Everyone makes mistakes, how often you make them is what determines whether you make money or not. I got cocky and ended up with my face in the dirt. Those too things are highly correlated.
Printable View
Net tangible asset backing per ordinary security $ 0.82
Is that number anywhere near reality?
Falling knives and in this case, very sharp ones.
How many fingers have we all lost collectively buying on the way down and trying to pick a bottom?
I was the biggest bull here last month but macro conditions changed my whole view. The bernanke panic, ie QEternity is a sign of monetary desperation in the USA and from what we know of previous QE's we can see they don't work. The only positive news out of the USA is that employment is getting better due to hundreds of thousands of full time jobs being divided into multiple part time jobs due to changes in health care laws for employers. The entire EU including Germany is in recession. France just instituted 75% taxes on businesses(why wasn't this mentioned in the half year report? It's pretty significant!) China is 60%+ dependent on exports and the largest exporter in the world and global shipping prices have dropped through the floor, I'd say that's a pretty sure sign China is going to crash too.
USA, EU, China, these are the countries that RAKON is massively exposed to. When I bought into RAK I did so thinking that the global economy had bottomed, but that is obviously not the case. The last few months were just an inflection point on the path of collapse.
The arguments from some of the people on this forum are quite hard hitting. What is the value of rakon's assets? Only what the market will pay for the plant and materials in an oversupplied bear market. What would you pay for a business that is likely to lose 5% of your money each year for the next three years? What is that asset worth? Would you pay $80,000,000 for a company that is on track to lose 8 million dollars this year? Certainly not without replacing management and a plausible story for success in a caustic macro environment.
I propose that Rakon is worth 10 times what you expect the mean earnings to be over the next 3 years. My generous guess from the current macro trends is that Rakon will average 5 million after tax earnings. That values Rakon at NZD$50,000,000.
If you consider that there are 191,000,000 shares outstanding the intrinsic value of each share is .26
Give yourself a break, mknz.
We all get it wrong from time to time, and sometimes spectacularly.
Important though to be objective and balanced at how we look at the world - there are always winners and losers.
Nokia was king of mobile once - look at it now. Apple was almost broke once but is now #1.
Change in management and directors however is the starting point for a turnaround.
Until then, best to stand aside.
Mr Mogridge and at least one of the Robinsons have to go.
Just look at the mess at PGC - courtesy of the Chairmanship of Mogridge.
Rakon was started in the middle of the GFC and management didn't have a clue what was happening. They started "hedging" by diversifying globally, however in a GLOBAL financial crisis "globalization" is actually just diversification into a greater number of losing macro positions.
Oh yes, and like snapiti and balance have said, management has a now proven history of misleading shareholders.
Having attended a number of meetings with RAK management and gone to most of the AGM's it is obvious that RAK management really think that the world has just not played fair with them and it is not their fault I can assure you. These guys will never front up and while they own so much of the company the only real answer would be a takeover because they still think of the company as really just theirs.
And dont for a second think the 'reduction' in salary is anything but a deferment of debt to the family that run this puppy, the moment there is any sign of a pick up they will load up on heaps of options and front load the salary packages (with obligatory 'independent' analysis paid for by the company that shows they have been underpaid for ages and deserve every penny).
Sparky, a great reply, with some well thought out suggestions that probably all of us should consider when investing. Printed and attached to the wall. Thanks
Agree with you 100%.
Look at how Mr Bryan Mogridge chairs PGC, and you better get the hell out of Rakon.
Shifts PGC's AGM to Auckland (after 150 years of holding AGMs in Christchurch) to avoid irate long term shareholders.
Then, the MD did not show up because he is too busy trying to sell their last NZ asset (after fire-selling the others).
And Mr Mogridge seems to think that is all fine!