Forum Archive Index - December 2000

["Geoff Ewert" <gewert@wai.quik.co.nz>]

    Hi Chatters,

    Interesting comments from "Isaac Sofaer" below.

I guess that might answer my querry ( re the banking sector ) a while ago.

    I will take the opportunity to thank Ben , Will and the team for the great job they do for us, and best wishes for xmas & the silly season.

 

    cheers G.

 

Retail?

Given that retail sales must be adversely affected in any slowdown, I must confess at my surprise at the resilience of stocks like WESTFIELD, WOOLWORTHS, HARVEY NORMAN and FLIGHT CENTRE. I for one wouldn’t be holding them at this point in the cycle and I would be reducing exposure to banks for good measure as well. It really does seem to me that scared money is holding these stocks up at levels where they wouldn’t normally be.

The question for investors in 2001 is by how much the positive effect of an easing in interest rates is offset by the negative drag of a decline in corporate earnings per share growth, for the latter will surely occur even if the market refuses to believe it at this time. All I can say with certainty now is that each company will be affected differently and that the financial/earnings dynamics of one industry group will be vastly different to another.

More than at any time in the past, therefore, next year is likely to be a stock picker’s market with disappointments overwhelming surprises. Investors had better watch out!