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Show I' ; , - I," - ;, ,. B Local Business E2 News E5 Agricultural VftSJ sea iaa H - ,iii,h- ,r jgs : 'j -- 1 V jQS v The Daily Herald h Sunday, January 21, 1936 iVhat will small Investors do? These are times that test the ;esolve of millions of small, inex-krienc- ; ed investors, determining Whether they hold against the tide )f selling or join the frantic herd. ; It is a time when traders are separated from investors, when hose with long-tergoals are lifferentiated from the s, when the money-wis- e with ;lear goals distinguish themselves rom those who live on hope. These are important distinctions. History shows that nvestors who choose stocks and hold them until changes occur in their goals or .hose of the company outperform .hose who trade in and out on the m short-terrier- pru-Jent- ly lews. ' It might not seem that way, but .t is. The real winners in stocks, such as Warren Buffet, are as slow to sell as they are to buy. They' invest only after studying a Msieess John Cunniff AP Business Analyst stock'.They sell for profound reasons rather than headlines. The point of this is that mil- - ' lions of small newcomers have joined the pursuit of equities in the past few years, mainly through mutual funds, of which there are now thousands. Will they bolt on bad news or will they hold? How they will act really isn't known, because never to this sxtent have so many of them been in the market. .' ; If they resist the negative comments and the scary news and the price volatility they can be a market stabilizer. If they withdraw from their mutual funds they ioiiid create a turbulent financial whirlpool. In this way: Withdrawals force funds to raise money, which they must do by selling shares they , '.. own, putting additional pressure on prices and perhaps causing others skittish owners to withdraw. Forgotten in such a scenario is that fundamental values might , change very little. Companies . might have good earnings, fine ' prospects and competent managethe very qualities that jusments tified high prices for their shares. : ;No" matter, they might fall. In the marketplace, fear and rumor weigh equally with the studious research and prudent evaluation. Prices can fall, and of course they have, simply because they are falling. ' The factual basis for a slowdown of corporate earnings increases is that the rate of economic growth isn't likely to be as strong during the next six months as'it :was in the immediate past. ; Still, at perhaps 10 percent : corporate earnings growth, roughly a third of I995's, some popular ratios of earnings to price could support a Dow Jones industrial average at its current reading higher if interest rates fall. This is the verdict of Arnold Kaufman, editor of "The Outlook," Standard & Poor's weekly investment advisory newsletter, published just prior to the latest correction: "We don't at this time see any major problems, either from a fundamental standpoint or on a technical front. Greed or fear will gain the upper hand at some point, but for now, the bull mar-- . ket remains intact." Still, he and most other forecasters have found it wise to attach caveats to their assessments, the two most common correction being that a short-teris likely and the year's gains will be far below those of 1995. Almost as common is the reminder of that most basic of market truths, that nothing rises in an uninterrupted line, and rarely for the five straight years :his market has been at it. That's m . . Other factors also are involved. How will the Bosnia peacekeeping mission turn out? Will a budget agreement be reached? Will the Pederai Reserve blunder in its monetary Emission? Will scandals undermine public confidence? For now, though, the focus is on those small, inexperienced investors, and the question ts whether they will hold firm or go to pieces, selling mainly for th reason thatvothcr small investors are selling. to be 635 million liters, up from 505 million in 1994 and more than doubling the 288 million of four years earlier. Santi Bhirom tor of family-owne- d Boon Rawd, said his company lays claim to 81 to 85 percent of Thailand and Africa have looked at the beer market in their regions and how brewers are coping with changes in their business and their environs. the market, J ery is owned mostly by a very rich and influential Thai whiskey magnate, Charoen Siriwattana-pakd- i, has provided the stiffest challenge to Singha. The old champ's was pride wounded late last year when Carlsberg sponsored the biennial Southeast c C a slight drop from the days when nine out of 10 By GRANT PECK Associated Press Writer Asia Games, held in the northern Thai city of Chiang Mai. Carlsberg bottles of beer BANGKOK, Thailand Bangkok used to be a town, which suited Boon Rawd Brewery, maker of Singha beer, just fine. But when the industry began to be deregulated six years ,ago, Boon Rawd had a battle on its hands. Government regulation had handed Boon Rawd, which was launched by a Thai nobleman in one-be- an bnakdi, in reporters same time. He predicted beer consumption will double over the next 6 to 7 years. executive direc- bore its label. er "Actually we are not cerned entered the in market June 1993 as a joint venture between Denma- con- much about the market share." Santi said. "The base is bigger so consumption is much larger." Singha's. 1934, a virtual monopoly. Not so long ago, you could work up a considerable thirst just trying to track down a bottle of Singha's poorly marketed rival, Amarit. Today, while Singha is still the undisputed champion of the By too much to expect. Editor's note: Brewers in developing countries face a variety of challenges. Sometimes it's competition from big international brands, but often beermakers also must contend with wars, political problems and local officials demanding paybacks. AP under threat of losing their lucrative liquor rights. Tales of dirty tricks abounded. Asjde from marketing and distribution, alcohol content plays a key role in the Thai market. Singha, a lager with a 5 percent alcohol content, is noticeably stronger than the average U.S. beer. "If you go to. the countries where the beer is very expensive due to the excise tax, the tendency of the beer is to be stronger, because people like to have some kind of feeling when they drink," said Boon Rawd's Santi. In Thailand, the tax on a liter of beer is the equivalent of $1.12. Sales of Boon Rawd's light beer, Singha Gold, have been "disappointing," Santi said. , Exploiting the point, Carlsberg early this year introduced its Beer Chang (Elephant Beer), with a 7 percent alcohol content and pricing, meant to drinkers appeal to lower-incom- e a for looking quick high at a low cost. At the high end of the market, rk-based Carlsberg International and Siriwat-tanapakd- i. Its battle to wrest aver- age annual sales growth the past four years has been just under 20 percent. Beermakers can thank near industry, top" ly a decade of challenger Carlsberg has kept strong econom-- . Boon Rawd hopping and recent ic growth for arrival Heineken seeks to skim their good fortune. The price the foam off the top of the marof beer has not ket. Local drinkers are signaling increased for 10 years, while sonal incomes have probably their approval of the new comever shot up 35 or 40 percent, Santi by downing petition said, adding that whiskey, the of amounts suds. increasing Total Thai beer sales for 1995 favorite local tipple, has been were estimated by Boon Rawd getting more expensive at the loss-lead- market share from Singha has been locally brewed Heineken, licensed by its Dutch owners, went on sale in July. Singapore's Asia Pacific Breweries has a 35 percent, share in the venture and provides most of the technical any- thing but a friendly er rivalry-B- oon know-ho- Rawd forbade "Our Heineken brand is aim-- " market, which ing at the top-en- d does not yet exist in Thailand," said Asia Pacific regional director Alex Kiljan van Heuven. "Singha has over 60 years of history in Thailand. Our strategy is not to fight directly with Singha, but Jo create our own segment for clieMs! who prefer premium beer." ; agents of its The good times really began flowing in 1989, when new deregulation measures included approval of licenses for two new breweries. Carlsberg, whose local brew formidable nationwide distribution network from handling Carlsberg. Carlsberg, which used Charoen's equally extensive Surathip whiskey distribution forced network, allegedly Surathip agents to sell Carlsberg eer making, where there's water there's a way By PATRICK McDOWELL Associated Press Writer South African companies staking out foreign holdings following the end of sanc- Global drinking id MAPUTO, Mozambique Nobody said making beer in Mozambique would be where there's water, but easy, there's a way.' And maybe there's new profits for a big' brewer hoping to expand across Africa, a continent most others see as a hopeless investment. Anheuser-Busch- ? Miller? Heineken? No, and not Bass, Fosters or the big Japanese outfits either. Try South African Breweries, the vyorld's by volume although it's n off the southern tip of Africa. The firm, known as SAB, is rapidly expanding northward, g brewbuying into eries around the rest of Africa as and China and Hungary fast as governments privatize them. And it's dealing with obstacles like outdated equipment and local officials who won't turn on the water without a bribe. The expansion marks one of the more striking examples of war-shatter- ed '" ? sixth-large- beer-mak- st little-know- money-losin- cash-strapp- er tions and the country's new, respectability under President Nelson Mandela. V y "I was amazed last summer to see someone from South African Breweries at a wholesalers' convention in the United States," said Robert Weinberg, an industry analyst and former Anheuser-Busc-h vice president. "They were looking for a wholesaler to sell their beer in the United States. They're very aggressive. I was impressed." .The company denies any immediate plans to sell its brands in the United States. But it has picked up stakes in the state-ru- n breweries of Zambia, Tanzania and Mozambique and is talking with Angolan officials. All were enemies of South Africa's former regime, but all have been wrecked by decades of civil war or economic bungling and need investors. Yet poor infrastructure and stifling bureaucracy scare off white-minori- ty most business people. SAB isn't scared. South Africa's third-largeconglomer- st ; The top 10 countries ranked according to 1994 beer consumption per capita in liters: J2 Czech Republic H 4 ' "" Germany Ireland" Luxembourg . ; H SvaWa 8 Hungary E Ur&ed Kingdom 10 New Zealand . 160.0x1 139.6 135.2 122.9 e 121.461 117.0 Austria 6 . ' 103,9 T 103.0 e '102.3 'J down-at-the-hee- head-to-hea- d. ry 102.1 x approximately e estimate Source: World Drink Trends, 1995 Edition ing poster echoed the British tively straightforward. SAB buys imperial slogan, "Cape to Cairo," into the local brewer, preferring a and executives view the rest of joint venture with government to Africa as their rightful backyard. minimize hassles. Outmoded "For better or worse, we have machinery is replaced, producsome experience in Africa, and tion increases and hygiene and find it a bit easier than some realshelf life improve. Once demand ly high-tec- h companies might," for the local brand is met, the said Andre Parker, head of SAB's brewery will start making Castle Indol subsidiary that runs the and Lion. African investments. Although the world's big In Mozambique, where local brewers may not be interested in ls brands such as Manica and 2M countries like were almost always out of stock, Mozambique, many have sniffed Craig McDougall of SAB leads a around South Africa. But none $15 million joint venture that has cared to take on SAB, which boosted output overnight. has a strong distribution system, He bought the formerly state-ru- n Some, like Guinness, find it brewery, then faced bribe-hungofficials who refused to easier to let SAB brew their turn on the water taps. So product under license. "I'd rather McDougall cut a deal with the be with them than against them," fire department, supplying tires said Jim Doyle, director of Guinfor trucks in exchange for two ness' southern Africa operation. tankers of water a day. SAB's Parker expressed cauSome of SAB's African expetion about expanding too fast, but rience comes from getting around said privatizations only come sanctions. Castle along once. and SAB's other big brand, Lion, "What they're doing makes have sold throughout the region sense," said Weinberg, the indus-- ; for years, having been brewed try analyst. "They want, to get a position before other people look during the sanctions era in neighinto Africa. I think South African boring Swaziland and Lesotho. is Breweries is on a roll." rela Today's penetration AP ate behind the Anglo-Americmining and De Beers diamond giants, it has a capitalization of $8.7 billion and controls 98 percent of the South African beer market of 23.5 million liters, the an continent's largest. The flagship brand, Castle, was founded in the Johannesburg gold fields in 1895. An early advertis id Gov. Leavitt sends chailenqe to Provo s business leaders By TRAVIS JACOBSEN Daily Herald Business Editor. Utah Gov. Mike Leavitt calls it a "mentoring state," while Provo Mayor George O. Stewart refers to it as "a light on the hill." Either way you look at it, the governor and the mayor are seeing The "it" being referred to is businesses in Provo and the need for business owners to support the community and state, by shouldereye-to-ey- ing the issues which will face 100 years. That was the ernor's message ing as Utah's addressed in e. and challenges Utah in the next thrust of the gov- Thursday morn-- : chief executive a question-and-answ- er format ever 120 Provo business men and women at the Provo Economic Development Office's Winter Rountable. Leavitt answered specific questions about Utah's traffic problems, the issues related to growth in the state's government, the private versus the public sector in solving compelling problems in the community, the state's centennial celebration cost, public education, the 2002 Olympics and the need to return power to the states and away from the federal government. About Traffic The traffic issue was a hot topic as many attendees called the corridor a failure and the recently finished Bangerter Highway a "planning disaster." ' ' In response, Leavitt stated that Utah's traffic issue is reaching a milestone in which the state must now.begin investing in the problem. Leavitt also' stated that the traffic issue will "never be solved," but must be "properly managed" forever. About Growth in Govern- 30-ye- ar tion of our heritage," stated Leavitt. About States' Rights "What we .are experiencing now this global movement to recap- ture our agency and the ability to decide how we will solve our comis bigger than munity problems any movement in time's past," stated Leavitt. "It is bigger than Quebec's desire to secede from Canada. It is bigger than Russian states' desire to be independent. It ment is our human trait to have our Leavitt stressed that Utah's' "agency," concluded Leavitt. For almost two years now, Pro-vo- 's Legislature and the executive branch are trying to decide just EDO has held quarterly trainwhat constitutes for business leaders seminars governexactly ing ment. at the Provo City Council cham"Are roads part of government? bers. Is building schools part of governThese training sessions are forment? Is building prisons part of mally known as Provo's Business government? Those questions are Rountable and have included , facing us now," stated Leavitt. nationally acclaimed speakers About Centennial Celebrasuch as Arnold Parrott, who spoke tion Money on Total Quality Management; One businessman asked Leavitt Steve Schalenberger of Provo-base- d why the Utah taxpayer may be Covey Leadership Center, is what for to in discussed who pay required training principles; d essence "a giant party" for celeof Salt Lake Smith, Hyrum Franklin Q est, who highbrating Utah's Centennial celebration over the course of one year. lighted the issues of time manage"Although the final cost, if any, ment; Russ Jardine, who spoke on is not yet available because it is too the Internet; book author Dr. Tay-- . early, I can't feel badly about lor Hartman, who spoke on people and relationships; and most recent spending $300,000 on a celebra City-base- v5 1 Z' Daily Herald PhotoMatthew R. Smith Utah Gov. Mike Leavitt speaks to attendees of the Provo Economic Development Winter Rountable In Provo Thursday. The governor discussed Issues such as growth, traffic, returning power to the states and the ccst of the Utah Centennial Celebration. . ly, Gov. forum sion. Leavitt, with his open question-and-answ- ses- - er ' The rourtables are organized by business development and public information officer, Steve Glea- son, who works for the Provo Eco- nomic Development Office. pour uupffi ' |
