Desperately seeking alpha

WilliamofOckham.com content generator and great friend of this organ, Jess Irvine has written another informative Facebook post on her child’s nursery chat group.

Before we get into it, let’s have a quick reminder of an important phenomenon; the Dunning Kruger Effect. This has been summarised thus:

“.…If you’re incompetent, you can’t know you’re incompetent … The skills you need to produce a right answer are exactly the skills you need to recognize what a right answer is.

With that context in mind, let’s have a look at Jess’ genius Mumsnet story.

Jess tells us she’s knocking on the door of her 40th year and has never invested in stocks outside of her Superannuation fund, which presumably is managed by somebody else. I’m not sure this is the sort of admission a “Senior Economics Writer” should make in public. One would be sceptical of a surgeon who admitted to never actually holding a scalpel, after all.

But still, not one to be worried by inconveniences such as competence, capability or knowledge, Jess has announced she’s going to be sharing her top stock picks over the near future.

I may need to write a “Jess Irvine piss take bot” to cover these announcements.

The secret to Jess’s investing success starts, as with all of Jess’s advice, with a spreadsheet. To a man with a hammer, the whole world looks like a nail.

So, with the spreadsheet, she has categorised the stocks in the ASX into her own unique budget labels: housing, household, utilities, transport, food, health, education, appearance, lifestyle and professional fees.

Curious minds might wonder at this point, why Jess’s investing strategy is limited to the Australian exchange, especially as most major tech companies are on the NASDAQ and the world’s major corporations are listed in London or New York? Keep wondering, as we aren’t told. I’m sure it’s nothing to do with a lack of knowledge and experience.

If you’re paging down the column looking for the first stock pick, don’t bother, we’re being made to wait. After all, Jess doesn’t want to rashly splash her $10,000 on just any old crap.

Wait, didn’t I mention this entire column is to tell us that one day, sometime in the future, Jess may buy up to $10,000 worth of shares?

That’s not strictly true, she does manage to get a mention in about her astute purchase, at the last market peak, of a tiny Sydney apartment, which she now owns is renting from a bank and, that she’s got nearly $300,000 in her pension, which suggests she’s made three fifths of fuck all alpha on the principle over the 20 years she’s been paying in.

The only missing components of a classic Jess Irvine’s Mumsnet post are mention of her coming last in a marathon and having a baby. Plenty of time for that when the stock picks are shared though.

Bill’s Opinion

There’s no real way to confirm this but I’m going to wildly speculate about Jess Irvine, Senior Economics Writer at the Sydney Morning Herald:

  1. The only reason she has that job title is because of her gender. She could not, surely, have been the most qualified business and economics writer available to that newspaper.
  2. The ongoing requirement for the news desk to maintain diversity quotas has emboldened her to push this kind of pointless and, frankly, embarrassing writing on the editors and, being spineless, they roll over and publish it.
  3. All of Jess’s stock picks will rise at least 10% in value over the next year. This will be hailed as genius (self-assessed). proof of her financial acumen and mastery of a pivot table.

In the meantime, nearly everything on the ASX will rise 10% too, what else can it do in an era of central banks hitting CTRL P to infinity?

My advice is don’t take slimming advice from an overweight person and don’t take stock tips from the shoe shine girl.

The life of Brian

Here’s one for the coffee table collection, Brian Hartzer’s autobiography:

For those who’ve arrived here since our mildly unhealthy obsession with Brian’s Wokepac subsided and have therefore missed all the fun watching his slow-moving car crash of a career, perhaps start with this and then read any of the subsequent posts under the Wokepac category.

I’m sure the book will be a fascinating read, explaining the key to Brian’s excellent and almost magical ability to connect (or engage, if you will) with the average Australian.

Most management books seem to have seven rules. Seven is a good number for bullshit advice.

What might Brian’s seven rules consist of, perhaps?

Could we respectfully offer the following:

1. Over-promote people based purely on genital configuration and rig the quota numbers, if required

2. Attend every woke event in the calendar

3. Don’t pay attention to the Risk Department when they suggested the IT systems were enabling 3,000 cases of child sexual abuse

4. Assume everything is going to be great now we have 50:50 diversity in leadership

5. Ignore the year on year decline in share price and market share

6. Front up to APRA with a pathetic and worthless mea culpa

7. Resign as an absolute professional failure, after destroying shareholder value and the credibility of a 200 year old bank whilst maintaining the highest relative operating cost base in the industry

Bill’s Opinion

There are people to take advice from and there are people from whom it’s best to learn by doing the opposite of their example.

Brian is in the latter category.

Don’t be too surprised to find his next career move is Celebrity Strictly Ballroom and I’m a Celebrity, Get Me Out of Here.

Australia’s lack of ambition

Stars lobby for Netflix to face 20 per cent local content quota.

Seriously? Just 20%? You’re selling your talent short, guys.

Why not 50% or even 75%? If “Australian content” is so good, surely we should be pushing for more of it? Who doesn’t like “Australian content”?

In fact, why not 89.56161 (recurring) %?

Who on earth wouldn’t want to be faced with pages and pages of Netflix options of shows featuring stars and A listers such as Simon Baker, Marta Dusseldorp, Bryan Brown and Justine Clarke?

We’ve all enjoyed their back catalogues, haven’t we?

Well, at least you’ve heard of these people, right?

Clue: Baker has starred in a USA TV crime series. As for the others, your guess is as good as mine; it’s probably safe to assume they’re panellists on some crappy quiz shows on the ABC.

Anyway, we digress.

This call for legislation mandating the origin of the entertainment offered by Netflix raises many questions. Questions such as:

  • Why is there so little Australian content on Netflix?
  • Of the existing Australian content, how popular is it with the Australian public relative to content from other countries?
  • What’s the international worth of this Australian content? Are other countries lining up to buy it off us faster than we create it?
  • Who the fuck are these so called “stars” and couldn’t they even get Huge Ackman to join them, given his track record of turning up to the opening of anything more significant than an electricity bill?

Bill’s Opinion

There’s a few things going on here. Firstly, this is a very Australian response to the reality and impact of market forces; seek government intervention in the form of protectionism, regulation and subsidies.

From car manufacturing to baked beans, there isn’t an industry in the country that, even before the luxury communism of covid, didn’t benefit from taxpayer largesse. Australia went from being a nation of ex-convict sheep farmers without a chance of leaving to a nation of farmed sheep without a chance of leaving.

More amusingly though, this is the type of lunacy we get when people who get paid to play “let’s pretend” for a living try to interfere in economics and business. That they’ll even get an audience in Canberra for this stupidity also tells us much about the IQ and real life experience of the political class.

In the meantime, anyone with an understanding of economics or recent experience with paging through reams of unpalatable viewing options of woke, race baiting, climate change pushing, unfunny, uninteresting and, frankly, preachy bollocks on Netflix, will be able to tell you what the likely unintended consequences of this will be; cancelled subscriptions.

If your “Australian content” is so good, sell it to us and the world like France does with series like Bureau des Legendes or Dix Pour Cent. Don’t force it on us like medicine.

Toot toot chugga chugga big red car….

Everyone back in the trees!

Observed evidence suggests a possible hypothesis; in some pockets of the human species, evolution has stopped and has gone in to reverse.

The human species has reached a level of such great technological advance, the resulting inventions and indeed much of everyday life contains too much detail for the vast majority of people to fully comprehend. For many, it could be indistinguishable from witchcraft, to borrow a theme by Arthur C. Clarke.

This idea is neatly demonstrated by the excellent book and subsequent short animated video, “I, Pencil“. Although we take a pencil for granted, no one individual is capable of making one or even has the complete knowledge of how to make one.

Many of us are able to understand the principles behind much of the process though.

William of Ockham’s evolution in reverse hypothesis suggests we’ve left some people behind in this ability to understand complexity at a high level.

Today, I will offer two items of evidence for this but there will no doubt be plenty more over the coming weeks and months. Once seen, this phenomenon becomes visible everywhere.

Item 1: A CEO, whose entire business model is to offer sage advice to other organisations, couldn’t predict there would be any significant problems with paying exactly the same wage to every employee, regardless of age, skill level and skill value. In fact, the poor love seemed almost childlike in his wonder when he discovered a web developer in central London won’t work for the same wage as the office receptionist.

His brain hasn’t quite made the leap to the realisation other humans might have agency and will make choices that best suit their personal circumstances. Imagine reaching adulthood and not being even vaguely aware of that?

Item 2. A Senator of 14 years longevity in the Federal Parliament, who has spent her entire career sitting in vehement opposition to the government on the often inferred basis that it is a combination of corrupt, incompetent or even evil, believes a Government-developed internet search engine would be a useful project for taxpayer dollars.

This, despite the not entirely irrelevant facts there are already a dozen alternative free search engines which, between them, spend perhaps more than $3bn every year on research and development.

Yet she still believes we should trust the bureaucracy that brought you the NBN, CovidSafe App, expensive national firewalls to block websites such as PirateBay without understanding what a VPN is and countless examples of IT procurement and development with quadrupled budgets and minuscule realised benefits. This time they’ll get it right though, surely?

Bill’s Opinion

That they walk amongst us without their jaws wide open in amazement at the miracle of electric light bulbs, coffee machines, bicycles and adhesive stamps on envelopes, says much about these people’s lack of imagination or introspection.

Without getting all eugenics on the subject, it’s a bit of a worry for the species these genes are still washing around the system.

Somewhere in the world there is a tree working really hard. I think Calvin Benton and Sarah Two Dads owe it an apology.

Just duck duck go and call their bluff

Executives from Google and Facebook’s Australian offices were dragged in front of a Senate hearing where they were savaged by Green politician Sarah Two Dads, which must have been scary for them.

If you missed the story, the chronology can be summarised as follows:

1989 Tim Berners-Lee invents the World Wide Web

1998 Larry Page created Google

2020 The Australian news industry discovered the internet

2021 Australian politicians tried to tax the internet

Ok, there’s a bit more to it than that….but not much.

To get a completely unbiased version of events, read this article published by the Sydney Morning Herald, an organisation whose entire raison d’être was to write about new stuff, yet has failed to change its business model every year since 1998.

Bill’s Opinion

As Ben Shapiro is fond of saying, two things can be true at once. Google and Facebook can be ruthless and unscrupulous operators, willing to steal content and commoditise everything they touch AND the Australian news media can be guilty of failing to adapt their business model to make money and not have to keep firing journalists.

In the unlikely event Google switch off their search engine in Australia, nobody should care. Other search engines are available and some, such as Duck Duck Go claim not to track you like a Stasi surveillance team.

I suspect the politicians will blink first, but who really cares anyway.

What is most amusing is the news outlets most exercised by this. Outlets like The Australian and, in the UK, The Times, Telegraph and Spectator have all made a success of the paywall model. This Australian spat says more about the outlets who haven’t, doesn’t it?

Newspapers such as the Sydney Morning Herald are desperate for a government handout, nominally paid for by Google. To understand why, one only needs to answer the following question; “where would a Sydney Morning Herald reader go for free news if they locked the paywall?”.

The answer is, of course, the government news agency, The ABC.

The SMH can’t compete because they have no Unique Selling Point to offer to someone whose politics leans towards the left.

Yet don’t expect to see calls in the SMH for The ABC to be defunded.

It’s the Australian equivalent of Stockholm Syndrome.

As for losing the Google search option in Australia…. I’m reminded of this exchange in The Hitchhiker’s Guide to the Galaxy:

Prosser: Mr. Dent, have you any idea how much damage that bulldozer would suffer if I just let it roll straight over you?

Dent: How much?

Prosser: None at all.

The customer is always right

An interesting Twitter thread here on the subject of Chinese visa abusers students in an Australian university complaining about the subject material being taught.

This caught my attention for two reasons; firstly, it had never crossed my mind that, once reading the prospectus, applying and paying for the course, students would then vociferously petition to define the course material.

But the most instructive aspect of this is the reply by the University. Spoiler alert; it isn’t a single sentence along the lines of, “that’s what we’re teaching, if you don’t like it feel free to fuck off”:

To understand what’s going on with this story, you’ll need some specific Australian background. You can do your own research to confirm/reject these statements and, if you do, it’d be great to hear your conclusions in the comments:

Australia has been running two unofficial route to citizenship schemes for decades. The first is “457 visas” for IT workers where they are employed at lower than market rate until they achieve permanent resident status. In earlier times, this might have been called “indentured labour”. The second is a student visa whereby the children of rich foreigners with questionable qualifications and English language skills pay to attend a university course with the intention of staying long enough to achieve permanent resident status.

This has had the effect of keeping IT salaries lower than they might otherwise have been and inflating the revenue of the universities most guilty of turning a blind eye to non-bilingual students.

Following the events of 2020, these two industries are having to reassess this model.

Bill’s Opinion

The correct response from Monash should have been taciturn and Anglo Saxon. That it was a mealy mouthed equivocation tells us quite how reliant they are on the revenue being shipped in from mainland Chinese parents.

As the old axiom goes, “the customer is always right”.

…and don’t do it again!

…unless you want to.

Well, that certainly gave President Xi a piece of our mind. I hope he reads it carefully and has second thoughts about his nasty policy of reneging on the 50 year agreement to not impose Chinese legislation on Hong Kong.

One can only imagine the reaction in the inner circle of power in Beijing, they must be absolutely shitting their pants.

Well, imagine no further; we’ve been very fortunate to have access to a secret recording of President Xi’s reaction.

Helpfully, it has been translated for us by Kevin Rudd. Many of you may not be aware, because he doesn’t like to mention it, but the former Australian Prime Minister is fluent in Mandarin:

(Presidential aide passes the text of the Australian response to the arrests to Xi)

(Pause while he reads it)

(Xi scrunches the paper into a tight ball and aims it at the basketball hoop on his wall. Throws and gets it in).

President Xi: Three points! Yao Ming eat yer heart out!

Bill’s Opinion

In August 2019 I wrote about Australia’s quandary on how best to deal with China.

This piss weak response to a further incursion in to the freedoms of the Hong Kongers, supposedly protected under international law, tells us which side of the Chamberlain/Churchill spectrum the current Australian Federal Government have chosen to sit.

That’s fine, we can choose appeasement and cowardice if that’s what we feel is best for our interests. But let’s just admit it then, rather than pretending we’re some kind of moral arbiter and guardians of objective truth.

Without Chinese trade links, Australia is more fucked than a Wan Chai whore after a weekend when a US aircraft carrier has been in town.

They know that, we know that and they know we know that. Which means China can do what the fuck they like and we won’t lift a finger, except perhaps to wave a piece of paper thus:

2021 surely can’t be any worse?

Gonna sleep down in the parlor

And relive my dreams

I’ll close my eyes and I wonder

If everything is as hollow as it seems

When you think that you’ve lost everything

You find out you can always lose a little more

I been to Sugar Town, I shook the sugar down

Now I’m trying to get to heaven before they close the door

Bob Dylan

Last year’s predictions weren’t too far off the mark, with the minor exception of missing a global pandemic and subsequent complete overreaction by practically every national government…..

“Other than that, Mr Waite, how was your holiday in Beirut?”

On to this year’s predictions then:

Australian Politics

Internal borders will continue to open and close like a hooker’s legs throughout the year. The two week quarantine for international travellers will remain all year.

An Australian university will threaten to declare bankruptcy and will be bailed out by the federal or a state government.

An interviewee will point out to a Sky News Australia talking head that they can’t simultaneously berate Dan Andrews for his response to Kung Flu whilst complaining the rest of the world are overreacting to a virus with a 99.93% survival rate.

Global Politics

Kamala Harris will take over the presidency from a medically-impaired Joe Biden. For this selfless act of bravery, she will will receive the Nobel Peace Prize.

A proxy war between China and the western powers will be fought in SE Asia.

The USA will return to the Iran nuclear deal. Somewhat related, mysterious explosions will continue to occur at various locations in Iran followed by an innocent face and shrug of the shoulders in Jerusalem.

The UK will have a new Prime Minister, most likely Dishy Rishi Sunak or Liz Truss.

An EU-sceptic party will win an election outright or by enough to form a coalition government in one of the 27 states.

The trial of Ghislaine Maxwell will result in weasely apologies and withdrawal from public life of several high profile figures.

A Black Lives Matter leader will be arrested for embezzlement and fraud.

Zeitgeist

The new “Trump TV” internet channel will overtake CNN’s viewing figures within a week of being launched.

As crowds return to sports matches, nobody will kneel before kick off for fear of ridicule.

A new hedonistic and illegal music/dance/drugs genre will emerge as teenagers and twentysomethings kick out against the societal restrictions. It will be inspirational for about as long as the northern hemisphere summer lasts and then it will crash and burn.

Alec Baldwin launches a charity with Rachel Dolezal and Shaun King to help sufferers of the newly identified condition, TransEthnic.

Harry and Megan Windsor-Markle’s podcasts and Netflix output is quietly dropped due to awful listening/viewing figures.

Sport

England wins the Grand Slam in the Six Nations.

The British and Irish Lions tour will go ahead in empty stadia and will be won 2-1 by South Africa.

The Olympics will also go ahead but will be a dull collection of the sports you wouldn’t normally pay to watch, as always.

Economy

Gold will reach new highs and stay above $2,100 an ounce all year.

Bitcoin will reach $35,000 and also fall to $18,000 and back again.

Tesla will reach a market capitalisation of $1 trillion but you still won’t personally know anyone who owns one.

All major stock indices will have and maintain major rises.

Several major airlines will be nationalised.

Bill’s Opinion

Some serious, some jokingly serious.

On verra, on verra.

Predictive test

Predictions for 2021 incoming later today.

In the meantime, it’s end of year report time. On January 1st we made the following ridiculous suggestions:

Australian Politics

Politicians of all sides of the aisle increase the warnings against reliance on China. There will be noises made by the Federal government to have closer trade and defence links with the USA (particularly following the USA election).

A Westpac executive is jailed for the AUSTRAC issues. Probably Lynn Cobley.

Hindsight score – 7/10. As with the Victorian hotel quarantine fuck up, it’s looking unlikely anyone will be found accountable for the Wokepac kiddy-fiddling scandal.

Global Politics

The UK will reach a WTO+ deal (ie closer to WTO terms than a full trade deal) with the EU and negotiations won’t be extended. Boris will call their bluff.

Congress won’t send the impeachment papers to the Senate. The GOP will make political hay about this all the way to the election.

Hindsight score – 8/10. As anyone who has ever negotiated anything could have predicted, when faced with a credible threat of a walk away, the EU blinked.

The impeachment went to the Senate and we all yawned.

Zeitgeist

Sentiment turns against Saint Greta. There’s a financial scandal involving her parents or handlers.

A judge in the USA finds a single mother of a transgender child guilty of abuse. The Supreme Court supports this finding on appeal.

Hindsight score – 5/10. St Greta has been relatively quiet this year, so we can be thankful for small mercies.

Sentiment and the courts are turning against the child abusers masquerading as transgender allies.

Sport

Six Nations table:

1 England

2 Ireland

3 Wales

4 France

5 Scotland

6 Italy

Australia finishes bottom of the Rugby Championship table.

Hindsight score – 6/10. I correctly called the winner and loser of the disrupted Six Nations, and Australia did indeed come last in the amended Tri Nations.

Economy

Gold to temporarily breach all time high ($1,895).

The Dow to breach 30,000.

Hindsight score – 10/10. Expect more of this to come, we are truly living in the “everything bubble”.

Bill’s Opinion

Not bad, all things considered.

Everything needs a bail out

Government’s view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidise it.
Ronald Reagan
I learned something today; there is a 1c per litre tax on the petrol in my car’s tank used to subsidise Australian oil refineries.

Wait. WHAT???

Worse, the unions and Opposition think this isn’t going far enough.

Primarily, the reason given is the usual “to protect jobs” bollocks.

The government argues keeping refineries open will suppress the price of fuel and modelling suggests wholesale prices would increase by almost 1¢ per litre if production ended, adding up to $4.9 billion over a decade.

Oh good; they’ve got a model.

Well, why didn’t you say so earlier?

We love models in 2020, they’re such a great way to build our confidence in an argument, and they’ve got such a good track record, they’ve never lets us down previously…..

Interestingly, the part not being said aloud in this article is the national security argument. It is referenced by the union though, here.

….our politicians now seem to understand the significance that refineries have to our national and economic security and how difficult the operating environment has been.

A similar low bow was drawn before the car manufacturers took the taxpayers’ money and scarpered.

It was never quite made clear how the ability to build a shitty Holden Commodore would dissuade or slow President Xi and the PLA Navy from steaming into Sydney Harbour and Port Philip Bay with all guns blazing. An allergy to garish paint jobs and shaded windows?

Bill’s Opinion

Putting aside the hilarious concept of Australia needing a refinery for reasons of national security, the protection of refinery jobs is a classic example of the Broken Window Fallacy, best described by Henry Hazlitt.

It’s probably only fair we subsidise fuel refining, after all, we chuck money at wind farms, solar energy and the coal mining industry. Why not oil refineries?

2020; the year we all stopped worrying and learned to love being Keynesians.