Doyle....your logic is utterly astounding...however it remains yours....cheers...
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Doyle....your logic is utterly astounding...however it remains yours....cheers...
Lets keep the topic to ALF, there is already a thread to whine about Hanover.
So balance sheet update with the 50m writedown.
Assets 527,347,000 (Intangibles 19,792,000, Deferred Tax 6,359,000)
Liabilities 407,433,000
Net Tangible assets 93,763,000
Shares on Issue 1,952,294,858
NTA 4.8 cents per share.
Anyone want to speculate how much futher the current 124m will get written down?
Perhasp the issue here is the difference between legally wrong and morally wrong.
I can't comment on the legally wrong bit - we have Regulators who will determine if thier is a case to answer and courts to decide that matter.
As for the morals - thats a difficult one. On one side you will have Hotchin and Watson being "dodgy" - but give credit where its due - they were also clever. On the other side you have the investors. Sucked in by Richard Longs Celebrity status and good looking returns - how many of them looked at the accounts? And that Eric Watson is such a nice man - he beat up that horrid Russel Crowe and has such good taste in women - of course you'de follow him with your cash. Given an opportunity to get Watson and Hotchin to cough up $20m they turned it down - so don't go bleating about Paratia Drive: the investors gave Hotchin $10m for that build. And what about the red flags. GPG were said to have cast an eye over the opportunity. Not only did they turn it down but they also flogged off all their ALF shares as soon as they could.
I have a feeling you could chisel the word "warning" into the skulls of ALF holders and they still wouldn't have a clue.
Why should anyone who worked hard and saved hard then have to work even harder, learning a whole new set of skills (accounting), simply to be entitled to keep their savings?
They most certainly shouldn't.
Anyone who doesn't want to 'learn' about investing should stick to bank term desposits and a pretty safe 5% (or whatever it may be at the time), and preferably spread it around a number of banks.
If they want better returns, they have to put some work into it, else it is just a gamble, and often they'll lose.
Alan.
Lizard - because having money sucks, but not having money also sucks, so we all get to choose our path.
Out of the people I know, the ones who have the most money are the ones who worry the most about money, and have to do lots of extra work learning money management skills and investing.
The ones who have the least money also worry the least about money itself and put virtually no effort into learning about how to manage money or invest. Their time is spent on the practical - trying to get the stuff they need without much money.
If you choose to accept the responsibility of having money - and you have the desire to have more and more - you HAVE to accept it comes with strings attached.
During the boom, a lot of people got hooked on the idea of risk free return. Some of the popular phrases were "work smarter, not harder" and "passive income". I recall books about 5 minute managers and 4 hour work weeks.
"Property never goes down" persists to this day. For a while longer.
The cold hard fact is this. Most of the people caught in finance company debentures were there for an extra 2% a year return. 2%!
I personally warned dozens of people, far in advance - ie 2005. I wasn't the only one.
Could I predict Lehman Brothers or Bear Stearns in 2005? No
Bridgecorp? Yes
C + M Finance? Yes
Five Star? Yes
That contagion would result? Yes
Most importantly, was it becoming clear in 2005, and crystal clear in 2007, that the world was pretty much at the end of a multi decade borrowing and consumption binge? Yes
Would this end well? No
These people didn't need to learn accounting, or burn the midnight oil - I laid it out for them very clearly. More importantly, I walked the talk and invested like I was telling them to.
How many listened?
One.
The rest were too busy making "easy money".
Hotchin and Watson were greedy, yes. But they weren't the only ones. The only difference was scale - they leveraged other peoples greed.
By the way, I've talked to a couple people who ignored my rants is 2005. They came back seeking the same advice they were given in 2005, but in 2008/2009, so that they could somehow apply it then to get the same result they would have got in 2005.
This type of thinking is exactly what made people vote for the moratoriums and the Hanover/ALF deal.
It is for this reason most advice I give people these days starts with the phrase "Well, first, buy a time machine..."
In other words, I've given up! Rant over.
It takes a change of mind set - they are not "Savings" they are "income generators". These people no doubt learnt skills and practiced them when they were "working" to generate an income from their jobs. Why would they not do the same thing when they want an income from their cash?
I suspect its basically because we are not taught how to manage money over the long term (the piggy bank at school doesn't count!) - and where there is a vacuum in knowledge someone will fill it. Some may say this leaves the gullible and vulnerable open to the sharks - and I'd agree for maybe 10% of the population - but then they probably don't have too much cash to invest. That leaves the rest of the population with reasonable inteligence able to make simple decisions based on a simple analysis. But they don't - and why not. Because they are too lazy and won't take personal responsibility for their decisions.
Harsh words which I'm bound to get flamed on - but bear with me. How many things in life do we spend our money on and we get a guarantee on perfomance - just about everything! Everything that is except financial advisors who keep coming up with the old chestnut "Past performance is no guarantee of future performace" and like sheep NZ'ers just hand over their loot. If peoepl aren't perpared to work at theri investments I have no sympathhy for them whne things go belly up - I have even less sympathy when they don't know when to cut their losses and like possums in car lights stay transfixed on the promise of returns which just can't be achieved.
Re Alan's post:
I think that is a pretty arrogant attitude. Not saying investments have to be risk free, but I think there is more obligation on the providers than that.
The same attitude says that anyone who doesn't bother to become an expert in medical procedures or drug interactions shouldn't take anything stronger than manuka honey or they deserve what they get...
Lizard,
I know virtually nothing about medical procedures.
However, I do know - from talking to people in the profession - that the standard of care received can differ based on the patient.
In other words, be cruel or arrogant or demanding, and you'll get crap care. Be nice, and considerate and friendly, you'll get great care.
I also know this from my own experience in other fields - its universal.
I know that there is a public and a private system. I know that having money means you have a choice of going private. This gives flexibility.
I know that getting drunk every day, smoking, or being obese increases my odds of needing medical help. Talk to nurses. They spend their days with drinking, smoking fat people.
I have control over these things.
Once I'm knocked out and getting an operation, I agree with you. I put my life in their hands.
There is an element of trust with medical care, just like investing.
You are in the hands of your professional.
I refute, however, the notion that you have no control at all - really, how hard was it to work out Rod Petrecivic? The info was all out there.
Can't say I'm overly comforatbale with Lizards analogy - and Troyvdh is probanly in a better posiiotn to comment.
But hrter are clear difference. You end up in hospital you wil be treatred by nurses who have done years of practical and theoretical evidence based study and doctors who have done even more. Our society demands such stand when dealing with our personal life - but we have no such expectations with our financial life.
If things go wrong in health (and they do - you've got a reasonble chance of being worse on on leaving a hospital than when you entered it) but there are monitoring and back up systems. You also have medical malpractice and misadvernture suits to back you up if things go wrong.
Either way - if I had a choice between a Registered doctor advice and Rongoa I know which way I'll go.