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Re: [sharechat] DB Shares and Westpac


From: "Brent Wheeler" <brentw@bwcl.co.nz>
Date: Fri, 17 Sep 1999 11:38:14 +1200


<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN"> <HTML><HEAD> <META content="text/html; charset=unicode" http-equiv=Content-Type> <META content="MSHTML 5.00.2614.3401" name=GENERATOR> <STYLE></STYLE> </HEAD> <BODY bgColor=#ffffff> <DIV><FONT size=2>Judging by the ads Westpac seem to think they will be all things to everyone in just about every sector/industry imaginable.&nbsp; They must have a formidable array of stock pickers out there - or do they, deep pockets are not quite the same thing as conglomerate scattered investment companies. The lessons of thw 70,s should not be lost too quickly - just ask BIL or FCL.&nbsp; I think the old story of "why keep a dog and bark yourself" may apply (even transaction cost savings notwithstanding).</FONT></DIV> <DIV>&nbsp;</DIV> <DIV><FONT size=2>As to DB they have a horrible history of struggle for a few reasons:</FONT></DIV> <DIV><FONT size=2>*&nbsp;&nbsp;&nbsp; beer on an ever downward spiral.</FONT></DIV> <DIV><FONT size=2>*&nbsp;&nbsp;&nbsp; razor thin margins</FONT></DIV> <DIV><FONT size=2>etc</FONT></DIV> <DIV>&nbsp;</DIV> <DIV><FONT size=2>Is wine distribution in their core of expertise?</FONT></DIV> <DIV>&nbsp;</DIV> <DIV><FONT size=2>I note the competition:</FONT></DIV> <DIV><FONT size=2>*&nbsp;&nbsp;&nbsp; wine in supermarkets which all have their own distribution chains and immense buying power in places.</FONT></DIV> <DIV><FONT size=2>*&nbsp;&nbsp;&nbsp; beer in supermarkets soon,</FONT></DIV> <DIV><FONT size=2>*&nbsp;&nbsp;&nbsp; horrible tax laws in respect of wine</FONT></DIV> <DIV>&nbsp;</DIV> <DIV><FONT size=2>Booze is not the defensive stock it once was.</FONT></DIV> <DIV>&nbsp;</DIV> <DIV><FONT size=2>Just cos it gets you drunk doesn't make it an obviously good business diversification (or your core business).</FONT></DIV> <DIV>&nbsp;</DIV> <DIV><FONT size=2>Sorry to be a pessimist - just looking (as usual) to risk first</FONT></DIV> <DIV><FONT size=2>Brent</FONT></DIV> <DIV><FONT size=2>PS</FONT></DIV> <DIV><FONT size=2>I grant you DB have hauled back from a precarious position.&nbsp; I still wonder if the div. yield doesn't reflect a low share price as much as a booming company.&nbsp; They were coming off a pretty low base.</FONT></DIV> <DIV><FONT size=2><BR>Dr Brent Wheeler<BR>Director<BR>Brent Wheeler &amp; Co. Limited<BR>AUCKLAND</FONT></DIV></BODY></HTML>

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