Earlier Comment: from “Early Signs of Negative Wealth Effect” at Rogermontgomery.com on 17 January 2019

It is basic common sense – when through regulation or general policy drift one sector of the economy is favoured over others, partly through co-option of the political and bureaucratic system, a smaller share of the pie must by definition be shared by the “others”. In this case the “others” were content to live with this while the pie was growing, but it was never sustainable to grow the banking/housing sector so out of proportion within the economy so that eventually the pie would shrink back and those proportionally smaller pieces of pie within a shrinking economy had to have serious consequences.

My disappointment is greatest with the RBA. They have treated everyone like we are Nongs (my wife’s favourite derogatory term 🙂 ) and have become confidence sellers – peddlers of hot air and baloney.

For example, until recently they argued that there would be no negative wealth effect on the basis that there was no discernible positive wealth effect as price rose strongly in recent years. Another far more plausible, and I have to say rather obvious, discussion around the topic would highlight that earlier stages of the long process of almost continually rising house prices, and concomitant household leverage, since the late 90s/early 00s was accompanied by strong wealth effects, and that the latest period of strongly rising prices in Sydney and Melbourne was not is suggestive that the positive wealth effects from these very strong rises in prices were counterbalanced by the negative wealth effects from the stock of household debt. In other words the laws of diminishing returns were very much in play and the end of the debt cycle was nigh, and the risks that Mr Stevens discussed in his 2012 paper “The Glass is Half Full” have in fact come to the fore .

From an investment perspective, I firmly believe that we have a deleveraging process that will go on for much longer than anyone would predict. A search for the truly long-term data on real house price movements in Herengracht provides sobering reflection…

I wrote the following to two mates in early May last year [2018]:

“FYI – obviously this ppt [presenting data of shop/restaurant closures in my near vicinity in Brisbane] is just for your eyes… don’t think it’s anything earth shattering, but I am convinced on this now and an effective* recession within 1.5-2 years is now my base case… It would be better if I was wrong, but I thought what I saw last November was a precursor and it continues to play out along those lines… I am sure that there will be policy thrown at the problem – and increasing the committed liquidity facility (to 250 billion) will stop the banks from going under and mean that we should not suffer a current account crisis (our own form of QE) – but there is a lot of vulnerability built into the system now (which the RC is addressing all too late) and the Government just has much less ammunition than it did 10 years ago (the AAA will be stripped, banks then downgraded, more sceptical voters so not sure first home buyer bribes, etc will work)… it’s going to be a long tough period for many over-leveraged Australians in my opinion…

Yes I have been bearish for a while… but the only reason to be bullish has been a belief in “too big to fail” and Government intervention which just leads to more and more moral hazard in markets… that’s hardly a reason to be confident over the medium to long term – well for anyone who is trying to build wealth through investing over their life time as apposed to those concentrating on earning a fat bonus from clipping the ticket of fund flows… there will be a time when Governments can not kick the can down the road for future Governments and taxpayers to deal with… And I rather suspect this is it for us…

I honestly look forward to one day being bullish 🙂

* “effective” because high immigration and increasing volumes of gas exports might prevent the technical definition from occurring – eg most business people here consider 2000/01 was similarly an unrecognised recession – but I think it’s going to get pretty bad so I think the definition will be met”

I continued on the same thread with this:

[For] businesses depending on discretionary spend I suspect a donut structure will be most rewarding – those targeting the zero or lesser leveraged cohorts in the young and the retirees, and the hole being the very highly leveraged in the middle. It will have to be a truly extraordinary business to do well in the middle because, in my thought process, house prices in Sydney and Melbourne relative to wages will fall for a decade or more if nominal price falls are capped at 20%. (Of course greater nominal house price falls will speed up the adjustment but that does not improve the investment case.) Eventually wages growth will do some of the heavy lifting on that but nobody believes that will be any time soon unless we get truly reformist or even radical (eg universal basic income). Based on the performance of our political/bureaucratic/business leaders over the last 2 decades, I can’t see how we can sustainably/enduringly avoid anything other than a long hard grind ahead in the middle… (I know it’s depressing, but I was amused to read [by James Montier, on GMO] that depression has been shown to be an advantage in investing… the author said they aimed to be miserable at work and jubilant at home… unfortunately it can’t be turned off and on 🙂 – but at least it’s not too challenging/confronting to accept depressing conclusions )…

Over the next 10 years or so there may well emerge one or two extraordinary businesses that do target this “middle” demographic… (in fact there is a case to make that tough conditions will produce exceptional businesses – like rugged ground and challenging conditions will produce exception wines – part of the reason why I am not deterred from investing in Chinese companies at present with growing headwinds of slowing growth within a changing economy within a changing global context) [See updated view on The Perils of Investing in Chinese Companies… I would suggest, though, that when analysing candidates, given these headwinds, it would be prudent to “lengthen the yardstick” and thus widen the margin of safety…

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© Copyright Brett Edgerton 2019

Earlier Comment: from “Early Signs of Negative Wealth Effect” at Rogermontgomery.com on 7 February 2019

[In an earlier comment on this thread] I inferred that I had used the weakness in stocks at the end of 2018 to buy into numerous Chinese stocks, and that I felt that the tough conditions ahead would benefit these companies to sharpen their competitiveness. I had done this, but I have now reversed full throttle and below I explain why.

I have long felt that Chinese companies would be successful going forward – because of the size and growth of their own domestic markets, the way in which China was increasingly interacting with especially the developing world, and because of the Chinese-specific factors that everyone at least partly understands (ie the heavy hand of Government).

As early as 10 years ago when I wrote a piece on the Australian property bubble, which Steve Keen posted on his website, I have been of the belief that there is no reason why that final point would ensure that it is all smooth sailing for the Chinese economy and their companies and markets. I had this in mind when I invested and accepted that.

In recent years I have taken particular note of people who I admire greatly as investors and economic thinkers (eg Roger M, Charlie Munger, Grantham and others) in forming an opinion that I wanted to have a high weighting to Chinese companies for future growth potential. And last year’s falls created an opportunity to buy in at lower prices.

However, I have to admit that there was an extra unease inside of me as I loaded up especially on Chinese tech and automobile (around EV and autonomous), tech infrastructure, industrials (plumbing goods), and education companies.

I was fortunate to spend a month in China around 20 years ago, while I worked for the Australian federal Government, for an APEC training workshop. It was an interesting insight into the country that has emerged as our most important trading partner.

At 30 I was one of the youngest workshop participants – some attendees were in their 50s – and the first night that we stayed out later than the “recommended” time for lights out it became clear that it was not a recommendation but an enforced curfew! The second time that we were late, around a week after the first time, we were walking back to our accommodation about 30 mins after “curfew” and it become clear that the short stocky man who was taking photos throughout the workshop, and was that night a pillion on the motor cycle of the junior staff member, was laying down the law to that staff member and was very, very cross with our “insolent” behaviour. (Imagine professional men ranging from 30 to 60 years of age constantly checking watches to ensure that we were not late for curfew!)

After that incident, the next day the “photographer” entered the room and from 3 rows of desks in front of me took photographs with me in the centre of the frame. I covered my face acting as if in deep contemplation. The next day he came into the room again to take photographs, but this time squatted down immediately in front of my desk and made it clear that he would take a photograph of me if he so chose.

The small family restaurant that we were frequenting to have one or two beers between supper and “curfew” received two visits from black limousines while we were there. Men in dark suits entered and spoke with the owners after shutters were pulled across to cordon off half of their restaurant.

Also, when I worked in Thailand for a multi-national organisation under the auspices of the FAO I had an interesting and memorable conversation with a Chinese national colleague, who had quickly become a good friend, about Taiwan/Taipei.

With these experiences, I have watched concerningly whenever the level of interference by China into our political system has become apparent.

I also noted the changes that Xi made last year to prolong his stay at the helm, and I was particularly interested and concerned by Soros’ recent speech at Davos.

The truth is that while I am no fan of Donald Trump as an individual, I do think that pushing back on China is long overdue, and I respect his administration for it. I think that I would feel far more comfortable with the world if the US continues what it has begun. I suspect it will happen because Trump’s administration has crashed through the “group think” that had prevailed on China. I certainly hope that China’s main advantage – short-termism for political expediency by western democracies – does not return to the US or allies over this issue.

With that in mind, I not only think that we have begun a historic reframing of China’s engagement with our western allies, I very much want it to happen. As such I feel I cannot on the other hand seek to profit from China continuing to rise.

Attempting to do so will throw up all sorts of conflicts and already did. For example, while researching one of the EV companies that I was invested in I learned that it also produced military vehicles!

Now I realise that there are many western companies that at least partly depend on military sales.

But I do think that increasingly, as this relationship is reframed, we are going to have to navigate the shifting ground carefully as individual investors and at a national level (certainly that many interested observers, like myself, now understand from newspaper articles what the “five eyes” means is indication of that). For me I would rather be early than risk being caught in a rush for the exits when the crowd realises how the environment has become much more complicated and volatile.

I should also admit that my concerns were probably showing through in a question I posed on one of Roger’s posts at the end of last year when I inquired whether the Montgomery team was taking the opportunity to increase exposure to Tencent at cheaper prices or was concerned by a reframing of the wests relationship with China – and I have noted since in investment updates that exposure to Tencent has not been increased.

Fortunately, coming to this realisation did not result in a financial penalty for my family – it actually yielded a fairly nice short-term return – but I do wonder whether this is a widely underestimated issue that will ultimately affect returns over the medium to long term. I guess I hope it does because that will mean that what I consider to be a dangerous drift in geopolitics will have been contained or slowed.

I accept that these actions could be seen as an over-reaction – however, as a personal investor, not a professional with career risk at play, I am “allowed” to turn full circle on a dime, and it has usually worked out OK for me when I have done so. (If I wish to put a positive spin on it I would say that I tend to act decisively once I’ve decided, and am not afraid to admit if my opinion has changed, but hindsight is usually the best “judge” of that.) But I have to admit that while I was feeling good about buying into reasonably valued companies in the areas in which I have greatest conviction – as opposed to buying into mostly overvalued ones in developed markets – I do feel a whole lot better about my positioning now (which has resulted in me increasing cash weightings again to about 50%! – between September and December I had gone from less than 20% in equities to a high of close to 70%)

Comment on 14 February 2019 at One Important Aspect of Active Portfolio Management:

As I said [earlier], in this recent period I went from less than 20% in equities to around 70%… but I have already taken profits on my (considerable) China and wider EM positions as I want to see how the current reframing of the West’s relationship with China progresses, and because I want to be a lot more thoughtful as to my views on the ethics/risks of investing with companies arising from non-democratic authoritarian systems. My own personal experiences have never sat comfortably in this regard.

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© Copyright Brett Edgerton 2019

Comment on RogerMontgomery.com on 3 November 2017 at Money News 31.10.2017:

I was at a small suburban shopping centre 8 kms south of Brisbane CBD that has 5 or so restaurants, and 2 fish and chips takeaways as well as several chain takeaways, at 7.15 last Thursday picking up some takeout… Two cars in the 30-odd capacity car park in front of that particular restaurant (and a normally busy fish and chips + another restaurant)!! Yes, there was a storm around but nothing out of the ordinary for Brissie this time of year – I typically hate parking at this centre because it’s pokey and difficult to find a spot – at least it used to be!

Been going to the restaurant for 15 years so know the owner well. He was complaining bitterly about business – said last year was bad, so when this year started better it was a relief, but it has dropped off badly through the year. (Seriously, it almost felt like tumble weeds would blow through.) Restauranteur said that his supplier has said that his business is down across the board except for the outer areas, and put it squarely at the foot of over-leveraged middle to upper income households.

Saw McKibbin talk the other night and he made the point that if the RBA was concerned about leverage/housing bubble then they should not delay rate increases to address this and as a sort of stress test. It’s what I have been thinking that they have actually been doing already with pushing through repricing of interest only borrowing.

I am the first to admit that one observation does not at all suggest a trend. But the restauranteur did supply information suggestive of a worsening trend. And, even if this particular night were an aberration, it was truly alarming compared with what I have witness at this centre over the years. I’ve seen nothing even remotely like this previously.

I was shocked because 1) data suggests that employment is improving in the Brisbane area with the (perhaps temporary) revival in resource industry prospects, and 2) even though the oversupply of apartments would create weakness in that segment of the market and that would cause some spill-over effects to the general property market, I thought the fact that Brisbane prices have not run anywhere near as hard as Sydney and Melbourne in the last decade would protect it somewhat from a sharp down turn.

These observations are leading to me to reconsider that view and I was wondering whether you have had any feedback on the general economy of this region?

As much as you hear anecdotes of politicians visiting cities and noticing too many cranes, suggestive of an economy running too hot, for me this portends the next phase is here…

(with respect to John Fraser’s comments late Friday, absolutely politicians have let Australians down in their disinterest in economic and social reform – but senior bureaucrats have sat by and done little to discourage massive household leverage and the blowing of a serious housing bubble)

Related comment RogerMontgomery.com on 8 April 2018 at ABC Nightlife:

I just want to pick up on the discussion about retail. What [is said in the article] about the global access to specialist retailers is spot on. What’s more, and actually I am surprised that this has not really featured in discussion I have heard on the topic, I think the impacts on general retail are much deeper than many appreciate.

I noticed several years ago the emergence of items on Ebay that seemed so incredibly cheap, even after postage costs, that it was trivial to “have a go” and purchase accepting that it probably was too good to be true. (In other words, the monetary loss was so trivial it was worth the risk that the item never arrived at all or was completely unusable.) Low and behold, the many products that I have bought in this time have turned up and nearly all have been at least as good as I would have purchased through mall or other brick and mortar retailers.

For our household this has ramped up in the last 6 months with the “discovery” of Wish (which incidentally is a major sponsor of the LA Lakers). For example, my wife is “known” at her workplace for her shoe collection. In fact, a few weeks back a sharp-dressing and well-informed male colleague held the lift door open to admire her shoes, enquiring “are those Christian Louboutin?” (Here in lies perhaps one weakness of this model – my wife is so discrete about her “thriftiness” that she dare not admit to anyone other than her closest friends about her new-found favourite shopping experience 🙂 ) All of her shoes she has purchased for less than $20 inclusive of postage – and she has even been fully reimbursed for very minor defects (which in no way lessen their appearance or wearability/longevity) on a couple of them. She has also purchased clothing, jewellery and lingerie for what can only be described as ludicrously cheap prices, sometimes free with postage costs of a few dollars! (which translates to incredible value seeing as they have all arrived and have not disappointed in terms of quality).

I suspect that the impacts of this fast-moving development is the reason why after years of whinging Gerry Harvey (“I don’t think this internet thingy is going to be much at all but I guess we have to do something”) looks like he is going to get his tax on all imported goods!

But the truth is that, while a $5 tax will double the price on some of these goods, when retailers have to pay mall owners tens of thousands of dollars each month in rent to have the space to retail what can be purchased directly from China for as little as 10-20% of the price, I doubt it will have a noticeable or enduring impact. (But it will annoy the general populace – and one has to wonder just how much flack is Mr Turnbull prepared to take on taxes for the business community… then again I strongly suspect many large businesses are “over-employing” as a down-payment on those tax cuts, eg. my local Bunnings!)

And these developments, I believe, is why Mr Lowey is pretty keen to get his sale off as soon as possible. Certainly the strains of this retail competition in combination with an over-leveraged “consumer” (afterall we aren’t people any more) are obvious to anybody walking around my local Westfield which is one of the largest in Brisbane! Yet another shop closure this past week, making around 15 closed with 13 or so closed since end of January. (It’s been rather humorous to watch their creativity at disguising just how many spaces are now vacant.) But on a serious note, it surely has not escaped the attention of most people employed in the centre and unfortunately I have seen nothing to dissuade me of my prediction of 4 months ago (on this site) that my region is heading toward recession, if not already in recession, as a consequence of over-indebtedness (due mostly to real estate speculation). What’s more I think it likely a forerunner of what will be seen throughout the country as particularly Sydney and Melbourne begin to digest the consequences of the extreme run-up in property prices over recent years from already lofty levels.

With an annotation on 10 April 2018:

Make that two more closures this past week – just noticed another store with boarding, this time covered in advertising for the neighbouring store, but enquiries within revealed that store is not expanding into the vacant space (so an attempt to reduce the proliferation of the black boarding reading “another exciting retailer opening here soon”) … retailers remaining in the centre – many with signs indicating major discounting – must be negotiating very hard indeed for rent reductions …

Comment on 26 September 2018 at Doing it Tough in Aussie Retail:

That [a recession is where we are] heading is now my base case…

And it is living in Brisbane – intuitively not the first city that one would imagine to show these stresses as house prices have risen much more modestly here over the last 6 years – but perhaps on deeper reflection that may actually be the reason – that has provided me with this insight…

I wrote about some observations from around Brisbane last November in the comments section of a post [and] it would be helpful if I updated you guys on my observations… At that time I noted an eerily empty car park in a suburban shopping centre with a number of restaurants on a Thursday evening, followed with the details of a chat with that restaurateur who described how poor business had gotten over the 2 years leading to that nadir (especially in the inner and middle rings of Brisbane), vacancies in that same centre, and then the closing of a large café in the very large Westfield centre that I frequent just at the beginning of the pre-Christmas period… Then I said in as much as Paul Keating famously worried for what was coming after seeing (too) many cranes in Australian cities, I feared what this portended…

Well since then I have seen nothing that assuages my concerns… More spaces in the smaller centre have become vacant and none have been leased… The high proportion of vacancies in small centres and shopping strips has been recognised and discussed in various newspaper articles in Brisbane… As has been the closing of large numbers of restaurants… From speaking with several restaurateurs a common story has been takings down by around 30% from 5 or so years ago, while costs have continued to increase (often by over 10% in the last year as rents continue to increase)… Under these conditions many have not increased menu prices for 5 years… Of course restaurants are under similar disruptive pressures to retailers…

The most marked changes that I have observed, however, are in the large Westfield Centre (one of the 3 largest in Brisbane)… Over a 1-2 week period at the end of January/start of February around 10 shops closed suddenly… I spoke with employees at a Jewellery store pasted in sales signs and they spoke of being frightened at how quickly it was happening and how they did not know what was happening to their own store… That store closed a few weeks later…

Since the café closed last November, I have counted a total of another 29 businesses that have closed in this centre (that does not include store relocations, nor does it included small temporary stores or kiosks in the aisles of the shopping centre which are much harder to keep track of but are clearly much fewer in number than several years ago)…

Most vacant spaces remained boarded up for months and some spaces – including that original café that closed – have remained vacant 6 months or more… And some businesses that opened in a space have then closed after trading for only a few months…

In total I have counted 11 stores that have opened in vacant spaces, but that count stood at only 4 until mid-June, suggesting that the impending end of financial year may have caused a flurry of activity to acquire new tenants…

Clearly many spaces have been boarded up or left abandoned at any one time over the last 6 months, and this has not gone unnoticed by shoppers and especially those working in the centre…

In the mean time, the centre has increased its parking fees to customers by around 50%, which has not been mentioned in the local press, but one has to wonder whether that is going to further deter “consumers” from coming and “experiencing” the centre…

Also cost-cutting measures being undertaken may not be conducive to enhancing that experience – for example it is clear that the centre has became less well-lit in recent months…

This centre is a little unique in that it is 50% owned by a REIT in which it is the only asset, so I was keen to look at its financial year results… The only suggestion of deterioration in the results was a decrease in property income of 1.6%, but apparently the leased rate increased from 99% to 99.4%, and I could find no mention of the increase to parking fees… What I did also notice was that David Jones will only be re-leasing one of the two floors it currently leases from 2019, and the report suggested that this will have an impact on reporting for two years… so it will be difficult to ascertain the quality of earnings on the asset for a further 24 months…

The final observation that I will make is that a number of the business closures have been in the food court and none of these have been re-tenanted… where there were kiosks they were removed, so what was once rather tight seating is now very spacious… I would suggest that the apparent lack of uptake of shop vacancies in the food court is a reflection of a lack of confidence, even with reduced competition, and that would be partly related to the lower level of confidence among workers at businesses in the centre who are fearful of losing their own jobs and are cutting back on expenses by bringing their own lunches, etc….

Of course those aiming to downplay the pressure on households – from overleverage, improved bank lending standards (back towards prudent, sustainable practices), low wages growth and rising interest rates – apparently wishing not to dent”confidence” among “consumers” – have some factors available to muddy the waters as these industries are currently under disruption… But I think it is clear that what is occurring goes well beyond that…

It remains unclear whether this period will ultimately be recorded as a recession… I am aware that most business people in Brisbane consider that they went through a recession in the early 2000s – interesting since it was ended by the arrival of the housing bubble – that was not recorded as such… However, even though the level of immigration and the Volume of resources exports may reduce the likelihood of an official recession being recorded, I can’t help but think that, once these stresses to households flow through to other cities as their house prices don’t just rise slowly (as in the Brisbane experience) but fall, these mitigants will be overwhelmed and we will indeed record an official recession.

And, just as the lived experience of the majority of Australians is not as good as the GDP statistics alone would suggest, GDP will not accurately reflect the depth of the recession experienced by Australians.

The real shame if it is that it is now unavoidable – our economy was pushed to extremes in certain areas that have made it unsustainable – and nobody in a position of power has had the courage to do anything about it (remember Joe suddenly realising negative gearing wasn’t a good idea – when he had quit as Treasurer and was leaving parliament?)… The GFC provided the greatest ever “cover” in history to deflate a bubble, and that’s what was happening, until the RBA began listening to those that said “we need a little more confidence in our economy”… even when they, themselves, were warning of the risks of providing that confidence through unsustainable leverage… Now the RBA seems to be in search of another “crisis” on which to pin another bout of arse-covering – like a trade war – but I suspect it is all too late and the system has become entirely unstable…

In all honesty, there have been times when over the last year I have walked around feeling like the guy in “Margin Call” when he’s driving around and looking at all of the unsuspecting people hurrying about their lives…

Having gone so long without tough economic times, this will be hard-felt by many… Already a loving father of one of the restaurateurs that I spoke of above is very concerned about the mental health of his son, suffering depression… he hopes his son manages to sell his restaurant (in one of the most affluent suburbs of Brisbane)…

I can understand those in positions of power wanting to avoid recession – but doing so is always the best outcome, also, for those in power – and it really can’t be said to be for the betterment of our country if the tough microeconomic reforms required are not undertaken in the breathing space given by anti-recession spending… This was the case in our post-GFC period due a lack of genuine political-economic leadership and I fear Australians will now pay a heavy price…

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© Copyright Brett Edgerton 2019

Comment on 13 April 2018 on RogerMontgomery.com at ABC Nightlife:

The following is perhaps more a “weekend read”, but I think this really needs to begin to be dealt with…

The more important issue around retailing in Australia, in my opinion, is the impact of the throw-away society on the environment, especially in relation to medium to large-sized (household) goods.

Here’s a question: When you last shopped for a household white good, what was the expected life of the product according to the salesman? And did the short time period shock you?

There is no way in the world that the price of goods sold represent their true cost, including importantly impacts on the environment in their production, use and/or disposal. Star ratings may be an attempt at addressing the middle point, but I don’t believe the other – probably more important issues – have really begun to be addressed.

This is something that I have been reflecting on following a couple of recent events.

Recently I took advantage of an in-home installation offer while purchasing a built in closet from a major global retailer. Near the end of the installation the installer told me there was a minor defect – a small scratch on the door – and that I would be within my rights to reject the product and have a new one delivered. And, as we all know, because these goods are flat-packed and sent from overseas, this would mean taking away the whole closet and bringing back an entire new one. Being fairly pragmatic (after all it was for my sons and they could easily do at least that much damage to it that very afternoon), but more importantly not wishing to add to waste, I declined to do that.

As he completed the job he proceeded to tell me just how many items arrive with defects that are rejected – one example was someone rejecting 3 sofas (including one that was completely busted) before getting “a good one” !

At the price that these goods are sold, and while I accept that some of these “defective” goods end up in scratch and dent sales or are sold/given to friends, at least I sincerely hope so, I think it highly unlikely that the goods are shipped back to be either repaired or at least repackaged and re-exported. One can only assume that much of these new goods end up being dumped.

“When I was a young lad”, if you could not afford a leather lounge you bought a vinyl one. Sure they did not breath – and being a poor student in Townsville I certainly understood what that meant! But at least they lasted for years!

Now it seems that “PU leather” is the cheaper alternative to leather. When we bought our last lounge (from a different retailer than mentioned above), not wishing to pay for our “forever lounge suite” having young children (still with a penchant for Niko pen art), we opted for “PU leather” over the real stuff.

Almost to the day on 2 years, once the “warranty” had expired, we noticed fine cracking all over. And within months this thing flaked down to the underlying fabric mesh over most of it. (We also bought an office chair and an ottoman in “PU leather” around the same time which have done exactly the same thing). It’s gross – the flakes stick to your skin and clothes, and build up like confetti around the offending and offensive piece.

I sent an email to the retailer of the lounge with photographs and asked them to contact me to discuss what could be done. They did so fairly promptly and it was quickly determined that we were outside of their warranty period. I replied that I was aware that ACCC regulations make it clear that warranty periods are largely irrelevant, and after further discussion they offered a 50% store credit. I replied that wasn’t good enough and that I would send them the link to my Youtube video clip of our experience, once I uploaded it, to give them first right of reply. At that point the representative said they would have the manager call me. The representative called back shortly afterwards offering a full store credit which I accepted (even though I would have preferred a refund to purchase elsewhere).

The point of all of this is that the business models of these manufacturers and retailers MUST allow for all of this transit damage and product failure in their pricing. (As well as the annoyance to the customers at the poor quality of the product being sold and the inconvenience.)

And we all know the number of goods that fail on us often due to rather small issues well before the product life of most of the other components have expired. These goods are often unrepairable because parts are unavailable or, in rare cases when they are available, the costs of repair are uneconomic compared to buying an entirely new good. Over recent years people have tended to replace rather than working at, and perhaps accepting a little inconvenience, extracting as much life from them as possible. (As a parent I would proffer as an example backyard trampolines where I have seen on many instances plastic components of the safety net breaking well before the utility of the trampoline has expired, but, unable to buy replacement parts, unwilling to persevere and develop work arounds, and with replacement cost of a cheap trampoline only a couple of hundred dollars, they are thrown out within just 2 or 3 years.)

While handy-minded people sifting through curb-side offerings and recycling programs might reduce this waste somewhat, much of these materials end up in land fill prematurely (or the metals recycled) often when 90% of the parts in the goods have significant useful life left in them (and are worth more than their elemental value which requires more energy to process).

Part of this is undoubtedly due to China encouraging over capacity in all forms of production (to meet their own internal growth targets). But I have little sympathy for retailers for not being able to compete with Chinese businesses selling directly because they have embraced these cheap suppliers for years. All that has changed is that first wholesalers were cut out by businesses going direct (via trade shows and then Alibaba and the like), and now the local retailers are being cut out.

What I believe firmly has to be the future, and this is where I do have something a little constructive to say about Trump, and it would be the saviour of local retailers with the right mindset, is that prices of goods do need to start to reflect their genuine costs to human beings as a whole. Perhaps that can be done by tariffs, but I think it would be preferable if it were explicitly called an anti-waste or environmental tax. (I realise that this is certainly not Trump’s aim – but it is interesting his first target for tariffs were white goods and solar panels – and if a reduction in the sale in the US of low-quality, short-lived products were an unintended consequence of his actions then that would be something!)

There needs to be pricing signals embedded in the costs of all goods that reflect the genuine full cost of goods. I simply can’t see how goods manufactured overseas from resources gathered in various geographies, and shipped to Australia (all along burning fossil fuels) can retail at these prices at a profit (with all of the local costs) after allowing for a replacement rate of say 50%.

If the genuine full cost of goods became embedded in the pricing then I strongly believe the concept of food miles would quickly expand to all goods (once again) and be a major competitive factor.

If I were the entrepreneurial type I would be going flat tack on this right now, opening for example small furniture shops where the furniture is made very locally and customers know that whenever the piece should break – be it accidentally during setup or in 10 years – it can be repaired promptly and at reasonable cost. Sadly this type of service tends to be marketed as a premium-type of service and thus is expensive. But the premium level can be built in based on the desirability of the materials used (eg. type of timber and fabrics), not the longevity of its components and construction, to allow for different pricing points.

Further complicating customers assessment of quality is an understanding that the marketing budget spent on the product or branding (of producer or retailer) is often more correlated to the retail price rather than its actual quality.

Moreover, it has long been postulated that even some high quality goods are intentionally and programmatically made to function less well or even become defunct after a specified period. This is often referred to as “planned obsolescence” and may be used to drive more frequent turnover of a product and therefore increase sales. Evidence of such behaviour should be treated very dimly indeed by national and perhaps international authorities.

I do not pretend to have all of the answers – of course I am abundantly aware that I have few of the answers. But the problem is plain for all to see.

Moreover I wish to be clear that I am in no way suggesting that all imported products are poor in quality, and all locally produced products (currently or in the future) are necessarily of higher quality. The progress towards producing higher quality products, with greater reliability and better technology, as national economies develop and manufacturing capabilities improve is well understood.

Essentially there needs to be disincentives for retailers to sell, or for customers to purchase, products which are likely to have short working lives compared to the resources that went into making them or to the true full cost of their disposal.

In many instances this may well lead to a renaissance in local manufacturing and this would mean that the customer is dealing once again with retailers who will genuinely stand behind their product because it actually is their product! (As used to be the case before transport allowed increasingly wider distributions of goods.) And regardless of your budget you can access this level of service because pricing signals have been altered such that retailers of lesser quality goods do not have a price advantage and the competition would require them to also stand behind their products irrespective of their origin.

Undoubtedly this would lead to increased inflation during a prolonged adjustment phase. But I just can’t see how the world can afford this level of waste and its consequent damage to the environment. (I always think of the movie “Wall-E” when I reflect on this, with piles of rubbish taller than sky-scrapers.)

If this type of restructuring were undertaken genuinely and comprehensively, then absolutely I would support taxing of (some, or even all) goods purchased directly from overseas suppliers by end customers if it were necessary to prevent circumvention of these anti-waste measures.

I think most Australians have to know in their heart of hearts that we have been underpaying for a whole range of goods. We all manage to avoid confronting this reality, except on the rare occasion when we are reminded by, for example, a building collapse in a developing country where, it emerges, was housed a business (often employing very young people) exporting cheap goods to Australian companies or companies retailing to Australians. Even those of us that feel guilty about it are relatively powerless to do anything about it or even to become better informed.

Clearly international and/or supra-national authority involvement is what is needed to genuinely address these issues.

Moreover, while I have a lot of time for the benefits of unions – and I consider it a sad state of affairs that our Reserve Bank Governor has become the loudest voice arguing for salary increases due to increasing impotence of labor unions – I do have concerns about them talking about disparities in safety standards between our wealthy nation and developing countries. Given their membership is Australian workers, I do not think they are calling for improved working conditions for the benefit of people in the developing countries. And it would be unrealistic for people to work in pristinely safe factories and walk out the gate dodging potholes and innumerable hazards to return to their shanties. (I think most people will be familiar with the footage of children scrambling over moving piles of rubbish and dodging bulldozers in a race to get hold of resources that may be of some value and benefit to improving the lot of themselves and/or their family.)

If we want the world to become a fairer and more equal place then we need people in poor countries to have a chance to benefit from accessing wealth from rich countries by as many mechanisms as possibly. Moreover, again the link between population growth and economic development of a regions is very well understood.

This is my major concern about the policy adjustments I propose above. However, I find it difficult to believe that it would be impossible to make these adjustments within the broader context of genuinely working towards a better world for all human beings.

When it comes down to it, I am a globalist and I am always sceptical about campaigns to protect local environments and peoples (above others). Two precepts explain my views best, the “butterfly effect” (if a butterfly flaps it’s wings in the Amazon …. ) and the following quote from Franklin D Roosevelt’s Fourth Inaugural Address on 20 January 1945:
“We have learned that we cannot live alone, at peace; that our own well-being is dependent on the well-being of nations far away. We have learned that we must live as men, and not as ostriches nor as dogs in the manger. We have learned to be citizens of the world, members of the human community”

(Why I similarly have deep scepticism towards those who wish to argue for enforcing a population limit for Australia.)

But there is no doubt that we need to urgently work towards making human progress on this globe sustainable, and when done in the context of caring equally for all human beings irrespective of where we live or were born, then that will really be something of which we all can be proud.

In fact, I believe a “Roosevelt clause” should be inserted into the oath of all those in Public Office from and for all nations that acknowledges that to do their best for their constituents they must always, and above all else, act as “citizens of the world; members of the human community”.

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© Copyright Brett Edgerton 2019

Comments made on 2 August 2017 at “How Driverless Cars Will Change Our Lives“

I recall Buffett saying during a Squawkbox session around the time of last year’s annual meeting that for the first time in the 30 odd years that he had been privy to detailed insurance data that the incidence of single driver accidents had increased… without any actual data to back up his hypothesis, he suggested the cause may be the proliferation of the smart phone… at the time I agreed to myself and thought “yes, you can’t go for a 10 min drive in your car without seeing at least one person at lights distracted by their phone”…

More recently I have been reflecting that it seems at lights almost half of all drivers are distracted by devices, as well as (more worrying) while driving in traffic and on occasions the drivers I have witnessed have been in heavy vehicles (trucks)…

I personally think that once the technology is proven to be safe, autonomous vehicle acceptance in major metropolitan areas will rapid and profound – and may well be driven in part by regulation and enforcement, as well as preference…

As someone who is not particularly status driven – I recently replaced my 15 year old camry with a 10 year old station wagon (because I appreciate the depreciation rate to reliability ratio of these cars) – when I thought about an alternative being a safe, highly efficient (appears at your door within 5 minutes of ordering through your app), and clean vehicular pod (no steering wheel) I suddenly had no desire to waste space in my home to park a vehicle or the logistical hassles of maintaining one…

I honestly think that the biggest obstacle to overcome my envisioned future is the status symbol value of one’s own vehicle…

But I do wonder whether younger Australians will quickly get over that – afterall, they certainly won’t have the big home in which to park a flashy vehicle because, well, they can’t afford one, can they? Certainly not both!

Comment made 19 July 2019 at “The Autonomous Age is Still Some Way Off“

I do believe that the “need” for this is growing sharply indeed. Two years ago in a conversation around this topic I would say that it is becoming necessary because people are becoming less able to keep their hands off of their devices, and that in one round trip pre or post school drop off/pick up I would see at least one driver totally distracted on their phone. Then a year ago I changed that to at almost every traffic light I would notice at least 1. Now I have to say that at every light I see many! It’s essentially an epidemic…

I do agree also on your point that many of these safety concerns will be met by lower order automation and other regulatory responses such as road cameras to detect device usage. But I think this will go much further – I think that fatigue detection software will be adapted fully to detect distraction, and may well become compulsory in cars in the years ahead (I did some research on potential investments in this space but most were either a part of larger companies – eg Caterpillar – or were not planning public listing any time soon).

I had a brief chat with a delivery driver a month back who had some rather frightening stories – in one case he saw a crash at lights where the young woman on P plates didn’t even break as she went through a red light and straight into a collision! It didn’t surprise me given the level of distraction I have been observing personally… And I mentioned the school periods because I want to make the point that it is not just young drivers – I think that middle-aged drivers up to their 60s are some of the most distracted! Perhaps Facebook will need to link in with maps to detect fast motion and automatically close down (like many car Bluetooth systems will not allow fiddling when moving)…

So I believe that over the next decade stronger and stronger regulation will be needed to stop distraction. It’s a far, far bigger issue than drink driving ever was. And ultimately people will be required to decide – get off your device or drive… A lot people will not want to be detached from their devices, but also will not want to make use of mass public transport… so the demand for autonomous is enormous, I believe… (and this trade-off will help people get over the “control” issues that they might have with “letting go of the wheel”).. it’s not just cheap money that’s “driving” the investment in this area… So money will continue to be thrown at even if there is a “paradigm” shift in the availability of financing, and I think this will happen at a speed that will surprise many skeptics… Mind you, like most major technological advancements, being able to make money by investing in the theme, well that’s something else altogether… I do like the anti-distraction device theme over the next decade

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© Copyright Brett Edgerton 2019

Comment on 9 February 2018 at Why Helicopter Parenting Can Set Kids Up For a Crash:

Thanks for sharing that very thought-provoking article, Roger.

“He believes many of us get deluded by a phenomenon known as survivorship bias, where we only see the winners … and do not properly observe the losers.”

That is precisely the point I made to my son’s teachers when I accompanied their class to the Queensland primary school leadership forum two years ago. (Now being a stay at home dad, I am fortunate to have these wonderful opportunities to help out teachers, the children and my sons.)

An amazing assemblage of “winners” was put together to inspire the children – including the young scientist that was in the running to go to Mars – and they were all keen to share the secrets of their “success”, many even having the humility to admit that fortune was indeed a factor. But it was clear that none truly understood just how big a factor it was (perhaps it is only natural to focus on what we actually contributed to our “success”).

I suggested to the teachers that we only heard from the “winners”, and while their messages were very worthwhile, the children would also do well from hearing from some of the many equally talented and equally resilient people that for any number of reasons did not quite “make it”. The teachers gave polite affirmation to the comment, but it’s probably something that one can not fully appreciate unless you can truly understand it from personal experience or from observing it at close hand.

Here I am going to share something deeply personal, where these reflections formed the basis of the first point I made in a letter that I wrote a year ago to be held for my sons in the event of my early passing (I recall reading, not long after I wrote this, a letter by a female corporate high-flyer in the US to her children which received enormous publicity at the time – as I read it I could not help but smile at the extreme contrast in our parenting – but it is this variability that makes the world an interesting place!):

“Enjoy the ride”
Now I realise that you have sat down to read this important letter – probably with a range of emotions – and after just one page I am going to ask you to do something which requires you to stop reading for a bit. I want you to watch one of my favourite movies – “Along Came Polly” – at first writing you have both watched the very start of it where Claude was naked on the beach trying to find customers to come scuba diving with him. So go and watch the whole movie (again?) and take in especially what Mr. Pfeffer says to Sandy. Then continue reading.

Hope you enjoyed the movie and be sure to use the word “shart” in your everyday life as often as possible 🙂 … Also frequently quote “as long as you are for scuba Lubaan I am a pea” (I love that one)… Now back to the serious stuff…

As we are growing up we are bombarded with all of these positive messages that we can do anything! “You can achieve any dream!” Popular culture – through TV, etc, and the education system – is strongly based on this. It’s part of the incentive system for capitalist societies (along with one of my pet hates that greed, if not completely good, is natural). Most often the inspiring people that you see and listen to, like at leadership days and so on, are from the small proportion who actually get to where they set out a long time ago.

While the “you can achieve any dream!” message is worthwhile, nobody tells you that lots and lots of people don’t end up achieving the dreams that they set out to achieve – I would be certain it is lots more than do. However, if they have the right mindset they usually realise that the goals that they do actually achieve are much better for them anyhow!

The inspirational speakers usually glance over luck and circumstance, and instead focus on their resilience and goal-setting, both important characteristics to develop.

The danger in taking the “you can achieve any dream!” message literally is that you can trap yourself into trying to achieve something which only had real relevance and meaning for a short time in your life, when in fact you have changed and you might just be better off considering other new dreams.

Take me for instance – I would, and could, never have imagined even when I was 30 where I would be at 40! I left Australia just after I turned 31 with my beautiful wife on an adventure that was going to be exciting and, through working in the top labs in the world in my field, together with my hard work up to that point, I was going to cement my place as the world’s expert in freshwater crayfish disease. Many already considered me to be Australia’s leading scientist in the field – in fact I was introduced as such before my talk at the World Aquaculture Society meeting in Sydney in 2000. And even though I had mixed (at best) relationships with Australian colleagues – in a dog-eat-dog world nobody wants young, enthusiastic competition! – I was going to develop such a strong position that not even my strongest detractors could deny me a future in Australia when I was ready to return.

A lot of people who are focused on a goal forget about enjoying what happens along the way, and the truth is for all of us this is where real life is lived. As Mr Pfeffer says, “it’s not worth it if you don’t enjoy the ride”. For some that is a hard thing to achieve, but I am convinced that learning to “enjoy the ride” is the most important skill in life. And being open-minded on where that ride takes you will get you a long way towards enjoying that ride.

I can’t take credit for choosing the right path for me when I retired from science at 34 years of age. At the time it felt like I had little choice, and the extreme stress of what had occurred over the 3.5 years since we had left Australia to go to France – together with what had occurred before that – had robbed me of most of my perspective on life.

I was just extremely lucky that the path that I ended up on turned out to be the right one for me. I have told you both several times, but you need to know that I would not change a thing – and if I knew how much I would love being a stay-at-home dad to you both then I would never have struggled so much with my ending my scientific career. You both, together with your mother, are the best things that ever happened to me and I will be forever proud that I had the opportunity and privilege to take such a strong role in helping you to become the wonderful people you are.

The ride was so much better – and infinitely more fulfilling – than my dreams of what it would be like to achieve my earlier goal!
END

Again, not long after writing this to my boys I was interested to watch a 4 Corners episode on how hard it was for sports stars to deal with the ending of their careers, especially when it was an abrupt end through injury. Many spoke of their struggles with depression and anxiety.

I reflected on how ironic it is that it is that we only hear about these challenges because they were “winners” – that people might actually be interested in Lauren Jackson, for example, as she is known to many Australians because she was once a sports star.

I related very much to the challenges those sports people faced, as I think very many others would, and so I am pleased that the story aired. It’s just unfortunate that there is not a lot of awareness that very many every-day people have had to face similar challenges – you don’t need to have been a household name to have suffered the loss of what you perceived to be almost your very purpose for being, even one that you believed whole-heartedly was making a difference for society and mankind in general regardless of whether it was widely recognised or not.

When I returned from overseas without a job, but hoping to continue my research by attracting funding, I was manically driven to turn something up for myself. On one occasion I recall driving the car with my wife and realising just how much I was taxing my brain – I was driving while talking to my wife, and all along my mind was spinning with ideas for research proposals. I spent 18 months unemployed in Australia – but working every day writing research papers and grant applications, reviewing journal papers and research grants, and generally trying to prove myself useful to the university that was providing a desk for me – before reality caught up. In my case it was the joyous news that I was going to be a father – that my partner of 14 years, with whom I had dreamed for a decade of starting a family as soon as possible once we had some financial security and stability, was pregnant.

Having received notification that all of my grant proposal were unsuccessful, with nothing else on the horizon, and with a perhaps old fashioned view that it is best if one parent devotes themselves to raising children, it was clear that my career in science was over. And when I sent an email notifying my field of my retirement, including pulling research papers that were in various stages of review, and sending papers back to editors that I had received to review, suddenly a hole opened up in front of me that I could not avoid falling in. How on Earth can I occupy my thoughts when the thing that had consumed 90% of my cognisance was gone with the click of a mouse button!

I now realise that my nervous breakdown was inevitable… (That is something I probably would never have admitted to publically before, and only do so now as I am now fairly sure that I will never have another career, and I am not sure that society’s understanding of mental health is strong enough to see past that for an ex-scientist – though possibly for an ex-sports star!)

I tend not to enjoy speaking about my past and until recently I had been able to totally avoid it. But recently I joined a men’s group for company (while the kids are at school) and rather ironically after a few months a speaker was invited to discuss the white spot virus outbreak in Queensland prawn farms. I had never taken the step of standing in front of the guys and explaining my background – as most newcomers had done – though I realised I probably should as many would have wondered what this “young” fella was doing among them (I am 20 years younger than the average). When I reflected on what I would say I realised that at the time when I quit science most likely I was the only Australian who had ever worked with white spot virus. Even if there was another Australian who had worked on the virus in another foreign lab, I was certainly the only Australian who had exposed native Australian species to the virus.

It was hard to listen to the speaker – full of the political baloney that had frustrated me so greatly when I worked in Biosecurity policy in Canberra for a few years before we went to Europe – but ultimately it was very cathartic for me.

Finally, after 14 years, I can say in total honesty that I am free of the pain and disappointment, and am actually very grateful for the way things happened because as a young adult I got to experience the world through my career, by my early-30s I had established a formidable legacy that can never be taken from me, and best of all I have had the opportunity to be there for my sons in a way that very few modern parents – and especially fathers – do. I have come a long way from the 17 year-old who begged his parents to let him drop out of university to return to the family sugar cane farm in northern Queensland.

When I tell people that I am a stay at home dad, a lot of people respond that I am so lucky “to be able to do that”. Absolutely I am lucky. But not only because I am “able” to be a stay at home dad. Because through circumstances it was me that got to stay at home with the kids after my wife and I had chosen that was right for our family.

These decisions are intensely personal for Australian families. However, without seeking to diminish in any way the struggles that many Australians face in making rental payments, I have to admit that I agree with the authors of “Affluenza” where they suggest that there are also many Australians who are working more to earn more to buy more things to impress people that they like less. (Unfortunately a lot of those depreciating status symbols have now been bought by increasing leverage against appreciating home values which will prove ephemeral, certainly in inflation-adjusted terms.)

I can’t help but think that the issues raised in the above article are a reflection of growing anxiety in society, expressed especially in our children, and exacerbated by the perceived acceleration in the rate of change such that children have no idea of what “success” looks like in the future anyhow. For instance, they are told that they will have many more jobs than their parents had and most of these have not even been created. What’s more, perhaps they will only need to work 15 hours a week and be paid a basic universal income. In stark contrast, an alternative future might see Australia continue to follow the US and we could experience growing inequality and may have the entrenchment of a working class poor (who occasionally sell their plasma to help make ends meet).

The point is, I personally think that active and thoughtful parenting has never been more crucial for Australian children, and that is why I feel incredibly proud that we have put a lot of effort into making well-informed decisions, thankful to my Accountant wife for working hard and smart, and grateful for living in a society that allows people to choose what works for them.

Sadly, in my opinion, in Australia a career in science is probably a worse choice than sports person – instead of very low probability/high reward it is a low probability/low reward proposition (I studied till 26 and earned above a subsistence income for just 4 years) and I think “Park Ranger” is probably out of place on that list… I encourage my naturally STEM-talented sons to not listen to the business leaders that encourage increased enrolments in these fields and instead think about paths that what let them have their jobs if that’s what they end up deciding they would like to do…

Then again, I also note that Malcolm Turnbull said at the weekend that nobody should study law unless they intend to be a lawyer. My father always said to me, looking down as his muddied cane farmer hands and torn work clothes, “you don’t want to be like this, do you?”… Lately I have been reflecting on whether, just like it is natural for children to want to emulate especially their same sex parent, perhaps it is equally natural for us to want to discourage our children from following in our paths (even if somewhere deep down there is immense pride if they ultimately choose to)?

Additional comments on same thread on 13 February 2018

Since I wrote that passage on Friday, I have to admit that my past has been ruminating in my thoughts. Partly it is the reality that (when something happens to bring these memories and emotions back into the fore) I have to acknowledge that probably I will never truly be completely free from the disappointment and sadness (anybody who went recently to see Yusuf Cat Stevens in concert where he explained how difficult it was for him to “make up” with music after such a long time might begin to understand.)

However, there is also an element of guilt – and of concern that I might be seen to be a “Negative Nellie” by others – and worse still, one who would seek to take away the dreams of his children. In this day and age we are told that we should spend time only with “positive people”, and that “negative people” are just a drain on our energy. So speaking about negative issues – that are not graphically shocking and immediately anxiety-raising – is not exactly something that is “encouraged”.

This testing of myself is my nature that I cannot escape – a person who naturally asks “why” also is prone to repeatedly asking that question to test whether that opinion holds true to that moment in time.

Once again questioning my views that it is best to discourage my sons from following my path into science has brought a lot of those points back into my mind, and perhaps sharing them is a useful contribution on what needs to be addressed for scientific research to be a viable career for more young Australians.

Firstly, I will make 3 points:
1. Queensland called itself “The Smart State” over 20 years ago. In the intervening period we have had a massive resources boom, and somewhere along the way “The Smart State” was dropped from our car number plates.
2. Remember that huge issue in the early years of the new Millennium – the “Brain Drain”? – in Government reports in my field and reports to Government from Industry my name was included in discussions surrounding the affects of the Brain Drain.
3. When I held a Humboldt Fellowship in Germany in 2003 I met 7 other young Australian scientists holding the same fellowship. Only one of us had a job to return to – for young Australians the utility of the fellowship was to provide another year “in the game”. Fellows from most other countries – both developed and developing – typically were using the fellowship as a sabbatical. In that year Australians had one of the highest success rates of all countries – I think around 40% of applicants were successful. In other words, compared to the pool of Humboldt applicants, a better level of researcher was applying from Australia, and we were comparatively more insecure than even those coming from developing countries.

The takeaway from these points is that this issue has been around a very long time. But the reality is that, even if Governments decide that politically it might play well to talk about technology and innovation, there is a long history of these initiatives being dropped at the first sign of the easy gains from another resources boom.

The ambivalence surrounding this was clearly on display when I saw Paul Bloxham speak last week on television. This investment bank senior economist – who was said to be a loss to the Reserve Bank of Australia – when asked if he was concerned about the loss of advanced manufacturing and the lower levels of innovation in Australia, responded that he was not because we have no natural advantage in these areas and that we are better off focusing on those which we do – resources, tourism and education (of course, not research, but graduate factories).

For me nothing has changed, and the probability that anything will change in Australia on this front is very low.

With these thoughts fresh in my mind, at the weekend I was talking with a German research scientist currently working in an Australian university and another German-born visitor – a general practitioner living in the UK. The research scientist told me how he had to write his NH&MRC application that afternoon. He was looking forward to it because during the week he gets precious little time to actually “do any science”, and this for him was a rare opportunity. It was a common complaint that I heard many years ago.

It seems that most of those that actually gain security as a research scientist actually do very little of it – and those that actually do carry out the research generally have very, very little security.

We spoke about just how difficult it is to live a life in research science, and he was clear that he knew that he had been extremely fortunate to have survived. However, unsurprisingly, he was pointing out the things that he had done to survive – like being flexible and moving around.

When I told him about my experiences shifting around he had to concede that he also realised that flexibility was far from a guarantee, either (and he actually apologised when I told him what had occurred during my stint in German university – but that is another story). We also found common ground in acknowledging that it is very, very difficult to have what many would consider a “normal life”, such as putting/finding yourself in a position which you feel secure enough to have a child.

(In fact, I have come to realise that most of the people that I know of my age that have survived the academic or scientific research fields into their 40s in fact were unmarried. And one ex-scientist that I have gotten to know in recent years – a woman who ironically worked in the lab of one of the best-known Australian scientists working on a women’s health issue – was told that she had “clearly decided on an alternate path” when she notified her boss that she was pregnant!)

But I took the last bit of wind out of his sails when I asked whether he had unemployed researchers in his institute at a desk writing research proposals and generally trying to prove useful to find a way to stay in the game just a little longer.

His tone dropped as he confirmed there were several. I turned to our GP friend and rhetorically asked whether he had any unemployed GPs in their late 20s or 30s voluntarily turning up to work at the clinic just hoping that they might prove their worth and ultimately be rewarded with perhaps a 12 month contract, or get really lucky and be offered a 3 year contract!

You can be assured that most science departments in all Australian universities have these people desperately hoping to make something happen for themselves – not wanting to give up on their dreams, or lose all of what they have been working towards, and proving their resilience to someone… anyone… Many will not survive, and, besides the personal costs to those people, that is a serious waste of human capital and a significant loss to Australia.

What’s more, compared to contemporary science postgraduates I was fortunate because monetarily I only paid for this lesson in foregone income. HECS only came in towards the end of my undergraduate degree and it was standard to receive waivers on HECS when conducting postgraduate research.

Imagine coming out into this environment with a full HECS debt from undergraduate studies and postgraduate qualifications for the privilege of conducting research that you hoped might help mankind in some way.

Why do so many people do it? Probably in part because it’s easiest to keep “doubling down” in the hope that black might finally be spun on the roulette wheel rather than realistically reconsidering the probabilities of the range of “successful” outcomes (from single to multi-year contracts through to more secure employment).

More important, I suspect, is that monetary reward is not a high priority for budding researchers, while intellectual and self-esteem rewards are more important. My second job after completing my PhD was a well-paid Government policy position, but I only ever saw the extra income as a resource to be saved to ultimately help me to get where I wanted to go – to be a word-class research scientist.

When I moved to France my personal income dropped by over half, and because my wife could not work, our household income dropped by over 80%. The following year over 40% of my Humboldt fellowship went to paying rent in Munich, and the remainder went on other living costs. And on returning to Australia I was unemployed for 18 months while I worked every day (towards the end I had a 3 month contract based in Thailand at a local rate of pay).

Even at that point, it did not really concern me EXCEPT for the fact that in the two years we were in Europe Brisbane house prices had doubled. By the time we had settled in Brisbane, with my wife in a full-time job, and then pregnant with our first child, house prices were well on their way to tripling!

As I said to the Senate Select Committee on Housing Affordability at its Brisbane hearing, deteriorating housing affordability in Brisbane during this period was a deciding factor in our decision to end my career.

Effectively, the political system is choosing a structure for our economy that disadvantages and thus dis-incentivises a huge swathe of people who, under a different structure, might choose to stay on in roles which “give back” to society.

With the prospect of growing inequality, it is completely rational that those with flexible innate and learned abilities will choose “safer” career options which are more likely to provide the opportunities afforded to previous generations of Australians, such as the possibility to have children and own a home.

To take this the full circle, I see no evidence from policy-makers that they even understand the short-comings in our economy and society, let alone have any desire to genuinely tackle these issues in sustainable long-term strategy.

While that remains the case, when I hear a business leader encouraging young Australians to increase enrolments in STEM I will continue to re-interpret the acronym as follows: STEM = smarties to exploit monetarily!

Instead, to young Australians I would suggest that, as well as climbing trees and enjoying your sports for the fun of it, get a subscription to National Geographic and American Scientist and let that satisfy your interest in science.

I have the Sky Business Channel, Bloomberg or CNBC running continuously at home outside of the kids’ electronic time. It is on not only for my interest, but so that my sons passively take it in. My 12 year old knows who are Mario Draghi, Janette Yellen, and Glen Stevens and now Phil Lowe; he understands (roughly) what is quantitative easing; and he understands more about markets than I understood in my early 20s. A week ago my 9 year old acknowledged that I was right about bitcoin, that when something seems too good to be true in finance it nearly always is.

A while back my eldest son challenged me suggesting that I have these channels running all of the time because I want him to work in “business”. I simply said that I will be proud of him no matter what he chooses as his first career or job. But I stressed the importance of understanding that what happens in these markets has a huge effect on what happens in the world and affects the way people can live their lives. (That lesson was seared into me watching what happened to my parents and family when the world sugar price collapsed in the early 80s – and that was followed by a sharp lesson in politics when Sir Joh told a hall full of desperate cane farmers that he would not do anything to help them because he had not had a member in parliament from the area for several years!)

The one thing that I do stress to my children, however, is the importance of not getting hung up on what will be their first job. After all, if they are going to have several different careers, and more jobs than the previous generation, which are yet to even exist, then why get stressed about choosing the first one! We also talk about the importance of flexible thinking and of strong emotional intelligence – thank fully they get that modelled to them in spades by their mother!

To those who have waded through these thoughts, sincere thanks… I hope they are of some use…

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© Copyright Brett Edgerton 2019

I intend to write an indepth post detailing my views on Berkshire Hathaway. Before I do that, for full disclosure it is appropriate that I place here my earlier public comments on the topic.

My Comment on 1 November 2016 at “Is Berkshire Hathaway a Victim of Its Own Success?“

Whilst I agree with your depiction of the challenges that BH faces, Tim, I am not sure that you amply discussed the nuances (which admittedly is not easily done with the brevity required in a blog article) and the favourable factors it possesses with reference to the current and likely future investment environment.

When I look at that graph of rolling 10 year performance it springs immediately to my mind that BH peaked in the early to mid 1980s coinciding with a very significant historical point in markets – the commencement of the great bull market. It’s generally accepted that there have been two periods of serious under-pricing of BH stock – when markets have become irrationally exuberant with “new era thinking” overtaking tried and tested, old-school investing (of which Buffett and Munger are the poster boys) – the late 1990s tech bubble and the euphoria running up to US property market crash.

The current very high prices for stocks makes me wonder whether we aren’t in fact experiencing another significant relative undervaluation of BH which will become apparent over the years ahead. (I know that statement might seem silly with it trading around 1.3x book but one only need consider that 30 year US treasury bills with a 13.5% coupon were not seen as a lay-down-misere in 1984, but were a hard sell, to understand how difficult it can be to see opportunity in markets.)

Perhaps a case can be made that BH stock performance displays a general inverse relationship to the level of enthusiasm towards the stock market. I realise this might seem counter intuitive initially, but on deeper reflection, perhaps not…

The straightforward, ethical, common-sense approach is not particularly amenable to hyperbole and slick advertising by ticket clippers making hay while the sun is shining brightly on a bull market.

If we also consider just how rare it is for businesses to steer clear of the wall street crowd – the $million dollar fee consultants recommending all manner of mergers/ acquisitions/ general financial shenanigans – and the fads that short-sighted executives follow (such as paying out record high proportions of earnings, or even borrowing to pay dividends, rather than investing in growing the business, as they do presently) I would tend to think that BH has a huge advantage over many capital allocators that gives their managers a better than average chance – even with all of their challenges – of outperforming for at least another decade or more…

My Comment on 7 October 2017 at “Robert Shiller Warns Us to Prepare for a Bear Market“

Long time fan of Shiller – all versions of Irrational Exuberance are on the book shelf and occasionally re-read in part or full…

So today I am milking the conformational bias for all it’s worth – yesterday I put in the sell order on my Berkshire Hathaway shares after 3 years of ownership – only disappointment the higher AUD (but proceeds will go into USD ETF to continue that exposure, as I did in my initial two-stepped purchase strategy)… 

The thing that people need to realise is that timing for individuals is very different than for Fundies… the question I ask myself is what is the probability that I will be able to buy this same asset at a lower price some time in the future… if my answer is high then I will very strongly consider going to cash or choosing another asset which is likely to outperform in the intervening period…

I am unsure whether I will ever buy BRK again… I think that BRK has a massive advantage in that their credibility is so high that they have earned the right to genuinely invest with a long term view in mind – they are impervious to wall street shenanigans and pressure.. thus they are rare in the current environment (low yield) where many capital allocators are feeling pressure to maximise payments to owners rather than investing for future growth… And I am a major fan of Buffett and Munger… But that is not a basis to allocate capital, and the major nagging in my mind is that – while what these guys have done over the last few decades, every bit including up until today, will ensure that the company will perform well when they are gone, there will be inevitable turbulence when they do pass… And sadly, with Munger well into his 90s and Buffett only half a decade behind, well even their cash can not have them beating the odds for much longer – though they are a wonderful example of the benefits of their oft mentioned “healthy” diets 🙂

Back to timing, from late 2004 I was sceptical on the stockmarket and so, even though quite young (and theoretically able to withstand a significant drop in invested capital), I clamped down allocation to stocks to 50% (so didn’t get the full value of the market run up) and by 2007 liquidated and went to cash… didn’t really matter how long I had to wait, I was confident I would have the opportunity to buy those assets cheaper in the future…

Through 2008 I bought and bought equities, and by complete luck finished my buying (reached 100% equity allocation) a week or two before the trough… In 2013, after having traded in and out with some range trading, I figured that the hammered Gold Coast apartment market was significantly undervalued and invested (which again by some luck turned out to be pretty much the trough)…

Fung managers can’t behave in this way for obvious reasons… a 30% cash position, that Roger and others of the more cerebral and contrarian fundies, places pressure on them to explain this relative to the title of their fund, especially by investors who are employing their own capital allocation nouse.

But I think employing blind dollar cost averaging or the like for an individual investor is crazy, would suggest that taking a strong interest in markets and understanding that timing markets – whether broad markets or in individuals issues such as stocks (in other words buy low sell high) – is the way towards superior returns is the way to go… And as any of these generous finance thinkers who regularly publish their thoughts will tell you, if you think by timing you need to be accurate within a day, week or even a month, that might be the case for fund managers (who come under increasing pressure the longer market prevailing behaviour continues), you don’t need to be anywhere near that accurate in your timing to profit handsomely…

All that matters is what are the chances that I can buy this at a later date for a lower price if I should so choose (and yes, taking into account relative yields in the intervening period)…

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© Copyright Brett Edgerton 2019

Comment on 14 May 2019 at “More Trump?“

I wanted to share two things. Firstly, I recall reading in Rutger Bregman’s book “Utopia for Realists” that in the 60s the Republicans came very close to implementing a form of Universal Basic Income… Apparently the Bill was put forward to Congress, etc, and the only reason it was not passed into law is that the Democrats felt it did not go far enough… Politics being what it is, the Republicans eventually dropped it as a “stale” policy… Having personal concerns about social equity in Western Societies, and seeing the US as now representing a role-model in which I would not like to see my own country continue to follow in this regard, I find it rather surreal to consider how the world might now be had this policy been enacted! So I have no trouble in believing that Republicans have gone further to the right…

On Trump, I made a prediction to some friends over Christmas which freaked them out – not just because it concerned them, but because they quickly realised it is actually quite plausible given the character of the man… I expect that if Trump is re-elected, within 12 to 18 months he will begin to feel out the public for support for over-turning the 22nd amendment limiting US presidents to 2 terms… I know everybody will say there’s no chance, but I don’t think anyone would suggest it is against his character to try (just one example, look at how he has brought his own family with him to Washington DC)… And China issues, especially with Xi extending his stay indefinitely, will likely be used as partial justification… In the last 3 years we’ve all learned to not think that anything is beyond the realms of possibility for this president… (Note, I do agree with him pushing back on China, and I give him a great deal of kudos for breaking through the group think surrounding their emergence as a Global power as Western elites, especially in business and politics, lined up for the short term gains from it, but I firmly believe that future US Presidents will continue what his administration has commenced)…

Having now read this, tell me you don’t think it’s likely crossed his mind… and lingered…

I agree entirely that to the extent that it is a risk to consider it is certainly a tail risk/black swan and should not be factored into considerations, except in one specific way… the simplistic market jibber jabber that goes on daily has been saying for months that Trump wants/needs a deal with the Chinese… I see incentives to Trump in continuing to play hardball with the Chinese (and that’s certainly starting to be more recognised even this last week)… This thesis is just one potential end game to which Trump may or may not be aiming (or may potentially become his aim)…

Comment on 25 November 2016 at “Make No Mistake, Rising Bond Yields are Bad for Investors“

Yes things have gotten interesting. In my opinion it all remains to be seen whether the Trump presidency is akin to the Whitlam prime ministership – in terms of policy urgency if not policy intent – or he turns out to be rather more “pragmatic” (as the herd currently like to call it).

It’s interesting how the world turns. I had been slowly developing the view of artificial stability in markets for a prolonged period that was well articulated by Jeremy Grantham and Ben Inker in the GMO 3Q2016 Newsletter – and feel sure that a Clinton election would have continued the status quo for a good while longer.

But now we have completely black box in the form of Trump and we are presented with a matrix that runs from extreme policy urgency/radical policy initiatives right through to pragmatic policy urgency and initiatives (so not much deviation from the status quo). And if anybody pretends to have a good handle on where this presidency will go then one should promptly disregard all that they say.

Absolutely the unexpected election of Trump has thrown market psychology on its head, and has the capacity to kickstart a return to the cyclical boom bust (revert to mean) world that we have come to know and love over the last half century (Grantham reckons we have been spoilt with around half of all speculative bubbles from the last 400 years occurring in that period).

But given the remaining imbalances in the world – and especially public and private debt – and thus the need for central banks to continue with extraordinary policy accommodation (afterall the Fed Fund rate is still well below 1%), one has to consider that the likelihood that this is a false dawn is non-trivial and in fact is probably significant.

While I would not be surprised if the peak for bond prices has been seen, I would be equally unsurprised if there were very significant retracements in these recent moves for several years ahead…

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© Copyright Brett Edgerton 2019

This site encompasses economic, investment, financial, business and managerial analysis and life philosophy.

It is unapologetically challenging! 

If you do not take with a grain of salt some of what I say here then I have failed in my aim. I pride myself on being ahead of the curve and absolutely feel uncomfortable being a part of the herd, ie. part of the consensus, perhaps the one exception being when I am ready to take profits on an investment position.

I developed this site to fill a number of growing voids around the need for quality unconflicted opinion accessible at a reasonable cost, but not from a robot! 

In fact, this site is run on a new business model – you decide what the analysis is worth. If you read a piece of analysis which you feel has added value to your thought process then you decide yourself on what that value is – immediately and enduringly – and make a donation on my GoFundMe page.

Of course if down the track you realise that something that you have read that I have written has added value – such as something that you took with a grain of salt initially but you came to realise there was validity to it – you can return and donate when you reach that conclusion.

This model is essentially an “honesty system” and it reminds me of my family’s first watermelon stall (we own a sugarcane farm along the Bruce Highway in northern Queensland) which operated under the same principle. My older brother, always a sceptic, insisted that we collect the money via a slot in an old steel safe in which we placed 4 x 50kg tractor weights. (Dad of course made the point that the tractor weights were worth more than a few days of takings.) One morning in the first week, as we brought the watermelons to stock the stand, we noticed that the safe was standing on its edge. Somebody did well to even lift a side off the ground, but we failed to notice who around my small home town was walking with a sore back!

I prefer to work this way because it is entirely fair and democratic to the reader. Just like I was prepared to accept that some people won’t pay for a watermelon, I accept that some who will profit from reading these pages will not pay for it. But I also know that being optimistic about the goodness at the core of human nature has been the most profitable – in all of it’s senses – courses that can be taken in life.

I do not want subscribers with automatic renewals where other content providers hope payment will slip by unnoticed or for subscriber lethargy leading to cancellation after payment has been made one more time.

Moreover, not operating on a subscription basis releases me of any obligation to produce to deadline. I will write what I want when I want – when I feel passionate is when I write best. 

If you find value in what I have written, you reward me. Simple as that!

There are a few economic analysts – working privately or within investment banks – who charge several thousand of dollars annually for a subscription to their research, and I would also certainly appreciate gratis access as an “in-kind” contribution for my efforts.

In this age of click baiting, please be aware that there will never be advertising on these pages and I will not in any way attempt to determine what genre of writing brings in the greatest revenues.

Finally, there is a good reason why there are no contact details on these pages and there is no opportunity for another’s opinion to be stated here. If you wish to understand these reasons then you can read the “About” page to its conclusion.

Warm regards

Brett Edgerton

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© Copyright Brett Edgerton 2019

I am an ex-scientist and believe in full disclosure… so here is the full story…

Check out my Curriculum Vitae for my career as a scientist.

Check out my Investment History.

Firstly, why the “Edgo” in “MacroEdgo”. I come from the small agricultural town of Innisfail in northern Queensland where my Great Grandparents were pioneers after moving there when only 5 houses existed in the town. My Great Grandparents had 13 children, and my Grandparents alone then had 7 children who gave them 26 grandchildren of which I am the youngest (and many of my cousins have grandchildren). Very many of my extended family remain in Innisfail and most of us are referred to as “Edgo” often preceded by our first name – so in Innisfail I am often referred to as “Brett Edgo”. A voila…

I was a research scientist until the age of 34 when the biological clock caught up with my career aspirations. After returning to Australia from 2 highly regarded international research fellowships (in France with the CNRS, the equivalent of Australia’s CSIRO, and the Alexander von Humboldt Foundation in Germany) I was unable to find a way to continue my work or obtain secure employment, and having delayed starting a family to obtain that security, I “retired”from my career when my wife fell pregnant with our first child.

My accountant wife had far superior career security and earnings potential, and with home prices charging ahead (I will discuss this in one of my posts), it really was the only choice for me to assume the role of being the primary carer for our beautiful son who was joined shortly afterwards by another beautiful son.

I won’t pretend that the transition was easy – for 14 years I had poured my heart and soul into my research and I could only imagine a future where I never retired and was the dottery old professor still hanging around the University electron microscopy centre. I was devastated.

Making it worse was the knowledge that my work was important even if it was difficult to obtain funding. For instance, at the time when I retired I was almost certainly the only Australian that had worked with White Spot Virus which was the cause of the disease incursion in south east Queensland prawn farms in recent years. While in France in 2001 I obtained funding from Biosecurity Australia (my previous employer) to expose native Australian freshwater crayfish to the virus to determine their susceptibility.

Because I could not even contemplate another future for myself, I went “cold turkey” and retired immediately with the clicking of the “send” button of the email announcing it to my colleagues. And within a few weeks I was in the emergency room of a hospital having a breakdown, panicked at the thought of how I could ever deal with my loss.

That was a long time ago, and I now am entirely certain that ending my career was best for me and my family. I am extremely satisfied and happy with the course of my life. Becoming a stay at home Dad is my ultimate fulfillment and, while I left behind a body of research of which I will be forever proud, my primary role in raising two quality young men – worldly, rounded, confident and at ease within the world – is easily my most enduring contribution to mankind. 

But I still had a very active, analytical mind and I yearned to contribute to societal progression. 

I submitted my PhD thesis in October 1996 and earned my first professional income a few months later when I was very nearly 27 years of age. Even though my work was far more important to me than money – eg. when moving to France with my wife in 2001 our joint income fell by 80%! –  having foregone so much earning potential I instinctively knew that I needed to use well whatever funds my wife and I were able to accumulate. So I became a voracious reader of financial and investment literature as well as Business media. Thus began a long and enduring passion.

I was raised on a sugarcane farm, which was originally owned by my Great Grandfather, and my parents had long struggled with meeting debt obligations taken on to clear additional land during (what turned out to be the end of) the 1970’s resources boom. My father always regretted listening to industry and Government forecasters who encouraged those that had capacity to expand to do so as they forecasted sugar prices to remain high for the foreseeable future.

From this I instinctively understood that I needed to develop a strong knowledge of markets and economics to insulate myself from “salespeople” peddling agendas which are not necessarily in my best interest. I realised that it is not sufficient to plead ignorance and blame others for my decisions – if I was going to take on risk then I was going to be informed and take responsibility for my successes and failures.

On returning to Australia in 2003 Brisbane was in the grips of the first leg of the house price run up as the housing bubble spread from the larger southern centres. I will go into greater detail in a post but suffice to say that by 2007 I was ready to turn my market analytical talents to providing an alternate opinion to the property-conflicted mainstream media.

In 2007 I launched my website “Homes4Aussies” shortly before I shirt-fronted a newly installed PM Rudd at a Community Cabinet meeting in northern Brisbane (see here). Even more than my personal early glimpse at Rudd’s now famous temper, I remember the meeting for being taunted at arm’s length by Treasurer Wayne Swann. And I honestly shook all the way home as I congratulated myself for showing such admirable restraint while wondering how it would have played out in the press if a guy who had had his rent raised by 30% in one year while saving for a home deposit while property investors pushed prices to surge higher, with a second child on the way, while recovering from a breakdown after finishing an accomplished career in scientific research due to lack of opportunity in this country, took a swing at the Treasurer after he taunted him with “you’re dreaming if you think negative gearing will ever be ended!”

I drove traffic to my website by blogging widely on mainstream media and listing as my location my website (I had not seen anybody do that previously).

I wanted to play a role in public policy debate. But most of all I wanted to show particularly younger Australians that there were alternate views to the ones that they were being bombarded with in the mainstream media. I wanted to challenge these so that fellow Australians might stop to think twice before committing to a future of debt repayment for an asset that they were being told only ever went up in price and where they could not lose. For example, I blogged against and attempted to initiate a wager with the realestate agent author of a report which featured in all major Brisbane papers who forecasted that the median price of Brisbane houses would rise exponentially and would reach $1 Million soon after 2015.

I was also invited to participate in several online debates.

And I proudly walked with Steve Keen on his first day out of Canberra after losing his infamous bet which Rory (where are you these days?) Robertson ambushed him with the proposed wager at a public presentation.

A lot of things happened around those times. Such is the passion around housing investment that I received a lot of threatening email which, on reading, my family would wonder why I persisted with my efforts. On this site I have placed as much of my work from that time as possible, but unfortunately I lost quite a lot when my computer was hacked. I was tight-lipped about having been hacked for a few weeks but within a couple of hours of me mentioning it in an email to Tony Richards of the RBA I received a phone call from my bank saying that my credit card had been cancelled due to suspicious activity which had just occurred. I accept that it could be coincidence but I think it highly likely that I was being surveilled (by someone) at the time.

I became quite active on a blogsite named “Bubblepedia” set up by Sydney anaesthetist Daniel Cox and I think it is fair to say that I was a key contributor and my involvement was a major reason for it’s growth in popularity. In the midst of widespread group think around housing I found it helpful to “hang out” with like-minded individuals often in similar situations. I have always been careful not to provide advice but I was keen to provide my opinion on factors surrounding the housing market and the purchase decision.

While active on Bubblepedia I led the development of flyer which was available to print and deliver into mailboxes, and donations received funded the printing and delivery of the flyer in the electorates of PM Rudd and Treasurer Swann.

In late 2011 I bowed out from blogging on Bubblepedia as I had been hard at it for 4 years and there were some quality contributors entering the space who I felt could do a better job than myself. Three of these went on to form MacroBusiness. And by this time I had bought a family home which required work and I was happily getting on with that.

I left the group saying that I wanted to write a book around the issues of the home purchase decision process. But I was never committed enough to sit down and write it. In many ways this site will pick up on that desire, although housing will only be a minor focus, in a more progressive manner than writing a large treatise in one hit!
After Bubblepedia I continued blogging occasionally on MacroBusiness, and in the early days had a couple of Guest Posts.

However, in 2017 I pulled my support for MacroBusiness due to concerns over the way that they are prosecuting their arguments around immigration. As I explained to Leith Van Onselin when he called to discuss my withdrawal of support, I had become increasingly concerned with their emotional language, and the final straw was Leith’s use of the xenophobic terminology “white flight” in a post. Leith immediately admitted it was a mistake to use the term and edited the post upon my objection, but I explained that it is an error that should not have been made. The response by other participants to my objection in the comments section below his post really confirmed my greatest concern that the site is acting as a ecosphere for people who have ramped up and seek to further ramp up xenophobic emotions – Leith informed me that they do not moderate comments, which in itself is problematic in my view.

I read on occasions comments about the choice of Homes4Aussies as the name for my website. It should be noted that one’s definition of who is an “Aussie” is very much subjective, and all should be assured that mine is a very broad interpretation and I have always been very clear about that. In fact, my aim was to help all people seeking housing in Australia whether they be temporary residents right through to peoples who have resided in our geographical area for 40,000 years.

I never cease to be amazed by how quickly us human beings connect. If you need any assurance of that just participate in a student exchange and see how many children and adults are crying a the end of the week! (We have recently participated in two exchange programs and our guests leaving was sorrowful for our family.)

Anybody who respects us and our country enough to wish to spend some of their life here – even if just a year on a working holiday – almost certainly considers themselves partly “Aussie”, and I certainly see them as just that.

I vividly remember singing with moist eyes, arms around each other, “We are Australian” with an Indian-Aussie guy at an entertainment night during a month-long workshop in China. I love multicultural Australia and it is what I am most proud about this country. And being overseas, amongst intellectual and worldly fellow Humboldt Fellowship recipients, answering questions about the children overboard election was one of my most embarrassing and disappointing moments as an Aussie!

As I said in my parting comment on MacroBusiness, human beings are at their best when they seek to unite not divide.

Most recently I have only blogged infrequently on various investment websites and most frequently on Roger Montgomery’s. I have re-posted on this site some of my more recent comments as they remain topical and are themes that I will surely return to in the weeks and months ahead.

During my early blogging activities I seriously entertained the idea of challenging PM Rudd in the political arena by running against him in his electorate as an independent, admittedly not with any fantasy of actually beating him but with the aim to draw attention to the housing affordability issue. 

However, after a few years of intense blogging I realised that I did not possess the mental health capacity to be so actively and publicly engaged in public debate, and this was also a factor in me stepping back from blogging. 

As an early teenager I was exposed to chronic stress and conflict, and on one occasion I had to to bravely stepup to prevent a seriously violent escalation which could have had catastrophic outcomes.

These times left scars on my mental health, and in part precipitated my breakdown later in life when I was confronted by extreme stress and loss. As a consequence, while being reasonably adept at conflict and heated debate, I know that prolonged conflict – such as protracted debating – takes a toll on my mental health and causes me great anxiety.

While I wish to have my views heard on these critical issues, I need to do so in way which protects my health.

That is why, unlike on my first website and through my blogging activities on other sites, and although I respect others’ rights to have their voice heard, there is no opportunity on this site for others to state their supportive or contradictory views, there are no contact details to voice disagreement directly to me, and I aim to not publicly respond to any comments about me or this site.

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© Copyright Brett Edgerton 2019