Forum Archive Index - August 2001

["tennyson@caverock.net.nz" <tennyson@caverock.net.nz>]

>
> 
>If the darling of the NZ market was previously a debt collector and
>now that they are to go, the NZ market's best company is to be a
>casino operator, then perhaps RIL has been right all along.
>Michael
> 
>
Michael, my suggestion that Baycorp was the 'best' company in New 
Zealand and now perhaps Sky City is, was a purely 'accounting' level 
statement.  Principally I am thinking in terms of return on equity 
and a consistent 5 year profit growth trend.

I know there are people who think that "all gambling is a bad thing", 
and so by implication "Sky City must be bad" and therefore "Sky City 
cannot be the best company".   This is more a moral argument.  
Whatever financial figures I were to quote you would not make a scrap 
of difference on to moral argument like this.

Different again is the question: 
"Should you invest in the best company?"
Since I am using a five year performance time horizon, the fact that 
Baycorp might be the best should be of no surprise to anyone.   It is 
very likely that a lot of this 'bestness' is already built into the 
Baycorp price.  So purchasing the 'best' company can be quite risky 
if you pay too far over the odds for it.

SNOOPY



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