Benchmarks

The scariest part of the IPCC’s 2030 forecast isn’t actually the science

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Before we read into the validity about how we’re doomed before 2030 if we do not strictly adhere to the preachings of the UNIPCC’s latest gloomy climate bible, this is far more compelling

The Delinquent Teenager, written by Canadian investigative journalist Donna Laframboise chronicles how the IPCC participants are picked by governments, not for their scientific knowledge and expertise, but for their political connections and for “diversity.”

Other issues she uncovers go as far as to say that approximately 1/3rd of the sources for the IPCC come from magazines, press releases and unpublished scientific papers. It also tables corruption, scandals, and conflicts of interest. The Summary for Policy Makers (i.e. our leaders) is compiled by bureaucrats not scientists and often completed before the articles they actually summarise are made available.

She writes:

Richard Klein, now a Dutch geography professor, is a classic example. In 1992 Klein turned 23, completed a Masters degree, and worked as a Greenpeace campaigner. Two years later, at the tender age of 25, he found himself serving as an IPCC lead author. Klein’s online biography tells us that, since 1994, he has been a lead author for six IPCC reports. On three of those occasions, beginning in 1997, he served as a coordinating lead author. This means that Klein was promoted to the IPCC’s most senior author role at age 28 – six years prior to the 2003 completion of his PhD. Neither his youth nor his thin academic credentials prevented the IPCC from regarding him as one of the world’s top experts…

Or

Nor is he an isolated case. Laurens Bouwer is currently employed by an environmental studies institute at the VU University Amsterdam. In 1999-2000, he served as an IPCC lead author before earning his Masters in 2001. How can a young man without even a Masters degree become an IPCC lead author? Good question. Nor is it the only one. Bouwer’s expertise is in climate change and water resources. Yet the chapter for which he first served as a lead author was titled Insurance and Other Financial Services. It turns out that, during part of 2000, Bouwer was a trainee at Munich Reinsurance Company. This means the IPCC chose as a lead author someone who a) was a trainee, b) lacked a Masters degree, and c) was still a full decade away from receiving his 2010 PhD.

Or this

Sari Kovats, currently a lecturer at the London School of Hygiene and Tropical Medicine, is an even more egregious example. She didn’t earn her PhD until 2010. Yet back in 1994 – 16 years prior to that event and three years before her first academic paper was published – Kovats was one of only 21 people in the entire world selected to work on the first IPCC chapter that examined how climate change might affect human health. In total, Kovats has been an IPCC lead author twice and a contributing author once – all long before she’d completed her PhD.

One of CM’s favourite passages though is when one of the expert reviewers noticed “in a particular section of the report, the IPCC was basing its arguments on two research papers that hadn’t yet been published. In itself, this should ring alarm bells. Since the wider scientific community had been given no opportunity to scrutinize them, it was surely premature to consider.”

So we are expected to fork over billions of dollars to defend this junk science?The biggest battle the scientific community faces is the damage done by the fraudulent data manipulation. The scandals are too numerous to mention. If a fInancial industry pundit missed 98% of the time they’d be fired.

Maybe the trick is to make regulations that will lead to fines, jail sentences and stripping of credentials (such as the finance industry) should scientists be caught fiddling the books. Afterall isn’t inappropriately wasting taxpayers money through junk research just as bad as  torching investors’ hard earned cash via insider trading?

Were such laws passed we would soon see alarmism paint a far less hysterical position.  As it stands the UN shows once again why it needs defunding. Afterall they thought Robert Mugabe would make a good ambassador for WHO. With judgement like that who’d doubt their credibility?

Flannery departs GE. Market rewards +14% in pre-market

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General Electric (GE) shares have been a dreadful investment. The company, which trades in negative equity is indicated c.14% higher in trade after CEO John Flannery stepped down inside one year on the job. Lawrence Culp replaces him as Chairman & CEO.

Losing Flannery will look to add about $14bn to GE’s value. Keeping Musk will look to add $7.1bn to Tesla’s value today. A tale of two CEOs. The power or losing one to that of keeping one.

Weren’t sisters doing it for themselves?

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Aretha Franklin and Annie Lennox from the Eurythmics told us back in 1985:

Sisters are doing it for themselves
Standing on their own two feet
And ringing on their own bells
Sisters are doing it for themselves”

It was only yesterday CM congratulated Ana Carrasco for being the very first women’s motorcycle world champ. She defied all the odds which undoubtedly made her achievement all the sweeter.

However California is introducing legislation forcing companies to have at least one female board member by next year and three by 2021. What if women don’t want to work for the sewage board?

In June 2018 CM was in Israel on a delegation and met some of the most brilliant, intelligent and talented people in that group. Many happened to be women (an irrelevance) but they’ve achieved their status through ability not gender. To think they’d got to the top by anything other than raw determination and talent would be an insult to them. Not one of them has been out there waiting for a free pass.

On the contrary, California must have rocks in its head to think that talented sisters are waiting for a legal leg up. Talk about a patriarchy that wants to do good. It only seeks to point it out. Effectively saying without our help you can’t get ahead by yourself!

To put the shoe on the other foot, what if a company has a 100% female board? I’m sure California will clock it up as a win for diversity. What next, LGBT representation? Religious representation?

CM welcomes 100% female boards if meritocracy is the driver. Companies in this day and age that don’t strive to hire the best will suffer in the end if they choose mediocre men over women. Surely shareholders are the ones who should have the say, not legislators.

The CEO of CM’s next venture is a woman of such impeccable credentials that she totally deserves the position she’s in. She wasn’t selected on gender but qualifications.

So 33 years ago, the movement was already in full swing. Is it that California’s leaders are just way behind the curve?

Now there was a time when they used to say
That behind every – “great man”
There had to be a – “great woman”

But in these times of change you know
That it’s no longer true
So we’re coming out of the kitchen
Cause there’s something we forgot to say to you (we say)…

we got doctors, lawyers, politicians too

Everybody – take a look around
Can you see – can you see – can you see
There’s a woman right next to you

Sisters are doing it for themselves
Standing on their own two feet
And ringing on their own bells
Sisters are doing it for themselves

Now we ain’t making stories
And we ain’t laying plans
Cause a man still loves a woman
And a woman still loves a man
(Just the same though)…

 

Musk’s $20mn fine covered if Tesla shares jump 59 cents

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$20mn sounds like a lot. It is a lot. The SEC has struck a deal with Tesla’s Elon Musk which demands he steps down as chairman and hires two independent directors. Musk owns 33.7mn shares. Technically he would only require a 59c share price rise to cover his fine. Make it a dollar to cover taxes and transaction costs plus legal fees. In any event the fine is peanuts in the grand scheme of things.

To be honest, Tesla disciples will breathe a sigh of relief that their king still remains in the company and more importantly as the figure head. The question remains is whether a new chairman (from outside?) will see to it that the company is not just a one man band which has been painfully obvious with so many senior level defections. Too often the board has seemed to be an onerous burden for Musk in that his intergalactic brilliance shouldn’t require checks and balances.

Will a new chairman demand a thorough audit into business practices to date? It is likely that the SEC will expect a new chairman to lift the standards of the board to make sure that shareholders interests are properly decided with all directors heard. An independent audit should be viewed as the bare minimum. What would that unearth?

Tesla shares should bounce on this news and in aftermarket trading it is up. The question is how a new structure changes dynamics which reveal the short cuts and internal processes which have created so many reporting inconsistencies.

Musk channels the Black Knight?

It has become apparent that the SEC & Musk had a deal which would see him removed from Tesla yet his lawyers have rejected it at the last minute because he’d rather fight the charges. One could argue in favour of his bravery to appeal against what looks to be a very open and shut case about breaching probably the most basic of errors in standard reporting to the exchange to ensure fairness.

Maybe he feels that he is only going to get a slap on the wrist? In the 63 odd charges laid out against individuals by the SEC for reporting violations in 2018, the average fine has been $75,000. Hardly a ripple to Musk’s net worth.

The bigger risk for Tesla shareholders if Musk loses in court against the SEC and is forced out (to be honest his board should demand it) will be losing a figurehead who at the very least has managed to make a company with no profits, monster debts and questionable actions worth more than Ford, FCA & GM combined. Betting against Musk has been a dangerous game. He may well be teflon coated but it remains questionable whether he can strap himself to his reusable rockets and escape the fraud charges.

Will financial planners bring out a Naomi Osaka ETF?

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Japanese investors can get star-struck with investments. In 2015, popular pop-idol band AKB-48 saw the stocks of companies it was sponsored by surge 136% relative to the market. Aggregate sales of those companies surged 46% and 30% over the following two years. Such is the ‘hayari‘ (boom) culture in Japan. Corporates know this.

Since the US Open win by tennis star Naomi Osaka, sponsors are lining up to sign her. Prior to the win, Nissin Foods, WOWOW & Yonex were already sponsors. Nissan has just signed her. Since the win, the Topix has risen a tad over 6% while Nissan, Nissan & WOWOW have risen 7.5% in aggregate. Yonex has jumped 12.2% Early days to be sure, but the likelihood is that if she is sponsored by some smaller less liquid stock names these stocks could well fly.

Forget fancy models and esoteric investment strategies. Find whatever Osaka will be sponsored by in Japan and outperform through popularity over underlying earnings performance.

Any financial firm that launched a Naomi Osaka basket would likely see massive inflows and be able to charge higher fees on the back of it. Will the marketing departments wake up?

More love for Naomi Osaka

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20yo Naomi Osaka deserves every success she gets. She is without doubt the hottest marketing prospect globally. There is no media spin or polish with her on any level. She is authentic in the extreme. No prima donna antics or bragging. If anything her press conferences since returning have defined her as ‘what you see is what you get.’ Humility and grace. Pray we get more millennials like her. She shows one doesn’t have to beat their chest in ridiculous ways to get attention.

No wonder Adidas want to throw $11.9m per year to sponsor her. As a Nissan ambassador, despite her media appearance in front of the Leaf electric vehicle, when asked Naomi just let her inner petrol head scream her favorite car – the GT-R. Lucky for her she will get one in white.

The world of tennis couldn’t have a better ambassador for the game. Let’s hope that the media don’t pry too deeply into her private life (good luck with that) and her sports manager doesn’t put her on a multi-year roadshow from hell to please sponsors which would put any star to the test.