Wry & Dry

Lazy Australian companies

Wry & Dry is getting sick of the whingeing.

Not from the Greens, but from Australian companies and bankers wanting even lower interest rates and/ or more fiscal stimulus (i.e. the government to spend more money).

The latest is Macquarie Bank, wanting the RBA cash rate to go to 1% and more of we-the-taxpayers-money to be spent.  To 'stimulate' the economy.

Good grief.

Why do Australian companies have to rely on the government or the RBA?

Well, the answer is that the larger ones are mostly incompetently directed and managed.  The facts speak for themselves.  W&D reproduces a chart he used in early April.

10 years 2Generally speaking, these companies have wasted their cash on excess dividends and have not invested for the future.  The share-price performance is woeful.

W&D can hear some readers saying "but the ten years takes in the GFC'.  Well, yes, so it does.  It also takes in the recovery since then.

But W&D is nothing if not fair, so will go back 15 years and include the heady days before the GFC.

15 years 2

This is disgraceful  The 15 year data is just shocking.  And over this time Australia did not have a recession.

Most of these companies are lazy.  Their boards are lazy and their senior management is lazy.  Overpaid and under-performing.  

And because of that they want the government to do the heavy lifting for them.

Good grief, get off your backsides and take some risk!  Invest, develop, explore.  Interest rates are low enough.  The economy is stable enough.  The institutions are stable.  The world is not going to collapse.

Get on with it. 

By the way, this shows the folly of index investing.  The All Ords has returned 1.5% p.a. for the last 15 years.  Sure dividends have boosted this return, but only to a hardly acceptable figure of 4.7% p.a.  

By any measure this is woeful.