Thursday, June 18, 2009

Morgan's book "After the Panic" timely

Media - Video | Text

It is a little too late when you look back having lost your life savings to get it back, but anything that improves investor education and puts the spotlight on dodgy financial practices so you don't perpetuate the same mistake has got to be a positive thing.

Gareth Morgan, the well known economist/socialist has finally come back on track, pulled his finger out of his backside after his embarrassing book on so-called "global warming" and produced a book the average investor should read called After the Panic: Surviving bad investments and bad advice.
His book names collapsed companies and those individuals who are responsible for some of the finance companies that have been buried, along with nearly NZ$ 2 billion of investor money buried along with them.

I am not sure if it includes names of "financial advisers", the financial world equivalent of global warming zealots, but these individuals take a large part of the blame.

The book provides documents from said finance companies that reinforced their "stability" to the investor public while behind the scenes trusts were re-organised, bank accounts were siphoned, money was given to mistresses and tickets to Australia were purchased -my emphasis.

This excerpt from the book is but one example:

"You can have peace of mind when investing with Provincial Finance as you're dealing with an experienced, dedicated finance company," Provincial Finance said in a prospectus in 2005.

"... when you invest with Provincial Finance you'll enjoy high levels of personal service, regular, easy to understand performance reports, attention to risk, and a good rate of return over the term of your investment".

Disclosure was only the beginning of the dodgy dealing of finance companies of course, there was also the massive inter-related party lending to bolster the books, the selling of property that didn't exist, money siphoned from company accounts to pay for lavish personal expenses and a whole host of small crimes and massive mis-demeanor's.

Gareth has written a book of its time and inexperienced/experienced prospective investors alike, in any asset class, should have a read of his book, if only to see where the bodies are buried.

You can be sure though, just as some of these individuals who have participated in this financial rape of the greedy, the hapless, the elderly and the mis-advised, came out of the ashes of similar shell games from the financial collapse of the sharemarket in the 1980s, they will rise again sometime in the future to do it all again.

Gareth's book looks like another tool that investors can use to stop them from becoming financial prey, again.

Related Video

Gareth Morgan Interview - One News



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After The Panic

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c Share Investor 2009

Wednesday, June 17, 2009

The Continued Fascism of New Zealand Governance

Since when did people like me vote in a fascist in November that has first decided that he wont give Auckland voters the right to decide whether they want their council's combined and then yesterday and again today tell us that even if New Zealand citizens decided to give the anti smacking bill a good beating in a referendum then he would ignore the result because he thinks it is working.


Regardless of which side of each debate you fall on- the anti smacking bill is clearly a failure and the coming supercity is debatable- we must have the right to decide in a free democracy important life changing events.

We have processes and democratic rights which must be upheld and while the previous administration trampled all over these in the last 9 years, more than any other Government in New Zealand history, I certainly didn't vote for more of the same.

I will be reassessing my vote in 2011. In its current guise it wont be for Labour and if John Key ignores my referendum tick then it wont be for him either.

Doesn't leave me with much does it?

c Political Animal 2009

Charlies Group: A Triumph of Style over Substance

There was much fanfare, overwhelming hype and plenty of free publicity when Charlies Group [CHA.NZ] listed on the NZX through the back door in 2005 and that has been the way the company has operated for the last 4 years.


They had Marc Ellis as its largely titular head and Stefan Lepionka in the back room squeezing the juice and running the business side.

Shareholders who got in at the entry point have lost millions and are unlikely to get it back and many of these same people would have participated in the 42 below IPO a few years back expecting Charlies to pay back the same way that deal finally did.

We have learnt that the company is looking at raising capital in some way to enable them to continue to function as a going concern and their original idea to build up the company to sell it off to a major beverage player has failed because they cannot get what they think it is worth in the current economic climate.

Burger Fuel Worldwide [BFW.NZ] which is contemplating capital raising itself, is another one of those flash harries that investors got hyped up in and ended up largely kissing goodbye to the 2 million that was raised from them in that particular IPO in 2007.

These companies all share a sense of style over substance and should be avoided at all costs by those without money to lose and that should be pointed out clearly before virgin investors plunk down their cash.

The fact that these sort of IPOs were pitched to those without much financial nous and got caught up in the hype is a testament to Kiwis lack of financial skill and those that were raising funds were counting on when they targeted the financially illiterate for their hard earned moola.

Fare enough for Ellis & Co to take a big risk in business but to pitch there IPO without spelling out there was a fair chance the business would fail is, once again, a triumph of style over substance.

Footnote: Charlies have just issued a press release to the NZX softening up shareholders for more money.


Charlies Group @ Share Investor

Takeover Documents

Charlies Group Ltd: Asahi make takeover offer
Share Price Alert: Charlies Group Ltd
Share Investor Q & A: Charlies Group CEO Stefan Lepionka
Chart of the Day: Charlies Group Ltd
Charlies Group: A Triumph of Style over Substance
Charlies juicing through Shareholder cash

Discuss CHA @ Share Investor Forum
Download CHA Company Reports

From Fishpond.co.nz



Buy Bird on a Wire: The Inside Story from a Straight Talking CEO & more @ Fishpond.co.nz




c Share Investor 2009





Tuesday, June 16, 2009

MICHAEL HILL - Toughen Up: What I've Learned About Surviving Tough Times

I have been taking an increasing interest in Michael Hill the man and the Jewelry company that he runs over the last few weeks.

I picked his company Michael Hill International [MHI.NZ] as Stock of the Week this week and covered off an interview with him on TV3's 60 minutes aired last Monday.

His high profile in the media in the last week has been mainly due to a book of his, Toughen Up: What I've Learned About Surviving Tough Times that was launched today .

I received an advanced copy of the book and have read just a brief part of the first chapter.

Suffice to say it sounds like Michael from the get go (it has his "voice") - positive to the point of being unfashionably earnest and eager to tell his story to the rest of us.

As I pointed out in my comments about his TV3 interview and of course gaining much about the content of his book from the title, this book is not only revelation to today's economic condition's but also timeless in its old-fashioned approach to business and indeed life in general.

Hill sees our current economic valley as an opportunity to change, move forward and above all grow business and our economic livelihood in the process.

From the press release for the book:

Michael Hill believes the looming meltdown can be a good thing for businesses and entrepreneurs. It is possible to succeed in a downturn - in fact it is the perfect situation in which to perfect a business. Instead of fearing the side-effects of recession, wallowing in gloom and convincing ourselves the only safe haven is at home under the blankets, entrepreneurs can use this period to their advantage. With the right attitude, you can not only survive, but emerge from the crunch with a new feeling of prosperity and strength.

Over the years, Michael Hill has had just about every possible experience in business: from lie-awake-at-night nerves to the joy of unexpected success. He's reshaped the landscape under his feet and he has ventured into new territory. And at every moment, he has relished the excitement of it all. Once, he was an outsider in his industry; the cheeky startup whom nobody expected to succeed. The established players had no reason to view him as a threat. Now, his business is the establishment. It dominates the markets in which it operates. Michael Hill Jeweller is a respected part of the business culture in a large part of the world - and they are continuing to expand in both size and ambition.

Plain sailing through a business storm encapsulates the ingredients of Michael's philosophy. There are no secret herbs and spices. It is not a magic recipe - it is just a collection of solid ideas, firmly grounded in reality. All these concepts are remarkable only because they make common-sense - but you'd be amazed how rarely they are fully understood and embraced in the business world. Michael Hill believes the looming meltdown can be a good thing for businesses and entrepreneurs. It is possible to succeed in a downturn - in fact it is the perfect situation in which to perfect a business. Instead of fearing the side-effects of recession, wallowing in gloom and convincing ourselves the only safe haven is at home under the blankets, entrepreneurs can use this period to their advantage.

With the right attitude, you can not only survive, but emerge from the crunch with a new feeling of prosperity and strength. Over the years, Michael Hill has had just about every possible experience in business: from lie-awake-at-night nerves to the joy of unexpected success. He's reshaped the landscape under his feet and he has ventured into new territory. And at every moment, he has relished the excitement of it all. Once, he was an outsider in his industry; the cheeky
startup whom nobody expected to succeed. The established players had no reason to view him as a threat. Now, his business is the establishment. It dominates the markets in which it operates. Michael Hill Jeweller is a respected part of the business culture in a large part of the world - and they are continuing to expand in both size and ambition. Plain sailing through a business storm encapsulates the ingredients of Michael's philosophy. There are no secret herbs and spices. It is not a magic recipe - it is just a collection of solid ideas, firmly grounded in reality. All these concepts are remarkable only because they make common-sense - but you'd be amazed how rarely they are fully understood and embraced in the business world.

I imagine this book is not just for those who are in business or have an interest in business but can be used as an inspiration by those who would like to get motivated, learn from someone who has been there and done that and made all the mistakes along the way and would like to put their ideas into action.

Like Michael, I would say all it takes is an idea - it doesn't even have to be a spectacularly bright one - very hard work and the tenacity to stick with if it is successful and know when to fold if it isn't.

Highly recommended. *

* just a wee footnote, a correspondent quite rightly pointed out in a comment below that how can I recommend a book if I haven't finished it and of course without explanation he is right. I answered thus:

CJ, what I should have said is that from what I have read and skimming over other parts of it I would recommend it-and I do -you know sometimes you start reading a book and you know it is going to be good. I have similar old-fashioned values and share much of his outlook on life, so I know I am going to enjoy the read.

I will of course finish it at some stage, and tell you if it disappoints. I doubt it will.


Disclosure I own Michael Hill International shares in the Share Investor Portfolio.


Michael Hill International @ Share Investor


Long Term View: Michael Hill International Ltd
Michael Hill Downsizes USA Operation
Michael Hill International: 2010 half year profit commentary
Michael Hill Makeover kicks off
Michael Hill International: 2009 full year profit commentary
Toughen Up: What I have learned from the hard times
Stock of the Week: Michael Hill International
Michael Hill TV3 60 Minutes Interview
Long VS Short: Michael Hill International
Marketwatch: Michael Hill International
Michael Hill's profit shines
Michael Hill takes on the windy city
Why did you buy that stock? [Michael Hill International]
MHI has defined growth strategy
MHI profit sparkles

Discuss MHI @ Share Investor Forum

Download MHI Company Reports


Buy Toughen Up: What I've Learned About Surviving Tough Times

Toughen Up: What I've Learned About Surviving Tough Times

Toughen Up - Fishpond.co.nz



c Share Investor 2009