the state will provide. In any event I think there's a vast tsunami of baby boomers who will want to have quality late stage care and I think OCA are well positioned to provide it to them.

    LOL Minimoke...after this debate with Percy I definitely need a drink lol
    It is not a debate between us.
    It is a debate between you and S&P, and the likes of Vanguard,as to what is definded as a Consumer Staple.

  13. #2743
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    Quote Originally Posted by minimoke View Post
    Surely an "essential" is available to all, regardless of wealth. Otherwise its a "luxury"
    The average national price of a care suite at OCA according to last year's annual report was just $227K. I read today the average national house price has hit $680K.

    Its this huge margin of comfort that makes me think OCA care suites will keep selling in good times and bad whereas for example if the Auckland medium house price drops from $900K to $750K will people still be buying SUM and RYM Auckland units for $800K ?

  14. #2744
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    Quote Originally Posted by Beagle View Post
    The average national price of a care suite at OCA according to last year's annual report was just $227K. I read today the average national house price has hit $680K.
    That may be. But your average OCA Care Suite will be bought free of debt. Your average national house will be loaded with debt.

    So to buy a suite (or any retirement villa type option) a person needs to pretty much clear of debt by the time the option is being looked at. That is an option that will only apply to the top X% of NZ's population.

    The trouble with falling property values is that it releases, on sale, less capital to the owner - which tightens their options for their next buy. Then a care suite becomes an unaffordable luxury.

    There remains an ongoing beacon of hope - and that is government (regardless of side) wants people out of the primary health system. We ought to see incentivisation into care suites - with the added benefit of freeing up residential housing stock.

  15. #2745
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    Quote Originally Posted by Beagle View Post
    lol believe it or not you can live without booze.
    Cholesterol is an alcohol and although too much of it is bad it is essential for survival and two thirds of your bodies total cant be influenced by diet or exercise.

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