Economic Rigor

One of the best investments I have made has been with WebJet. Bought them when they were around $3 and then sold a few at $14. Not a bad return at all when you get a four bagger! Gloss has come off them a little over the last few months, so wondering if I should rebalance my holdings in this segment. So I went to my trusty metric, the comparative advantage index and compared Webjet, Flight Centre, Helloworld and Corporate Travel Management. over the last 3 years. And we get the following So it looks like Helloworld has been travelling the best with around 144% outperformance over the ASX over 3 years. (though their profit disappointed a couple of days ago), Webjet still outperforming the ASX200 with 109% over 3 years and the dark horse of Corporate Travel Management outperforming as well at 99% (and its up around 11% today). Forget Flight Centre, at 6% over 3 years its Gooooooooooooonnnnnnnnnnn. Might need to look more at CTD and...

Running an eye over the Afterpay stock recently. Share price has been on a monster in 2018 (up close to 100%) and so was curious about the fuss. Worth investing in? Hmm.. First, the business. Becoming a company that provides credit risk management services to companies for asset and cash poor Australian millennials seems not the most appealing of choices to be honest. But then, I am just a poor old Gen Xer after all. And it is still pretty much an Australian business. Afterpay Australia has 86% of the Accounts receivable of the entire business. Couple of things smell a bit off to me, based on info in the 2018 Annual report. 1. The company is primarily an Accounts Receivable business (around 77% by Revenue). They are paying the bills of their customer up front and then trying to recoup that expense. So the impairment of that Accounts receivable asset is key to the profitability of the business. At the moment, the total impairment is around 5.9%. When cr...

And so it ends with a wimper. A draw when clearly India was on top. In batting, all the top players were Indian except Harris who clearly seems to be quality. Where has he been hiding. CA Pujara (INDIA) zscore 3.076144162 RR Pant (INDIA) zscore  2.389086583 MS Harris (AUS) zscore  0.812895665 RA Jadeja (India) zscore 0.812895665 MA Agarwal (India) zscore  0.732065362 On the crap batting list, Marsh again appears for the locals. Needs to join his brother I think KL Rahul (INDIA) -0.642049797 SE Marsh (AUS)  -0.662257373 TD Paine (AUS)  -0.7228801 NM Lyon (AUS)  -0.82391798 JJ Bumrah (INDIA) -0.82391798 Mohammed Shami (INDIA) -0.82391798 On the bowling front, for once Bumrah had a quiet one while the new kid Yadav had a blinder. Kuldeep Yadav  (INDIA) 2.240593664 Mohammed Shami (INDIA) 1.233824617 RA Jadeja  (INDIA) 0.788603642 On the shit li...

A bit late on the recaps for this. Been away for Christmas India with the win this time, again on the dual quality of Pujara with the bat, Bumrah with the bowl and the addition of Agarwal who is a bit of a find. Agarwal, statistically had the best z-score with the bat. Here is the list of quality z-scores MA Agarwal (India)   Zscore: 2.19 CA Pujara (INDIA)  Zscore: 1.85 V Kohli (INDIA)  Zscore: 1.16 PJ Cummins (AUS) Zscore: 1.11 RR Pant (INDIA)  Zscore: 0.88 RG Sharma (India) Zscore:0.77 SE Marsh (AUS) Zscore: 0.62 Pretty much says it all. When your best bat is a bowler, you are in all sorts of trouble. On the shit list, we have the usual Finch, who is clearly not TEST calibre, and the regrettable Marsh brother who should be finally banished to the shield. GH Vihari (INDIA)   Zscore: -0.578116636 MR Marsh (AUS)   Zscore: -0.635278731 AJ Finch (AUS)   Zscore: -0.863927108 RA Jadeja (India)   Zscore: -0.9210...

Well, the results of the second test were pretty convincing....Australia wins. And once again I will go to my old friend the z-score to try and explain why this is... It appears in the batting, you either played well or had a shocker. Only 3 players had standard ok games (z-scores of between 0.5 and -0.5)...Marsh, Pujara and Vihari In Batting, quality players (z-score of > 0.5 SD) V Kohli (INDIA) - z-score of 2.58 MS Harris (AUS) - z-score of 1.26 AM Rahane (INDIA) - z-score of  1.02 TM Head (AUS) - z-score of 0.92 UT Khawaja (AUS) - z-score of  0.92 TD Paine (AUS) - z-score of 0.86 AJ Finch (AUS) - z-score of 0.86 RR Pant (INDIA) - z-score of 0.63 Kohli showed his class this game, and again Rahane was effective. For Australia, most of the top 6 got runs. The dodgy players (z-score of Mohammed Shami (INDIA) - z-score of -1.12 I Sharma (INDIA) - z-score of -1.09 KL Rahul (INDIA) - z-score of -1.07 JJ Bumrah (INDIA) -...

ATO published their annual tax data for Australian companies earning over 100 Million in Revenue, and again, it is very eye opening in regards to the IT Industry in Australia. I did this analysis back in 2015, but decided to do it again in 2018 to see how it has changed. And change it has. About 10% of the revenue value appears to have been wiped off the industry. In 2013/14, the combined Managed Services biggies appeared to pull in $15.7 billion. Now it is only $14.2 billion. That's destruction of $1.5 billion out of the industry. Huge. And its easy to see who the biggest losers are. IBM and HP. IBM Australia went from having revenues of $4.6 billion in 2013/2014 to $3.3 billion in 2016/2017. A drop of 28% over 3 years. HP Australia was worse though...revenues of $3.1 billion in 2013/2014 down to 1.6 billion in 2016/2017. A drop of 48%! And its interesting to see the various strategies being employed by those MS providers to survice. It appears Accenture and Data3 have p...

Well India takes first blood as I predicted. Played well. Australia stayed in it, but our top order looks dicey. Wanted to perform a statistical analysis about who played the best. So I turn to my trusty friend, the z-score (score-average/SD), to give me the good oil. On the batting, if I calculate the z-score on total runs...we only have 3 players who batted with a z-score of over 0.5 (which is my benchmark for quality play) CA Pujara: z-score of 3.1!!! TM Head - z-score of 1 AM Rahane - z-score of 0.93 On the poor performing side we have 5 players who had poor batting displays JR Hazlewood: z-score of -0.83 AJ Finch: z-score of -0.89 Mohammed Shami: z-score of -1.02 I Sharma: z-score of -1.07 JJ Bumrah: z-score of  -1.17 Finch had a shocker. Needs to do better than this as an opening batsman. The rest are bowlers so can be forgiven. On the bowling side, if I calculate the z-score on wickets/runs (i.e the inverse of average), we get the f...