Share Investor: politics of business

Showing posts with label politics of business. Show all posts

Wednesday, September 6, 2017

When Labour Gets In

Jacinda Ardern Becomes Labour’s Sixth Leader in Nine Years

The question is what do investors do in the face of impending doom when the Labour Party stumbles across the line to win the 2017 election.

Well they've started it already.

They have stopped buying Auckland International Airport Ltd [AIA.NZX] its moving backwards with a DIV coming,

Auckland Airport growth is bound to stall under a Labour Govt.

Labour's stated aim is to at least halve immigration and I think it will go completely the other way within 2 years - people will not want to stay.

The other thing Labour is going to introduce, a $25 dollar new tax for travelers to this country is going to have a major impact on tourists.

This will clearly impact further on Auckland Airport, it clearly has already.

Uncertainty certainly plays a part in it, there's no doubt about that but reality plays a big part as well and Labour's focus of their extra spending is on the unproductive parts of the economy. That has been the way of the Labour Govt's from year one.

But you don't get economic growth from putting taxpayer money into things like "higher wages for everyone" it is simply a blight on the taxpayer and business as a whole.

You've got to be focused on what you as an individual can bring to the table rather than Labour's view that whats on the table is mine and that extending the table through extra taxes and more Govt borrowing is the way to go.

Its not.

You've got to wonder about those companies that have got a high component of transport costs, Like Freightways and Fletcher Building.

These companies have come off recent highs and they are nervous about what will happen when Labour gets into power.

Every company on the NZX is effected by the probable change of Govt.

I'm not worried about my investments. I will take the time to look at each company in the Share Investor Portfolio and buy more when they get cheap enough.

That's the thing with long-term investing in shares and changes in Govt. You make your serious money in times of gloom and (like we will be heading to under a Labour Govt) and make even more in times of boom (like we are just coming off now - under National).

Either way I'm not disturbed.

AIA @ Share Investor

Auckland Airport: Look Before You Leap
Auckland Airport: Its a Buy
AIA: To Buy Now Or Not To ?
Share Investor Q & A: Auckland Airport's Simon Moutter

Freightways @ Share Investor

Share Investor's Total Returns: Freightways Ltd
Share Price Alert: Freightways Ltd 3
Share Price Alert: Freightways Ltd 2

Fletcher Building @ Share Investor

Share Price Alert: Fletcher Building Ltd 4
Share Price Alert: Fletcher Building Ltd 3
Share Price Alert: Fletcher Building Ltd 2

c Share Investor 2017

Thursday, August 24, 2017

Tax

Tax

1. a sum of money demanded by a government for its support or for specific facilities
or services, levied upon incomes, property, sales, etc.

2. a burdensome charge, obligation, duty, or demand.

Source: Dictionary.com

So you you see I have underlined one word in the definition of tax. It is money demanded by Govt.

I mention this because just yesterday the Govt. released figures showing New Zealand Inc had $3.7 Billion left over after costs (more taxes)were taken away from revenue (even more taxes) for the preceding year.

Now what you have is a struggle of ideas from 2 main camps. (as well as some others that have Contact Energy holders laughing) One; National, that would kinda be plain sailing - still overspending our tax. Two; Labour that would introduce a wealth of taxes, water, capital gains and a whole host of others just to pay for the extra spending they have promised.

What about us?

The demands, (there's that word again) that are placed upon the workers in this country increasingly get more and more each and every year.

AND it has to stop.

From the individual who earns the minimum wage right up to those who pay the most tax and will pay more under Jacinda Adern.

We want our ***ken money back.

We earnt it. We should decide where it will go.

So when you go to vote in about 4 weeks time. Think about it.

Don't be so selfish and go after the party the promises you the most - they probably wont deliver - Especially if they are left of centre.

Vote for somebody that will give as much of your money back as possible.

It is after all your money.

Demand it.

c Share Investor 2017

Monday, June 13, 2016

The Clintons: Mark 2

What really had me thinking lately was Monica Lewinsky's ex Billy Clinton and the fact that he may be in charge of the world's largest economy for the second time in almost 30 years should they - the Clintons - win in November - Hillary told us that in March this year;

"Democratic front-runner Hillary Clinton says her husband would be “in charge of revitalizing the economy” if she is elected president, The Hill reports.

Speaking at a campaign stop in Fort Mitchell, Kentucky, Clinton said her husband, former President Bill Clinton, “knows how to do it … especially in places like coal country and inner cities and other parts of our country that have really been left out.”

Well this brought me back to yet again, in my opinion that, Bill Clinton is the reason why we are floating around in this "financial scary no man's land" today.

I have been aware of this opinion - since around the late 1990s - since before I wrote this piece in a book review I did in 2008;

"The chapter that held the most interest for me is Chapter 27, "The Age of Innocence". In it Cashill describes the genesis of the present day financial collapse and President Bill Clinton's central hand in it - something I was already aware of and have been for years.

Clinton forced banks and then Fannie Mae and Freddie Mac to lend money to individuals (Americas race based form of lending was extended even further than it was in the 1970s) who were poor credit risks to buy houses in the 1990s and Alan Greenspan (another evil Jew?) provided the cheap interest rates through the Federal Reserve that led to the frenzy of house buying that then led to the bubble and you know the rest.

You don't read a lot about the Democrats, Bill Clinton and their historical central role in the 2008 financial collapse but Cashill gives you the facts and lets the reader join the dots".

What are the Clintons going to do this January when they take the reigns of power for the 2nd time? - I don't think Donald Trump is going to gain power, much to this author's chagrin - I think they are going to finish what they started.

Well, put it this way continue along the same lines.

Like all socialist leaders in power, the Clintons became even richer than they were already because of the presidency and the 2nd time around they will become even richer.

They are not doing it for yours and mine good they are doing it for their own good.

The answer to my questioning above, is a severe depression, at some stage, the likes this world has never seen before.

Think before you vote.

From Amazon

Popes and Bankers: A Cultural History of Credit and Debt, from Aristotle to AIG by Jack Cashill Buy new: $13.58 / Used from: $0.01 Usually ships in 24 hours c Share Investor 2016

Popes and Bankers: A Cultural History of Credit and Debt, from Aristotle to AIG by Jack Cashill
Buy new: $13.58 / Used from: $0.01
Usually ships in 24 hours

c Share Investor 2016

Thursday, November 24, 2011

Labour's Capital Gains tax to impact negatively on house prices

Originally from Political Animal

If I maybe slightly political this morning.

The impact on the economy of a 15% capital gains tax (CGT) proposed by Labour will be huge. Not only will all asset classes be negatively impacted directly but the 15% tax on rental housing will have a direct impact on the selling prices of the family home.

The 15% tax on rental housing will almost immediately affect that sector as shortly after election day investors would want to sell before the CGT is imposed in 2013. It is hard to tell by how much but in a depressed market with increased selling pressure you don't have to be Einstein to figure out it will be substantial negative impact.

The spill-off of that will be pressure from falling rental house values impacting on sellers of private homes. These are of course homes that kiwis generally have their biggest investment in.

Long-term a CGT and its impact on house prices may be debatable in terms of its influence but in the short to medium term it is economics 101 that prices for the family home will fall.

Given a more robust economy, sustainable rising house prices and good demand a CGT may not have been such a bad thing in terms of its economic kick but in the most uncertain economic times since the Great Depression a CGT has the potential to kick-off a major housing sell-off and a consequent drop in house prices.

The fallout from that is obvious. Less confidence in people's personal financial situation and a resultant slowdown in consumer spending and a loss of jobs.

Labour really need to think hard about this if they are lucky enough to gain enough votes on November 26. It may have support from left commentators like Gareth Morgan, Bernard Hickey and the hapless Rod Oram but it is probably more akin to an exercise in economic suicide rather than a good way to raise more taxes - especially given the tough times that we are currently facing and will continue to face for years to come.

Disc I will be voting National this Saturday

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c Share Investor 2011

Tuesday, June 14, 2011

VIDEO - Sky City Entertainment Group : Parliamentary Question Related to Convention Centre

Tuesday, March 29, 2011

ACC Influence on Stockmarket Liquidity a Concern to Private Investors

I am a little worried about the Accident Compensation Corporation having such an influence, in terms of sharemarket liquidity, on the local NZX.

It has been buying up significant stakes in several NZX listed companies and now owns over 4% of the free-float of the market:

The Accident Compensation Corp now has significant stakes in 28 NZX-listed stocks, cementing is position as the biggest player in the market.

ACC manages some $13 billion of assets and had about 10 per cent of its reserves in New Zealand equities in 2010. So far this month it has declared holdings of at least 5 per cent in Argosy Property Trust, Abano Healthcare and Pumpkin Patch, while adding to its stake in Nuplex Industries. In February it emerged as a holder of DNZ Property Fund, Goodman Property Trust, Mainfreight, Tourism Holdings, Kermadec Property Fund and Restaurant Brands.

"New Zealand equities are cheaper than they once were but you can say the same thing about global equities," said Nicholas Bagnall, the state-owned accident insurer's investment manager.

He wouldn't be drawn on whether the disclosures point to a bet on a revival in New Zealand's economy, which the International Monetary Fund sees growing just 1 per cent in calendar 2011 before accelerating to 4 per cent in 2012, helped by the rebuild after the Christchurch earthquake. Figures this week showed the economy narrowly avoided a double-dip recession last year.

ACC now owns more than 4 per cent of the free float of the New Zealand stock market, giving it influence over liquidity in some of the nation's biggest listed companies as well as smaller-cap firms.

"We're effectively enhanced our returns by being a seller of liquidity to the market," Bagnall says. "It works for us and it works for the market as well."

The corporation's investment mandate is to ensure it can cover the long duration of claims liabilities. Its allocations between asset classes tend to be "riskier than the minimum possible risk position," according to ACC's 2010 financial condition report.

It may not seem like a problem to the uninitiated but the New Zealand Stockmarket already suffers from a lack of liquidity and while this obviously will have positive effects as the ACC is buying, it will have very negative effects when they sell.

The ACC has a short term relationship to our market and its main pursuit is to extract the best returns for its investments as possible - as we all do - but that goes against the sort of long-term investment that the NZX has been pushing for the last 10 years.

In short the size of ACCs stake in the NZX is bad for the average investor in the long term because they are able to manipulate the market because of that size.

What we need from this taxpayer funded Government Department is a upper cap - I suggest 5% - on what they are allowed to invest in terms of overall investment in the stockmarket.

It is our money after all and using it to compete against local investors to their detriment is clearly unwise at best and reckless at worst.

It keeps other private investors from using their own money and building up stakes in companies because the ACC are artificially competing with them.

Real competition still remains in the private realm not the bureaucratic one.

Disc I own, PPL & MFT shares in the Share Investor Portfolio.

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c Share Investor 2011

Tuesday, March 15, 2011

Auckland Council in conflict of interest furore over Casino Development

Monday, February 14, 2011

The Case for State Asset Sales

Originally posted @ Share Investor Blog

Much has been written over the last month since the National Party announced its policy to partially sell State Electricity assets should they win the November 26 election and most of it the typical rantings of those commentators from the left and those politicians from the same place that are scaremongering for political gain.

If we look at the facts before us though, in terms of the economic fortunes of New Zealand we are in a dire situation.

These are the main points of the National Party Policy:

The Government would have to maintain a majority controlling stake by owning more than 50 per cent of the company.

New Zealand investors would have to be at the front of the queue for shareholdings, and we would have to be confident of widespread and substantial New Zealand share ownership.

The companies involved would have to present good opportunities for investors.

The capital freed up would have to be used on behalf of taxpayers to fund new public assets and thereby reduce the pressure on the Government to borrow.

The Government would have to be satisfied that industry-specific regulations adequately protected New Zealand consumers.

Very specific guidelines for a sale process that do not mention full sales.

We have very high debt levels, both personally and publicly and this debt is a heavy weight on out present and future economic stability.

We owe almost as much as we own and borrowing and interest costs are currently having a big impact on us, with the State borrowing NZ$300 million a week and individuals still borrowing and servicing their own debt.

This impact will have long term effects if we do not do anything to either pay down more debt, cut spending or drastically cut both. Nobody would attempt to do the latter, apart from the most rabid right wingers so we have to do something right?

Absolutely is the unequivocal answer.

While I would be happy to sell non-essential assets to the State like schools, hospitals, airlines, banks and many other under-performing state monopolies, the National Party are only considering selling partial minority stakes in 4 electricity companies to Mum and Dad investors -hardly a sell-down of the family silver!

The control of those assets remains in the hands of the State on behalf of all of us, so it shouldn't be a problem to the left who have championed the same sort of sell-down of Air New Zealand Ltd [AIR.NZX] that happened under Labour nearly 10 years ago, so the current opposition seems at the very least sour grapes that the left are not in power and at the most hypocritical to the extreme.

The proceeds from a sell down of 49% stakes in the 4 remaining state power companies should go to paying down debt, there are indications that Government want to use the cash freed up to buy other assets for the State but that would clearly be a mistake given the poor quality of management of State assets under any political party.

The sell-down will also encourage prospective small Mum and Dad investors to invest in good companies based in New Zealand rather than putting money into dead end stuff like term investments, private real estate or investing money overseas.

The vast proportion of Kiwisaver money and money invested in various New Zealand superannuation schemes is currently invested offshore and that clearly needs to change.

We need to invest in ourselves, promote a savings culture based on our own assets and the National Party proposal ticks all those positive boxes.

To scaremonger by saying this policy is one based on failed models of the 1980s and 1990s is simply that and is not based on fact at all but a political agenda and lack of economic education, business skills and a determination and political ethos that will have us stuck with the debt we have now for generations to come.

We need to take politics out of this and take a good hard look at the merits based on fact.

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Discuss this Topic @ Share Investor Forum

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c Share Investor & Darren Rickard 2011

Share Investor

Wednesday, September 6, 2017

When Labour Gets In

Thursday, August 24, 2017

Tax

Monday, June 13, 2016

The Clintons: Mark 2

Thursday, November 24, 2011

Labour's Capital Gains tax to impact negatively on house prices

Tuesday, June 14, 2011

VIDEO - Sky City Entertainment Group : Parliamentary Question Related to Convention Centre

Tuesday, March 29, 2011

ACC Influence on Stockmarket Liquidity a Concern to Private Investors

Tuesday, March 15, 2011

Auckland Council in conflict of interest furore over Casino Development

Monday, February 14, 2011

The Case for State Asset Sales

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