Forum Archive Index - August 2000

[Derek <dkw@paradise.net.nz>]

Thanks for your comments Hugh, I can't really comment on Buffet since I
haven't read any of his books. 

The size of companies like CAH must make a large barrier to entry for new
players in the business. At current levels you can buy into CAH at about
2/3 cost of plant, equipment & other assets, therefore whatever the
returnon assets is that they can muster, the return on share price is about
50% more.  This has to be a good situation for shareholders. I think the
death of rain forests has been happening, not just for timber though.

PVC isn't a green technology and environmental factors are going to play an
increasing part in purchasing decisions. I wouldn't say that Aluminium
smelting is very environmentally friendly either (Cd - the death of the
bluff oyster?). Due to run-off from pine plantations one could also argue
that they aren't very green either, although in my mind they are the best
choice. Can't see paper being replaced and I don't see many new NZ
buildings being build without wood.

About your last point, I don't think that CAH is a magnificient bargain,
just a bit of a bargain.

Cheers,
Derek


At 05:41 PM 26/08/00 +1200, you wrote:
>Is this realistic re CAH....the newspaper share tables show a low
>gross yield for CAH but the main point is that it is into commodities
>and one of Buffetts guiding principles is not to get into commodities.
>(I was very happy to sell out of CAH at $3.80 in the partial takeover 
>by IP). They've spent the money from Chile not on returning the capital
>but on more commodity investment. There was an article in the press 
>recently that timber products are proving a mirage because of substitutes
>such as PVC and aluminium and this is why the death of the rain forests
>meaning a killing for NZ's pinus radiata hasn't been happening/isn't going
>to
>happen.
>On the other hand people have been pointing out that a handful of cases
>such
>as Auckland Airport are Buffett consumer monopolies and its proving true.
>One of Buffetts tricks is to analyse a share who's price is thought to be 
>too high; look at its growth trend and rate of return and in a couple of
>years the price thought to be too high seems a magnificent bargain.
>
>cheers,
>Hugh
>----------
>> From: Derek <dkw@paradise.net.nz>
>> To: sharechat@sharechat.co.nz
>> Subject: [sharechat] CAH & CEN
>> Date: Saturday, 26 August 2000 9:12
>> 
>> At $1.79 there must be an easy 5% gain to be had with CAH, maybe 10% by
>the
>> end of the year. Then there's the dividend if you hang on long enough.
>Also
>> the chance of a takeover for an added bonus. 
>> 
>> The above also goes for CEN, the dividend yield with CEN is running at
>> 9.4%, better than the bank?
>> 
>> Derek
>> 
>> 
>> Disclosure: Moving money out of speculative shares [need a cup of tea!]
>> bought CAH & CEN yesterday.
>> 
>> 
>> 
>> 
>> 
>> 
>> 
>>
>----------------------------------------------------------------------------
>
>> http://www.sharechat.co.nz/          New Zealand's home for market
>investors
>> http://www.netbroker.co.nz/        Trade on Credit, Low Brokerage. Join
>now.
>>
>----------------------------------------------------------------------------
>
>> To remove yourself from this list, please use the form at
>> http://www.sharechat.co.nz/forum.shtml.
>
>----------------------------------------------------------------------------
>http://www.sharechat.co.nz/          New Zealand's home for market investors
>http://www.netbroker.co.nz/        Trade on Credit, Low Brokerage. Join now.
>----------------------------------------------------------------------------
>To remove yourself from this list, please use the form at
>http://www.sharechat.co.nz/forum.shtml.
>
>




----------------------------------------------------------------------------
http://www.sharechat.co.nz/          New Zealand's home for market investors
http://www.netbroker.co.nz/        Trade on Credit, Low Brokerage. Join now.
----------------------------------------------------------------------------
To remove yourself from this list, please use the form at
http://www.sharechat.co.nz/forum.shtml.