SuperInvestor Business Articles

Investment Mixology

So what do your Investment Manager and your neighborhood bartender have in common, other than the probability that you spend more time with the latter during market corrections? [...]

Investor Political Priorities

We all want to keep more of what we make, and to spend it as we see fit. Politicians won't support change unless their power positions are threatened. Protectionist policies, excessive regulation, taxes, and government mandates make businesses move elsewhere for a less restrictive environment.

[...]

Apartments might be a better investment

Some lessons for investors. As our population grows there’s no doubt we will need to embrace the apartment culture. Fortunately our lifestyle preferences are changing, with many gen Ys prepared to trade a backyard for a balcony.

[...]

Losing sight of the lucky country

Australia is a country that barely understands, let alone appreciates, its own luck. Being so close to good fortune can make us blind to it. I sincerely hope it will remain the lucky country. [...]

General Motors management triumph over hypocrisy

General Motors top management in Detroit makes its decisions knowing that Opel, Vauxhall and Holden are all, for different reasons, a drag on the mother company. But only in Australia can GM extract taxpayers’ money to keep its operation alive. Neither the German nor the British government has given in to GM’s pressure. [...]

EU referendum is a bad Irish joke

The Irish decision on the EU Fiscal Compact looks inevitable. Even though, recently, Ireland’s relationship with Europe has followed an erratic path. However, even if the Fiscal Compact unexpectedly fails the referendum, it will not matter much to Europe, only to Ireland. [...]

Striking a French euro tinderbox

Internationally the outcome of the upcoming French elections is crucial for the future of the euro and the way of European integration. However, it is likely that the campaign will be decided by which candidate proves the better populist. [...]

A zero-sum carbon game

As Groucho Marx once put it, you have to learn from the mistakes of others because you can never live long enough to make them all yourself. If Australian policymakers heeded his warning they could save the $10 billion they are prepared to commit to the Clean Energy Finance Corporation.

In this case the mistakes of others were previously made by the Germans. For more than a decade, dating back to the election of the Social Democrat-Green coalition government under Chancellor Schröder in 1998, the Germans have pioneered the introduction of renewable energies. However, in designing policies to move closer to a clean energy future they made some basic mistakes of economic logic – mistakes that Australia is just about to repeat.

[...]

The hypocrisy of European bankers

The eurozone crisis is a strange beast. When it suddenly erupts with ratings downgrades, spiking yields and high political drama it can scare even the most experienced analysts and commentators. But it is probably much more dangerous at times when the crisis has seemingly settled down.
[...]

Returning to old European rivalries

The current crisis of Europe has no lack of material tragedies and personal hardship. The periphery economies are in a sharp tailspin, driving thousands of companies out of business. An entire generation of young and educated people in southern Europe cannot find jobs. And for those lucky to remain employed, life is becoming unaffordable because of falling wages and rising prices.

Beyond these visible effects, the fiscal and monetary crisis is causing severe collateral damage to the philosophical constitution of Europe. This is jeopardising the political and economic recovery.

[...]

In search of a Greek hero

More violence in the streets, more political acrimony in parliament, more austerity measures demanded by the international community. It’s Groundhog Day again for Greece, or rather – and in keeping with its mythology – it is a Sisyphus experience. Greece, just like the fabled king, has to pay the price for its past sins. And just like Sisyphus, it is caught in an endless sequence of mindless and eventually futile tasks.

[...]

Asian investors set sights on Australian apartment market

Australia’s natural resources are not the only asset in demand from Asian markets right now, as an increasing number of foreign investors set their sights on residential apartment development in our major cities. According to CBRE property group, around a third of all new apartment developments currently in the pipework for Sydney and Melbourne are owned and developed by overseas investors.
[...]

Implications of a Glencore and Xstrata marriage

It’s worth reflecting on the implications and issues surrounding the proposed Glencore – Xstrata marriage of two of the world’s biggest mining houses. The rationale for the deal is simple. Glencore wants to add more mines to its portfolio in order to enhance and grow its trading business. Glencore is different from most mining companies in that it has historically been a major commodity trader. This means it makes money whether commodity markets are rising or falling. [...]

2012 will be a disastrous year for property

I’m not going to invest in property in 2012! It’s going to be a year full of crises. Just look what’s looming in Europe. The China bubble could burst. And the US could have a double dip recession. These were the words of two of our friends, Gill and John, as they discussed their plans for this year with me. [...]

An EU fix stuck at German denial

The summit-less time is over and the professional euro rescuers are back at work. After the first crisis meeting of EU leaders this year, the future of Europe’s common currency is as uncertain as before. This is not despite the fiscal compact that was agreed but because of it. The Europeans are still trying to solve the wrong crisis. [...]

Paying for Europe's wishful thinking

It is one of the most used phrases in the eurozone crisis: Buying time. The measures taken by European politicians over the past two years have obviously not solved the problems. Instead, they provided temporary relief – sometimes for a few weeks, sometimes only for a couple of days. They literally ‘bought time’. [...]

Taking taxpayers for a ride

KPMG has published its Global Auto Executive Survey for 2012, in which executives from the world’s leading car manufacturers were asked about the situation of their industry. One of their key concerns was global overcapacity, estimated at somewhere between 20% and 30%.
[...]

Outlook for house prices in 2012

Economist Steven Keen is at it again. This time he’s predicting house prices will drop 5 to 10 percent in 2012. Is he right? Well… 2012 will be a tough year for property, but before I answer the question I posed, I’d like to mention that I find it interesting that Professor Keen is only predicting a 10% drop.

[...]

Do not be super ignorant

In arguably the second-most controversial section of the award-winning investment book, “Who’s Taking Your Money? (and how to get some of it back!)”, Chapter 13 opens by stating that, “some people are just intellectually inferior… to hardwood…”. We could possibly change that last word to “driftwood”, as many hardwood timbers actually serve a defined and structured purpose, unlike the soppy pieces of wood that simply drift through life aimlessly without direction. [...]

World class economy with first class prices

Australia’s economy is the envy of the world. No country has weathered the financial storms of the past few years as well as Australia. In global economic terms, down under is very much on top. Such statements have become standard ingredients in ministerial speeches about Australia’s recent economic performance. To a degree, they are true. And yet ordinary Australians may well ask themselves why they cannot see the benefits of this apparent miracle economy.
[...]

A wild forecast for Euro pain

Revisiting my predictions for Europe in 2011; I can today declare without any false modesty that I was right on the money. Not only that 2011 has been very much like 2010. It is also emerging that we will celebrate Christmas on December 25 this year – just as I had forecast last December.

Having thus established myself as a trustworthy futurologist, it is time to dust off the crystal ball so I can give you an exclusive preview of 2012. I hope you are seated with your seatbelts fastened. It’s promising to be a bumpy ride. [...]

Germany's blissful euro ignorance

The whole world is watching to see what Germany’s next steps in the euro crisis will be. Will Angela Merkel finally agree to a Europe-wide debt pooling? Will the Bundesbank let the ECB at last print the trillions needed by bankrupt governments? Can the German coalition survive the Free Democrats’ referendum on the new euro rescue mechanism? [...]

World economic power swings back to America

Don’t write off the American economy just yet. According to an article in the UK Telegraph the American phoenix is slowly rising again. Within five years or so, the US will be well on its way to self-sufficiency in fuel and energy. Manufacturing will have closed the labour gap with China in a clutch of key industries. The current account might even be in surplus. [...]

Germany's nuclear reaction provides a win for coal

As they say in German, ''Angst ist ein schlechter Ratgeber'' - fear is a bad counsellor. Had German politicians kept this proverbial wisdom in mind, their reaction to the Fukushima nuclear disaster would have been different. Before the decision to switch off their country's nuclear power stations in a hurry, they should have considered the consequences for energy security, electricity prices and carbon dioxide emissions. [...]

How to make upward profit in a sideways market

There is much uncertainty around the world, politically and financially, with post-GFC economic fallout, corporate collapses and riots in the UK, Africa and the Middle East. My solution for all of this is quite simple: turn off the television and go for a walk outside. [...]