I noticed Incitec Pivot (IPL) fell 27% today after successfully raising $819m in a capital raising. They go ex-dividend on Tuesday so I am thinking of buying some on Monday at about $3 with a 19.5c fully franked dividend.

I am wondering whether the REIT sector has been oversold. They all have fantastic yields and normally there earnings are stable. Surely they all can't go broke? So it's a metter of picking the survivors one would think

In a briefing on Tuesday by a stockbroker who will remain un-named it was commented that the market had appeared to have reached a floor at 3800. The very next day it plunged through that to below 3700.

All of a sudden I feel the doom and gloom being persuasive. The Euro Zone is now in recession. The policy makers are trying to solve the financial problems with the main cause of this crisis, more debt. Let's just print money to make the world go round again.

My mum has suggested food, geriatric care and renewable energies. Is it possible to have exposure to renewable energies on the Australian market? Babcock & Brown Wind? Sounds dangerous to me.

I think Australia is still a good place to invest. Better than Europe or the US.

I also think it is a great time for making changes to the economy and to encourage new industries that can support transformation to a non-carbon economy.

So what to do? Well I am going to progressively buy stocks. I think there is long-term value in the market. It is a matter of selecting stocks that will survive and then prosper. They need to be in an industry that has a future, have a sound business model, good management and cash flows. As for where the bottom is, who knows? It might be 3600, 3300, 2900, 2500, 2000. Perhaps it will be lower? And how long will it take to get to the bottom and then recover? I suspect the bottom is above 3000 but that the recovery period will be long. We might not reach record highs for a decade or longer.

Look at Japan as a precedent. They are 18 years from their peak and still only at 21% of that peak. When will that market make new highs?

Adieu - 14 Nov 2008, 8:10PM

Acknowledge the sacrifice required to change

We are in the business of change. We all are. This is a tricky business.

You will have a very good discussion for the need to change things. Everyone will be in agreement. The case for change is clear. All is bright. We're going to change the world (or our part of it) and make it a better place.

Then somewhere down the path things begin to get hard. Things used to be simple. People start to put the brakes on, whilst others are trying to change as quickly as possible. It gets messy. This then further retards momentum. The skeptics start taking sway. Doubt takes hold in the believers too. Relationships are tense and are under great strain.

The tide is now against us and our initial objective may not be salvageable. We are now in the world of disillusionment.

There appears to be a tendency to ignore the challenges involved with fundamental change. We need quick fixes that are palatable.

Where did it go wrong?

Arguably the best setting of a vision and case for change was the moon speeches of John F Kennedy. I recently played the Rice Stadium version from YouTube to a class. I had watched it previously a few years ago, but on this occasion I was struck by the emphasis given to the difficulty and challenges. I quote:

   "We choose to go the moon... and the other things...not because they are easy, but because they are hard. Because that goal will serve to organise, and measure the best of our energies and skills. Because that challenge is one we are willing to accept, one we are unwilling to postpone and one we intend to win..."

 

Today's business and political leaders give little attention to difficulties and personal sacrifice required for us to succeed and reach our potential. Sacrifice, hardship and discomfort do not appear to be widespread culturally acceptable norms in the 21st century, whilst plasma TV's, climate control, welfare and anti-depressants are.

 

Let's face it. Change is hard for many reasons, and not just because people don't like it. There are many of us who do like change and even yearn for it - there are the early adopters, the freedom fighters, the anarchists and the Y Generation. However change is made unbearable when we are heading in different directions all at once. It creates conflict. It ruins relationships. It is dysfunctional.

 

Bringing this back to your business - what do I suggest? How do we herd the cats?

 

Well it important, indeed vital, to recognise and acknowledge the difficulty in sustaining fundamental change. It is essential that we are selective and committed to the changes chosen as a group/team/unit. Otherwise we will go down the well trodden path of management by fad and ongoing disillusionment. We need not only accept the notion of the change and the potential benefits, but to realise those benefits we must accept the hard work and sacrifice that will be required. To truly be successful at pro-active change we need to embrace the journey, the adventure and all its ups and downs, with a clear view of why and where we are going.

 

Let's finish with a quote that Malcolm Fraser is infamous for,

“Life is not meant to be easy, my child; but take courage: it can be delightful.” - George Bernard Shaw

Adieu - 2 Sep 2008, 9:20AM

 

The age to account for Natural Capital

The ecomomy is in a state of flux. There are fundamental forces driving change. These include:

• Industrialisation of China, India, et al. and the huge demand for materials and energy
• Large debt levels in many developed economies that are not sustainable
• Technology
• The environment

 

Let us elaborate on the the environment. Over the past decades/centuries/millennia the world ecomomy has been running down natural capital. This capital (Water, Air, Bio-diversity, oil and minerals, soil, etc) has not been fully accounted for. Air & Water have been deemed free assets due to their perceived limitless nature. However it is becoming apparent that these assets do have limits and there are real impacts if they are drawn-down too far.

 

This draw-down in natural assets is reducing the world net wealth effecting us humans as stakeholders (just to be species ego-centric). We often draw-down on natural capital to increase revenues and assets (ie. by creating jobs, building things, creating electricity, etc). However we do so in a model that does not fully account for this natural capital draw-down. Decisions are made that exclude this cost and in many cases different decisions would be made if this was taken into consideration. For example would you use as much electricity as you do if electricity was twice the current cost? Because of our incomplete measurement systems we are making decisions that often cost more than the associated benefits at a global scale.

 

This is what carbon trading and/or a carbon tax intend to resolve for one aspect of natural capital - green house gases and a stable climate. The main sticking point is getting a system in place that provides a level playing field globally.

Regardless of the difficulties, it would seem that we need to tackle this problem and this should result in a signifacant ecomonic stimulus. This is because our whole economy and the infrastructure and bits that make it up need to be re-engineered. It's like going to war, it provides a catalyst for investment and economic growth.

 

There are some awesome challenges involved. How do we continue to provide billions of people with food, housing, transport and tv's now that we realise there are constraints to natural capital.

All things being equal there will be a significant inflationery impact as we start to cost the draw-down on natural capital. There will need to be pain and the more widespread it is shared the less painful it will be for individuals. But people need to know it will be difficult and sacrifice will be required just like in a war scenerio.

 

The trick is to be smarter and more productive at how we do things. Here are some ideas:

• Eliminate waste. We should no longer have waste materials. All by-products of a process need to flow back into productive processes. This is something that is evident in nature and which has let it develop and thrive for billions of years.
• Where possible capture water and generate power where it is needed. Reduce logistics.
  
• Reduce administration. I'm an accountant, and I know it is made a whole lot harder than it need be. We have the technology for electronic commerce and integration across public spaces. For example why does a business need to enter supplier invoice details into their system when the supplier has already entered into the supplier's system? Theoretically it is a simple matter of trensfering data from one system to another. Data entry should be kept to a minimum (ie. once only). In business today it is still often many times with resulting errors and inconsistencies.
• Use imagination. This is perhaps the one human endowment that can save us. The ability to see a vision of the future that is different to now. We have the benefit of knowing things now that our ancestors did not imagine in their wildest dreams. eg. 200 years ago people could not imagine that microscopic organisms could cause death. How could something so small effect us? Now it is taken for granted. What things today so we not see? What are we blind to? As the pace of change increases we are now more aware of how much we don't know. At least I hope we are.
• Look at nature. Understand universal natural principles fully. Apply them.
• Stop trying to live longer - start living better.
• Be frugal.

Adieu - 10 Jul 2008, 10.39AM

 

Namsat's new web site...

OK, this is the next generation in Namsat web pages. Woopee!

 

The first was rudimentary, because I did it meself. HTML is not my strong suit.

 

I had help from Shari Davies with the branding, logo and what not. Thanks Sharzworthy, love you.

 

Stuart Robinson the serious Saints supporter from the hustle and bustle of Old Melbourne Town has set-it up thus far and put these horrible photos all over the place. Cheers bro!

 

Anyways, what is Namsat Systems Accounting? If you have read this far then you deserve an explanation, 'fair enuf Gov'

 

Well it aims to take my learnings from working in the murky midst of the corporate world.

 

Where I could be likened to being a slave creature in Mordor, there are some gem times and I got to do and fix things all over the place. And most of the people are great, even some of the bosses, characters everywhere...

To be balanced I also had some bloody good jobs where they looked after me.

 

Well let's move on shall we.

 

Namsat would like to work with, partner, synergise and just plain help like minded independent individuals. And there are more of us than you would believe. And I also know that this web thingy will make this a reality.

 

Anyway that's enuf guff for now.

 

Sleep well and may the rain come at the right time in the right quantities in the right places.

 

Feel free to e-mail anything you want about this website - the best critical response gets a bottle of red juice.

Adieu - 7 July 2008, 10.54PM