Dear Readers
HC and I were talking today and discussing our stock tips and comments from the week. It dawned on us that we should call on our readers to join a bluechip challenge.
In this challenge, the task is to select 5 well known stocks from the US and 5 stocks from Australia where a virtual $1M of each stock will be invested.
We will update weekly on the progress of the portfolios selected and keep tally via a running score tab!
The competition will run for 1 month this time (so choose the short-haul stocks).
If you're interested to participate please contact me - or blog comment!!
Let the value-investing begin!
What's Up Jono? http://whatsupjono.blogspot.com
Introducing HC
I would like to introduce you to HC who my nickname is Ms Buffet and will be writing entries for this blog from a finance and stock perspective. HC used to work at Bloomberg and is passionate about Warren Buffet, Investing and thus also making money!
Please join me in welcoming HC to the whatsupjono duet!
If you'd like to write about stocks or for the blog - please send me a comment!
What's Up Jono? http://whatsupjono.blogspot.com
Please join me in welcoming HC to the whatsupjono duet!
If you'd like to write about stocks or for the blog - please send me a comment!
What's Up Jono? http://whatsupjono.blogspot.com
My Bookshelf Added
Just quick note to tell you I've added a few of my favourite books to my bookshelf (link at the top of my site). I started with just a few of my favourites but I will progressively grow the list and keep you updated as I read new stuff.
You can comment on any of my posts by clicking the comment tab (at the bottom right hand corner of the blog)
What's Up Jono? http://whatsupjono.blogspot.com
You can comment on any of my posts by clicking the comment tab (at the bottom right hand corner of the blog)
What's Up Jono? http://whatsupjono.blogspot.com
Virgin Blue delivers a shocker
New Virgin Blue CEO, John Borghetti (formerly from Qantas), took over on May 8th. Soon after, he confirmed profit guidance. 3 weeks later, ie YESTERDAY, he issues a shock downgrade of 75%. What happened in these 3 weeks to warrant this drastic change of direction??
Unsurprisingly, shareholders weren't happy. Shares dropped as much as 29% over the course of yesterday.
Even more concerning, is whether this shock downgrade is a more accurate reflection of the state of the economy, crunch time for the notoriously competitive airline industry (though less so in Australia), or clumsy management maneouvers?
More details about yesterdays shock here.
HC
http://whatsupjono.blogspot.com
Unsurprisingly, shareholders weren't happy. Shares dropped as much as 29% over the course of yesterday.
Even more concerning, is whether this shock downgrade is a more accurate reflection of the state of the economy, crunch time for the notoriously competitive airline industry (though less so in Australia), or clumsy management maneouvers?
More details about yesterdays shock here.
HC
http://whatsupjono.blogspot.com
and to lighten it up a bit...a little bit of OUCH
AUD weaker against the JPY - Honey! Hold that Holiday!!!!
I was thinking the AUD was going to decline to under 77 cents to the Yen today - and so far it has.. but check out the volatility!
If you had that million dollars - definitely a long term buy (horde Aussie , convert to Yen later)
What's Up Jono? http://whatsupjono.blogspot.com
My "Objective" as possible take on the Mining 'Super Profits' Tax
This one's for Auvik, who asked for an objective analysis of the tax widely known as the mining superprofits tax in Australia.
For those who are not aware this tax is proposed in a tax reform report known as the Henry Report. The report itself was scripted to the Treasurer in Dec 2009, but it only appeared in the media earlier this month after a roadshow from the government at the Budget.
In order to remain reasonably objective I have just looked in detail at the report itself rather than reading the news available. You can read it yourself here (in all its 1,000 + page glory) .
Of course the report itself covers much more than the resource rent tax - also delving into personal income, dividend imputation and other topics. It is actually an interesting an in depth report that reads like a textbook and is reasonably simple to understand.
To me no matter how you cut the cookie, there is a fundamental argument or decision here on whether to consume or to save (remember the old curve from Microeconomics). In this case the choice to spend or save is not money / savings etc but future income from a resource that is considered to be an 'economic rent' or item essentially on loan from Australia to the mining companies for a fee.
Essentially without stepping into any further arguments about price / negotiations / tension surrounding the tax the question is whether or not mining companies should be forced to regulate supply by shifting the regulatory barriers and competitive environment around each company.
In simple terms - should the Government (and thus We Aussies) be entitled to more share of 'profit' from the mining companies. Essentially the Henry report argues that from a stakeholder perspective the government should be entitled to a stable and predictable share of the profit from the entities it taxes. The case study it highlights is the Petroleum rent tax which has been consistently stable at between 30-40 % of the profit of the industry over the last 10 years. This is opposed to our mining companies where the profit has reduced from 50% to around 10% of the profit of the industry over the last 10 years.
If you hit pause here and think from a business perspective this makes little sense. Companies are separate legal entities and have not entered into any partnership with the Government. The fact that these companies have performed exceedingly well (off the back of China and India) is actually nothing to do with the government - as the purpose of the company is to maximise profit and current share price.
To raise an analogy - the proposal of this tax is very similar to NASA being told to use less fuel to get its rocket to the moon. The goals of NASA are to deliver the rocket and achieve the mission, this is another roadblock from their perspective.
Having watched Marius Kloppers (CEO of BHP) and Andrew Forrest (CEO of Fortescue) you can understand also the outcry. The mining industry is one industry that has multi-year projects spanning 10-30 years. Changes in variables like tax rates have massive implications to models but most of all much like the smokers who woke up 25% poorer (due to higher cigarette costs) the change will not happen over night whereas the cost has.
The Henry report was clearly written for the Government's benefit in this area of tax. For instance, various items such as exploration support - that are economically sound - have been advised against in order to save the government money as well as to increase the life of the asset.
I actually believe the current conjecture on the details of the tax are well summarised in this report - but are less key to the decision on whether or not the tax is founded. The report basically shows that the new scheme seeks to encourage required rates of return of under 10% as it gives a tax benefit to these projects, but it charges more for projects with a return of above this.
So to step back again this is clearly a hung debate. The government will always want to secure more funds for the people of Australia - as it should. The companies will always want to secure more profits for its companies as it should. There is no right or wrong from a political / company perspective.
The only issue is that the world is dynamic and Australia is just an island that contributes 2% of world GDP. That means that it relies on foreign investment for profitability and also for taxes and international competitiveness is also at stake. The Henry report does not consider the loss of tax revenue from lost business. It is largely a domestic report.
To bring this closer to home - what would you do if you found two restaurants with the same level of food - but one which was 100 dollars and the other for 50 dollars. In the restaurant business you would laugh at the one charging 50 dollars and say it was mad... but then again that restaurant will never go broke or be empty.
The real question for Australia and the Government is really can you still open shop for business tomorrow if you raise your prices - and how many customers are you going to lose. Jury is still out in this turbulent time as to whether the conservationist or the spender will prevail.
What's Up Jono? http://whatsupjono.blogspot.com
For those who are not aware this tax is proposed in a tax reform report known as the Henry Report. The report itself was scripted to the Treasurer in Dec 2009, but it only appeared in the media earlier this month after a roadshow from the government at the Budget.
In order to remain reasonably objective I have just looked in detail at the report itself rather than reading the news available. You can read it yourself here (in all its 1,000 + page glory) .
Of course the report itself covers much more than the resource rent tax - also delving into personal income, dividend imputation and other topics. It is actually an interesting an in depth report that reads like a textbook and is reasonably simple to understand.
To me no matter how you cut the cookie, there is a fundamental argument or decision here on whether to consume or to save (remember the old curve from Microeconomics). In this case the choice to spend or save is not money / savings etc but future income from a resource that is considered to be an 'economic rent' or item essentially on loan from Australia to the mining companies for a fee.
Essentially without stepping into any further arguments about price / negotiations / tension surrounding the tax the question is whether or not mining companies should be forced to regulate supply by shifting the regulatory barriers and competitive environment around each company.
In simple terms - should the Government (and thus We Aussies) be entitled to more share of 'profit' from the mining companies. Essentially the Henry report argues that from a stakeholder perspective the government should be entitled to a stable and predictable share of the profit from the entities it taxes. The case study it highlights is the Petroleum rent tax which has been consistently stable at between 30-40 % of the profit of the industry over the last 10 years. This is opposed to our mining companies where the profit has reduced from 50% to around 10% of the profit of the industry over the last 10 years.
If you hit pause here and think from a business perspective this makes little sense. Companies are separate legal entities and have not entered into any partnership with the Government. The fact that these companies have performed exceedingly well (off the back of China and India) is actually nothing to do with the government - as the purpose of the company is to maximise profit and current share price.
To raise an analogy - the proposal of this tax is very similar to NASA being told to use less fuel to get its rocket to the moon. The goals of NASA are to deliver the rocket and achieve the mission, this is another roadblock from their perspective.
Having watched Marius Kloppers (CEO of BHP) and Andrew Forrest (CEO of Fortescue) you can understand also the outcry. The mining industry is one industry that has multi-year projects spanning 10-30 years. Changes in variables like tax rates have massive implications to models but most of all much like the smokers who woke up 25% poorer (due to higher cigarette costs) the change will not happen over night whereas the cost has.
The Henry report was clearly written for the Government's benefit in this area of tax. For instance, various items such as exploration support - that are economically sound - have been advised against in order to save the government money as well as to increase the life of the asset.
I actually believe the current conjecture on the details of the tax are well summarised in this report - but are less key to the decision on whether or not the tax is founded. The report basically shows that the new scheme seeks to encourage required rates of return of under 10% as it gives a tax benefit to these projects, but it charges more for projects with a return of above this.
So to step back again this is clearly a hung debate. The government will always want to secure more funds for the people of Australia - as it should. The companies will always want to secure more profits for its companies as it should. There is no right or wrong from a political / company perspective.
The only issue is that the world is dynamic and Australia is just an island that contributes 2% of world GDP. That means that it relies on foreign investment for profitability and also for taxes and international competitiveness is also at stake. The Henry report does not consider the loss of tax revenue from lost business. It is largely a domestic report.
To bring this closer to home - what would you do if you found two restaurants with the same level of food - but one which was 100 dollars and the other for 50 dollars. In the restaurant business you would laugh at the one charging 50 dollars and say it was mad... but then again that restaurant will never go broke or be empty.
The real question for Australia and the Government is really can you still open shop for business tomorrow if you raise your prices - and how many customers are you going to lose. Jury is still out in this turbulent time as to whether the conservationist or the spender will prevail.
What's Up Jono? http://whatsupjono.blogspot.com
Bear signals from the stockmarket
http://www.businessspectator.com.au/bs.nsf/Article/stockmarket-bear-Dow-pd20100526-5SSE8?OpenDocument&src=sph
Interesting take from Richard Russell on recent market movements.
What's Up Jono? http://whatsupjono.blogspot.com
Interesting take from Richard Russell on recent market movements.
What's Up Jono? http://whatsupjono.blogspot.com
Mac Overtakes Microsoft
With the launch of the Apple iPad in Sydney, it has also overtaken Microsoft as the winningest company in the tech industry. Read it here.
Apple shares were rose 3.79% last night.
What's Up Jono? http://whatsupjono.blogspot.com
Apple shares were rose 3.79% last night.
What's Up Jono? http://whatsupjono.blogspot.com
AUD/JPY up 10% this week! Let's go to Japan!
Book the holiday, JPY is on it's way down again.
What's Up Jono? http://whatsupjono.blogspot.com
Tiffany & Co - Part Two
Tiffany and co still up last night - another 5% which means it's up 10% in two days!
In other news Heinz and Costco both up - looks like the economy is on its way back up.
What's Up Jono? http://whatsupjono.blogspot.com
Tiffany first-quarter profit more than doubles - MarketWatch
Are the luxury stocks back?
Tiffany & Co released a Q1 profit that was well above expectations today.
The stock price jumped over 2 dollars or 5% yesterday driven by greater inventory turnover.
Whilst this is a positive sign for the stock the 12 month rolling earnings are still 7% worse than 2009.
Tiffany first-quarter profit more than doubles - MarketWatch
Posted using ShareThis
What's Up Jono? http://whatsupjono.blogspot.com
Tiffany & Co released a Q1 profit that was well above expectations today.
The stock price jumped over 2 dollars or 5% yesterday driven by greater inventory turnover.
Whilst this is a positive sign for the stock the 12 month rolling earnings are still 7% worse than 2009.
Tiffany first-quarter profit more than doubles - MarketWatch
Posted using ShareThis
What's Up Jono? http://whatsupjono.blogspot.com
This is a Good Read
I just finished reading Outliers by Malcolm Gladwell*. The book took me slightly over a week to finish but left me thinking about the components of success, the future developments in the world and also about life in general.
In general I always reflect on life in general as I read books and place them into context for me - but I've found that Gladwell has a knack for extending the thought process further than you would usually.
This book looks at some instances where statistical outliers appear, using a variety of examples from the stellar success such as the Bill Gates to catastrophic failures in Korean Air Airline Safety in the late 1990s. It then analyses and traces each outlier to an underlying, explainable by a series of plain, simple events and co-incidences. The book later also covers off the idea of competitive advantage in cultures and good luck in the equation.
Part history, part psychology, part success it's a must-read. You'll be sure to have learnt something applicable to business and everyday life from it. You should read at least one of the trilogy below.
Ideaman
*Malcolm Gladwell, writer and columnist for the New York Times has been pretty famous since his first book in 2002 titled the Tipping Point followed by a Sequel titled Blink in 2007. The books were an international best seller and very thought provoking.
P.S. To those non-savvy readers
I get all my books from Amazon second hand dealers in the US. In fact the last purchase I did was for all my MBA texts I ended up finding some used books in great condition selling for half the retail price! The only downer is shipping costs - but if you've got a larger order it's usually ok.
Just be careful that the order is from the same location or separate shipping applies.
What's Up Jono? http://whatsupjono.blogspot.com
In general I always reflect on life in general as I read books and place them into context for me - but I've found that Gladwell has a knack for extending the thought process further than you would usually.
This book looks at some instances where statistical outliers appear, using a variety of examples from the stellar success such as the Bill Gates to catastrophic failures in Korean Air Airline Safety in the late 1990s. It then analyses and traces each outlier to an underlying, explainable by a series of plain, simple events and co-incidences. The book later also covers off the idea of competitive advantage in cultures and good luck in the equation.
Part history, part psychology, part success it's a must-read. You'll be sure to have learnt something applicable to business and everyday life from it. You should read at least one of the trilogy below.
Ideaman
*Malcolm Gladwell, writer and columnist for the New York Times has been pretty famous since his first book in 2002 titled the Tipping Point followed by a Sequel titled Blink in 2007. The books were an international best seller and very thought provoking.
P.S. To those non-savvy readers
I get all my books from Amazon second hand dealers in the US. In fact the last purchase I did was for all my MBA texts I ended up finding some used books in great condition selling for half the retail price! The only downer is shipping costs - but if you've got a larger order it's usually ok.
Just be careful that the order is from the same location or separate shipping applies.
What's Up Jono? http://whatsupjono.blogspot.com
Jono's Tips (May)
If I had a million dollars... I'd be rich!
Watch this space for my top 5 picks from the US and Aussie markets over the next month.
I've discovered a new Yahoo finance widget and will add this to the blog and check on my all stars.
Open for comments now - taking suggestions!
What's Up Jono? http://whatsupjono.blogspot.com
Watch this space for my top 5 picks from the US and Aussie markets over the next month.
I've discovered a new Yahoo finance widget and will add this to the blog and check on my all stars.
Open for comments now - taking suggestions!
What's Up Jono? http://whatsupjono.blogspot.com
Dedicated to Zoey
Zoey - thanks for the post on FB.
Attached is the AUD vs the GBP on a 3 month scale.
You kinda kick yourself for not buying pounds two weeks ago (well I do cos I'm off to London) but the rebound has been strong - and my opinion is that the AUD hammered by the super profits tax which may not go through (let's hope) but the UK and Euro economy is genuinely weak.
Place your bets!!!
And as always... you can buy your foreign exchange at American Express my favourite place!
What's Up Jono? http://whatsupjono.blogspot.com
Attached is the AUD vs the GBP on a 3 month scale.
You kinda kick yourself for not buying pounds two weeks ago (well I do cos I'm off to London) but the rebound has been strong - and my opinion is that the AUD hammered by the super profits tax which may not go through (let's hope) but the UK and Euro economy is genuinely weak.
Place your bets!!!
And as always... you can buy your foreign exchange at American Express my favourite place!
What's Up Jono? http://whatsupjono.blogspot.com
The Guru Talks
This is an old clip but one that is very interesting for the MBA's out there.
What's Up Jono? http://whatsupjono.blogspot.com
Dow going Down?
All the previous charts I've posted on a daily scale indicate that we're in for some doom and gloom. After two weeks of bludgeoning it's easy to lose perspective. I came across this chart from CNN.com which actually puts it all into perspective. Over 5 years we're 2.25% lower at present ... makes you think what all the fuss is about?
What's Up Jono? http://whatsupjono.blogspot.com
What's Up Jono? http://whatsupjono.blogspot.com
Adsense?
So having optimised the website for adsense and spent the last few days putting up this blog. I decided to check whether it would work by asking some friends to test click a few stories.
After 146 visitors to the website and 40 clicks... no revenue.
What is going on Google? Global Financial Crisis times are tough eh?
After 146 visitors to the website and 40 clicks... no revenue.
What is going on Google? Global Financial Crisis times are tough eh?
I am eagerly awaiting the launch of the new iPad
Reading today's local papers the new Ipad is revealed later today.
I won't be buying one just yet - but let's see how it sells!
What's Up Jono? http://whatsupjono.blogspot.com
I won't be buying one just yet - but let's see how it sells!
What's Up Jono? http://whatsupjono.blogspot.com
London Bridge is Falling Down
AUD gained on the GBP last night despite both bouncing vs the USD.
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Suddenly August doesn't seem so bad.
What's Up Jono? http://whatsupjono.blogspot.com
What's Up Jono? http://whatsupjono.blogspot.com
Pleasant Surprise in the Morning
What's Up Jono? http://whatsupjono.blogspot.com
Carnage
What's Up Jono? http://whatsupjono.blogspot.com
GO THE AUD!
Despite the crappy sharemarket at least one thing with silver lining is that the AUD /GBP is goin up ... thank heavens.
What's Up Jono? http://whatsupjono.blogspot.com
What's Up Jono? http://whatsupjono.blogspot.com
Dow --- D'OH
Dow Jones has dropped another 250 points tonight and is set to open around 9800 well below the 10,000 mark. Looks like carnage is ahead.
What the Blog?
Blogging is the latest fad for me. I wonder what is the future of the internet and social media?
The winner is... me.
Sooo....having thought about how I want this particular blog to progress here we are then.
This blog is my opinion blog. It should take the place of my wall posting in Facebook and will be a way for me to communicate whats going on and what i'm thinking / experiencing with you all!
Let the web log begin.
This blog is my opinion blog. It should take the place of my wall posting in Facebook and will be a way for me to communicate whats going on and what i'm thinking / experiencing with you all!
Let the web log begin.
Developments
I am still deliberating what the format of the blog will be.
To suit the audiences I think I'll be going for a mixture of key updates that resonate with me between posts and for reflections and thoughts.
Comments welcome.
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