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Why at least one long term holder sold ( had been with Fletcher Building from the Fletcher Challange days)
For the following reasons which I could see more than two years ago, finally decided to sell back in November 2016;
1. there were too many directors selling quite a lot of their shares during 2016 (looked like some wanted out).
2. thought Fletchers had got too big with fingers in too many pies and was likely to get complicated to run.
3. But the main reason I sold was because I was hearing complaints about the shoddy work being done on repairs to peoples houses from the Christchurch earth quake, they had emdemnity clauses to excuse them of liability but I didn't beleive it to be lawful for a bussiness, or for anyone for that matter, to contract themselves out of their legal obligations, I also didn't want to be a shareholder involved in a company that was creating an ever growing number of unhappy homewners.
I was also concerned then that thousends of disgruntled homeowners would adventually get their claims upheld and Fletchers could be liable potentually for many millions if not billions if they have to go back and fix bad repairs.
IMO the problems so far experianced by Fletchers will be dwarfed by the problems that the Chistchurch rebuild, may have coming to them, I see FBU as simply not worth the risk .
The day after the Kaikora earth quake, we took our entire holdings out, which if I remember correctly was total of around $250k at between $10.30 & $10.50 per share. Even if this company is around in few years time, we want to be able to remain good friends with those that have suffered ill repaired or damaged homes, and the resulting physiological stress we don't think I will ever invest in them again, unless that is they can make good all the house repairs that are in dispute.
As Warren Buffett once said " Try to buy stock in businesses that are so wonderful that an idiot can run them. Because sooner or later, one will"
FP
