Taking Stock 23 April 2026

DURING my career in financial markets, now in its 52nd year (good grief!), I have become familiar with most options for investors.

I remain puzzled by the likes of the modern betting products (iPredict etc) and am unfamiliar with some of the new American synthetic offers but am now informed about the latest version of timeshare, promoted by the Marriott Group, a huge American tourism company.

Recently I was staying at Ko Olina in Hawaii for a family break that brought four of our directors together to consider the best options for the various outcomes of the Middle East's disastrous war. We stayed at a resort owned by Marriott International, the world's biggest hotel group. 

A polite young woman asked my wife and I if we would attend a presentation on an offer from the Marriott. Politely we agreed, my logic being I might learn something useful.

What followed was a full disclosure of the Marriott's "ownership" scheme, a modern version of Timeshare, a holiday ownership scheme commonly marketed in New Zealand 40 years ago. Marriott International wants regular holiday travellers to pay a variable one-off lump sum and a small annual fee to acquire "points" used as payment for holidays chosen from Marriott’s menu of about 80,000 options around the world, including several in New Zealand, at places like Wanaka, Waiheke, Taupo and Queenstown.

Each of the 80,000 options has a value expressed in points. The number of points required for each option never changes.

The resort we were using would cost 500 points a night. (We simply paid cash.) A resort in Florida would cost 300 points a night, in Chicago 100 points.

To buy 5,000 points might cost US$80,000 payable only once, the points given to you to spend, every year, in perpetuity, transferable to one’s estate.

The annual fee for "maintenance" might be US$4,000 a year and for other incidentals, say US$1,000, so ongoing costs are defined.

If one paid $80,000 once, and $5,000 per annum, one could receive 5,000 points every year forever, enabling you to holiday 10 days a year in the Hawaiian Ko Olina resort, in superior accommodation.

The 5,000 points are yours forever to be used each year, except they may be stored up or even spent in advance. In Ko Olina each accommodation houses at least two couples in opulent rooms.

The 80,000 (approx) Marriott holidaying options on which points can be spent include cruises, as well as fixed destinations, such as Ko Olina.

If you buy into the scheme your status changes from being a "renter" (people like me who book and pay the going rate whenever we wish) to an "owner".

In the US, ownership eliminates the hefty US hotel tax, around US$100 a day at our resort. It eliminates car parking fees (US$48 a day at Ko Olina) and it comes with a wide range of "discounts", from services, restaurants etc in nearby areas.

Americans love the concept and see it as an affordable way of holidaying at middle-class venues. (Marriott hotels are somewhat short of the top of the range.)

The Marriott in Ko Olina costs a renter of a small hotel room around US$700 a night. The hotel has no dining room and no bar. Food services are in a couple of restaurants/bars offering, may I say politely, food of the equivalent (at best) of a Cobb & Co in NZ. 

There is a resort mini supermarket where staples (bread, milk, food etc) are sold at a price that most would find uncomfortable (i.e.a litre of milk - US$13). It is a long walk to any competing supermarket.

Renters accept all of this.

Those who are "owners" enjoy the superior units, two bedrooms, three bathrooms, large kitchen/dining, nice views etc. They get discounts from the supermarket.

Within ownership status there are five categories based on how many points were bought. If you paid US$250,000 to acquire 20,000 points you might reach the President status, which would entitle you to various additional privileges.

All of this is very American; status, discounts, privileges etc.

As a form of investment, it might suit some.

 Americans to whom I spoke found it "forced" them to take holidays; they found they could offer free holidays to friends and family. By being canny they could often book at very low prices when cancellations left rooms vacant, leading to big reductions in the points needed per night.

Because the maximum points per night never increases, those with decades of travel to enjoy genuinely found the points scheme an investment, as the points per day cost never increases.

I attended the Mariott presentation with my wife. I listened. I learned a little. My wife and I were offered a half-price holiday at Ko Olina next year. 

We were granted a day's free tariff from our stay this year. We were not buyers. (I politely asked if I could attend every day and thus make our stay costless!)

Footnote: Ko Olina is on the west coast of Hawaii and has four adjacent resorts - Royal Hawaiian, Disney and Four Seasons, as well as The Marriott, each with its own safe man-made lagoon, all four within a drive and a wedge of the Ko Olina golf course, a PGA venue (US$350 a round, including club hireage).

Ko Olina is a suitable location for a series of brainstorming sessions for company directors. We may reconvene there in the future. As renters!

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GROWING evidence of the divide between the wealthy and the rest grows at pace in the US.

Their all-important auto industry illustrates this.

Three years ago, the lower half of US households by income owned a third of all cars registered in the USA. The latest published figure is 25%. Explanations for the decline include higher interest rates, higher fuel costs, job insecurity, maintenance costs and the cost of parts (tariff-related).

Cost of ownership, largely based on car leasing, not outright purchase, has risen 40% since Covid. (Outright purchase is rare.)

Delinquent loans for cars have risen 28%.

More people are using Uber.

The average US car on the road was built in 2013, somewhat similar to NZ.

The gap in living standards is starkly reflected by the success (or otherwise) of shopping malls. Of 900 shopping malls, the value of the top 100 equates to 50% of the sector's total value. The bottom 350 malls make up just 10% of the sector's value.

Malls selling at auction have little value. An example was the Palisades Centre in New York's Hudson Valley. Twenty years ago its value was US$880m. It recently sold for US$175m.

Bank loans to malls have a sickening delinquency rate of 11%.

Each year throughout the USA 40 malls close, many as zombie properties.

The successful malls focus on high-net-worth individuals, promoting luxury. Rents there are at all-time highs. People of “normal” wealth shop elsewhere.

The cost of pharmaceuticals in the USA highlights their inaccessibility to those without health insurance or high income. Two of the world’s most-desired new drugs are Wegovy and Zepbound, both weight loss medications.

Below is a chart of the price of the drugs in US Dollars in major economies.

Wegovy

Zepbound

Japan

163

155

France

196

268

Denmark

198

333

Germany

198

320

UK

222

279

Switzerland

225

284

Italy

282

399

USA

349

399

Canada

375

256

Like NZ, Hawaii is highly dependent on imported energy. It aspires to be based on renewable energy by 2045. Enabling the transition is LPG/LNG.

The Japanese company (JERA), the largest power provider in Japan, is to build in Hawaii a hybrid plant, initially using LNG, able to be adapted to use hydrogen and ammonia, planning to convert to net-zero sources by 2045.

The plan is highly contentious in the islands which are home to 1.5 million people, of whom around 350,000 live around Honolulu. Many locals oppose the JERA plan, evoking thoughts of New Zealanders towards the same issue.

Given the extreme difference in wealth between Hawaii’s many shanty towns and, say, the resorts or the narrow Waikiki surf beach, it did sound as though low-paid Hawaiians make no connection between the cost of lifting living standards and the compromise on things like development, with its implied environmental changes.

Footnote: Hawaii is no fan of Trump. Some 83% of its population vigorously oppose Trump's plan to sign the new US dollar notes.

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SANTANA shareholders now face a long wait. This will test the patience of many, especially given the depressing weather, the global instability, the future of oil prices, and the upcoming NZ election.

The panel had asked Santana to respond to any of the submissions. The response is now on display on the Fast-track website. It makes compelling reading.

Santana’s response offers science and maths to counter some of the more tenuous submissions, but its response mainly addresses the Iwi claim that Santana has breached the Treaty of Waitangi.

The claim is that Santana did not communicate adequately with Iwi and did not address sincerely the concerns of Iwi.

Santana has responded with a log of every meeting on site and on marae, every zoom conversation, and every discussion between Santana and the Runanga.

The panel will read the minutes of those hundreds of discussions and will decide if Santana was respectful, responsive and reasonable. Any accusation of Treaty breach will have to be considered alongside the minutes of meetings, and related correspondence.

So too, will the offers of inclusion in the project and any evidence of Iwi requests for involvement.

My guess is that thousands will read the minutes of all the contacts. They will reach their own conclusions.

I recommend reading the Santana response to submissions.

My own expectation is that many of the opponents’ submissions will be fully addressed by science and maths, and by the correction of much totally unsustainable comment.

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Travel

28 April - Wellington - Edward Lee

6 May - Christchurch - Johnny Lee

28 May - Kerikeri - David Colman

29 May - Whangarei - David Colman

8 June – Nelson – Chris Lee

9 June – Blenheim – Chris Lee

Chris Lee

Chris Lee and Partners Ltd