Life In Australia

I didn’t notice anything at the weekend, but the Courier Mail says there was a drink-driving blitz by the police. After administering 50,000 breath tests, one of the peoople caught was a policeman - from the far north of Queensland.

It’s something I warn visitors about - once you leave Brisbane and the Gold coast, you’re entering the ‘wild west’ for driving. The death rates on Queensland’s rural roads is pretty high. Part of the reason for this, I’m sure, is that for many people in rural Queensland - and too many in the urban areas too - driving after a few drinks isn’t considered such a bad thing to do as we’d consider it in Britain.

Funnily enough, Australia has tougher alcohol limits than the UK has. The legal limit here is 0.05 percent while in Britain it’s 0.08 percent. The practical effect is that most men in Britain can get away with drinking a couple of pints of standard-strength beer and drive legally. In Australia, two pints would put you over the limit.

In the case of the of policeman caught at the weekend, he’d have been over the limit in the UK or in Australia - he was measured at 0.1 percent.

Oh, in addition to the hapless police officer, the blitz netted 614 drink drivers, 287 speeding offenders, 83 disqualified or unlicensed drivers and six dangerous driving offences. The Queensland police force is apparently going to stage another weekend blitz ’soon’.

I though I’d return to the drought theme. I haven’t written about it for a while, but it hasn’t gone away – in fact it’s now the worst drought Brisbane has seen in one hundred years.

Normally we would get storms in the afternoon or night in the summer but there were very few this year. There seems to be no relief in prospect. Winter is the dry season so everyone is hoping for a wet spring and summer.

The water level in the dams fell below 30 percent a couple of weeks ago, bringing with it a total ban on using hoses outdoors. I see today that the water levels are at 29.5 percent. We’re still allowed to water our gardens but it needs to be done with a handheld watering can.

One of our neighbours is having a tank installed to collect rainwater from their roof. It’s something we’re probably going to get done too.

The Australian Government has approved the $ 2 billion puchase of thirty-four MRH 90 helicopters to be built in Brisbane.

Delivery of the first twelve is scheduled from December 2007 through to December 2009.

It’s expected that somewhere around skilled 400 jobs will be created at the Eurocopter subsidiary Australian Aerospace. (Australian Aerospace is currently assembling the army’s Tiger armed reconnaissance helicopters.)

Australian Aerospace chief executive Joseph Saporito said:

“This decision creates the prospect of Australia becoming more involved in the global helicopter supply chain, more exports from Australia, more jobs, the development of new skills in the latest composite fibre manufacturing and construction techniques and more investment by Australian Aerospace.”

There is a lot of misery in the markets just now. There’s an old saying that when the shoeshine boy starts giving you stock tips, it’s time to sell. It was getting like that in the Australian markets - people thought the gold price was heading towards $1,000 per ounce and were buying mining stocks left right and centre.

I suppose I was the lucky shoeshine boy who (partly from listening to the hype at the time) got into mining stocks a year before they peaked. I was lucky enough to sell my stocks to “bigger fools” before the bubble burst.

An interesting question now is whether the market is heading into a longer term bearish period.

The chart of the ASX All Ordinaries to close of trading yesterday (below) shows that the long-term uptrend is still intact - but increasingly it looks as if the uptrend is going to be tested.

My official position is that I’m going to wait and see whether the uptrend holds and re-establishes itself. If it does, I will look at buying more stocks. If the uptrend breaks, I will need to be very convinced of the merits of aparticular stock before buying it.

Chart Courtesy of Online Software From Big Charts.

Last year I was lucky / skilled enough to turn $100,000 into $373,800 investing in Australian resource stocks and sold out part of the way through the recent falls in world stock markets.

I’d like to reinvest my share market gains in the most profitable way I can.

My concern about stock investing right now is that the world seems to be in an interest rate raising cycle. This is bad news for share market gains, at least until the markets start to believe interest rates in the world’s major economies have stabilised.

I’ve considered selling one or two choice stocks short. Short selling is a riskier affair than buying (you can lose more money going short than long if the market turns against you). So I rejected that.

I’ve also considered shorter term trading. I’ve been reading Trading for A Living by Alexander Elder. It’s been an enjoyable read. Of some concern is Elder’s statement that 90 percent of beginning traders blow their account. Elder gives plenty of advice and strategies to ensure his readers don’t share the same fate. He leaves readers under no illusions that it’s easy to succeed. In fact, he did such a good job of presenting some of the negative features of trading that I don’t think I’ll go down this route without doing more research. If you are interested in trading shares yourself, I would recommend you read Elder’s book.

Elder begins the book saying,

“You can be free. You can live and work anywhere in the world. You can be independent from routine and not answer to anybody.

This is the life of the successful trader.

Many aspire to this but few succeed. An amateur looks at a quote screen and sees millions of dollares sparkle in front of his face. He reaches for the money – and loses. He reaches again – and loses more. Traders lose because the game is hard, or out of ignorance, or lack of discipline. If any of these ail you, I wrote this book for you.”

He ends with,

“If you believe that being a trader is worth the effort – as I decided years ago – my best wishes to you. I continue to learn, and like any trader, I reserve the right to be smarter tomorrow than I am today.”

Queensland, like the rest of Australia, is chronically short of engineers, accountants, scientists and maths teachers.

The situation looks set to worsen.

According to the Courier Mail, it seems that large numbers of Year 11 and 12 (lower and upper 6th form) students in Queensland and Australia are avoiding advanced mathematics, opting instead for the elementary variety.

Good news for British school kids who one day might want to come here? Perhaps ………… except we know from recent statistics that not many British kids are interested in learning maths either.

So who is it good news for? I imagine students from India and the Far East who know the value of hard learning will prosper.

In Queensland, more than half of all Year 12 students are studying maths A - the easiest maths course.

37.1 percent are studying maths B, the intermediate subject while just 8.4 percent have opted for maths C, the advanced subject.

In 1995, 14.1 percent of students took maths C, dropping to 11.7 percent in 2004.

According to Professor Garth Gaudry, over the past decade, there has been a mass movement into elementary maths, posing a serious threat to the nation’s capacity to compete internationally.

“The nation is at risk of a dire shortage of mathematically-trained people.”

Professor Tony Bracken, head of Mathematics at the University of Queensland said the University of Queensland’s decision to drop Maths C as a prerequisite for engineering was one of the major influences contributing to the fall off in Maths C Queensland schools.

But, he said, engineering students who had not studied Maths C at school had to complete a make-up course as part of their engineering studies.

Professor Gaudry said university entrance scores should offer greater rewards to students who opted for more difficult subjects.

“Most universities have softened entrance requirements and dropped prerequisites. They are underplaying the level of mathematics essential to undertake many degrees successfully.”