War in the Pacific

I've got friends living in Yokohama, Japan and they tell me the US Navy base at Yokosuka is the busiest they've ever seen it. Also extremely busy are the Kanagawa area US Naval Air Facilities. Planes are flying in 24 hours a day, 7 days a week. Locals are complaining of the noise. Bear in mind all the various crises over the decades, but they say the bases have always just been ticking along despite that. Not now, now they're really ramping up. Based on this evidence I'd say the US is preparing for war and not just talking tough. Who will that war be with? North Korea is my suggestion and anyone else who takes their side.

Portfolio Performance

It's been a year since I posted my portfolio on this blog. As a whole the portfolio is up 54%, with Oshkosh up 107%. Two other favourites of mine, Trinity Industries and Caterpillar are also up more than 70%.  If you want more picks like these then I suggest my readers subscribe to the Stock Tip Hotline.

Check out the portfolio here http://www.siliconinvestor.com/portfolio.aspx?fid=521

Stock Tip Hotline explained here http://kenhorlor.blogspot.com/p/stock-tip-hotline_18.html

We are investing now as well, so if you've got a good business to sell, let me know. Even if it doesn't meet our strict requirements, we may offer the business on our blog to our very wide readership.

Investing now explained here http://kenhorlor.blogspot.com/p/investment.html

Have The French Gone Mad

It looks like the French have gone mad, or have they? They're going to have a new President and for the first time in a long while not from one of the old established parties. Will they go for a right-wing woman in Marine Le Pen or the centrist Emmanuel Macron? Who knows, but the future of the EU is at stake as Le Pen wants a Frexit. That's a French Brexit.

Update Market Report UK

Just a note pointing out Breedon are on a bit of  slide, now at a P/E ratio of 26.52, down from the 31 they were on when I last mentioned them. Breedon has been a standout performer in the aggregates sector, the value of their shares having almost doubled in value in the last three years. Given their performance and market domimance with room still to grow, Breedon now represent a "buy".

https://www.google.com/finance?cid=6216709

Prime Ministers Make Moves

As if acting in concert the Prime Ministers of three Commonwealth countries have made moves designed to ensure re-election.

The most significant is the UK's Theresa May calling of a snap General Election. A brave move and we'll soon see if it pays off. No doubt May is hoping for an affirmation of her Brexit negotiations and 'hard' exit. I think she'll get it. Whether UKIP can build will be also of interest. The Tories are after their share of the vote.

A side bar is which way Scotland will go. Will they vote SNP or Labour? The debate over Scottish independence I'm ambivalent about, have they not checked out New Zealand? Technically part of Australia, it goes its own way, with its own currency, but on trade and immigration has a flexible relationship with Aussie. There is no reason why Scotland couldn't do a similar thing with England and the rest of the UK. The world does not come to an end, trust me, NZ has been doing its own thing for over 170 years.

Talking of downunder, the PM's of Australia and NZ must have been talking on the phone, as they've both introduced immigration reforms at about the same time. They're both thinking of the electorate. NZ PM Simon English has been even more cynical in also raising pay rates for women working in the care industry. It's an election year bribe, if the National Party wins, they'll take the pay increase away with tax hikes next year, maybe putting GST up.

Greens Naysaying Again

Why do young people vote Green? They've got to be the most negative political party I've seen. Their latest opposition is against the water export scheme from South Westland in the South Island of New Zealand. First they opposed non-renewable, now they oppose renewable as well, when will this end, when homo sapiens are back living in caves?

I wrote about the scheme here: http://kenhorlor.blogspot.com/2017/01/innovative-water-export-scheme.html

I notice the campaign to stop this project are completely misrepresenting where the water is to be taken from and what impact it will have on the environment. The water is not being taken from a national park, and it will have absolutely no effect on the environment.

The impact on global climate change will be positive and schemes like this should get widespread support from environmentalists. One of the problems of climate change is the lack of  cloud formation and thus precipitation from the areas where it is most needed. As an example, the Sahara desert is spreading south because of this, but the problem is global. Greening areas impacted by a lack of water holds back the tide. Water from South Westland is literally a drop in the bucket for that region but a vital resource for those that need the water.

Greens, a message, stop being silly and get behind something that helps the environment and which is renewable.

Pyne Gould Corporation: Free Advice

I am a shareholder in PGC (NZX PGC) and have been so for quite a long time. It is my worst stock and I'm not afraid to say it, I don't always get things right.

What are PGC up to now? They're into distressed assets these days and currently own land which they're developing and selling for house construction. When I invested they were mainly a lender and owned Marac Finance (now part of Heartland Bank).

Here's my advice: get out of property development. There are many good reasons for not becoming a land developer but the most important can be summed up in two words - cash flow. That's right, cash flow is king and developers regularly have little of it.  Hence the saying, always an investor never a developer be.

PGC have got cash, don't plough it back into real estate that may never sell. Invest that cash in good solid businesses instead. Will they listen? Unlikely, but heh, we all live in hope.

NZ School Funding: Predictive Risk Modelling

New Zealand society is about to change forever, it will mean an end to the 'give everyone a fair go' Kiwi concept and a new darker future where Kiwis will be ranked according to their familial surroundings and social status. What I'm talking about is Predictive Risk Modelling and linking that to funding of NZ schools. >>Link explaining the issue here<<

Why is this a bad idea? It stigmatises. Consider a child with no criminal record, doing okay at school, well behaved, gets along with others. But she comes from a broken home, father is in jail and a brother in jail as well. Mother was raped in the past, sister the victim of sex abuse. That child who is doing okay will be tagged a risk. Extra funding is made available to any school that takes her. The child carries a code that attracts funding and extra attention. But why?  She is not a victim apart from being in a difficult family, and has committed no crime.

The incompetent Prime Minister of NZ, Simon English is behind this. He hates the poor and wants to see all disadvantaged persecuted. NZ is on a very slippery slope, one where some will be tagged for life, while others receive a free pass. It is a very dangerous precedent.

Stop obsessing over whether NZ has surpluses and instead work toward fully funding all schools in NZ, so parents don't have to put their hands in their pockets. That'd solve the issue. Educate, educate and then educate some more. Stop with this find someone to blame nonsense and rearranging the deck chairs on the Titanic.

Trump: The Turning Point

US President Donald Trump, according to news reports, is at an all-time low approval rating for US Presidents. But this could change if he manages to achieve a satisfactory resolution to the three items currently on the agenda.

1. Syria and their War Crimes and Crimes Against Humanity

We've all seen the horrific images on the television, civilian communities being gassed. Children amongst the victims. Syria has lost the plot and stepped over the line.

The USA will likely intervene in some way, and the whole world should support them if they do. Done right, decisively, with weight behind the punch, President Trump will surely be saluted.

2. Trade and China

China has the playing field tilted toward it. Everyone else is running uphill. They write the rules, interpret those rules, and then cry foul when anyone questions them. This approach has seen China accumulate massive wealth. But it has to stop, it must, or the US and the rest of the western industrialised world will be pushing handcarts. President Trump seems to grasp this and his approach with the Chinese President will be interesting to observe. Is President Trump the great negotiator? We are about to find out.

3. North Korea

Then we have the unstable and, quite frankly, loony North Korean state. It appears they only listen to China, and China entered the Korean war to support them just as they were on the brink of losing. So there is history as they say. How President Trump juggles this and trade with China will be crucial. He must be strong with China on trade but also diplomatic in getting China to rein in North Korea.

The stakes for President Trump are high, get at least two of the three sorted in his first term and he'll soar in the ratings and be re-elected. If he falls over and can't seem to deal with things, he may not even get to the end of his first term. Interesting times as they say.

Lotto Changes

The popular Lotto game in New Zealand is changing and not before time. Lotto has become unpopular and the changes look to revive the game.  Will the changes have any effect? My prediction is it will have a short-term effect, but long-term the game is a dud and here's why:

Gamers, rightly or wrongly, have come to see the game as being rigged. Incredible I know, how could a game like that be rigged? But they still think that and that's a major problem. Let's look at why gamers think the game is a put up job. Kiwis travel overseas a lot and have established contacts in the UK. There has been many controversies in Britain surrounding their Camelot lottery and word filters back.

Then there are the very few instances of statistical cuteness or anomaly. What I'm talking about is there are few draws where there are many winners of division 1 off a cute number selection. For instance, if the six winning numbers in division 1 are 1,2,3,4,5,6 then the top prize would be shared by tens of thousands of people. But very few cute number sequences drop out of the barrel. People see one or two winners of division 1 each week, then invariably off the Powerball jackpot, one winner after a cosy time period and reasonable multiplying effect.

Note, I'm not saying Lotto is rigged, just that as the game has developed it has taken on the appearance of being rigged, The two are not the same thing but they look one and the same.

How could the game be rigged? The only way to rig the game is to change the weight of the balls. Thus, balls should be weighed individually when going in and when coming out (this covers different chemical composition or gas filling the inside void of the ball). They could have several sets of balls and a random stranger used to choose each ball going in, say, individually select one ball from any set; 40 ball Lotto game, 40 sets of balls, one ball from each set. You get the idea. No chance of choosing the favoured balls with that type of arrangement. What do the Lotto people do in reality? I'm not sure, but I don't think they weigh each ball individually in and out.

The changes as announced (see the changes here) do not address the level of mistrust gamers now feel. Putting the price up and making a few changes won't rebuild that trust.

Lexi Thompson and that Golf Ball

Lexi Thompson was penalised at the recent ANA Inspiration golf tournament. She moved her ball and for that she received a 2-shot penalty followed by a further 2-shots for signing an incorrect scorecard.

We are hearing sympathy from fellow players and a call to change the rules. I don't agree, the rules should stay exactly the way they are. I say this carefully, and here's why: golfers score themselves. So with that luxury and in order to balance things up, anyone can call foul on a shot. That's fair. Golfers honour the code.

Think about the the possible repercussions of a rule change. If only a select few can challenge, then self-scoring may lead to collusion between groups of players. Not every player is closely scrutinised, the game relies on their honesty. Consider situations where you're doing a round together with a friend on the tour, he's about to miss the cut, while you may challenge for the lead. On the back nine you may agree to cheat, so you can gain on the leaders and your mate may miss the cut. See?

If you're going to restrict who may challenge, then you need all scoring in the professional game to be refereed and scored, with only the referee able to say what the score was; then challenges may be restricted to rival players and other referees. That's like tennis, where they have an umpire, and linesmen, overall tournament referee and challenges from players.

So long as the golfers score themselves, then I say no way to professional golfers being scrutinised less. There is too much at stake for that to happen.

Most read posts from the last month

Why would anyone be interested in reading about which of my posts gets read the most? Actually quite a few as a blog post on that very subject makes my top 10 list from last month. Here are the most read posts in order from March, a strange mixture I have to say:

1. Did Prince Charles and Camilla Have a Child (this is an oldie but a goodie, regularly top since I first posted on the topic.)
2. The Retirement Income Problem (oldies and their money, a real vote grabber, politicians take not)
3. Labour Panic
4. Innovative Payroll Service and it's a Charity
5. Most Read Posts - Last Month
6. Controversy at the Academy Awards
7. Adrian Orr is worth it
8. John Key
9. Dance Moms
10. Was Super Bowl 51 Rigged?

My page on The Brothers BBC TV series from the seventies is also a perennial favorite, even though I don't link to it any more. Here it is in case you're interested, they really need to come out with another drama like this: http://kenhorlor.blogspot.com/p/the-brothers-bbc-tv.html