#dietcoke

ESG Blacklisted portfolio

ESG (Environment, Social Responsibility & Governance) blacklisted stocks. We all know deep in our hearts that vices are far more fun than virtues. Real Coke tastes better than Diet Coke. Full cream is better than skim. McDonald’s fries are tastier than mashed potato. CM made this point in yesterday’s piece on the irresponsibility of socially responsible investing for building a retirement nest-egg given the long term underperformance.

When all of this politically correct ESG investing meets a recession, these oversold anti-ESG darlings, many with gobs of free cash will look like total bargains. Suffice to say in a downturn, vices tend to be what people resort to.

All CM cares about is the G in ESG. Governance is a must for investing. E & S are merely subjective views which don’t automatically convert to shareholder value. Good governance goes without saying.

So perish the thought that CEOs, like Harvey Norman’s Katie Page are being attacked by the likes of Ownership Matters which thinks putting in a shareholder activist who has failed 49 times out of 49 to be appointed to ASX listed boards is a better bet? As Janet Albrechtsen of The Australian wrote,

A copy of the report obtained by The Australian reveals Ownership Matters has recommended that Stephen Mayne be elected to the board of the retailer, even though the 50-year-old has no corporate experience in retail or property, no corporate board experience and no corporate management experience…Harvey Norman has a market capitalisation of $5.2bn, and shares in the retailer have gained more than 32 per cent over the past year, outperforming the 16.4 per cent gain in the benchmark S&P/ASX 200 over the same period…The advice sent out on Monday has baffled Ms Page’s husband, the business’s billionaire co-founder Gerry Harvey, who remains its largest shareholder, retaining ­direct ownership of almost a third of the company. “I have been on a public company board as chairman since 1972, and I have never seen anything as bizarre as the fact that the best ­retail executive in Australia is to be replaced by a ratbag called ­Stephen Mayne who has been a proven failure … every time he’s run for a board seat,” Harvey said.

 

It’s hard being perfect

Obviously, a very daft thing to say. Self-appraisal is so vacuous. Then again, Trump is the master of lighting fires for the media to chase. True to form they’ll wail for days over this comment questioning his intelligence to deflect from impeachment and demands for his tax returns. Yet is this quote remotely surprising?

According to Trump, he’s said he is a

“stable genius,”

that “no one respects women more than I do”, 

“I will build a great wall–and nobody builds walls better than me, believe me–and I’ll build them very inexpensively. I will build a great, great wall on our southern border, and I will make Mexico pay for that wall. Mark my words”

“I’ve said if Ivanka weren’t my daughter, perhaps I’d be dating her.”

“I will be the greatest jobs president that God ever created.”

“Ariana Huffington is unattractive both inside and out. I fully understand why her former husband left her for a man–he made a good decision.”

“When Mexico sends its people, they’re not sending the best. They’re not sending you, they’re sending people that have lots of problems and they’re bringing those problems. They’re bringing drugs, they’re bringing crime. They’re rapists and some, I assume, are good people, but I speak to border guards and they’re telling us what we’re getting.”

“My fingers are long and beautiful, as, it has been well documented, are various other parts of my body.”

“I Have never seen a thin person drinking Diet Coke.”

“I think the only difference between me and the other candidates is that I’m more honest and my women are more beautiful.”

“I’ve now been in 57 states — I think one left to go.”

“The reforms we seek would bring greater competition, choice, savings and inefficiencies to our health care system.”

N.B. the last two were Obama.

Nancy Pelosi wasn’t much better – “We have to pass the bill for you to find out what’s in it.”

Max Headroom – “Hard Brexit vote is between Coke Classic May, Diet Coke Farron & Coke Zero Corbyn”

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Be honest with yourself. If you were after the best taste (casting diet aside) would you have real Coke over Diet-Coke or Coke Zero? Full fat milk in your latte or soy milk? 34% fat King Island Brie cheese or a block of no-brand low fat supermarket cheddar? Wine from a bottle or a cask? The answers are obvious. The real thing always tastes better. Even in the adverts, Coke used to put girls eating fatty foods, seemingly balancing out their decadent junk food cravings with Diet Coke because it was “just one calorie” conveniently forgetting all the other unhealthy chemicals that went into the can to make it so. We know better and is it any wonder? Who could forget in the 1980s when Coke decided to change the formula of real Coke causing massive hoarding of the original, with a whole secondary market treating the scarce commodity like precious metals. Such was the backlash, Coke had to restore the old faithful. In their hearts people want the real thing. Same for Brexit.

The UK Labour Party has been espousing Coke Zero under Corbyn when constituents are clearly calling out for the real thing. The recent local elections saw a total drubbing. While local elections aren’t always a read across for national elections, the results are so telling that Theresa May, as much as she is inconveniencing the voters for the third time in such a short period, has clearly got the mood of the Brits for hard Brexit. I listened to London Mayor Saddiq Khan rabbit on about why Corbyn is the better option for the UK in the face of being so trashed in the local elections. He went so far as to say how evil Theresa May was to call an election to further her majority. Err, Mayor Khan, perhaps if the opposition were a viable alternative she would never have done so. Even The Guardian is arguing that the Lib Dems are the only hope for a soft Brexit. Tim Farron has no chance. Here are the results of the local elections.

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Labour lost its status as the largest party in Cumbria and its heartlands Blaenau Gwent, Bridgend and Merthyr Tydfil – good blue collar coal mining areas. Labour also lost Glasgow, the first time since 1980.

Here is how England looked:

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Here is how Scotland fared (mostly voted Remain):

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Here is how the Welsh voted (mostly voted for Brexit):

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Despite all of the pre & post-Brexit scaremongering of how the UK would slide into the abyss, the economy has done anything but reflect that. Juncker is now so unleashed in his bullying over Brexit negotiations that Merkel and Tusk have had to rein him in. The plucky Brit is probably the last person to cave into oppression. They love the idea of doing the opposite of what people dictate. We have cautionary tales. Who could forget when Obama told them that Brexit was a bad idea? Now we have Juncker and Verhofstadt hiking the Brexit bill like gangsters demanding a ransom.

The Brits are speaking – “Give us Hard Brexit. We don’t want soft compromises. We voted out so let’s make sure we fight for the best deal.”

Or perhaps as Max Headroom, the man of the moment of the New Coke once said, “Say, would someone mind checking the ratings? I seem to have an audience of two.”

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