Sunday, November 11, 2007

Kyoto critic comes to town

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The Sun is the Main reason for "climate change".


You are not going to hear much from the sniveling lefty media about this man except to critique and denigrate him for not jumping on the Global Warming bandwagon. Watch for snivellers with closed minds like Rod Oram from the New Zealand Business Herald whose sole obsession these days seems to be how to stop his carbon footprint from getting stuck in his mouth and using it to kick the more sensible among us that know that this whole GW nonsense is just that. I agree largely with Lawson except he is a bit lightweight on GW's proponents where as I wouldn't give them an inch.

They are NUTS!

Go here to View The Great Global Warming Swindle



C Darren Rickard 2007


Kyoto Critic Comes to Town

By JENNI McMANUS - Sunday Star Times | Sunday, 11 November 2007

Contentious climate change issues have been bumped to the top of the business agenda with the release of a consultant's negative report into the economic impact of the government's proposed emissions trading scheme.

Hard on the heels of the Castalia report and its view that the government is seriously underestimating the costs of Kyoto compliance, another strong Kyoto critic flies in to town this week.

Nigel Lawson, former chancellor of the exchequer in the Thatcher government between 1983 and 1989 and father of celebrity chef Nigella, is visiting New Zealand as a guest of the Business Roundtable. On Thursday in Auckland he will give the annual Sir Ron Trotter lecture, this year on the topic of economics and climate change.

Expect strong debate from an ex-politician not known for taking prisoners. Since leaving politics, Lawson has researched and lectured widely on climate change, his most recent contribution being work on a documentary called The Great Global Warming Swindle.

His message: the conventional response to global warming the bid to get global agreement among industrialised nations on reducing carbon dioxide emissions to a fixed, but arbitrary, level by 2012 is "absurd".

Even its strongest advocates concede the existing Kyoto agreement will do virtually nothing to reduce future rates of global warming, Lawson says. The US, the largest source of carbon dioxide emissions, has refused to ratify the treaty, largely because developing countries such as China, India and Brazil are effectively outside the process and determined to remain so.

What's being done with Kyoto simply isn't working, Lawson says. "There's a lot of talk and some things are in place in Europe, but while subsidies have been given to emitters (to help them adapt), they've done nothing to cut emissions. Politicians say greenhouse gases are the greatest threat facing the planet, but every year emissions get higher. I cannot see any other case where the difference between the rhetoric and the reality is greater."

Lawson argues adaptation to climate change is better than attempting to mitigate or reverse it.

Adaptation is cheaper, will more efficiently fix already existing problems (such as coastal flooding in low-lying areas) and will generally happen naturally, without government intervention, he says. Farmers, for instance, will show commonsense and change their crops, improve irrigation and cultivate areas once too cold to be economic if the climate gets warmer. Rich countries of the temperate world have an obligation to help the poor countries of the tropical world do whatever adaptation is needed, he says.

There is also the "just-in-time" solution of geo-engineering where pioneer work is being done at Stanford University to devise actions that could be taken quickly to cool the planet if necessary.

Lawson wants to see the debate shrunk to what he sees as its central focus: what has been the rise in global mean temperature in the past 100 years, why we believe this has happened and what the consequences are likely to be.

"The only honest answer is that we do not know," he says. "But it is very difficult to refine the issues because people feel so emotional. It is hard to get rational discussion going, but it is very important that we do.

"It's clear politicians think they're seen in a good light if they tell people they're saving the planet. It's wonderful grandstanding. But we simply don't know why climate change occurs and politicians can get very impatient with scientists who don't say anything definite, even when the science isn't certain." The difficulty is climatology is a relatively new and complex science "and neither scientists nor politicians serve either the truth or the people by pretending to know more than they do".

For example, many people probably aren't aware that at times during recent history the world has been warmer than at present. And while atmospheric concentrations of CO2 increased by 30% during the 20th century, global warming has occurred only in fits and starts. In fact, says Lawson, it ceased in 1998 and is not expected to resume until 2009.

Despite his views, he says he could live "up to a point" with cuts in CO2 emission levels. Even a carbon tax would be acceptable, providing the revenue was used to cut other forms of tax. But that's a different matter from putting the entire economy at risk with complex emissions trading schemes a point taken up by economist Alex Sundakov in the Castilia report. No scheme will be politically sustainable if the relative costs and benefits are not well understood and accepted by the electorate at large, Sundakov says.

Any major cuts in NZ emissions are expected to be very costly, despite government claims to the contrary, because of our high economic reliance on emissions-rich activities. Official estimates in the US and Canada put the cost between $5000 and $10,000 per household.

Nor does Lawson agree that we must do whatever it takes to avert the possibility of large-scale climate catastrophe. A number of other catastrophes are also possible, including another ice age, the prospect of nuclear war and the growth of terrorism "in an age where scientific and technological developments have brought the means of devastation within the reach of even modestly funded terrorist groups".

"Above all," he says, "in a world of inevitably finite resources, not only can we not possibly spend large sums of money on guarding against each and every possible eventuality in the future, but the more we do spend on this, the less there is available to deal with poverty and disease in the present."


C Sunday Star Times 2007

Friday, November 9, 2007

Friday Brief

Took a small holding of a new company to the portfolio, Micheal Hill International(MHI) the New Zealand Jewelry chain, with stores in NZ, Australia and Canada.

Having been watching this one for a while and it wasn't getting any cheaper so I thought I would take the plunge before a 10 for 1 share split on Nov19.

The company has aspirations to be a global player and it is very well run and has a great attitude to capital management and prudent expansion.

I would group it with my recent additional purchases of Pumpkin Patch(PPL) as giving exposure to a global market for the long term portfolio for good long term returns.

Just an update on Burger Fuel(BFW)

An indicator of how crowded the gourmet burger market is in Sydney where BFW has two stores. A link to a critique of the food served at Burger Fuel and five other competitors

Shares are still languishing and they finished the day at 65c today. I missed this one but they opened a new store in Napier, a small town on New Zealand's North Island East Coast.


Here's the story:

BurgerFuel Opens Napier Store

BurgerFuel Worldwide Press Release – For immediate release

30 October 2007

BurgerFuel Opens Napier Store


Only a few weeks after opening its second Australian store in King’s Cross, BurgerFuel has opened another new store in Napier. BurgerFuel on Carlyle Street marks the 24th store for the company, with 22 across the North Island and 2 in Sydney, Australia.

Since listing on the NZAX in August, the company has opened a mix of both company owned and franchised stores.

The local franchisee for Napier is Andrew Coombe. Andrew is formerly a fire chief, who is going from fighting fires to fuelling the flames at BurgerFuel. The Napier store is in the new complex on Carlyle Street, on the site of the old Shell station. Andrew and his wife Anne are providing a new fuel stop for the people of Hawke’s Bay with the gourmet burger experience they both became addicted to, whilst working in Auckland.

The opening of the Napier store is seen as strategically important to BurgerFuel says Chris Mason CEO “We want people to enjoy a visit to BurgerFuel – wherever they may be. Our commitment to the provinces is just as important as city locations. As BurgerFuel increases store numbers, so too does our customer base grow. Eventually everyone should have access to New Zealand’s best gourmet burger”.


No Friday Free for all column this week but it will be back next week.


C Share Investor 2007

Thursday, November 8, 2007

Fear and Greed are Lovely things

ARRRRRRRRGGGGHHH!!!!!

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The DOW doing its thing today



I don't know about you but I'm buying.

The current sell offs of some of my favourite stocks that I already hold I have added to and picked up some new ones.

I added to my Pumpkin Patch(PPL) Portfolio again yesterday and included additions to my portfolio of Kiwi Income Property(KIP) and Postie Plus Group(PPG)

I'm not going to the New Years day sales but I'm going to participate in this one.

If you are a long term investor you would be almost mad if you didn't...well on second thoughts each to his own but.

It just goes to show that the fear and greed labels apply the most when the markets are most volatile and that those that don't follow the herd are more likely to do better in the market long term.

Who knows if we are going to see a substantial sell off of stocks as the New Zealand economy tanks and the US is having a few flutters over high oil prices, all I know is that I like to buy when stock prices are going down.

C Share Investor 2007

Wednesday, November 7, 2007

Pumpkin Patch VS Burger Fuel

Sitting in the Takapuna KFC today eating my 3 piece quarter pack I got to thinking about brands again.

Putting the Colonel's badly run brands in this country aside I would like to discuss two up and coming brands that have their genesis in New Zealand and both with ambitions on a global scale.


Image result for pumpkin patch clothing

Pumpkin Patch(PPL) the trendy kids wear manufacturer and retailer and Burger Fuel (BFW) the trendy Gourmet Burger maker share few traits with the well established KFC brand as operated in NZ.

Both PPL and BFW are in the infant stage as far as size and brand awareness go, although Pumpkin Patch seems to have a very high brand recognition even in areas where they don't have stores and one could assume on that fact alone it could become a true global brand.

BFW are well established in New Zealand, with two stores in Australia and the brand is seen as the place to buy quality fast food.

PPL are similarly ensconced in NZ and Australia and have a small presence in the US and UK. They are represented in other international markets via department stores and mail order.

PPL have a total of just over 200 stores and BFW just over 20 and both had their beginnings in the early 1990s.

Both companies have had their images carefully nurtured over the last 15 years or so and that attention to the brand has paid off and will continue to sustain growth as they look to go global.


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While BFW only listed this year PPL got the jump in 2004 and has grown substantially since then, entering the US West Coast and now in Texas and New York.

The biggest risk for PPL is the cost factor, as they expand from a small base, likewise ,BFW will struggle as they enter new markets. This is likely to be ameliorated as economies of scale kick in and the brand gets additional awareness.

Strong branded companies like Starbucks have expanded this way. From their local area of Seattle they quickly spread their well managed brand across the US States and then globally.

Burger Fuel and Pumpkin Patch will attempt something similar in reverse. Probably harder to achieve than Starbucks but with their strong brands both these companies have a great shot.

The US market is arguably the most important market for both companies and the scale and exposure that will be available to them will either make or break them.

The cost of expansion will be high and must be done carefully and with much thought and planning. Getting it wrong in the US could well mean the death of either company. It is a very competitive market and there are giants there ready to match your product.

Thankfully, as management of Burger Fuel and Pumpkin Patch have been careful to keep their brands as strong as they are, as they have grown, this has given them an edge as they expand overseas and any company with an edge on the competition through strong brands and therefore brand recognition will have a better chance of surviving in a though market like the USA.

The possibilities for growth of these companies is truly mind boggling.

With around 100 Pumpkin Patch stores in Australia and a population of 20 million, it doesn't take much to extrapolate the figures in the US alone, with a population of 300 million.

The possibilities in India and China, while probably many years down the track, is enough to make ones eyes water.

Burger Fuel's future growth story isn't as easy to gauge as they have just started their foreign expansion although it will probably be tougher for them to expand than PPL as the fast food sector in which they operate in has a lot more competition. Their strong brand and differentiation to the competition will make this task easier however.

While not guaranteed global success and the associated riches that would surely follow, Pumpkin Patch and Burger Fuel have put their global expansion plans squarely in the hands of two very strong brands in the markets in which they currently operate.

Their success will hang largely on how new consumers respond to their carefully crafted brands and the backup management give them.


Disclosure I own PPL Shares



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c Share Investor 2007