Tidbits of blog bits

Posted by Andrew Pegler

This week, an assortment!

Bit 1: Writing in Business Spectator, Gills says significant new technology promises to bring solar much closer to the cost of coal than anyone would have expected even just a few years ago. Some of these efficiency improvements are occurring right here in Oz, involving tiny nano-particles (50 fit on the end of a human hair) and a technology called plasmonics. As I pointed out a couple of weeks ago, this is the sort of stuff we need to secure a viable manufacturing future.

Bit 2: Further to the closing thoughts in last week’s blog, legendary Australian fund manager John Sevior has come out loudly and proudly to back the new “two-strikes” rule that gives shareholders decisive power to curb executive pay. If at least 25% of votes cast at two consecutive AGMs oppose a bonus package, the board (but not the managing director) must stand for re-election within 90 days. Google “GUD Holdings two strikes” to learn how this recently worked in practice.

Bit 3: I had a thought bubble – has anyone else noticed that the financial crises in Europe and the U.S. are problems borne of their respective cultures? In Europe, socialist ideas of bigger government and unsustainable welfare states have seen massive stimulus packages rolled out and, particularly in Greece, too many people working for the government. Meanwhile, the U.S. problem stems from its individualism ethos, where everyone has to look after themselves. This free market philosophy failed to properly regulate the banking sector, triggering the GFC house of cards.

Bit 4: The growing shift to online retail is presenting Harvey Norman and Westfield with a wicked challenge. According to the latest research from Quantium Online, the value of Australian online purchases is rising 26% a year and the number of online shoppers by 20% a year. This leaves both companies with little choice but to follow the very same trend that is undermining their once-vaunted property values. Harvey Norman, which operates a franchise model, owns most of its buildings, as does Westfield. The further they push online the less valuable their portfolios of bricks and mortar. Good luck turning that problem into an opportunity.