Monday, March 14, 2011

Where do you sit on the nuclear debate?

Two very contrasting views of the same thing. The state of the nuclear facility in Fukushima, it's a tribute to great engineering or it's a disaster just about to happen.

http://www.bbc.co.uk/news/world-asia-pacific-12733393 the BBC is running with the scare story.

http://www.theregister.co.uk/2011/03/14/fukushiima_analysis/ The Register's analysis is that the facility has performed magnificently, massively exceeding its design specs.

I have to say I am in the latter camp, an 8.9 richter earthquake followed by a massive tsunami that takes out the power - and still everything is under control.

Add to that the incredible performance of Japanese buildings that didn't fall down and you see that it is possible to build this stuff safely, if you apply scientific principles and good technology.

Look what my son took on holiday with him



Unbelievably I found them in his bag when we got to our hotel. They were in his hand luggage and were not picked up at Gatwick, even though his bag was x-ray'ed.

They aren't live ammo, but they are real (not plastic).

I was petrified bringing them back, but we managed that as well.

Thursday, March 10, 2011

Star stuff

Not momentous or important, but I love the fact that we are all made of atoms that were created inside stars. We are all made of star stuff that has been ejected from stars in supernova events. This really grounds us in the immensity of the universe, and underpins why cosmology is so important, it is our history and heritage, it's what we are.

Barclays, bonuses and performance

This is my take on the bankers pay debate, especially as it applies to Barclays Bank. I have to be open here and admit that I bank with Barclays and so have an interest (probably negative though).

So this week we have had two bits of relevant news in my opinion. Firstly that, compared £100 invested in Barclays 5 years ago would now be worth £53 even with all of the dividends reinvested, this compares to the average of the FTSE which would have been worth £126. That is a crap return, not just a bit crap but seriously crap. This is a business that seriously underporforms, not a company that you would invest in really.

Secondly, Barclays has been paying (and still does) what most of us would consider to be obscene bonuses. This year the top 5 management team shared over £100 million, and remember they aren't likely to be the top earner, some traders will earn a lot more. And this in a company that is seriously under performing the FTSE.

To any rational person the two things are irreconcilable, how can a business that underpoerforms in such a manner (and one that had to be bailed out by a middle eastern monarchy to survive the crash) pay such high bonuses, and pay in general, why don't the shareholders vote with their feet and sell their shares, voting against the bad management of Barclays?

so why does this happen, and why is it important?

Well, you have to remember that most of us are dependent on institutional investors for our financial health, whether it is our pension fund or any investments you have some fund manager is investing your money on your behalf, and they have in probability
Ity been holding Barclays under performing shares.

Why? Well to understand that you have to realise that fund managers are not very good at their jobs, and few of any manage to do better than picking shares at random, so what they try and do is track the index (FTSE) this means that they are as good as everyone else. And the way you do that is by holding a portfolio that mirrors the constituents of the index. As a result if you are in the FTSE your shares are valued for being in the index, more than their performance. It also helps if,like Barclays, you provide funds for fund managers etc.

So who lost money over the last few years, that'll be the pension funds and investment funds - supporting the banks.

So it goes.