Forum Archive Index - May 2004

[mixtrader <mixtrader@clear.net.nz>]

Congratulations

This thread is possibly one of the best I have seen on sharechat (and I read
most).

It is really neat to get a glimpse of HOW others are thinking, it acts to
both confirm and/or expand ones way of considering investment options

Dave
----- Original Message ----- 
From: "Fiona Phibbs" <fibz@xtra.co.nz>
To: <sharechat@sharechat.co.nz>
Sent: Sunday, May 23, 2004 9:35 PM
Subject: Re: [sharechat] Sailing into the sunset with Norgate?


> Hi Snoopy
>
> > As a consequence I think you need to reassess whether using a figure
> > some 5 percentage points higher than the 15 year trend figure is going
> > to give you realistic results.
>
> Like I explained earlier I did obtain the risk premium of 7.5% for NZ from
> the Price waterhouse coopers website - so admittedly it was not calculated
> by me.  However I did reconcile it against the long run historical
geometric
> risk premium from the US market between 1926 - 2001 of 6% (from a study by
> Ibbotson-Sinquefield) and considered that it was a reasonable assumption
> that our market was more risky than theirs, and thus 7.5% seemed fair
enough
> to me.  Still, in hindsight  any historical figure used for future
> prediction  - the past may be nothing like the future.  Interestingly
Snoopy
> when I looked further there are a number of different figures for beta for
> WRI depending on the source of the information, so perhaps to be on the
safe
> side I should have calculated my own as well.
>
> > > I used 11.5c
> > >
> >
> > That figure was based on earnings at the peak of the commodity cycle,
> > so I think it is a less realistic base figure than 8.5c that has already
> > been forecast as the dividend by WRI management for this year.
>
> Fair call.  The directors are always loath to cut dividends as it makes
them
> go red under the collar at AGM's, so I assumed that WRI will try to ride
out
> the low by not cutting theirs. Ive just this moment lost my appraisal
> eport  - aren't they are also paying a special dividend to keep the div
> around the same level?
>
>
> > Both the figures $1.47 and $1.54 are surprisingly close to Norgates
> > $1.50 bid.     That suggests to me that Norgate is not paying for any
> > share price appreciation of WRI if he gets the reigns of control.   A
> > tacit admission that he can't do better than the current management?
>
> Very good. I guess the point of the exercise in the long run is the
analyst
> that can predict the future variables better than any one else 'gets the
> gold'.  If I do decide to continue to hold WRI I hope you're right and I'm
> wrong :-)
>
> cheers Dean
>
>
>
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