Archive for the ‘Business’ Category

Intrusive ads are counter-productive – at least with me

February 6, 2014

I must be representative of some consumers since I do buy stuff.

I even buy quite a lot of stuff on-line. Tickets of any kind (theatre, airline, museum, train, football, hockey bus ……), books, music, electrical and electronic gadgets and a host of small articles capable of being delivered by post. We book hotels on-line and sometimes pay on-line as well. We generally don’t buy food or clothes on-line but we do sometimes (at least my wife does) respond to the flyers dropped into our letter box by local retailers. Nearly all automotive products or materials for house repairs are bought physically and not on-line though we may have searched on-line.

But what I observe is that when I buy-on line it is from sites that I know or for which I have searched on-line. Never by clicking on an ad at another site. Even when I search I always hop over the paid ads which show up at the top of the search results. For a store to show up in a search result is much more important in getting my custom than in their advertising having been seen on another site. I cannot recall a single instance in the last year of buying something in response to an on-line ad. But what I also observe is that there is some threshold level of intrusiveness which leads me to remove sites from my bookmarks. If a site directs me first to full-page ads which I have to click away – and especially if they make it difficult to find the “close” button – then those sites get removed from my bookmark lists. I don’t watch videos on-line if their ads don’t disappear within 5 seconds. If my mouse, when hovering over text, brings up too many intrusive ads then the entire site gets onto my “black-list”. I don’t mind registering for some services at some sites but if that process takes longer than about 30 seconds (perhaps a minute) then that site never gets visited again.  Of course it could be that some of the on-line ads are having a subliminal effect and reinforce my perceptions when I search for on-line stores – but it is not very likely.

Even on TV and especially since the break for commercials is so long (in Sweden a commercial break lasts 6 minutes and there are not many ads of high quality), the commercial break either leads me to surf other channels or to go do something else. In the last year or two I notice that there are more TV programmes that I watch only up to the first commercial break because I then go and do something else and never get back in time to watch the rest of the programme. If it is a sporting or political event, then I may well return to the programme – after the commercial break. In any event the people paying vast sums for making and airing the commercials do not capture my attention. If anything they create a resentment in me since I am either a “captive audience” or am being coerced to view their “nonsense”. And it is the resentment which leads to the content being classified in my mind as “nonsense”. I never watch TV shopping channels but they clearly don’t have me as their target audience. The very existence of the commercials is leading me to strategies to avoid them!

My behaviour is surely influenced by the presence of ads on-line and commercials on TV. However, the behaviour engendered in me is nearly always counter-productive from the viewpoint of the advertiser. Maybe I am an untypical consumer – but I doubt it.  Which makes me wonder how effective some of this advertising is?

Certainly advertising agencies and the industry in general will never admit that there can be too much advertising. They get paid for exposure (or apparent exposure) and not for sales achieved. They don’t suffer any penalty for resentment caused or customers driven away. But I would suggest that there is a threshold – very low in my case – at which on-line advertising and commercials on TV become counter-productive.

I get virtually no text ads on my phone. I stopped using Facebook and Twitter some months ago so at least I am not harassed by their ads. But from what I hear, the intrusiveness of the ads on the social media are now leading to some people reducing their use and, in some cases, ending their use of social media. Social media and their business models are still evolving but the assumption that advertising revenues can keep increasing forever is fundamentally flawed.

BBCTwitter reports $645m loss for 2013

Microblogging site Twitter has reported a net loss of $645m (£396m) for 2013, just three months after its flotation on the New York Stock Exchange. The loss was expected by analysts, who highlighted Twitter’s revenues, which rose 110% last year to reach $665m.

But a reported slow growth in user numbers was a bigger concern for investors. Twitter averaged 241 million monthly users in the last quarter of the year, up just 3.8% on the previous quarter. That represents a slowdown compared with a growth rate of 10% seen at the beginning of 2013. Timeline views were down nearly 7%, suggesting users were refreshing their feeds less often.

“What this report will do is it will question how mainstream is Twitter as a platform,” said Arvind Bhatia, an analyst at Sterne, Agee & Leach.

Shares fell as much as 12% in after-hours trading on Wednesday.

Coal is still king in Svalbard

January 29, 2014

Svalbard, ranging in latitude from 74°N to 81°N,  is about as close as you can come to the “top of the world”. The mining of coal would not normally be thought of in the Arctic and that close to the North Pole but the Svalbard economy is dominated by coal mining. The population of Svalbard had increased by two percent, to 2,158 at the end of 2012.

CIA Factbook: The settlements on Svalbard are essentially company towns. The Norwegian state-owned coal company employs nearly 60% of the Norwegian population on the island, runs many of the local services, and provides most of the local infrastructure. There is also some hunting of seal, reindeer, and fox. Goods such as alcohol, tobacco, and vehicles, normally highly taxed on mainland Norway, are considerably cheaper in Svalbard in an effort by the Norwegian government to entice more people to live on the Arctic archipelago. By law, the Norwegians collect only enough taxes to pay for the needs of the local government. None of tax proceeds go to Norway.

Svalbard

Svalbard

Science Nordic reports:

The economy of Svalbard, the Norwegian arctic archipelago that lies between the country’s mainland and the North Pole, is still dominated by coal even as its value dwindles and employment in the mines drops. …

Tourism, a college and polar and space research activities have yet to make this community independent of coal. This has been verified by a recent analysis of Svalbard’s socio-economic status by the Norwegian Institute for Urban and Regional Research (NIBR).

“Coal mining has always been the mainstay here, and it still is,” says researcher Steinar Johansen, who wrote the report with his colleague Hild Marte Bjørnsen. ….. In addition to all who are directly employed by the local coal company, Store Norske, mining requires a number of sub-venders, and services need to be provided to family members who move to Svalbard’s little town, Longyearbyen, at the chilly latitude of 78° N. …

But can the Svalbard community surive without coal? Not without major changes, according to the researchers.

Tthe statue of the coal miner in the town of Longyearbyen is a reminder of who – or what – really dominates the economy. (Photo: Georg Mathisen)

US “sells” Norway Ambassadorship to an uninformed hotelier

January 27, 2014

The uglier side of “democracy”.

That generous donors to the US political parties are rewarded with Ambassadorships is common knowledge. The smaller and “less important” countries are usually the destination for these bought positions unless a very large donation is made. $6.2 million can buy an Ambassadorship to France or Monaco.

And now Norway knows precisely how unimportant it is considered by Obama’s establishment as George Tsunis, a rich Greek-American hotelier and a very generous donor to the Democratic Party made an idiot of himself at the Senate confirmation hearings. After all he can’t do much harm sitting in Oslo!!!

He thought Norway was a Republic and didn’t know which parties were in the coalition ruling Norway. It would have been pointless asking him the name of the King. An ignorant person is a correct description – at least about Norway. He does apparently know something about running a hotel. It does not say much for his knowledge (and perhaps also his intelligence) but it does not say much either for the briefings he must have received from the State Department. A member of the Greek Orthodox church now going to be an expert in a Lutheran country!!

Or did the career diplomats deliberately make sure he was not briefed properly because they wanted to showcase his ignorance? 

George Tsunis at US Senate in Jnuary 2014 - source screen grab - The Local

George Tsunis at US Senate in Jnuary 2014 – source screen grab – The Local

Future US envoy displays total ignorance of Norway

The US’s next ambassador to Norway has committed a jaw-dropping diplomatic blunder before he even begins, describing politicians from the Progress Party, which has seven ministers, as “fringe elements” that “spew their hatred” in a US Senate hearing.

Asked by Senator John McCain what he thought it was about the “anti-immigration” Progress Party that appealed to Norwegian voters, Greek American businessman George Tsunis seemed unaware of the party’s role in the ruling coalition. 
“You get some fringe elements that have a microphone and spew their hatred,” he said in the pre-appointment hearing. “And I will tell you Norway has been very quick to denounce them.” 
McCain interrupted him, pointing out that as part of the coalition, the party was hardly being denounced. 
“I stand corrected,”  Tsunis said after a pause.  “I would like to leave my answer at… it’s a very,very open society and the overwhelming amount of Norwegians and the overwhelming amount of people in parliament don’t feel the same way.”
The blunder came after a faltering, incoherent performance from Tsunis, in which he made a reference to Norway’s “president”, apparently under the impression that the country is a republic rather than a constitutional monarchy. 
Tsunis founded the hotel management company Chartwell Hotels, which operates properties for InterContinental Hotels, and other major hotel groups. He is one of the leading figures in the Greek-American establishment, and is heavily involved in the Greek Orthodox Church. 
He donated $267,244 to the Democratic party in the 2012 election cycle, and $278,531 in 2010, making him one of the party’s top individual donors. 
His ineptitude has also been noticed in the US (but he was confirmed anyway).

billmoyers.com:

The State Department is filled with veteran foreign service officers with years of experience in international relations. Most of them are products of elite universities, where they studied subjects like conflict resolution or international trade theory. Many are multilingual, and all have deep expertise on the political scenes of various countries.

Yet they routinely watch as deep-pocketed political donors with little or no foreign service experience are appointed to serve as America’s ambassadors overseas. The practice is so common that a pair of international relations scholars at the University of Pennsylvania were able to put prices on various plumb ambassadorships. According to The New York Times, “the study found that political ambassadors who had made campaign donations of $550,000, or bundled contributions of $750,000, had a 90 percent chance of being posted to a country in Western Europe.” The best postings — in France or Monaco — could cost up to $6.2 million in direct contributions. ….

Other Norwegian media described Tsunis as having “trampled through the salad bowl,” according to Olivier Knox at Yahoo NewsKnox added that Tsunis wasn’t the first to fumble the hearing:

McCain, already flummoxed by the apparent inability of Obama’s choice to be ambassador to Hungary to list strategic US interests there, closed his questioning with a bit of sarcasm: “I have no more questions for this incredibly highly qualified group of nominees.”

The real interests in the Arctic

January 26, 2014

Much of what is said or written about the Arctic – especially by governments or government funded institutions – is political positioning for military reasons, for staking a claim to the resources in the region, or to ensure potential sea transportation routes. Denmark’s positional strength is entirely dependent upon Greenland being part of Denmark whereas Iceland is only a second-tier country as far as rights in the Arctic are concerned. Without Alaska, the US would be in a very much weaker position (and in 1867 the purchase price paid to the Russians was just $7.2 million, or about 2 cents per acre!)

The region is divided into five sectors of responsibility between Russia, the US, Norway, Canada and Denmark. But there are others wishing to develop rich Arctic resources. Among them there are Sweden, Finland and Iceland. 

Arctic Circle  Image Athropolis.com

Arctic Circle Image Athropolis.com

The Russians have just had a conference about future development of the Arctic Region:

The Arctic is in the zone of Russia’s special interests. During the last week,

  • the Russian authorities, experts and the international community were actively engaged in the issues of developing the Arctic region.
  • President Vladimir Putin held a meeting on the issue of military presence in the Arctic;
  • leading political scientists and scholars participated in a round table discussion of the development of infrastructure in the Arctic;
  • and the International Maritime Organization announced an adoption of the Polar Code in the coming days.

……. It’s not a secret that a conflict is swelling between the countries making bids for the development of this territory rich of hydrocarbons and having a unique transit potential. Last year, Putin urged the Ministry of Defense “to pay special attention to the deployment of infrastructure and military units in the Arctic direction.” Today, the military industry is ready to supply the Defense Department with weapons that may be required in Northern latitudes. ….. Next to Russia, the US announced the increasing of its military presence in the Arctic. In these circumstances, Moscow needs to adhere to the course that was chosen during the Soviet times, member of the Federation Council Nikolay Fedoryak says.

“Back then, a serious contingent of Soviet troops was present in the Arctic. The troops located there mainly defended us from a possible air attack of the enemy. It’s not a secret that all strategic routes of US bombers were laid through the North Pole. Now, American capabilities of using high-precision weapons are significantly higher than in 1970-80ies. Therefore, it is inevitable that we need to restore the infrastructure and even do it on a higher level, so that we can protect our national interests. And if we don’t do it now, we may be late.”

…..  Russia puts great hopes on the development of the Northern Sea Route, which may become the most popular route from Europe to Asia. Its use will be strictly regulated in two years. The International Maritime Organization has announced its readiness to adopt the Polar Code of shipping. It will define international standards of the use of the Arctic for transportation purposes. The voluminous document will define in details what vessels and their crews, whose route passes above the 72nd parallel north, can and cannot do.

Until now, strange as it may seem, there were no international conventions regulating navigation in the Arctic. In other words, the same rules as those applied to the Adriatic Sea or in the Mediterranean with their mild climate were applied to the severe Northern region. However, the UN Convention on the Law of the Sea of 1982 stated that each state could introduce its own rules of Arctic shipping, head of the Center of Maritime Law Vasily Gutsulyak says.

“The international community can establish provisions on the environmental protection in Northern areas. Thus, it provides a carte blanche to extend the application of a number of international conventions to the Arctic. But the Polar Code quite clearly determines the order of requirements to vessels.”

The game is really worth it. Enormous reserves of hydrocarbons – for example, more than 90 billion barrels of oil – are concentrated in the Arctic. Hence, he who is the most active player in the Arctic direction will secure economic and geopolitical influence in the region.

The positioning of each country is immediately obvious in news articles and the statements of politicians. But it it is also discernible in most scientific papers about the Arctic and especially those about climate and the potential for ice-free regions giving rise to potential new sea routes. Many so-called “scientific expeditions” to the Arctic (just as with the Antarctic) are merely for demonstrating a presence or establishing a claim, for

he who is the most active player in the Arctic direction will secure economic and geopolitical influence in the region.

The next frontier after the Arctic and Antarctic which will see countries similarly jostling for position will surely be the moon. Positioning is one of the key drivers for the Chinese Chang’e-3 moon mission and for the Jade Bunny’s gambolling there. Similarly the Japanese and Indian Space Programmes have political and commercial positioning goals among their key drivers.

Science fiction is coming to life. Within 100 years we shall probably see Japan and China playing out their terrestrial island territorial disputes also around planets and asteroids in space. I have visions of some astronauts being left on asteroids by one country or the other to establish territorial claims!! Maybe we will see mining companies “occupying” mineral rich asteroids.

FIFA/Qatar on track to achieve 6 deaths per goal for 2022 World Cup

January 25, 2014

Just a few days ago we had the report about atrocities by the Assad regime in Syria commisioned by the Government of Qatar which supports some of the rebel groups in Syria. The report was released on the eve of the Geneva II peace talks.

But at home the Qatar government is cracking the whip to get construction completed for the 2022 FIFA World Cup and in the process has been complicit in the death of at least 193 Nepalese construction workers just during 2013. FIFA makes the appropriate noises but effectively turns a blind eye. They have too much money at stake. In October last year I posted

Based on the track record of World Cup Tournaments, the Qatar 2022 championship will see between 100 and 180 goals – most likely around 150.

But this number will be easily exceeded by the number of construction workers who have been killed by then. Already over 70 Nepalese workers have died since 2012 and the total number is probably around 200. By 2022 this number will exceed 1000.

Perhaps FIFA could introduce a safety performance index for the Qatar World Cup? Maybe to have less than 6 deaths per goal?

The Government of Qatar does not fill me with any sense of operating in good faith and certainly not with any confidence – either for peace in the Middle East or for the 2022 World Cup. They don’t really care how many second-class, immigrant workers lose their lives in any case. But FIFA has no excuse. They are going to easily achieve about 6 deaths/goal for the 2022 World Cup. FIFA is already in the dock for some of the condition of construction workers in Brazil  for the 2014 championship, but they should break all records in Qatar. There are 8 years to go and the risk is that by then deaths will exceed 10 per goal for the Qatar championship. Both FIFA and Qatar have blood on their hands.

The Guardian:

The extent of the risks faced by migrant construction workers building the infrastructure for the 2022 World Cup in Qatar has been laid bare by official documents revealing that 185 Nepalese men died last year alone.

The 2013 death toll, which is expected to rise as new cases come to light, is likely to spark fresh concern over the treatment of migrant workers in Qatar and increase the pressure on Fifa to force meaningful change. According to the documents the total number of verified deaths among workers from Nepal – just one of several countries that supply hundreds of thousands of migrant workers to the gas-rich state – is now at least 382 in two years alone. At least 36 of those deaths were registered in the weeks following the global outcry after the Guardian’s original revelations in September. …

… The revelations forced Fifa’s president, Sepp Blatter, to promise that football would not turn a blind eye to the issue following a stormy executive committee meeting. …… 

The Pravasi Nepali Co-ordination Committee (PNCC), which has cross-checked the figures from official sources in Doha against death certificates and passports, is still receiving new cases on a regular basis. The Guardian has seen evidence of at least a further eight cases, which would take the 2013 total to 193.

The PNCC called on Fifa’s sponsors to reconsider their relationship with world football’s governing body, which awarded the World Cup to Qatar in December 2010. “Fifa and the government of Qatar promised the world that they would take action to ensure the safety of workers building the stadiums and infrastructure for the 2022 World Cup. This horrendous roll call of the dead gives the lie to those reassurances,” said the PNCC. ….. 

Electric vehicles have no impact on emissions

January 22, 2014

If electric vehicles are to succeed they will have to provide the consumer with some real benefits by way of cost or convenience which are more than for feeling good. That in turn depends upon the further development of battery technology and increasing the range of the vehicle on a single charge. The cost of the vehicle and the speed of charging are other key factors.

The supposed environmental benefits are largely illusory since they merely shift the source of power generation (combustion from the internal combustion engine in a vehicle) to a power plant. In the United States this power generation is most likely to be fossil fired (coal or shale gas). A new study shows that even if electric vehicles made up more than 40% of all vehicles, emissions would be largely unchanged. As of 2012 electric vehicles made up about 0.5% of new vehicle sales and about 0.06% (170,000 of 254 million) of all vehicles on the road in the US.

(Phys.org)A new study from North Carolina State University indicates that even a sharp increase in the use of electric drive passenger vehicles (EDVs) by 2050 would not significantly reduce emissions of high-profile air pollutants carbon dioxide, sulfur dioxide or nitrogen oxides. … The researchers ran 108 different scenarios in a powerful energy systems model to determine the impact of EDV use on emissions between now and 2050. They found that, even if EDVs made up 42 percent of passenger vehicles in the U.S., there would be little or no reduction in the emission of key air pollutants. …..

The energy systems model also showed that key factors in encouraging use of EDVs are oil price and battery cost. If batteries are cheap and oil is expensive, EDVs become more attractive to consumers.

“How Much Do Electric Drive Vehicles Matter to Future U.S. Emissions?” Published: online January 2014 in Environmental Science & Technology pubs.acs.org/doi/abs/10.1021/es4045677

Abstract Image

Energy System Model

Abstract
Hybrid, plug-in hybrid, and battery electric vehicles—known collectively as electric drive vehicles (EDVs)—may represent a clean and affordable option to meet growing U.S. light duty vehicle (LDV) demand. The goal of this study is twofold: identify the conditions under which EDVs achieve high LDV market penetration in the U.S. and quantify the associated change in CO2, SO2, and NOX emissions through mid-century. We employ the Integrated MARKAL-EFOM System (TIMES), a bottom-up energy system model, along with a U.S. dataset developed for this analysis. To characterize EDV deployment through 2050, varying assumptions related to crude oil and natural gas prices, a CO2 policy, a federal renewable portfolio standard, and vehicle battery cost were combined to form 108 different scenarios. Across these scenarios, oil prices and battery cost have the biggest effect on EDV deployment. The model results do not demonstrate a clear and consistent trend towards lower system-wide emissions as EDV deployment increases. In addition to the tradeoff between lower tailpipe and higher electric sector emissions associated with plug-in vehicles, the scenarios produce system-wide emissions effects that often mask the effect of EDV deployment.

This “lulu” is a “lemon”

January 13, 2014

I had never heard of Lululemon till today. Yoga and black, transparent stretch pants are just not me.

image from racked.com

image from racked.com

Apparently they specialise in yoga clothes and are (or were) “upscale and very trendy” (which suggests to me that their products are/were unnecessary and extremely pricey). Their black stretch pants ($98) turned out to be transparent when stretched and had to be recalled. Their “outgoing chairman and founder Chip Wilson said in early November that some women’s body shapes “just actually don’t work” for Lululemon’s yoga pants, prompting a backlash from some customers”.

  • “lulu”Informal – one that is remarkable or wonderful
  • “lemon” – Informal. a person or thing that proves to be defective, imperfect, or unsatisfactory; dud: Our car turned out to be a lemon.

With a name like that I suppose today’s news report was inevitable.

Reuters:Upscale yogawear retailer Lululemon Athletica Inc (LULU.O) cut its quarterly forecast as the company struggles with the lingering effects of an embarrassing recall and controversial comments by its founder, sending its shares down 15 percent.

Lululemon has been under pressure since March after it recalled some of its signature black pants that proved too see-through. …. Vancouver-based Lululemon warned last month that weaker sales would hit the crucial fourth quarter ending February 2. …… 

Troubles at the company have been compounded by complaints about product quality and comments by outgoing chairman and founder Chip Wilson.

He said in early November that some women’s body shapes “just actually don’t work” for Lululemon’s yoga pants, prompting a backlash from some customers. … Lululemon shares were trading at $51.60 before the bell, after closing at $59.60 on the Nasdaq on Friday. They have fallen about 11 percent since the recall in March.

Chip Wilson founded the company in 1998. He chose the name Lululemon because “It was thought that a Japanese marketing firm would not try to create a North American sounding brand with the letter “L” because the sound does not exist in Japanese phonetics. By including an “L” in the name it was thought the Japanese consumer would find the name innately North American and authentic.” Rururemon would not be a threat clearly. 

There are a number of weird stories about him and his company. He apparently blames birth control pills and smoking for high divorce rates, approves of child labour, believes that illness is a choice and that “Health attracts health, Sickness attracts sickness.” 

But I suspect that Mr. Wilson having completed his $327 million IPO in 2007 and now having resigned as Chairman is not particularly concerned.

Still with a name like that, it was only a matter of time before the “lulu” would turn out to be a “lemon”.

Jaguar Land Rover now the jewel in the Tata Motors crown

January 12, 2014

When the Tata Group acquired Jaguar Land Rover from Ford Motors in 2008 there were many voices in the UK which were highly sceptical. Shareholders in India were concerned that group debt would be too high. They were scared that managing JLR from India could be too big a mouthful and would jeopardise the growth of Tata Motors and its core business in India. In the UK there were fears that the British automotive tradition and history would be threatened.

But five years on, this acquisition has been a resounding success. So much so that it is JLR and its growth which is now providing the bulk of the revenue (72%) and the profit (88%) for Tata Motors and which has more than compensated for the Indian operations which are stagnating in the current downturn.

It is JLR which is now truly the jewel in the Tata Motors crown.

The all-aluminum F-TYPE Coupe range will deliver, in production form, the uncompromised design vision of the Jaguar C-X16 concept, and will complement the existing  F-TYPE Convertible, winner of the 2013 ‘World Car Design of the Year’ award.

The all-aluminum F-TYPE Coupe range will deliver, in production form, the uncompromised design vision of the Jaguar C-X16 concept, and will complement the existing F-TYPE Convertible, winner of the 2013 ‘World Car Design of the Year’ award.

Bloomberg: 

Jaguar Land Rover, the luxury-vehicle division of India’s Tata Motors Ltd. (TTMT), reported record global sales last year, driven by growth in the Asia Pacific and China region.

Jaguar Land Rover’s total worldwide sales rose 19 percent last year to 425,006 vehicles, according to an e-mailed statement. Jaguar brand sales jumped 42% to 76,668 vehicles, the most since 2005, while Land Rover increased 15% for an annual record of 348,338 vehicles, the company said.

Jaguar Land Rover, which Mumbai-based Tata Motors bought from Ford Motor Co. in 2008 for $2.5 billion, accounted for 72 percent of group revenue and 88 percent of operating profit for the year ended March 31. In the quarter ended in September, Tata Motors posted profit that beat analyst estimates as rising Jaguar Land Rover sales outweighed a loss at the parent company’s Indian business. …… 

…. Sales in Asia Pacific and the China region jumped 30 percent during 2013, North America rose 21 percent, the U.K. grew 14 percent, Europe 6 percent and other overseas markets increased 23 percent, according to the statement. 

Under Tata, Jaguar and Land Rover have targeted emerging markets such as China and Russia for growth. In 2013, Jaguar Land Rover had record sales in 38 markets, including Russia, Brazil, Korea and Canada.

The sales growth in 2013 was driven by Jaguar’s F-Type convertible and Land Rover’s Range Rover and Range Rover Evoque models, it said. The F-Type began shipping in May.

It was “a great year in which we have seen some incredibly exciting new models launched to customers across the world,” Andy Goss, Jaguar Land Rover Group sales operations director, said in the statement. “The Range Rover Sport, F-Type, new engines and drivetrains, and a number of 14 Model Year enhancements to our existing lineup have seen Jaguar Land Rover continue to build strong sales momentum in every global region.”

My top 10 investment and disinvestment areas for 2014

January 2, 2014

I am relatively new to the world of personal investments and these are just based on my personal gut-feel:

  1. Oil and Gas companies – but only if they also have – or acquire – fracking reserves. I am staying away from those  gas producers who are overly dependent on “conventional” natural gas and have not embraced shale gas. If the economic recovery (globally) is confirned by Q2 then the “blue chip” oil companies become attractive again.
  2. I shall get out of wind and solar energy developers. Subsidies are declining and developers and plant operators are going to be hard pushed to retain their advantages. On the other hand manufacturers of unconventional energy equipment (off-shore wind, fuel cells, batteries, geothermal ….) and who are really spending their own money on R & D (as opposed to spending government grants) are attractive in the long term.
  3. Even with a solid economic recovery, there will be a time lag before the demand for special steels and other metals picks up. Metals and mining may becoming interesting again but only at the end of the year. Australian mining becomes attractive if the “green” burdens are lifted.
  4. Cement and bulk steels will respond first and manufacturers well established in Asia and Africa seem particularly interesting. I like cement in India for the second half of 2014.
  5. Rare earths will remain in short supply and economic recovery will give prices which justify development of new mines and new resources. Investing in China has its own risk profile though. Japanese rare earth development companies could be of interest.
  6. Big Pharma’s evergreen and predatory patenting will come under further attack not only from India and China but also from Indonesia and Africa. The whole IPR model is flawed which makes for uncertainty. I shall avoid new investment but hold what I have.
  7. Social media monopoly positions will be weakened and new media will grow. I haven’t the faintest idea of how to pick any winners from the newcomers here. There has to be a backlash against intrusive advertising and I think this will cap revenue growth.
  8. There is a battle brewing between tablets and mobile devices. A single device which is as small as a mobile and which can expand to the size of a large tablet (perhaps even as large as a desk-top through glasses) would be a winner.
  9. Large retailers are due for a boom in the second half of 2014 and especially those with positions in the developing world.
  10. There are going to be new winners from Africa and Brazil but I don’t know how to pick them and therefore must wait and see.

2013 report card – the year some alarmist bubbles burst

December 31, 2013
  • The global warming fantasy is falling apart
  • Fossil fuels have no significant part to play in climate
  • There is no over-population crisis as fertility rates decrease globally (but there may be a population decline by 2100)
  • There is no food crisis 
  • Poverty levels have decreased globally and are continuing to decrease
  • Infant mortality rates have decreased globally and are continuing to decrease
  • Nuclear power policy is beginning to recognise that fears about safety (Three Mile Island, Chernobyl and Fukushima not withstanding) are grossly exaggerated
  • Shale gas and methane hydrates have delayed any energy crisis by about 1,000 years
  • Fossil fuels and nuclear power are recognised as being critical in withstanding a Little Ice Age or a new glaciation
  • There is no resource crisis (whether for fuels or rare earths or trace metals), and finding new sources or alternatives responds to need and demand
  • There is no crisis of culture as Occidental decadence and Oriental thrift are combining to rejuvenate a global culture
  • Longevity is increasing
  • The crisis of religious fanaticism continues and will remain till religion becomes obsolete
  • The days of the nation states and their tensions are not yet over
  • The conflict between individuals and authoritarian societies continues (irrespective of type of political system they exist in)
  • Parents are increasingly abdicating their responsibilities for their children and passing them on to society
  • “Fact” is being increasingly determined by majority opinion
  • “Consensus” of belief rather than evidence is being taken as proof of scientific hypotheses
  • Aging is increasing but the elderly are underused
  • Democracies are getting less democratic
  • “Democracy” is over-rated

Follow

Get every new post delivered to your Inbox.

Join 539 other followers