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  Reply # 778238 11-Mar-2013 22:14
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Solid Energy invested in bizarre nutty green initiatives like mass biodiesel amongst others. Its a warning to what will happen to the wider economy if (hopefully not when) the greens get in

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  Reply # 778240 11-Mar-2013 22:15
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nathan:
doozy: Registered, but upon reflection probably won't buy any, 6% mortgage, better off paying that down with whatever I might spend on MRP, guaranteed return, no risk investment that is!


It is worth pointing out that property is not a guaranteed no risk return

But yes you are probably wiser to pay off mortgage


Sorry didn't mean property is, just paying the mortgage in its current format is a return to me :)




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  Reply # 778252 11-Mar-2013 22:42
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doozy: Sorry didn't mean property is, just paying the mortgage in its current format is a return to me :)


Absolutely, better investing in your future security than a landlords.

I've pre-registered but am in two minds whether to invest or not. Some good links have been posted which provide food for thought and I'll certainly be doing some research before making a final decision. My philosophy on buying shares has always been "if you can't afford to lose the money, you can't afford the shares".

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  Reply # 778506 12-Mar-2013 13:17
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  My philosophy on buying shares has always been "if you can't afford to lose the money, you can't afford the shares".

That is a nonsense philosophy at so many levels.  Jeez, people buy a flat screen TV and immediately loose 50% without batting an eyelid.

 

The share market is not a casino. It is an opportunity to buy a stake in a company. Once in, its then for the holder to actively decide when to withdraw - something you can't do easily with your own home.

 

If you want to be a passive participant you get what you deserve – but that’s no different from being a passive participant in anything.

 

It’s a philosophy that keeps driving people to property nirvana. Why would you be in the rental game with a 4% return on a good day.

 

The share market, like so many things in life has risk. NZ’ers need to become better educated at understanding that risk. It is not risk free – but then again owning a house isn’t as values do go down. Owning a forestry block or putting your money into a superfund are all with risk. Even putting your money in a safe as houses Alan Hubbard / Colin Meads scheme is risky. NZ’ers would much sooner follow the celebrity endorsements than do any real thinking. And then we have that ex school teacher at the helm of Mainzeal – quality board membership there!

 

So look at Mighty River. This is a politically motivated sale. Do you think the politicians are going to let this sale process fail? What do you think the risk of that is? I reckon it is absolutely zero. There is no way National will allow the pricing of MRP to be such that MRP is worth less at election time than it is at float time. Indeed there is a very strong incentive for them to ensure it is priced at such a low level on listing that it has increased in value at election time. That way the National Voters are happy; National get to say “there we told you so –and the Labour ne’er-do-wells were wrong” and those that didn’t buy in go “:ooooh – those National people knew what they were doing.”

 

Look at how much money is slopping around our super funds and ACC. One fund has just slapped a pile of cash into Wellington Drive technologies.  They may be playing double down – but they have cash to burn. Excess cash in these funds = excess demand.

 

Is NZ seen a as a bit of a safe haven. Our currency suggests so  - think about how international investors will see this opportunity. If its good, that equals demand.

 

And then look at fund managers portfolio weightings. They need a decent chunk of a decent company. More demand = higher price. There is more substance to a power company than a tech company like Snakk that hit over 300% gain on listing – though the sensible money is starting to come to play.

 

If you have a 6% mortgage do you think that MRP can pay a 9% dividend (9% less 33% tax for your net 6% mortgage payment). Or do you think MRP can improve on value by 6% in a year – that offsets, roughly, the opportunity cost of not paying down your mortgage. Or is there potential for a combination of both. If you answer “no” to any of these questions then you stay out of the float.

 

In my view the answer is “yes”

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  Reply # 781173 13-Mar-2013 17:36
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minimoke: If you have a 6% mortgage do you think that MRP can pay a 9% dividend (9% less 33% tax for your net 6% mortgage payment). Or do you think MRP can improve on value by 6% in a year – that offsets, roughly, the opportunity cost of not paying down your mortgage. Or is there potential for a combination of both. If you answer “no” to any of these questions then you stay out of the float.

IANAA, but bear in mind that the interest on any loan you take out to buy shares is tax deductible (source).



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  Reply # 781215 13-Mar-2013 18:55
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minimoke: 

The share market is not a casino. It is an opportunity to buy a stake in a company. Once in, its then for the holder to actively decide when to withdraw - something you can't do easily with your own home.

The share market, like so many things in life has risk. NZ’ers need to become better educated at understanding that risk. It is not risk free – but then again owning a house isn’t as values do go down. Owning a forestry block or putting your money into a superfund are all with risk. Even putting your money in a safe as houses Alan Hubbard / Colin Meads scheme is risky. NZ’ers would much sooner follow the celebrity endorsements than do any real thinking. And then we have that ex school teacher at the helm of Mainzeal – quality board membership there! 

So look at Mighty River. This is a politically motivated sale. Do you think the politicians are going to let this sale process fail? What do you think the risk of that is? I reckon it is absolutely zero. There is no way National will allow the pricing of MRP to be such that MRP is worth less at election time than it is at float time. Indeed there is a very strong incentive for them to ensure it is priced at such a low level on listing that it has increased in value at election time. That way the National Voters are happy; National get to say “there we told you so –and the Labour ne’er-do-wells were wrong” and those that didn’t buy in go “:ooooh – those National people knew what they were doing.”

 


Couple of observations.

In my opinion the share market is exactly like a casino, the only difference is risk/reward ratio and the veneer of respectability that someone else gambling with your money on investments offers.

Secondly the government can't afford to give the shares away for a low price as they are banking on this sale to dig them out of the deficit hole. Making no money gives the naysayers ammo to say it was a waste of time for no benefit. Price them too high and the end point is what you highlight above. I am not sure it is such an easy thing to get right as Facebook recently found out with their IPO.

Jon

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  Reply # 781312 13-Mar-2013 21:33
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Couple of observations.

In my opinion the share market is exactly like a casino, the only difference is risk/reward ratio and the veneer of respectability that someone else gambling with your money on investments offers.

Secondly the government can't afford to give the shares away for a low price as they are banking on this sale to dig them out of the deficit hole. Making no money gives the naysayers ammo to say it was a waste of time for no benefit. Price them too high and the end point is what you highlight above. I am not sure it is such an easy thing to get right as Facebook recently found out with their IPO.

Jon

Yes I have to agree some  of the companies of the share market are indeed run by some pretty dodgy Directors. Why some people have stayed in companies like ALF is well beyond me. But there are other pretty good offerings, such as Ryman for those that bought at IPO, if individuals are prepared to do the work.

Assets sale net returns will be a drop in the bucket of govt debt. I recall they were expecting around $6b including the value of Solid Energy. A discounted price won't make a squat of difference.

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  Reply # 781883 14-Mar-2013 19:30
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nathan: Solid Energy invested in bizarre nutty green initiatives like mass biodiesel amongst others. Its a warning to what will happen to the wider economy if (hopefully not when) the greens get in


The opposite of the truth....as is often the case with anti-Green commentary from people who don't know what they are talking about. 

Greens oppose biofuels because they do nothing to address climate change and potentially take food from people's mouths to make fuel for cars driven by the relatively (in global terms) wealthy. 

Here's the truth. The Greens reluctantly accepted there was support for biodeisel and insisted any use of it be sustainable. A law was passed by the Labour government, with Green support, requiring it be sustainable. 

National repealed it. They supported biofuels....a policy REJECTED by Greens. 

The "nutty" policy - including *subsidies* - you're talking about is entirely that of the present government...and they are (unfortunately) already in power. 

Do you care you are completely wrong? 

http://www.greens.org.nz/bills/sustainable-biofuel-bill

http://blog.greens.org.nz/2007/03/28/europes-biodiesel-industry-in-crisis-while-monbiot-calls-for-a-moratorium/

http://www.greens.org.nz/press-releases/government-mistakenly-gives-biofuel-subsidy-foreign-farmers







____________________________________________________
I'm on a high fibre diet. 

 

High fibre diet


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