Fifties nostalgia

After reading Bill Bryson’s book entitled “Thunderbolt Kid” about his boyhood experiences growing up in the USA, I was reminded of my own childhood experiences. I grew up in the picturesque small dairy farming town of Kyogle situated on the NSW side of the border with Queensland.
The back fence was all that separated our house from fields of grazing cattle and the river; an endless source of entertainment and excitement for me. I was scarcely ever indoors, coming in only to listen with bated breath to the daily radio broadcast of “The Search for the Golden Boomerang” and other popular radio serials broadcast then. Radio, books, comics, making sling shots, bows and arrows, climbing trees or exploring the river banks kept us actively interested. I can never recall feeling bored. In later life when I watched the same radio script on TV, I was sorely disappointed, actors and sets seemed surprisingly insipid and imprisoned on the tiny screen.

I loved the weekly visit to the movies. Afterwards we feasted on chips, smothered in salt and dripping with fat, wrapped up unceremoniously in old newspapers; pure mana from heaven.  When I returned home it was time to reenact the scenes, embellishing the story line to make it more exciting as I playing in the bush outside.

Supermarket shopping didn’t exist, so there was a constant stream of merchants and visitors to our house, the milkman at first light, filling your jug with fresh milk and cream, a baker carrying his basket under his arm of freshly baked bread exuding its enticing aroma, the postman’s shrill whistle, ice from an ice cart for your ice chest, an insurance man collecting the premiums and a salesperson selling encyclopedias.
Each week the faithful ‘Dunny man” had to carefully exchange your full dunny for an empty one which was an operation that required a combination of brute strength (as they were rather heavy when full) and skill to ensure you didn’t spill any of the contents out while lifting on to the truck. The contents were respectively referred to as “Night Soil”. The sign ‘Night Soil’ was emblazoned on the side of the old truck that excuded copious amounts of blue smoke as its engine groaned under the strain of its heavy load.   

My best pal conveniently lived next door; he was several years older and the wrestling champion of the local neighborhood. I soon leant that I was not going to be strangled and die when he engaged me in wrestling contests on our front lawn. There seemed no point in complaining since my parents seemed totally disinterested in my dire predicament. The wrestling experience turned out to be invaluable when I went off to school, when dealing with an older school bully. As he launched his attack on me on the way home; as he had promised, I thought I was a goner. To my surprise and that of the small crowd gathered around to watch (fights were usually premeditated to give everyone the chance to come along and watch) I managed to get a decent head lock on him and wrestled him to the ground with all my strength. To my astonishment and relief it was soon over; as he heeded the chant of the crowd. He’s got you!! , He’s got you!! Give-up, Give Up!!

Christmas time was always an exciting time. Receiving a bike for a Christmas present eclipsed all known joyous experiences in my life. My parents, sensing my excitement had laid a string throughout all of the rooms of the house and back down the stairs to be attached to the bike situated on the front lawn. Christmas morning at first light they invited me to follow the string and see what was on the end of it. Needing no encouragement I tore through the house and in a state of heightened excitement finally surveyed the wondrous sight, I immediately hopped on and cycled away. It didn’t matter a fig to me that it was a very old bike, where rust had been carelessly painted over with bubbly paint and made to look new with a false “Malvern Star” sticker on it. To me it was simply the best thing that could have ever happened and I was far too excited and happy to pay any close attention to such things.  It was only in later life when I recalled those images more carefully that I realized those bubbly painted surfaces were the result of paint failing to bond on rusted old surfaces. A few splashes of paint and a brand new shining bell was all that was needed to transform that rusty old bike into the gleaming new machine I had long dreamed about. Freedom is an elusive state but I never felt as carefree as riding that bicycle around in the country. Taking my lunch with me and cycling off to a destination of my choice, stopping for a drink for at a little shop I was totally ensconced in my own world of adventure.   

One must remember growing up in the fifties was a time when the country was fiercely loyal to the Queen under the guiding hand of Prime Minister Robert Menzies. During Queen Elizabeth’s Coronation we all made up scrap books as school projects. When she visited Australia no one really knew why we should all be excited, it was as if we were all swept along with this national bout of infectious enthusiasm and delight for the Queen. The cheers of the schoolchildren echoed everywhere as she was greeted with unanimous delight.
But tragedy was to strike us and the close knit Kyogle community in 1954. Our family house had been purchased on the basis it was flood free. As an added precaution it was built on high stilts. Even so, despite the cyclonic rain on that fateful day, it was thought our house would not be flooded. As the floodwaters entered our backyard I imagined myself as fisherman and unconcerned dangled my fishing line in the brown waters. However soon the rising waters were inching their way up our back steps so we evacuated to a neighbor’s on much higher ground. My father told us he was staying on to protect our furniture and effects.
That night I peered out over the murky waters to see my Father swimming around in the flooded house, placing objects onto higher vantage points in a futile attempt to avoid the ever rising floodwaters. The waters were rising at an alarming rate and it was with some relief, we watched in silence as my father finally wearily swam out through the bedroom window and with measured strokes struck out for the bank and safety at last. Fully clothed, cold, exhausted but determined he slowly hauled himself up onto the bank to join us on the veranda, in time to see our house disappear under the cruel raging waters of the Richmond River.
I can still recall that dreaded smell from the flood with its endless mud. There were pieces of corrugated iron from rooves around and it was soon turned to good use in makeshift canoes, folded over and sealed both ends with tar, to deliver milk and supplies. I remember search parties each morning looking for bodies and everyone helping one another. There was the drone of the old DC3 aircraft parachuting supplies to a stricken community cut off by floodwaters the likes of which had never been seen nor  have since.      

My parent’s sold their house at a tremendous financial loss and decided to leave Kyogle not long after.

The flood left my parents bankrupted so we moved to Ballina and stayed with my maternal grandparents to give my parents a chance to recover financially. We then moved to Wollongong for a short period until finally settling in Coffs Harbour.

My memories of Coffs in the fifties was of a town where you could leave the door of your home unlocked as there was virtually no crime helped no doubt by an alert police force that new everyone’s business. One of my fondest memories was of our pet dog called Rexie , a very intelligent foxie who was given the keys to the town. His daily routine, after breakfast, was to visit the Red Cross Snack Bar and then morning tea at my father’s work followed by lunch at home and then a final goodbye to the Red Cross workers in the afternoon. If there was any event on in town he was always around to check things out as an accepted observer.  He was always very careful crossing the street and would wait patiently for a lull in the traffic, or wait for the traffic lights once they were installed in the town. He even visited the golfers during the North Coast Open observing the professionals and crowds of people. I recall walking along the fairway when I overheard a conversation: ‘what’s that dog doing on the course’ only to hear the usual chorus of answers, ‘that’s Rexie, he turns up everywhere, always welcome and always well behaved!!  

Umm I thought – yes that’s exactly right!!

We were spoilt for choice at Coffs with beaches to the north and south of the town. I recall eating oysters of the rocks and on the odd occasions catching good sized bream with my mother cheering me on.          

An Existentialist question on the future of technology

It would be interesting to imagine how the various philosophers of that era proposed how one should dealt with some of the contemporary problems of today. One question that comes to mind is: 

Does the progression of artificial intelligence and robotics endanger our freedom and ultimately the ability to make wise choices to sustain our existence as highlighted by the late Stephen Hawking?

To reiterate, as  per my previous post, Kierkegaard’s call was to reject doctrinal imposition at that time. He talked about different types of choices we can make such as ethical, religious or aesthetic. He suggests we need to confront our anxieties head on. This in turn will enhance our self-awareness and personal responsibility. Kierkegaard was the forerunner to usher in a more human response to existence and freedom from the yoke of predetermined doctrines based on abstract values.

In a similar manner he may have asked us to confront our fears and ensure the technology only advanced as far as it allowed for various choices and the even possibly the option to opt out.
Nietzsche contended society was on the verge of nihilism; existential nihilism argues the case that life is without objective meaning, purpose, or intrinsic value. The subsequent horror of war and mass extermination proved his prophecy (assuming you allow for the flexibility to call it that) correct. His ideas were never fully realized as his work was unfairly discredited by a sister incorrectly ascribed his ideas as supporting the Nazi regime.  I think Nietzsche would have scoffed at the idea of artificial intelligence taking over as he championed the idea of being of sufficient strength to create one’s own values.

Could Nietzsche’s philosophy be applied to overcome the current fears about artificial intelligence? How can we reverse the idea of becoming slaves to technology and instead become its master?   

Like Kierkegaard Jean-Paul Sartre contended individuals become more aware of their potential as human beings as they experience anxiety; that involves a realization of one's true identity and freedoms.

Sartre's ideal of an authentic existence incorporated both historical and political underpinnings; as for instance he entertained an uneasy tension even with the idea of Marxism.

Conclusion
There is no escaping the conclusion the imposition of values is what is missing from the architects of two days technology. This is essential if we are to survive and prosper rather than fall slaves of technology.

Walking in the shadows of the mystics.

Introduction

Mystical type experiences or a sense of wonderment have always held a sense of fascination. As a child what comes to mind are memories of a kind of a dreamy state of wonder which came over me at bedtime. My room with its long row of glass louvres over one side, adjacent to the giant hypnotic eucalypts behind our family home, was the perfect setting for imagined other worlds.

The rattle of glass window louvers shimmered in the pale light to the sounds of wind or rain and the incessant buzz of cicadas or the more strident cry of - “mowpoke!, mowpoke!" of the mowpoke owl before drifting off into sleep where strange creatures good and bad inhabited my dream world.  

Although I’m a more practical and skeptical type person that mystical dreamy imaginative sense of wonderment has also stayed with me to emerge in later life. This is manifested itself in the form of a recurring day dreaming state from which I imagined nothing whatsoever existed; but once it became uncomfortable I would return to my everyday perception. In some sense the mystical will capture our imagination and none more so than those who have shaped our thoughts throughout the ages and have become as the mystics.  This is a paper that explores this interesting topic and attempts to form some general conclusions. 

Declining church membership and increased interest in spirituality.

In Australia over several decades we have seen a minor renaissance in spirituality in contrast to declining church attendances. This is evident in increased environmental awareness and in added interest in the wisdom streams of ancient societies. Many older cultures, although beholden to magic and lacking scientific knowledge nevertheless were more attuned to harmonious co-existence with nature as a consequence of mystic wisdom streams.
But firstly I should define mysticism which is, according to the definition of my Oxford dictionary:

1. Chiefly the Christian church, the beliefs or mental tendencies characteristic of mystics; belief in the possibility of the union with or absorption into GOD by means of contemplation and self surrender; belief in or reliance on the possibility of spiritual apprehension of knowledge inaccessible to the intellect.

2. Religious belief characterized by self-delusion or dreamy confusion of thought; belief based on the assumptions on occult qualities or mysterious agencies.

3. But for the purposes of this paper I will define a mystic as one who has had a mystical experience(s) so profound that distinguishes such an identity from all others; to that extent and subsequent revelation it is transformational to societies in their practices and beliefs. We might say for instance, in that context, Augustine was "the founding father" of western mysticism, which later also became our theology. Just as he built upon the prior transformational revelations of St Paul.

Knowledge inaccessible to the intellect.
Adherents of mysticism may posit it to be potentially a method of knowing separate to the knowledge or the knower in question. Aligning that idea to something more tangible one might posit the idea of a mystical experience can be the actuation of our various gifts, which applies universally to everyone.  

This is the idea we are all mystics and have the choice of sharing in those gifts conferred upon us to varying degrees or otherwise according to our freedom. But that is not to say we have mystical experiences which we can rationally refer to at any time or that mysticism is a method to potentially override other methods of acquiring future valuable knowledge.

Rather we might feel energized or mindful that we are engaging our gifts in the manner as was intended which will allow us to freely change our minds and to gain new knowledge without the restraint or imposition of ideologies presupposing necessary outcomes.

Aborigines mysticism
It behaves us to explore mysticism as it is embraced by the oldest known continuous culture of the Australian aborigines. Their ancestral origins of mysticism reside in the dreamtime creation where all living things were believed to be made co-dependent and reactive to one another in one inseparable land.

So it was in the beginning the dreamtime was to dominate every facet of their rich life; in mythical creation stories, ceremonial art, music, ritualistic practice; initiation rites into adulthood; and in the repository of knowledge of the law handed down from one generation to another. Within the tribal system adolescents were isolated away from the rest of the tribe under the control of elders who provided tutelage on all matters of their law until they were sufficiently aware to make the positive transition to adulthood which carried with it the responsibility towards their tribe and the environment upon which they were dependent - Charles P Mountford – The Dawn of time.

The very idea of mysticism may be of interest to secular philosophers because of the strength of unity such a system has on members of the tribe and to the wider nations; to hold what things and ceremonies are sacred for life existence, to apportion responsibilities on attaining adulthood, to be seen fit and able to support a partner, to embrace life without a fear of death to return to the creative dreamtime and to share in all things.

The extent of this bonding and the ramifications of rejection became evident to me as a child, as I recall the inexplicable death of the Aborigine named Kimiko from bone pointing for tribal transgressions. Speculation was that his extreme fear caused his untimely death just five days after admission to hospital, as Medical Authorities were unable to find any injury, poison, disease or medical condition that could be held responsible. The theory is the offending person was considered dead by his tribe and family at that moment of bone pointing and would die in reality because his life was no longer supported. In essence, the man would die of heartbreak. The opposite end of that spectrum would be the continued mystical experience to feel the love of the tribe, its ritualistic confirmation in affirming ceremonial practices so that to be cut off from all of that, for some individuals, leads to a corresponding physical collapse and death.

Eugene Stockton is a priest who has spent many years with the aboriginals and talks about their tribes gathered around the campfires at night experiencing a mystical oneness with the environment.
Like many religions, aborigines were interested in the meaning of dreams which unlike other cultures were perceived as a mystical return to the past rather than to interpret the future.
Aborigines often interpret dreams as being the memory of things that happened during this Creation Period. Dreams were important because they were considered the time when one was transformed back into prior ancestral time. This linking of dreams to the Creation Period has led people to adopt the general term “The Dreamtime” in order to describe the time of creation in their religion. The term “Dreamtime” in Aborigines mythology is not really about a person having a dream, but rather, a reference to this Creation Period.

Ineffable mysticism and reverence for life
In modern day terms the divide between mysticism in religion and philosophy has become blurred since the ‘perennialists,’ attempt to identify common mystical experiences across various cultures and traditions. In that sense, it does seem possible to me, to generalize about similar experiences and say they are of philosophic interest as I have subsequently undertaken in the essay. For although the experiences of mysticism may be claimed to be ineffable (Incapable of being expressed; indescribable or unutterable), nevertheless for those traditions to take root and be successfully handed down from one generation to the next required a teacher able to coherently convey what is meant to ensure a future survival.

In the Taoist religion “The Tao” was considered with such reverence that any references made could no longer be considered the true Tao-Lao Tzu (Taoist), since such supremacy in spirit is also ineffable.

GOD was also ineffable in early Judaism
In early Judaism coherency in teachings was described by reference to GOD’S ways or actions in the mystical stories of the Old Testament. The Jewish approach to mysticism is complicated but generally it is agreed the mystics are to be interpreted in terms of allegory and imagination, a not dissimilar view held by scholars today in relation to the parables contained in the New Testament.

In the end any inherent complexity must become mundane for its future survival, as the old story goes of the student and his understanding of the various contemplative mysteries of the mountain whose enlightened state reveals it is a mountain.

In more recent times the definition of mysticism has also tended to be expanded to include the ecstatic experience of oneness found in Indian religions such as Hinduism or Sufism in Islam which aims at unity or absorption of the divine.

A similar theme is evident In Tathagatagarbha Buddhism to proffer the idea of an enlightened indestructible nature for all beings, obscured by moral and mental contamination but whose enlightened essence is the Buddha Nature, present also in Tibetan Buddhist texts and traditions. Nothingness does not mean an absence of anything but rather the enlightened state from which attachments bringing moral and mental contamination are removed.

Christian mysticism
Turning to Christian mysticism we find an amazing labyrinth of different strands from the medieval Christian mystics included St. Augustine, St. Bernard of Clairvaux, St. Teresa of Avilia and Meister Eckhart and all of the other successors.

But by far the greatest of all of the Christian mystics is the apostle St Paul whose 13 letters make up half of the New Testament, although most scholars contend that only 7 were actually written or under the direction of Paul. Paul was a scholar, sail maker and mystic whose epic journeys established Christendom throughout the Mediterranean and ensured its spread throughout the world. Paul was seen as an apostle for the gentile’s yet in typical Judaist tradition frequently uses allegory by way of Old Testament references in his letters to the recently established infant communities.

Paul remains an enigmatically unique character – virtually unknown in a historical sense other than to be remembered in Jewish disagreements amongst followers, but one who professes to be willing to understand all things and become ‘as one’ to all men to further the cause of being “in Christ”. This arose from his mystical experience on the road to Damascus. I think this factor had led many to interpret his work in a more complicated manner than need be the case.

Many scholars remained unconvinced St. Paul was a mystic. A "mystical" experience does not a mystic make - at least not according to St. John of the Cross or Meister Eckhart.

But, a redefined meaning for mystics and mysticism emerged amongst many leading scholars from the mid-19th century onwards to firmly lump Paul in with the mystics. To reiterate, for the purposes of this paper I define a mystic as one who has had a mystical experience(s) so profound that distinguishes such an identity from all others; to that extent and subsequent revelation it is transformational to societies in their practices and beliefs. Under that more broad definition St Paul clearly meets that criteria. There can be little doubt Paul experienced a mystical experience which was continually subtlety evident thereafter, notwithstanding on face value his writings differ markedly with the more traditional mystics.

Although mystical experiences are said to be ineffable recipients gain insight and knowledge unavailable otherwise to the intellect which raises the question of contradictions since the experience is said to be ineffable. But this seemingly contradictory ineffable nature of the experience is coherently expressed in knowledge by reference to a metaphor or allegory or as is the case of St. Paul's to be mystically 'in Christ'.
The counter argument of course, is his letters bear no relevance whatsoever to mystical experiences but rather were simply inspirational to incorporate rational thinking.
Such an assertion however will lead us circuitously back to mysticism since Paul’s mysticism is evident in his frequent reference to this “In Christ” mystical experience. He uses the expression over 200 times but scholars are unable to unearth exactly what he means. The best one can interpret the oft repeated idea is it is meant to signify a mystical union, or existential bond made possible through grace. To reiterate what could be argued is this mystical experience gives way to the actuation of various gifts, in this case the gift to provide revelation in text and scripture to become representative of much of the church as we know it.

Much has been made of the abstract nature of Pauline theology as a bridge from the more individualistic Judaism into Christianity with the idea of justification by faith. But I think the primary aim of Paul was one of universal freedom from the law under the Jewish covenant about which he disagreed with Peter. His letters are best read simply as letters, not necessarily to be held as always Paul’s specific views but more to be understood as an encouragement and call to the fledgling communities to co-exist with love and respect for one another without the need for the prior ritualistic imposition of Jewish law.
St Paul is of significant interest to secular philosophers because his ideas carry with them the idea of a universal unencumbered system of unity which presupposes through grace existential philosophical aspects to life; to hold our life existence as sacred, to ascertain and acknowledge ones gifts for the benefit of the whole community, to joyfully exist in a state of grace without fear of death, to be free and remain free from guilt, to share in all things and to place love and affection ahead of all other known things. In the process Paul acknowledges our humanity and the imperfect cradle of existence which will continue to see communities straddle the idealism that is encapsulated in their new understanding and freedom from their law only to fall prey to the usual earthly failings.

Paul sends his letters of encouragement and hope in the expectation that the experience of freedom from the law will bring joy to existential living to transcend earthly suffering and sorrow.

CONCLUSIONS
Mystical experiences have been crucial in providing the creative imagination which helps shape our philosophies and give us that sense of self that gives rise to our humanity.

What is strikingly apparent from many of the mystics is the similarity in ideas about oneness and interdependence for all living things. Another is the wonderful philosophies which are suggested, through grace, as being available to all regardless of belief, to be simply experienced by engagement in mind and spirit. To find your own meaning to life (as opposed to seeking a meaning for life) as I see is in the use of one’s gifts in the way that was intended for a more complete and energised happy life for oneself and community. In that respect secular philosophers’ views often unintentionally reflect religiosity just as the more skeptical views of some religious commentators can be more secular than religious.

In another sense, in a more generalized universal viewpoint my personal philosophy leads me to believe that all life is sacred. We can learn from the mystics but ultimately we all determine what philosophy and life meaning we personally adopt. If you agree with me that all life is sacred then a call to arms must always be viewed with suspicion, except in extraordinary circumstances.

Warrnambool

We recently holidayed with a group of friends who are part of a walking group which had planned a number of walks and sightseeing excursions at Warrnambool, Victoria.  Warrnambool is a pleasant 4 hour drive from Melbourne, located in the South West region of Victoria. Although we only  participated in the shorter walks we enjoyed some memorable sightseeing and convivial company over evening meals. One of the key attractions are the whales which can be seen off the coast, from July to September. There are viewing platforms along Logans Beach

The picture below was taken at dusk not far from where we stayed.  Next is a picture of Hopkins Falls. 
We also visited a wonderful old property whose roots go back to the 1850’s, owned by a friend of one our friends. Set on 150 acres , located on the outskirts of nearby Terang , with some Arabian horses and Scottish Highland cattle. The property has links to the early days. Inside was magnificent with exquisite carved rosewood panelling and stain glass windows coupled with Chinese and antique furniture brought out with migration from HK to Australia.

Warrnambool

Not far out from the city of Warrnambool  is Australia's most extensive Volcano Province and Tower Hill, which we visited. It is one of the worlds largest Nested Maars - a  maar is a broad, low-relief volcanic crater which fills water. Below is a painting of the perimeter of the Tower Hill as it was in the 1850's. Below a real life Emu standing guard beside a welcoming sign to the park. 

Below are pictures of Flagstaff Hill Maritime Village which is a reconstruction of the 1800s port village. There is an interesting  collection of material salvaged from some of the shipwrecks in the area. There are over 30 buildings, including an inn, newspaper office, blacksmith and tearooms serving refreshments.
During our visit to the Botanical Gardens we spotted a very tame white faced heron at the edge of the large duck pond.  
 

Below more pictures of the wonderful old property whose roots go back to the 1850’s, owned by a friend of one our friends. 

Notice the spinning wheel in the corner.     

 

Trumping a deal with China

Australia, given its free trade agreement with China and exemptions from US Tariffs, is well place to weather any ensuing storm over trade in the unlikely event it becomes a full scale trade war.    
One might ask the question how come such intended actions happen so quickly.

Well, under section 301 of the Trades Act; the provision allows presidents to impose tariffs on imports considered injurious (as in restrictive) to US commerce. Previously the tariff was imposed on washing machines, steel and aluminium. More recently it is extended to include IT, aerospace and machinery. The total of $50 billion effected sounds a lot, but in an economy the size of the USA it’s not much. Excuse my rusty mental arithmetic but I think it’s about 2%. However, the President recently ratcheted up the ambient claims to $150 billion.

The Presidents aim is to restore a more equal trade balance between the two nations, but I think he is working on several false notions to appease those angry over loss of jobs in the rust bucket seats that swept him to power.

From an economic point of view one could argue the US is in the late stages of economic recovery (albeit there is a lot more poorly paid jobs) with record low unemployment not seen in many decades. Inevitably, during such cycles, it is natural enough for there to be increased demand met from imports. The fact is the worsening trade deficit is a consequence of firms needing to source cheaper imports from abroad and from China. It is true you could increase tariffs to such an extent that you force a structural change but this would have dire consequences such as massively driving up costs which would stifle investment and lead to a severe recession. 

The notion that  China’s trade surplus has been at the expense of poorer outcomes for the US is false, since an economy benefits from trade and having a deficit is not necessarily a bad thing.  

From China’s first moves to adopt a more market driven model, one might argue mostly this has been beneficial to its trading partners and particularly to the US tech sector.   

Asian surpluses have been re invested into US treasuries, underpinning lower interest rates and covering over consumption with massive government deficits. The buying of Treasury notes by China, when frozen credit markets (GFC) threatened to take the US deep into recession, averted a very deep recession. The buying restored liquidity during those challenging times. The US tech sector is also very reliant on low cost inputs from Asia. Tariffs, if they stay in place, will drive industry to migration. Loss of jobs is principally due to technology replacing the old traditional blue collar workers. But a lot more can potentially be lost from the imposition of tariffs.

According to recent polls many Americans concur with the president’s rants in general and endorse the standard approach to discredit rational debate, to be met with a response it’s just “fake news”.  In a recent poll more than three in four among American respondents, or 77%, said they believed major traditional television and newspaper media outlets report “fake news”.

But as an aside the US economy looks now to be in better shape, particularly as a consequence of going from a large scale importer of oil to become the biggest net exporter of oil in the globe within the next 4 years, due to fracking. That does not of course cover any remediation cost that may become necessary to ground water supplies that fracking may cause, assuming that is indeed possible. In the short term however it’s added to Governors state coffers where it has taken the pressure of ballooning deficits.

There is also the likelihood of a large scale capital flow back into the US as a consequence of the recent corporate tax cut as multinationals return most of the $3.5 trillion held offshore or in US Treasuries. This will only serve to strengthen the US dollar and drive up imports, which will be cheaper than local production inputs.  

The real case against China. 

Intellectual property belonging to the US has allegedly been stolen on a massive scale in breach of US laws. Restrictions by China on foreign investment prevent investment yet China can invest in the US.

There can be no question China has been restrictive and its lack of openness to foreign investors which has irked multinationals and others seeking reciprocal trade. However, China has recently stated that in an “orderly” fashion they intend to open up all of their markets to foreign investment in what is a major change in policy.

Conclusion & Sealing a deal  
Having said all of that there are grounds to be mildly optimistic a conciliatory deal can be negotiated. China might, for instance, say they are ramping up measures to crack done on intellectual property theft and opening their economy for more trade, with some exclusivity to the US to pamper to the ego of Trump. You begin to see possible ingredients for a deal. Trump would look as if he has gained a major victory and could boast he is a king deal maker.  China could continue to do what it always intended to do and its leaders would not lose face with the party officials.  

That is the purely speculative deal I envisage might get over the line but don’t hold your breath. 

 

Radio waves from the past and present

Recently a local community radio station North West FM featured recordings by my late father and youngest daughter. They played 'Mosquito' from the RAAF Glee Singers playlist below and 'Something's Better Than Nothing' from Rachael's Sound Cloud as per below.  
 

 

Introducing stock filters

An introduction to selection criteria’s to identify potential quality companies and sensible sector exposure limits within a portfolio  

 

Introduction

This paper was written to assist those not qualifying for government pension to make sage investment decisions. It aims to shed light on the methodologies involved in identifying prospective quality companies for further in depth evaluation. In other words I will talk about a selection criteria, which must inevitably involve some form of filtering.

 Adopting a conservative approach with less need for sophisticated filters  

One can opt to take the more conservative option by investing via LICs (Listed investment Companies ), where the evaluation of quality companies and determining value is a much more straightforward matter. This was illustrated in my prior paper on the subject. The advantage of investing in a large cap LIC is it will mostly cover the entire index for you.

However, to enhance your overall returns, you could also include in your portfolio a small cap LIC, on the expectation you expect small caps to outperform large caps. Another option is to include a LIC whose investments are principally overseas, should you consider the prospects are superior abroad.  

It’s a matter of feeling comfortable with an investment strategy that reflects you aims and risk appetite.

Sector exposure is also important to the extent we don’t want to

be overweight and risk a larger fall than applies to the index.

 

Sector weightings    

To recap it’s risky to be materially overweight in any one sector relative to the ASX. Their website provide relevant free information on sector weightings and performance. But it can be devilishly difficult to find. This paper sets out the detailed search steps for you.

However, before that, I need to quickly dispel the questionable common theme diversification in itself provides quality and safety. 

The questionable theme of quality through diversification.

This is the idea that a diverse mixture across different asset classes affords safety since as one sector falls it will be compensated by a rise in another asset class held in a portfolio. This is only true at times and it’s a terrible idea if you were only to be invested in shares and interest bearing securities. By way of example take the present US market where most interest rates are fixed whereas in Australia they are mostly variable. The risk for a US investor is if both inflation and interest move up faster than is anticipated, both Bonds and shares will both fall. That’s not the case for Australia because variable rates apply here (as in so many points over the 90 bank bill rate) so shares could fall but it doesn’t mean a fall in interest bearing securities. But nor does it mean one asset class affords protection over the other.

And if there was to be much higher interest rates in Australia I think it very likely house prices, consumer discretionary shares and banks would all fall simultaneously. The so called safe haven gold sector long term is one of the worst long term performers whose price does not keep pace with inflation. That doesn’t mean all the shares in the sector are duds, as you have some that performed very well. 

Sensible sector limits  

Rather obviously there is nothing wrong with diversification, except don’t presume it will always protect you, to offset falls in one asset class with rises in another. Instead what I propose for you is to consider a few simple rules:

1.  No share or individual security to exceed 5- 10% of your total investment portfolio. I use 6%.
2.  No sector exposure exceeds 15 to 20 % of your total portfolio. I usually use 15%.

Limiting exposure to sectors 

However, one can calculate accurately each sectors current relationship with the total index at any time. I invite you now to follow these links from the ASX website    

Firstly go to the ASX website https://www.asx.com.au/index.htm#

·       Starting from home click on the top heading called Products and  ·       Scroll down to the heading Indices – click on that.
This will take you to the screen headed ‘What are indices.’ 
·       Scroll down under that until you see the sub heading of ‘Types to sector indices.’ ·       Click on sector indices 
·       Scroll down the heading and narrative headed ‘Types of indices’, until you see the minor heading: to learn more, please refer to the overview of Sector indices.
·       Click on that and it will take you to the indices. You are now in the position to utilise the wealth of information available in relation to the above indexes. Scroll down to the Index with explanatory narrations. By way of explanation click on S&P/ASX 200 Consumer Discretionary Index. This index provides investors with a sector benchmark that reflects all entities in that index. The index provides facilities to measure (1) its relative performance to the broader S&P/ASX 200 and (2) Its relative size or % to the S&P/ASX 200. Additionally there are related comparable indexes to compare such as the S&P/ASX small ordinaries, franking credit adjusted total return index.

Hence you can carry out an exercise for each of the sectors as above to gauge the current respective sector exposures and returns. That can then be compared with your holdings under those sector classifications. You are then is a position to determine what percentage your holdings compare to your portfolio and how that compares with the sectors percentage to the total index.  

An introduction to filters  

As you may recall Professor Benjamin Graham is known as the father of Value investing, who introduced the ideas of more value orientated share selection criteria’s.  He authored 2 books namely Security Analysis and its much friendlier publication, Intelligent Investor.
Graham’s selection criteria was as follows:
·       An earnings-to-price yield twice the AAA bond yield.
·       A PE ratio (price-earnings ratio) less than 40% of the highest price-earnings ratio for the share over the past five years.
·       A dividend yield of at least two-thirds the AAA bond yield.
·       Share price no more than two-thirds of tangible book value per share.
·       Total debt less than book value.
·       Current ratio greater than two.(Ratio of current assets to current liabilities 
·       Total debt less than twice ‘net current asset value’.
·       Earnings growth of prior 10 years at least at a 7% annual compound rate.
·       Stability of growth of earnings in that no more than two declines of 5% or more in year-end earnings in the prior 10 years are permissible.

Comment & Explanation
Both Graham and Buffet were very successful in the early days using these filters to unearth and invest in undervalued entities. Successive acquisitions of undervalued companies, bore fruit in the form of an expanded share price as the quality of consistent earnings per share became much more widely appreciated. 
There is nothing wrong with applying that criteria to day except I would suggest there are no companies trading on the ASX who will meet such strict filters. Probably none in the US either. If there was they would be an aberration and likely to be subject to some obscure circumstances that would render the share as ones to be avoided in any case.
To reiterate Graham and Buffet were hugely successful because they were able to operate in an era when quality companies could be bought very cheaply as value investing was virtually unknown.   

However, with the use of computers and enhanced investor knowledge such opportunities no longer exist. Buffet has repeatedly told investors as far as Berkshire is concerned the salad days are over. Even so the share price continues to grow along with his reputations as a sage investor and that of co-owner Charlie Munger. These days Buffett/Munger talk about 4 key Filters.

1.  Understand the business. Research.   
2.  An enduring competitive advantage. Patents, expertise and circles of virtue.     
3.  Protective moats- barriers to entry to create advantage. 
4.  Ensuring you have a fair value and or a margin of safety.   

The idea of adopting filters has considerable merit and we can apply more realistic filters today in many different ways.

Application of Filters
The easiest way to apply filters is to evaluate shares within sectors or industries to identify new potential buys and sells. The advantage of this approach is it is simple and rather obviously doesn’t involve any additional cost. But it would involve a lot of manual handling (unless you could plug into a google finance or yahoo website that has the info) and even more potentially burdensome calculation.
Alternatively there are many excellent platforms that I have road tested. I prefer Skaffold, because one determines your own filters. Their system gives me maximum flexibility. I never take any notice of model portfolios, although I concede this can be an ideal measure. It’s more a matter I just like to do my own thing so that if I make a mistake I can only blame myself.

I road tested Stock Dr for 3 months and I understand the rudiments of Intelligent investor. All are excellent platforms that have their own inherent strengths and weaknesses. That’s true of course for any system you use and emphasises the importance of understanding their modus operando, as in their particular way or method of doing something.

Here are 2 illustrative examples of 2 filters – One for the entire share universe 
u Only quality companies (rated by a number of factors inclusive of performance metrics ) with a prior track record
u Grown in share value > 5% past 5 years
u Future consensus growth>5%  
u Return on equity >15%
u Has a continuing funding surplus
u Net Debt to equity < 50%
u Safety Margin over intrinsic value

Others filters might be confined to sectors, then broken down to micro, small. Medium, and large caps entities. As you can gather you can build up to a very large number of filters that can be employed across the ASX and abroad. This filter for instance is far less onerous aimed at unearthing a dozen or so names for further in depth analysis.

u Fair quality companies (rated by a number of factors inclusive of performance metrics which aren’t too restrictive) with a reasonable prior track record.  
u Grown in share value > 5% past 5 years
u Future consensus growth> 7%  
u Return on equity >10%
u funding deficit no more than 10%
u Net Debt to equity < 100%
u Don’t have a Safety Margin and allow the stock to be up to 17% over valued.  
Lindsay Byrnes
Value Investing Tutor - University of the 3rd Age.