#gowokegobroke

What are banned but addicted vapers going to smoke now?

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Tobacco companies fall foul of most ESG (environment/social/governance)/CSR (corporate social responsibility) measures. Good. Give that so much money is already loaded into corporations that focus on financial virtue signalling, tobacco companies remain forgotten. They look a great mean reversion trade.

British American Tobacco (BTI) is trading at $36 almost half the level of two years ago. Now at 1.02x book value and a 7.3% yield.

Philip Morris Int’l (PM) is at $72.60, down from $122.90 in 2017. A 6.4% dividend yield.

Imperial Brands (IMBBY) at $26.73 down from $55.55 in 2016. A 9.2% yield.

JT is less than half its 2016 number trading at $21.44. A 6.45% yield.

Philip Morris doesn’t have a vaping business but it appears with all these bans in NY etc that nicotine-addicted vapers will switch back to the old school.

Old habits die hard and cigarette smoking is pretty inelastic. Even in bonkers $40 a packet Australia, the ABS records men continued to be more likely than women to smoke daily (16.5% compared to 11.1%). Rates for both men and women have declined since 1995 when 27.3% of men and 20.3% of women smoked daily. However, these rates have remained similar since 2014-15 (16.9% for men and 12.1% for women). Therefore taxes haven’t killed off the habit.

So start underweighting the rubbish in your portfolio that has a penchant for banning plastic straws in the staff canteen to those corporates that allow yourself the opportunity to kill you!

Let’s not forget that governments aren’t going to terminate the monster taxes from this either, especially that so many national and state budgets around the world are looking seriously sick.

Gillette Direct – the best things in life are more than 50% off

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Everyone knows CM is no longer a user of Gillette products. The brand is rife with double standards. To be lectured on toxic masculinity while it happily plastered its brand on the backsides of Dutch supermodels wearing skimpy jumpsuits to promote a racing car series.

Interesting to see the company has turned to sponsored advertising on social media. Is Gillette Direct tempting? We don’t have a good idea of the costs of selling at supermarkets and chemists. So how much will Gillette margins change at the margin? Best sell for 50% off direct than 50% off at Woolies. Await coming 10Q data to see how the trends evolve.

Our total outlay would be $76.00. Savings are:

Free handle: $7.00 saving

Blades: $7.79 savings x 4 = $31.16

4th Set of Blades: Free ($28.00 saving)

Shipping: $10 savings

Total Savings: $7.00 + $31.16 + $10.00 + $28.00 = $76.16 

On top of this for Father’s Day, Gillette appears to be offering an extra 10% savings. 52.3% off.

Will be interested to see if the Dollar Shave Club model will somehow lift Gillette out of the hole they dug for themselves.

Dollar Shave Club offers 8 replacement blades per cycle and shaving cream for $31.35. Better value. A starter kit is only $15.00.

CM is unmoved. Thanks but no thanks.

Good on Schick BTW for this counter advert questioning gender stereotypes without pandering to radical leftist feminist cabals inside corporate marketing departments driving narratives about oppression obsession. #getwokegobroke

Gillette targets toxic men at 50% off

The power of virtue signaling. Gillette half price. Schick full price. Get woke, go broke. Neutral Bay Woolworths channel check.

NZ Wellbeing Budget? Kiwis still better off in Australia

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NZ PM Jacinda Ardern’s Wellness Budget is receiving lots of accolades. A true leader! Champagne socialist Sir Richard Branson also praised her saying other countries should take note. The idea that a budget should be solely based on economics is not progressive and more should be directed at “well-being”. That is not to say this budget is not “well-intentioned”. However, the statistics compared to across the ditch do not fare well on relative terms.

Comparing her newest policies versus Australia reveals the kangaroos get better access to social services than the kiwis. How surprising that none of the mainstream media bothered to look at the budget numbers on a like for like basis? Just praise her because she represents their ideal version of a socialist leader.  CM has looked through both budgets and adjusted for currency to make for easier like-for-like comparisons.

When it comes to health spending per capita (currency adjusted), Australia is expected to climb from A$3,324 in 2019 to A$3,568 in 2022. NZ is expected to go up slightly from A$3,516 to A$3,561 respectively.

On social security and welfare, Australia is expected to pay out A$7,322 per capita in 2019, growing to A$7,977. NZ, on the other hand, is forecast to go from A$5,573 per head to A$6,489.

On mental health, Australia forked out around A$9.1bn exclusively on these services reaching 4.2m citizens last year. NZ is planning on spending A$45.1m in 2019 with a total of A$428m by 2023/24 to hit 325,000 people on frontline services for mental health. While the move is a positive one, NZ will allocate A$1.78bn to mental health as a whole over 5 years. On an annualised basis, Australia will still allocate 5x the NZ amount to mental health per capita. So much for wellbeing.

On education, NZ plans to increase per capita spending 7.9% between 2019 and 2022 whereas Australia will lift it 12.5% over the same period. NZ spends around 2x Australia per capita on education although PISA scores between 2006 and 2015 are virtually identical (and both heading south)

On public housing, Ardern can claim a victory. Australia is expected to cut spending per capita from A$240 in 2019 to A$194 in 2022 when NZ will go from A$137 to A$282. Although let’s hope Ardern has more success than her KiwiBuild policy. The Australian’s Judith Sloan rightly pointed out,

“Ardern also has stumbled with other policies, most notably KiwiBuild. The pledge was to build 100,000 additional affordable homes by 2028.

It has since been modified to facili­tation by the government to help build new homes. Moreover, the definition of afford­ability has been altered from between $NZ350,000 ($340,000) and $NZ450,000 to $NZ650,000.

What started off as an ill-considered public housing project has turned out to be an extremely unsuccessful private real estate scam. The government estimated that there would be 1000 homes built last year under KiwiBuild; it turned out to be 47.”

In the process, NZ’s national debt per capita will grow from A$21,550 in 2019 to A$25,206 by 2022. Australia will climb from A$22,764 to A$23,293.

Look at page 119 of the NZ Wellbeing Budget, we can see the government is forecasting the economy to slow and unemployment to rise.

As we wrote several weeks ago, the statistics that Aussies are about to pack their bags and head of to NZ are not supported. CM wrote,

“According to the Australian Bureau of Statistics, there are 568,000 New Zealanders in Australia, or more than double the total 3-decades ago. Therefore more than 11% of the Kiwi population lives in Australia. At last census count, 35,000 New Zealanders migrated to Australia in 2018.

According to the New Zealand Statistics Bureau, 38,700 Aussies live in New Zealand. In the January 2018 year, 24,900 migrants arrived from Australia and a similar number departed for Australia.

Stats NZ stated, “Over half of migrants arriving from Australia are actually returning Kiwis who have been living across the Tasman for more than a year…The number of migrants going back and forth to Australia in the past year almost balanced each other out – the net gain was just 40 people in the last 12 months.”

As socialists love to point out, “feelings matter far more than facts“. Just goes to show how easily people will fall for a catchy headline, rather than judge it on its merits. Time the “woke” wake up from this slumber. By all means, celebrate more recognition of higher mental health spending but best put it in perspective. Jacinda Ardern is ordinary.