Rob Coyte's Blog
Recent Blogs
- Prosper or Panic? 06-Oct-2011
- A Revolution Occurring? 13-Sep-2011
- How to Pay Off Your Mortgage 05-Sep-2011
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What is Being Done to Change Our Energy Mix?
Last week our blog looked at the devastation of our world on the running out of oil.
This week we look at what is being done to avoid this catastrophic situation.
Episode Two
Episode Three
Can you do anything?
This week we look at what is being done to avoid this catastrophic situation.
- How commercial properties are designed to save power usage by up to 30-40%.
- What households can do to save energy but also tap into other sources of energy themselves.
- China leads the world in renewable energy spending US $34 Billion a year roughly twice the amount of the US. China has also set renewable energy targets by 2020.
- We look at new generation electric cars which are now being developed by a number of car manufacturers.
- We look at how bio fuels will reduce the reliance on foreign oil. Importantly, one of the largest users of fuel, the US Navy, has committed to renewable energy targets to run their planes and boats.
Episode Two
Episode Three
Can you do anything?
Our Addiction to Oil – “The Aftermath”
In last week’s blog we looked at our addiction to energy. The main source of energy that we use currently is oil and it has many uses such as used in the production of foods, allows global trade by fuelling planes and ships, plastics, and other goods such as rubber gloves.
Most scientist believe we have now passed “peak oil” yet the demand for oil is increasing dramatically.
What does that mean for when we do run out of oil?
An interesting documentary by National Geographic on the Aftermath – World Without Oil.
Episode 1
Episode 2
Episode 3
Most scientist believe we have now passed “peak oil” yet the demand for oil is increasing dramatically.
What does that mean for when we do run out of oil?
An interesting documentary by National Geographic on the Aftermath – World Without Oil.
Episode 1
Episode 2
Episode 3
Our Addiction To Energy – First Step Acknowledge the Problem
Globally we use the energy equivalent to 150 Billion light globes burning all the time.
Lifestyle and location is dependent on the amount of energy used per capita. In the US every person uses the equivalent amount of energy to continually burn 110 light bulbs. Europeans use 55, Asians 16 and Africans 8 however, as the world develops the demand for energy is rising rapidly.
As China and other countries such as India and African nations urbanise and become middle class they will demand and consume more energy.
Where does our energy come from?
Fossil fuels account for the most Oil 33%, Coal 25% and Natural Gas 20%. The remainder is made up of other sources such as nuclear 9%, Hydro electric, solar, wind and Geo thermal.
We are addicted to oil and it is getting harder to get which makes it more costly. 100 years ago it took 1 barrel of oil to get 20 Barrels of oil whilst currently in Saudi Arabia it takes 1 barrel of oil to get 20 Barrels of oil. Scarily , it takes 1 barrel to produce only 5 barrels of oil from the Canadian Tar Sands. Furthermore, many believe that we have pulled out more than half of the oil reserves we have. Given the dramatic increase in demand how long will the rest last? Other fossil fuels such as coal and gas are more plentiful but they release a lot of carbon dioxide into the atmosphere which most scientist agrees causes climate problems.
Importantly, there are ways we can as individuals decrease our demand for energy. Also, there is a way that we can produce the amount of energy that we require now and in the future but by implementing a portfolio of energy sources it is a challenge that needs to be and can be met.
A very good documentary in lay terms talking about these issues can be located below.
Episode 1/3
Episode 2/3
Episode 3/3
What Can You Do?
Lifestyle and location is dependent on the amount of energy used per capita. In the US every person uses the equivalent amount of energy to continually burn 110 light bulbs. Europeans use 55, Asians 16 and Africans 8 however, as the world develops the demand for energy is rising rapidly.
As China and other countries such as India and African nations urbanise and become middle class they will demand and consume more energy.
Where does our energy come from?
Fossil fuels account for the most Oil 33%, Coal 25% and Natural Gas 20%. The remainder is made up of other sources such as nuclear 9%, Hydro electric, solar, wind and Geo thermal.
We are addicted to oil and it is getting harder to get which makes it more costly. 100 years ago it took 1 barrel of oil to get 20 Barrels of oil whilst currently in Saudi Arabia it takes 1 barrel of oil to get 20 Barrels of oil. Scarily , it takes 1 barrel to produce only 5 barrels of oil from the Canadian Tar Sands. Furthermore, many believe that we have pulled out more than half of the oil reserves we have. Given the dramatic increase in demand how long will the rest last? Other fossil fuels such as coal and gas are more plentiful but they release a lot of carbon dioxide into the atmosphere which most scientist agrees causes climate problems.
Importantly, there are ways we can as individuals decrease our demand for energy. Also, there is a way that we can produce the amount of energy that we require now and in the future but by implementing a portfolio of energy sources it is a challenge that needs to be and can be met.
A very good documentary in lay terms talking about these issues can be located below.
Episode 1/3
Episode 2/3
Episode 3/3
What Can You Do?
The Consequences of Tragic Events in Japan on World Economy
The tragic events in Japan are the latest where mother nature is putting us on notice.
Whilst the people of Japan have the impact of massive loss of lives and property it is unlikely that this event will derail the world economy. Notwithstanding the fact that Japan accounted for US$5.4 trillion, or 8.7 percent, of world GDP in 2010, according to numbers provided by the IMF. Being the world’s 3rd largest economy any impact on Japan’s economy will feed through to the world economy. However, most believe that it will have small consequences including an increase in government spending to rebuild the country’s infrastructure. In fact a small dip in Japan’s economy may be a positive as far as the global economy is concerned as it would reduce the strain on inflation as a result of rising oil and material prices.
Sectors that will be directly impacted will be in the area of insurance companies given the huge scale of costs which may be up to US$100 Billion. Reinsurance companies will be looking to pick up an estimated US$15 Billion of this with the rest to come from increased government spending by Japan. Naturally, building companies and other companies that will benefit as having to “rebuild” the country will have a positive impact to their respective businesses.
With the explosion at Tokyo Electric Power Co.’s Fukushima Daiichi No. 1 reactor after its cooling system failed there may be fallout for the Nuclear industry which has been staging a renaissance of late. Currently there are 442 reactors worldwide that supply about 15 percent of the globe’s electricity, according to the London- based World Nuclear Association. There are plans to build about 150 additional reactors, most of them in Asia, and 65 reactors are currently under construction. In the wake of the 1979 partial meltdown at the Three Mile Island reactor in Pennsylvania there was a massive psychological impact upon people which halted the progress of nuclear power.
Whilst the people of Japan have the impact of massive loss of lives and property it is unlikely that this event will derail the world economy. Notwithstanding the fact that Japan accounted for US$5.4 trillion, or 8.7 percent, of world GDP in 2010, according to numbers provided by the IMF. Being the world’s 3rd largest economy any impact on Japan’s economy will feed through to the world economy. However, most believe that it will have small consequences including an increase in government spending to rebuild the country’s infrastructure. In fact a small dip in Japan’s economy may be a positive as far as the global economy is concerned as it would reduce the strain on inflation as a result of rising oil and material prices.
Sectors that will be directly impacted will be in the area of insurance companies given the huge scale of costs which may be up to US$100 Billion. Reinsurance companies will be looking to pick up an estimated US$15 Billion of this with the rest to come from increased government spending by Japan. Naturally, building companies and other companies that will benefit as having to “rebuild” the country will have a positive impact to their respective businesses.
With the explosion at Tokyo Electric Power Co.’s Fukushima Daiichi No. 1 reactor after its cooling system failed there may be fallout for the Nuclear industry which has been staging a renaissance of late. Currently there are 442 reactors worldwide that supply about 15 percent of the globe’s electricity, according to the London- based World Nuclear Association. There are plans to build about 150 additional reactors, most of them in Asia, and 65 reactors are currently under construction. In the wake of the 1979 partial meltdown at the Three Mile Island reactor in Pennsylvania there was a massive psychological impact upon people which halted the progress of nuclear power.
What is Currently Good Value?
Currently we are in the middle of reporting season where all the companies on the stock market are releasing their financial information. This is important as we can see how these businesses are performing and we can assess the valuation of those businesses.
Assessing the valuation means we look at the amount of profit they are making relative to what we have to pay to own a stake in that business. Valuation is a different concept to that of the financial strength or appeal of a business. For example you can have a pretty poorly run business but if it is really cheap it may be a great investment. Alternatively, you can buy the best run company in the world but if you pay too much for it you will be waiting a long time to get a suitable return on your investment.
Speaking of valuations our favourite asset class or investment, residential property, is displaying some worrying signs in regards to valuation.
The Demographia International Housing Affordability Survey for 2011 found Sydney was the second most expensive city in a survey which included countries such as US, China, Australia and Canada. When using the measurement of median property price divided by Median household income a multiple of 9.6 times is the result. It should be noted that the long term average for this measure is closer to 3 times. A similar survey conducted by HIA puts Australia’s ratio of house prices to household income at 4.1 times. When they started the survey in 1995 this measure was only 2.5.
For those looking to buy their first home or an investment property how does this fit into their thinking?
Assessing the valuation means we look at the amount of profit they are making relative to what we have to pay to own a stake in that business. Valuation is a different concept to that of the financial strength or appeal of a business. For example you can have a pretty poorly run business but if it is really cheap it may be a great investment. Alternatively, you can buy the best run company in the world but if you pay too much for it you will be waiting a long time to get a suitable return on your investment.
Speaking of valuations our favourite asset class or investment, residential property, is displaying some worrying signs in regards to valuation.
The Demographia International Housing Affordability Survey for 2011 found Sydney was the second most expensive city in a survey which included countries such as US, China, Australia and Canada. When using the measurement of median property price divided by Median household income a multiple of 9.6 times is the result. It should be noted that the long term average for this measure is closer to 3 times. A similar survey conducted by HIA puts Australia’s ratio of house prices to household income at 4.1 times. When they started the survey in 1995 this measure was only 2.5.
For those looking to buy their first home or an investment property how does this fit into their thinking?
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