The past month has certainly been interesting as the stock
market gyrated with renewed volatility and the Reserve Bank made
moves to reduce the dollar, however this was too late to save Ford
who made the decision to close its manufacturing plants in
Australia by 2016. Despite the outcry from many that an earlier
move on the dollar might have saved jobs,
this piece from the Wall Street Journal indicates otherwise.
Ford's costs in Australia were double what they are in Europe
and four times higher than Asia, so even if the dollar continues to
fall it has a long way to go before Australia becomes competitive
again. The move by the Reserve Bank to reduce rates, and the
indication that it may continue to do so, also saw moves in the
stock market which again puts the spotlight on active management
this interesting piece from Abnormal Returns.
Taking a slightly different approach, the author looks at active
management not from the perspective of performance (although this
is certainly a key consideration), but from an investor's peace
of mind. The argument over whether active management generates a
long term benefit after fees greater than a passive market approach
will be debated until the end of time, however if peace of mind is
your goal, perhaps the relentless pursuit of alpha is not for
Our Director of Wealth Management, Daniel Minihan, has also
regularly weighed in on this debate and most recently posted a piece that
looked behind the curtain to the analysts that provide
recommendations on what to buy and sell. The results were quite
startling, particularly when you consider that only 35% of analysts
said that the profitability of their stock recommendations was
crucial in determining how much they earned, and an even lower 13%
picked retail investors as their most important clients (over 80%
picked Hedge Funds!).
An actuarial review of the Invensys Australia Superannuation Fund showed it to be in surplus to the tune of $189.2 million. In mid 2003, the Invensys Group proposed to the trustee that the surplus be repatriated to the principal employer in the group.
Lenders in New South Wales breathed a sigh of relief earlier this month when the Supreme Court ruled in Bank of Western Australia Ltd v. Primanzon  NSWSC 862 that two part-time commercial property investors could not claim relief under the Contracts Review Act 1980 (NSW) because the loans advanced to them were entered into in the course of a trade, business or profession carried on by them.
A key aspect of an innovation culture is keeping it active at all levels of management, from teams to board meetings.
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