Check out the trailer for the Unconvention and get some insight from Jack Delosa, Andrew Morello and +Ruslan Kogan about starting and growing a business!
MARKETS
Written on 16 March 2013 by Kris Sayce
Energy: Dance Dance Revolution
This one’s a little left field compared to how we usually
cover energy stories. Nonetheless it makes a fascinating case for alternative
ways of creating energy.
First, let’s get a basic understanding of Piezoelectricity.
If you’re wondering what the heck that is, in short, it’s the energy created by
stress applied to certain solid materials…it’s electricity from pressure
(vibrations).
But if we (Sam) may now digress ever so slightly. The Dutch
love a good nightclub (can vouch for this as our family heritage is Dutch). And
what does one do when typically at a nightclub? Dance.
Believe it or not, some creative Dutch designers from Studio
Roosegaarde have pieced together dancing at a nightclub and piezoelectricity!
They call it the sustainable dance floor.
The idea behind it is the dance floor vibrates from the
dancing, which in turn creates energy to power the lighting and stage
equipment. We think harnessing the power of ‘the boogie’ and the ‘Gangnam
Style’ would be the best ways to really get the power pumping.
What this really means though is that everywhere we
move we create vibrations and energy. Vibrations and energy when harnessed in
the right way can lead to a vast array of power gains and efficiencies. This
type of experimental work also shows us that there are people from all
different aspects of industry looking at ways of solving some of the world’s
big problems.
Maybe the future isn’t about just one way of solving our
energy and power problems. But hundreds if not thousands of different ways
being used together to be more sustainable and energy efficient.
Gold: Will Gold or Shares Do Best in 2013?
What has gold done since we wrote to you in last week’s Money
Weekend? Er, not much.
And quite frankly we’re not convinced it will do much in the
near future. Whether that’s days, weeks or months we can’t say. But what we can
say is that it’s surely testing the patience of ‘fair weather’ gold
investors, i.e. those investors who only bought gold because they expected to
make quick gains.
The fate of the gold price has even sparked some discussion
around the office. As you’ve probably read over the past couple of weeks, your
editor is concerned that gold is behaving just like any other electronically
traded asset.
What we mean by that is the vast majority of people who buy
and sell the gold exchange traded funds (ETF’s) have no interest in ever taking
physical delivery of the gold that underlies the ETF.
Heck, most of them probably aren’t even sound money
advocates. Just in the same way that many investors buy and sell shares without
really caring about what the company does.
But my old pal, Greg Canavan (editor of Sound
Money.Sound Investments) isn’t so sure. He says there are still plenty of
people buying gold for wealth preservation…a kind of insurance. In his latest
weekly update he showed two charts comparing the performance of the US S&P
500 and the gold price. We’ve reproduced them below:
S&P 500
Source:
StockCharts.com
US Dollar Gold Price
Source:
StockCharts.com
Greg says about these charts:
‘The world’s largest stock market index has gone nowhere over the past 13 years. And everyone’s talking about a new bull market?‘In contrast…[the 20 year chart of gold]…looks much more like a bull market (in progress) to me. Yet the perception is that the gold bull market is over and a new one is beginning in equities. That’s market logic and crowd think for you!’
We like Greg’s point. But we also think that markets behave
irrationally at times (some would argue they’re always irrational). It’s for
that reason we believe stocks will do better than gold this year, next year,
and possibly into 2015.
Of course, we could be wrong. And we’re not about to sell
any of our gold in order to buy stocks. But we are using new cash flows in
order to increase our share exposure – something we’ve advised investors do for
more than a year.
That said, we’re keeping a close eye on the market for signs
of a sell-off. Our in-house technical trader, Murray Dawes, says the market is
approaching a key technical level right now that could have a big
impact on the market’s direction for the rest of this year.
Technology: Science, Technology and Innovation at 345kph
We thought that as we hear the sound of 22, 2.4 Litre V8′s humming
around near the office at an astonishing 18,000RPM we should give credit to the
technical innovation that Formula OneTM (F1) has given us over the years.
Ron Dennis, Executive Chairman of the McLaren Group sums it
up well:
‘Intrinsically, at its heart, it (Formula OneTM) is about technology and scientific innovation carried out under the extreme of time pressures, with a relentless fortnightly assessment of progress and performance.’
No matter where you look it’s pretty hard to find industry
that brings together aerodynamicists, quantum mechanics, computer scientists,
engineers, fluid dynamicists, fabricators, sports scientists and race car
drivers.
So it’s no surprise that in an environment like this (‘an
Intersection’ as Frans Johansson describes inThe Medici Effect) innovative
and cutting edge technologies are born.
To outline a couple of the F1 breakthroughs you may have
heard of:
Carbon fibre. In its early days companies such as
Rolls-Royce used carbon fibre to create parts and components for their engines.
But the first carbon fibre monocoque (structural skin) was raced in
1981 by John Watson in the McLaren MP4/1. This was the first time a monocoque
had been constructed from carbon fibre. To see the level of safety this gave
drivers, have a look at John’s demonstration at Monza. Because of F1′s advances
in the use of carbon fibre we now find it in everyday items like cars,
bikes, prosthetics, planes, golf clubs and furniture.
‘Green’ Technologies. Surprisingly to some, more recent
breakthroughs have been in engine and fuel efficiency. Next year the 2014 season
will require all F1 engines be 1.6 litre (less capacity than a Toyota Corolla)
V6′s. This is a far cry from 3 litre V10′s in 2005. Not only
that, but the Federation Internationale de l’Automobile (FIA) has said along
with the Kinetic Energy Recovery Systems(introduced in 2008) teams
may now use pioneering Heat Energy Recovery Systems. These together will be a
major factor in how the engine produces its total power. Without these ‘green’
systems, team effectively are running with their feet tied together.
So next time someone brings up the subject of how horrible
F1 is for the world (these conversations usually pop up around Melbourne Grand
Prix time) use those two simple examples. You might find yourself in the midst
of a healthy debate on the benefit that F1 technology brings to us.
Further to this if you happen to switch over the TV to watch
the race on the weekend, or are trackside enjoying it all first hand, have a
look at the pit lane activity. Like a swarm of bees, all those scientist and
engineers buzzing about are the true innovators of some of the modern
technologies we often take for granted.
Health: Why Something So Bad Could Be Something So Good
There’s no doubt that cigarettes are bad for your health. Even pack a day smokers should agree
on that. So what if we told you that there’s actually something good about a
cigarette? (We aren’t condoning smoking cigarettes, and neither does the rest
of this article provide sufficient reason to keep puffing away, or start. We
hope you get that distinction.)
Over the last few years a number of studies (‘Smoking, nicotine and Parkinson’s disease’, by Maryka
Quick at the Parkinson’s Institute is one example) have repeatedly found that
smoking over a period of time significantly lowers the risk of developing
Parkinson’s disease (PD). Compared with those who have never smoked, or smoked
for shorter periods of time, the results are conclusive.
So is there something in a cigarette that provides
the answer to slowing down, or even reducing the effect of PD in those
diagnosed?
Scientists don’t know the answer to that yet. But thanks to
the Michael J. Fox Foundation (MJFF), researchers at The Philipps University
and University of Rochester Medical Center are having a really good crack at
finding out. The suspicion is nicotine is the key to the PD problem. So with
the backing of the MJFF a new clinical trial has been set up in the US and
Germany. You can check out the podcast about it here.
What the trial is planning to do is test the impact of a
simple nicotine patch on those in the early stages of PD. We won’t know the
results of the trial for 12 months, but seeing as there is no current drug to
hinder or decrease the impact of PD this is one to keep an eye on.
Mining: Welcome the New Breed of Tech Entrepreneurs
[Ed note: The following is adapted from the latest weekly
update sent to Australian Small-Cap Investigator subscribers.]
Today we find ourselves at the beginning of another Space
Race. But this time round it’s not governments, it’s private industry. It’s the
commercialisation of space.
The real financial opportunities they see are chasing the
abundance of resources and mineral deposits contained in the asteroids flying
around the planet.
To give you an idea of exactly how big a resource is out
there, in 1997 there were 33,000 known asteroids orbiting the sun within reach
of earth. Today it’s over 610,000, as astronomers find more of these flying
rocks.
Why does this matter? For a start, the team from Planetary
Resources, where John S. Lewis, Professor of Planetary Science at the
University of Arizona, has been consulting, claim one asteroid (only a few
hundred metres wide) could contain more than 1.5 times the known world-reserves
of the platinum group of metals.
Still it’s seen as the realms of science fiction. Some
doubters say it’s crazy to think we could mine an asteroid for its resources.
The doubters don’t see an economically viable reason to do it at all and they
say the cost outweighs the benefit.
For instance, if a solid gold asteroid the size of the
Melbourne Cricket Ground passed by the earth, even the possibility of someone
‘mining’ this gold would have a drastic impact on the gold price. This could
make the prospect of mining the Asteroid’s gold a marginal business and
therefore not worthwhile.
Now, this may still sound a bit ‘Star Trek’, but history
confirms the speed with which crazy ideas become reality. The dedication is
there and there are a number of competing firms. They all want to be the first
to make space a commercial reality.
And it’s not just space. The idea of deep-sea mining is
starting to gain traction too, and will probably happen before ‘asteroid mining’.
But anyway, what this means is you can expect the new Space
Race to move just as quickly as the last. In the years ahead you’ll likely see
space tourism lead to hotels in space (one company is already working on this)
and from mining asteroids to mining and populating Mars.
Sound crazy? Maybe. But as we said above, sometimes the
craziest ideas become the most successful.
By +Kris Sayce and Sam Volkering via +Money Morning Australia
REAL ESTATE
More houses getting
sold in 2013 (Please note your editor would not buy an investment property in Victoria or South Australia for that matter during the current market cycle)
MELBOURNE real estate has turned over more than $6 billion
since January 1.
According to the Real Estate Institute of Victoria, total
sales from January 1 to March 13 have been valued at $6.1 billion - $900
million higher than the $5.2 billion sold in the same period last year.
This equates to an extra continue reading...
South Australia's top
30 property bargains revealed
THE state's top 30 property bargains have been revealed and
your future dream home might just be going for a song.
Real estate analyst SQM Research has identified the top 30
most heavily reduced South Australian metropolitan and hills properties now on
the market.
The research shows that continue reading...
Cash flows into
global property market
The amount of money moving into the higher-yielding global
property market could reach $1 trillion for the first time since early 2007,
before the financial crisis engulfed the world.
The global property investment market experienced a modest 6
per cent rise in activity during 2012 with volumes reaching continue reading...
SME
Support to young
entrepreneurs is out of touch (Though not an Australian article, this is relevant to all young entrepreneurs)
Outdated perceptions that entrepreneurs are ‘isolated,
highly driven, risk taking mavericks’ are putting off some young people from
starting up their own businesses, according to a report published today by the
RSA.
Pointing to figures released by the Global Entrepreneurship
Monitor, Disrupt Inc found that whilst 9.5 per cent of 18-24 year
olds say they intend to start a business, only 3.6 per cent are actually doing
so.
The report, supported by the Royal Bank of Scotland Group,
concluded that whilst ‘valiant steps’ have been taken to support young people
(via schemes such as StartUp Britain and Business in You), the language used by
the enterprise support industry alienates some young people and puts them off
starting a business. Read more...
Gillard's penalty
rate promise a "kick in the guts" to SMEs: Industry leaders
Irate business groups across Australia have slammed Prime
Minister Julia Gillard's announcement yesterday confirming penalty rates are
here to stay.
Gillard said the Labor Party will legislate to protect
penalty rates for weekend, overtime and public holiday work. The push comes as
her public support has begun to slip ahead of September's election.
Penalty rates are a big issue for small business, with
Fair Work holding reviews into penalty rates in the retail and hospitality
industries. Read more...
Australian SMEs not
using the cloud, or are they?
Australian small business owners who say they are not
currently using cloud computing may, in fact, be doing just that, according to
a new study which indicates that SMEs might just be lacking a real
understanding of cloud technology.
The study, conducted by small business financial management
solutions provider and publisher of QuickBooks, Intuit, reveals that continue reading...
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