Rob Fyfe's "Environmental Extremism"

A reader of mine brought this subject up, of sorts, yesterday. That is, the folly of investing in companies that base their business on airy fairy ideas like "green technology" based on the man made global warming myth or in companies whose grip on their business is so tenuous they will sink to the depths of using this kind of bullshit on competitors in the hope they make them look bad.

In my not so humble opinion Air New Zealand [AIR.NZ] is one of those companies.

Rob Fyfe, Air New Zealand CEO has recently labeled Emirates Airline alleged running of "empty planes" across the Tasman as "Environmental Extremism"

"For this competitor, the Tasman sectors are an easy add-on to their long haul flying and an opportunity to earn revenue at only marginal cost and load factors down around 50 per cent seem to be of no consequence," Read more

Fyfe told a gab fest of Global Warming zealots at the Green Skies meeting in Hong Kong.

Now using junk science to attack a competitor is one thing but Rob and the boys and girls down at Air NZ head office have been busy over a number of years spending 10s of millions of shareholder dollars developing nonsense bio-aviation fuels and asking customers to pay extra for their "carbon credit" deficit because of the naughty way they pollute when they choose to fly with the largely Kiwi taxpayer owned airline.

So it is in Robs best interest to attack competitors who don't appear to "care" as much about how filthy flying is because he is spending shareholder money in the hope this will give our airline an edge over the competition and to justify the spending of shareholder dollars - I think the Green Party call it Greenwash.

So Mr Fyfe's stance on the evil of flying is simply a race to the bottom where the eventual winner will be the first to award themselves a gong for being green in the hope it is good for business.

Ultimately though the reckless use of Air New Zealand shareholder money to pursue the bogus notion that every time one flies it is an affront to the environment and by setting your company up as a bastion of virtue above competitors by using this to attack them is environmental extremism itself and will ultimately end in tears and lost shareholder dollars when the whole Global Warming myth unravels.

Stand by for the fallout.


Air New Zealand @ Share Investor

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c Share Investor 2009

Investment Property Taxes a boon for the Stockmarket

There has been allot of talk about taxes in relation to investment property recently. There has been a government task force looking into the idea of capital gains taxes on investment property, principally a capital gains tax.

It appears our "business friendly" National Government are trying to shake down its citizens for even more taxes to fund the continued high spending of our Government.

I don't remember them in their pre-election campaigning that they were going to implement new taxes but be that as it may it looks likely some kind of tax on investment property is likely.

I don't agree with this at all, taxes kill economies and make Governments bigger and we know that aint good.

As I wrote last month the best thing to do to put investment property on an even keel with other classes of investments is to remove taxes from those other classes, not add another wallet numbing penalty to property investors.

Either way though if there are taxes applied to investment property, and I think there will be, this is going to be a minor boon for the New Zealand Stockmarket.

The withholding tax applied to dividends by Labour in 2007 further put stockmarket investors on the back foot and any move to even the score with property investment is a win for New Zealand.

The Nats probably wont raise taxes on investment property by a significant amount because of the obvious political ramifications, but any move that hamstrings the investment property market is going to be good for those of us investing in real productive companies that are either listed on the Stockmarket or indeed private ones.

About time us wise ones we got a break.

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c Share Investor 2009

Michael Hill Makeover kicks off

The next step in the Michael Hill International story[MHI.NZ] has happened with the opening of their new format store in Auckland's Queen Street yesterday.

A move towards a more sophisticated look inside and out is designed to take the company towards the higher end of the jewelry market and then hopefully higher margins.

This particular outlet is what the boffins call a "flagship" store and its charcoal and grey colours, along with its new lighting design is designed specifically to get those higher end punters in the door -revamps of retail stores tend to get more punters through the door, not this shopper though.

From Michael Hill himself on the reasons for the change:

“As the original high-end retailer in this part of Queen St, we’re delighted to be delivering a contemporary shopping experience to our customers.

“It’s important to move with the retail environment. As our customers evolve so too must we. This new store design has become the benchmark for all stores going forward, Hill said.



On the purchase his company made last year of bankrupt jewelry retailer Whitehall Jewelers:

"When you're opening in a new market and opening in a place like Chicago that has been particularly depressed you can't just roll out the old thing and expect it to work. It's really when you have to do things that you come up with your best."

Hill has himself said that the Chicago purchase was a mistake (listen to Michael Hill interview - You need to register first ) because of the price paid for it so it is either a very positive move by him to spend millions on the 17 United States stores or throwing good shareholder money after bad - I tend to think he knows what he is doing but having said that the US is a particularly hard market for outsiders to crack. Pumpkin Patch Ltd [PPL.NZ] has also had recent difficulties with its US operations, incurring significant losses, so this is a very tough market, especially in the current economic conditions.

The revamp of the company image comes in a year where underlying 2009 profit has been down by more than 45% and its share price hit because of the overall retail downturn.

Michael Hill shares closed even at NZ 72c yesterday.


Disclosure I own Michael Hill International shares in the Share Investor Portfolio.


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c Share Investor 2009

Time for high fives or time for a pause for thought?

A piece I stumbled upon while looking for something else - boy the internet can sidetrack me - got me thinking pessimistically again about the stockmarket and economy in general:

From EFT Guide, By Simon Maierhofer

A 50% rally, Warren Buffett, extreme levels of optimism, rallies based on vague reports of improvements, etc.; all the aforementioned are parallels between the 1929-1930 bear market rally and the rally from the March lows. If the parallels hold up, a mere rhyme to history (let alone a repeat), will wipe out millions of next eggs. Here’s how to avoid repeating your grand parent’s mistakes.It’s been said (and perhaps you are getting tired of hearing it) that those who don’t learn from history are doomed to repeat it.

If the parallels of the Great Depression continue to hold up as they have (and according to historical indicators they will), history doesn’t have to repeat itself to severely hurt investors. A mere rhyme to the Great Depression would be enough to wipe out tons of portfolios.But who cares about history when the market is up and the forecasts call for better days ahead. The Dow Jones (DJI: ^DJI) and S&P 500 (SNP: ^GSPC) have rallied over 55% while the Nasdaq (Nasdaq: ^IXIC) has soared nearly 70%. Wall Street is anxiously expecting another earnings season, which is expected to be predominantly good.

Reuters reports that “earnings optimism lift Wall Street” while Credit Suisse encourages their clients to buy bullish Alcoa options in advance of Alcoa’s (NYSE: AA) profit reports.

If there is one thing we should have learned from history, it’s that the bear strikes hardest when least expected. Pierre Corneille hit the nail on the head when he said that “danger breeds best on too much confidence.”

Black Monday’s or Thursday’s wouldn’t be called “black” if they were expected. Market tops are always marked by extreme levels of optimism.

In January 2009, with the Dow Jones slightly above 9,000, the ETF Profit Strategy Newsletter noticed elevated levels of optimism and warned of a severe decline with a target of Dow 6,700. Today, sentiment readings are even more extreme than they were in January. The implications are obvious.

If there is just one time you want to take a lesson from history, it is RIGHT NOW. The parallels between today and the Great Depression are numerous and strikingly similar. This 5-minute history lesson might be the best investment you’ll ever make. Continue article here

I was aware of the sucker rally of the 1930s that the author discusses but it certainly gets one thinking about where we might be right now and if the authors research and main points are accurate then it makes for grim reading.

The apparent economic "recovery" (green shoots my arse Mr Obama) that has led to markets skyrocket over the last six months is based on large amounts of State money borrowed from the Chinese or money simply being printed.

Banks and financial institutions in the US, which have made up a large part of the rally, have better looking balance sheets thanks to the aforementioned handouts, not for any concrete economic reasons.

Lets not even go into the massive debt that many Western countries have on their balance sheets - personal and State.

I don't think things are as bad or necessarily the same as what was experienced during the Great Depression - it very well could be worse I suppose - and I have been buying stocks ( 1 2 3 ) before the current rally but the general message from the writer is one that should be taken on board as an added risk factor when considering any type of investment in the current cycle of economic uncertainty.

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c Share Investor 2009