Forum Archive Index - May 2003

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

Hi Macdunk,
 
>
>
> SNOOPY dont get me wrong I am not being critical I follow your posts
> and have learned heaps from them.  However your wri stance is
> completely wrong. 
>
>



Of course I disagree with you Macdunk, although I respect your right to 
disagree.



>
>
>If a sector goes down as is the farming one,  then the best position
> to be is completely out of it regardless of yield, which must change to 
>suit  the new position. 
>
>



I am not of the view that the situation down on the farm is that bad.   

There have been a lot of high profile comments about dairy farmers via 
Fronterra press releases.    But the NZ exchange rate with Europe is 
still reasonable and our currency is tracking down compared to the 
Australian dollar.   IMO, there are other farming sectors that don't have 
the profile of the dairy sector that are percolating along quite well.

You are right Macdunk in that the yield on WRI may well drop.   I am 
expecting the final dividend to be cut by some 25% next year.   I still 
think WRI is worth holding despite this.



>
>
>To hold a share to stand still is as dumb as it is
> to stick it under the mattress.  If you know in advance it will drop.
>
>



I think very hard about selling a share that is paying me triple the 
income that the same money put into the bank would give me.    Just 
because farming income drops, it does not automatically follow that the 
share price of farm suppliers WRI, PGG and WKL will drop.



>
>
> Regardless of what we might think a share is worth, the bottom line is
> sell and get back in later.   If however you have too much money, then
> leave it where it is until it comes right which this particular share
> will do.  We must all be different otherwise what a dull world it
> would be. 
>
>



The problem as I see it Macdunk is the timing of 'getting back in later'.  
I don't believe that I can get that timing right.    If I perceive WRI is 
cheap already, why would I sell?

However, I do think I am a reasonable judge of when Mr Market does a 
silly thing - like selling down WRI to around $1 after the recent 
dividend.   In other words I am running a reactive not a predictive 
investment strategy.    If Mr Market does something silly like that, then I 
like to think that I will be there to take advantage of him.



>
>
> The farmers wont buy anything other than the bare
> essentials as long as the dollar is as high.
>
>



Perhaps, but then WRI sells the bare essentials.    It is other retailers 
that are more likely to suffer in the scenario you paint.



>
>
> Conclusion wait for the next time get out before it 
> drops again 
>
>



But what if it doesn't drop again before September?    I am already 
eyeing up that 8c dividend!  Feel free to disagree with me again.

SNOOPY


--
Message sent by Snoopy 
on Pegasus Mail version 4.02
----------------------------------
"You can tell me I'm wrong twice, 
but that still only makes me wrong once."


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