This year I had started with a goal to try and ride 10,000km. I failed. That doesn't mean I'm disappointed after completing my first full year back in Sydney, as I really haven't ridden in such an aggressive urban environment seriously in my entire life.
Just over 9,000kms so far is good result given I live in the most densely populated area of the biggest city in Australia. One of my colleagues in Geneva once said to me when I upgraded to the Pinarello that you shouldn't spend more in CHF's on a bike than kilometres you do a year. Well I think that rule of thumb just about works. It seems to me that once you ride around 5000kms you can put yourself in the upper enthusiast category and get something nice. People who see my bikes as a folly of sorts usually are the same people that can contemplate buying a car for $200k and drive it less than 10,000kms in a year, but see me as wasting money on $10k bike that I used to cover 9,000kms in that same period. The insanity of that proposition beggars belief. Don't even get me started on golf club memberships that get used a couple of times a year . . . but I digress.
This year I've been hit twice on my bike and survived both times with a few bruises. I've been yelled at, abused, buzzed by angry tradesmen and taxi drivers. I've been spat at, ignored and chased. I've argued with drivers of both sexes. all ages and been lectured to by people who you would normally think are very sensible liberal types, but who just can't stand you being on the road. The worst of these was one person who put forwarded the following arguments as to why you shouldn't cycle in Sydney:
- Bicycles scare me because I could hit one
- It's too hilly
- You don't have registration to be on a road
- Bikes slow me down on the way to the shops / school drop off
That same person probably is long debt to the eyeballs sand sees that 2008 financial crisis as something that happened in Europe and the US. You see because Australia got through the crisis with unemployment barely above 6% those type of people haven't had to rethink their lives, never mind their attitude to the boom in cycling in this city.
World stock markets are back at all time highs thanks to ultra-cheap money supply. It's hard to value risk when the hurdle rate for capital is so low. Take for example an insurance business sold by Australian conglomerate Westfarmers yesterday to fellow Aussie IAG. The business had an internal rate of return of 6.6% on average over the last five years. When I was reading the details at my local cafe this morning after riding the beaches of eastern Sydney my first thought honestly was; that's not too bad. My second thought was: "What am I thinking." This is an insurance underwriting business . . . shit happens! We just saw the biggest insurance business in Australia QBE have to writedown businesses because of a $US300m increase in prior accident year claims provisions, centred on long tail classes of business such as workers' compensation, general liability and construction defects risks." That saw them revise expectations from a profit of $700m+ to a loss for the year of $250m. On the day the stock was down 20%. My cappuccino was barely finished before I contemplated writing a well done letter to Westfarmers CEO Richard Goyder for getting $1.85bn for this 6.6% IRR business. The best part of the story though was Goyder saying the transaction represented a "win-win" for both his company and IAG . . . . LOL! I never want to play poker with Richard Goyder . . . LOL!
Following on from yesterdays blog and my rosy view of the US "real economy" we had confirmation of industrial activity. November US industrial production rose 1.1% beating expectations for 0.6%. That readers is the highest pace for the year and a repeat in December January confirms a tapering by the end of Q1 in this blogs opinion.