It has been a while since I've posted anything about New Zealand.Over the last 12 months the NZ 50 Index is down about 17% versus 8% for the S&P 500. The NZ dollar in that time is up against the greenback by close to 10%.
I sold out of New Zealand across the board a little over two years ago but have always kept tabs on what's going on. I am quite certain I will go back in one way or another at some point.
Here is a news item about Fonterra, a privately held dairy co-op that the management has talked about taking public but the farmers who belong to the co-op do not want it to go public as they feel their payout would be cut.
The idea behind going public is to raise the capital to recreate their very successful model in other countries. New Zealand gets more attention as a forex destination than as an equity destination but I think the listing of Fonterra would raise the awareness dramatically and do wonders for the economy.
New Zealand has a host of economics issues but that is not new. My thoughts on Fonterra are just thoughts and if it never lists we'll never know.
In trolling for New Zealand stuff I found a company called NZ Farming Systems Uruguay ticker NZS in New Zealand and apparently no pink sheet symbol in the US. It is a very small company that owns dairy farms all over Uruguay with an eye toward increasing it's footprint into neighboring countries. The company is profitable.
It has only been public since late last year and it has been up a lot. How different is this from the Australian Meat Fund? I have no idea whether anyone should buy this stock I just found it but it is interesting. If you know anything about it please leave a comment.
9 comments:
Roger - a little OT, but I noticed in the past you have written (positively) about covered call CEFs. I am somewhat new to investing in CEFs. I have a for you regarding their distributions.
Let's take ETV for example. Right now it is trading at a discount of about 5% and has a yield of 11%. Looks good on the surface, but when you dig into the distribution, per Eaton's website, about 65% is non-taxable return of capital.
Backing this out, the net yield is about 6%. Not bad, but not 11%.
Maybe I am thinking about this wrong, but when you see a ROC, aren't they just returning you your money net their mgmt fee?
If this is the case, I am not sure why these funds would be any better then a high yielding mutual fun (although I realize a 6% yield on a mutual fund would be very hard to find).
Just wanted to get your thoughts to see if I was missing something.
This is tricky and open to interpretation. There is nothing good about a return of capital but I'm not sure it has to be bad either.
If a fund could generate 10% in a combo of ROC and normal payout and somehow maintain a $20 NAV and market price would that be so bad?
In reality that is very difficult to do.
Often these funds target a certain yield and when they can't make it at certain points they can ROC to make up the diff. That plays in sometimes.
I'm not sure if there is a marketing thing with this because, as is the case with ETV the yield is disseminated at 11% which based on your research is not quite right.
My answer is not great but I don't think the reality of the situation is great either.
I think I should go to New Zealand to check these out further. Or maybe I could work for Mark Mobius and be in charge of due dilegence in places with palm trees.
we visited in 2005 and want to go back. if, as Lewis Black suggested, they pushed it closer to the US we'd move there (a bit of hyperbole).
Just got back from a week on the south island. If they pushed it closer to anywhere, it wouldn't be long before the rest of us ruined it. Wish I could convince my wife that a few hours farther by plane from the rest of the world wouldn't be such a terrible price to pay.
Re NZ -
Enjoy the visits, and dream of retirement, but working there is another story. Especially if you're an American (from the U.S.).
Kiwis are unbelievably hospitable and kind to tourists and foreigners and other temporary visitors. But to those that are landed with an intention to stay permanently, another side emerges.
Imagine a very very small town in the south, or in Texas. Imagine moving there from a big city. No matter how long you are there, you will always be "the outsider".
In NZ, in business and in the professions, at a certain level up the ladder everybody knows everybody. It's that small. If you are an outsider, waiting to reach up another rung can mean waiting a long time, and watching your Kiwi colleagues float upwards as if filled with helium.
It begins to get to you in time. For me, after 2 1/2 years, I decided I didn't want to see just how long it was going to take for the invisible (to me) tatoo of "not from around here" to wear off of my forehead.
However, I hear that Canadians experience something altogether different.
R
Don't get me wrong, I love going back to visit, and I cherish the friendships I made. But one of the great things about the states is the mobility. In NYC (Manhattan), you are an outsider for about a week, and then you're a NYr like the rest of us. (Not sayin' nothin' about Brooklyn, Staten Island, Queens or the Bronx, mind you.)
Rick, great insight as always, feel free to post more about your experience any time.
The combo of my visit and other things I know from various sources generally support what you say about NZ. I would add that exceptions would be for people who are self employed in such a way so as not to take from others and if jobs are created all the better and the other execpetion would be for doctors.
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