The Apple smartwatch outselling the entire Swiss watch industry - so what?

I have been reading the headlines with commentators telling us the the Apple smartwatch has outsold the entire Swiss watch industry - I'm not at all surprised. I am then reading the headlines where these commentators predict the end of the luxury Swiss watch industry - I respectfully disagree.

A luxury mechanical timepiece is a feat of engineering excellence and in most cases an object of aesthetic mechanical beauty. They are mostly purchased by wealthy individuals for their engineering prowess, heritage and style. Performing a little research, I find that Swiss watch sales account for just 1.7% of international sales yet account for approximately 57% of the value of watch sales - that's some serious value adding.

What we are comparing here is two totally different market segments despite both being wristwatches. Just as the quartz watch disrupted the mechanical watch industry in the 1970s, the tool watch of the previous era reinvented itself into the luxury timepiece segment. People with high disposable incomes are looking for more than just a tool to tell  time, they are seeking brand recognition, style and engineering prowess highly valuing the mechanical timepiece.

The smartphone that is current technology is already in decline, Nokia, Errikson and Motorola phones are no longer for sale - the Blackberry is also history. Payment systems are now contained in rings, people are already getting micro-chipped and other devices will emerge, the smartphone as we know it will be around for a little longer yet .

Whilst Rolex, Omega, Breitling, Rado, TAG Heuer, Tissot and Longines are all well known brands forming the bulk of Swiss watch sales figures, they are not the elite timepieces. The serious timepiece manufacturers of Patek Phillipe, Vacheron Constantin, Audemars Piguet, Breguet, Blancpain, Jaeger LeCoultre, Chopard, IWC, Cartier and A. Lange & Söhne are lessor known outside of the timepiece community yet they are the pinnacle of engineering design.

Just as the fashion watch didn't destroy the luxury watch industry, brands such as Hugo Boss, Daniel Wellington, Fossil, Michael Kors, Guess, Diesel, Armani, DKNY, Marc Jacobs, Swatch and Lacoste all fulfill a need.

Tissot timekeeping

Tissot is extensively sponsoring sporting events as an official timekeeper, the Australian Football League known as the AFL has been sponsored by Tissot for a couple of years now. The best on ground player on the Friday night game is awarded a Tissot watch after the match; needless to say, this is the premier time slot. I am also informed that a commemorative watch is struck for each player in the Grand Final winning team.

The AFL Grand Final is a huge sporting event on the Australian calendar held on the last weekend of September with the two teams winning their way through the finals series to the Melbourne Cricket Ground event with a capacity of just over 100,000 people for a match to crown the premiership team.

The National Basketball League in the United States has had Tissot performing timekeeping duties. The NBL is followed worldwide by basketball fans so would have a very high exposure to fans around the globe with individual players gaining international notoriety. Tissot is a mid-tier timepiece in the Swatch Group, one expects as an entry-level Swiss timepiece, this sponsorship would appeal to the mass market as an affordable wrist watch.

I am now starting to see Tissot watches on the wrists of people when I am out and about, so one expects this sponsorship to continue into the future whilst the branding remains successful. Tissot as a brand is supported by the technology invested within the Swatch Group, a consortium of elite Swiss watchmakers filling the full range of watchmakers from entry-level to ultra prestige brands. Is the Tissot strategy working? I would suggest so, this mid-tier timepiece is positioned to cash in on their support of elite level sports.

Shabooh Shoobah

It's an old album and I still love throwing it on, I really got into INXS when The Swing album came out in 1984 so I went back and listened to the earlier album that really gained them plenty of attention a couple of years earlier.

I knew their music, I started high school in 1982 and as a teenager really started to listen to the up and coming bands. My friends hated this music, INXS very pretty alternative at this point and not their scene. INXS were building a small but loyal following over in Sydney yet my friends would constantly ask me "why do you listen to this shit?"

We had heard that the Farriss brothers started off playing in Perth and Michael Hutchence had joined them around that time too. I was way too young to go out to any of the bars in Perth. That was pretty clear so I never got the opportunity to see them play live until later in the decade. This was when Kick was released and I was old enough to gain entry into pubs and clubs. 

The album kicked off with The One Thing, this was an upbeat and slightly unusual song, I liked it. With Black and White leading the second side album, the tempo was great. Old World New World holds plenty of charm for me, the B side is where the album really shined. Don't Change was pretty big, what a way to end this album, starting pretty slow before the guitar kicks in and fires up and then the whole band joins in - that's the song that gets cranked up loud.

To this day I still don't know what Shabooh Shoobah actually means, I don't care as this doesn't detract from my enjoyment of the album. I have it on CD now and still love loading it into the slot of the CD player in my car, stuck in traffic - who cares? I'm enjoying my time and no amount of traffic will wreck that. Now my teenage nephew is really into Shabooh Shoobah, he might be young but this album still holds up well, it's not just the old guys who like it.   

Side A
1. The One Thing
2. To Look At You
3. Spy Of Love
4. Soul Mistake
5. Here Comes

Side B
1. Black And White
2. Golden Playpen
3. Jan's Song
4. Old World New World
5. Don't Change

Flying the Boeing 787-10 Dreamliner

There has been plenty of advertising of the new Dreamliner 787-10 service between Perth and Singapore by Singapore Airlines. I have been lucky enough to be one of the first to fly this route and I have to admit - it's pretty good.

My outbound flight from Perth to Singapore was one of the older aircraft, I didn't think much about it as I wasn't really following the advertising - I fly Singapore Airlines anyway. The return trip two weeks later was on the the Dreamliner and based on the accounts of the people on the aircraft - they were pretty happy. My flight wasn't so great, I was sat next to a fairly large guy who took up all of his seat and plenty of mine - that happens.

He decided to fly in shorts and a T-shirt with only thongs as footwear, he kicked them off well before I got to my seat and I learned pretty quick that his feet stank. Fortunately, I had a window seat so I was able to sit with my head up close to the window trying to get the fresh air streaming in - it wasn't enough. That being said, my experience on the 787-10 was pretty good regardless. Much is made of the entertainment package, I can't really judge how good it was as my entertainment unit froze and that was the end of my entertainment - everyone else on the aircraft had no problems.

Fortunately I had my laptop with me and I was able to resume work, I shouldn't waste my time watching movies when there was work to do. People argue that pilots are not required anymore as the aircraft virtually flys itself, that is until a problem is encountered with the technology and requires diagnostics and trouble-shooting. Ok, so an entertainment screen is a little different from avionics, yet in many respects the same principles apply.

A peculiarity of the windows was they were not fitted with shades, there is a dimming effect controlled by a button that did not work for the whole flight until we actually touched down in Perth and then magically the electronic window shades worked. As we were heading to immigration, I heard passengers chatting on how great the experience was and I would have to agree.

Singapore Airlines is a quality airline and they run a pretty good service, a fat passenger is not the fault of Singapore Airlines and they had no control over the state of his feet. I look forward to my next experience on the Dreamliner and I hope there will be no more stinky feet.

I love my new laptop

I hated my HP laptop computer and finally got around to replacing this piece of rubbish, so I headed down to the post Christmas sales. Although the sales staff attempted to steer me in the direction of a new HP computer, I was adamant that I was not purchasing another HP pile of junk. So, instead I went for a Lenovo computer and haven't looked back.

The Lenovo ideapad 110 is not a fancy computer by any respects, all I wanted was a laptop computer capable of word processing, spreadsheets, presentations and internet browsing and that's what I got. The processor is 4 core AMD A8-7410 APU 2200 Mhz with 8.00 GB of RAM, 100 GB of disk space and that unfortunately is about as much as I know - I just want something that works.

I had Windows Vista on an older computer that crashed, everyone hated Vista, but I thought it wasn't so bad. I know about the compatibility issues but what I really hated was the Windows 8.0 operating system; I couldn't upgrade to Windows 10 because of issues with 8.1, at least that upgraded. So I'm happy with this computer coming loaded with Windows 10, no more upgrading and the best of all - it isn't HP. 

The Rolex Sky Dweller

Undoubtedly the most complex movement in the Rolex range, the Sky Dweller maintains the classical Rolex traits of the in-house movement, fluted bezel and oyster case that I consider almost unusual for a timepiece released in 2012.

Whilst not my first choice as a timepiece, I appreciate the complexity of the engineering built into the Sky Dweller movement but sometimes feel this is an upgraded DateJust in regards to styling.

I have always thought the DateJust was an old man's watch with the Sky Dweller adapting the fluted bezel; to my way of thinking, this is an old outdated style. This timepiece firmly targets the global executive working across time zones with the red pointer aligned to home time.

Naturally, what sets Rolex apart from competitors is the classical style that doesn't change with trends; hence, Rolex never goes out of style. Still, this isn't a style I lend myself to.

Yet I understand and appreciate there are many who do so I question my own opinions of style. The 9001 movement is the most complex in the Rolex range with 40 jewels to achieve dual time zones indicated on the centre hour and a power reserve of 72 hours.

The 42 mm oyster case is water resistant to 100 metres with a stainless steel, white gold, yellow gold and Ever Rose gold as case materials. As soon as the term global executive is bandied around one can expect steep price.

This timepiece could be costing anywhere from $21,000 AUD to $61,000 AUD depending on the precious metal construction of the case - that's some serious coin.

Reflecting on my MBA journey

I decided to document my personel journey starting back in 2015 when I was selected in the second Torrens University MBA intake. I missed out on the inaugural 2014 intake as I was overseas at the time and although I returned home just as the first online MBA classes started, the faculty didn't believe I had enough time to prepare. Naturally I disagreed but the decision wasn't mine and I had to fall into line.

I left school after just turning sixteen beginning a technical apprenticeship and attending trade school part-time for three years, this actually gave me a solid foundation in business. After all, I was then fourty six and not twenty six when I began this course. After completing my four year apprenticeship, I was a twenty year old seeking to make a living as a tradesman and I found the first six months post-trade as the hardest of my life. By the time I turned twenty one, I was well on my way and a competent tradesman, I still needed to build experience post-trade but I was well on my way.

I didn't complete any real business qualifications until well into my thirties as I had always successfully engaged in work-based learning and never had time to complete more than short courses. That changed after leaving private enterprise after twenty years and I moved into the government sector, I had the availability to undertake certificate and diploma level qualifications that were very reasonably priced and supported in the government sector.

In order to apply for higher levels based on knowledge and skills as a state government employee, I had to undertake tertiary education and so began my undergraduate studies in Training and Development beginning in 2012 as a fourty three year old. That gave me all of 2012 and 2013 plus half of 2014 to complete the qualification. I would never have undertook such an obligation had I remained employed in the private sector.

I then took long service leave throughout the European summer of 2014 as I had already postponed the trip to complete the Training and Development bachelor degree. I only submitted my final assignment the day before departure for Europe so missed out on graduation and I really didn't care. When I returned from three and a half months leave and wasn't accepted into the 2014 inaugural intake, I took a further unit of Organisational Behaviour at my old university in trimester three, a unit that I found very informative.

So whilst I began Organisational Leadership as an undergraduate student at the University of New England, I quit that course to concentrate on the MBA and I am glad I did. My first two units of Accounting for Leaders and Economics and Decision-making nearly did my head in - I struggled with the workload. It was a big step up from undergraduate level but despite the stress, I did ok. Now that I am close to the end of my MBA experience, I want to get on and get some accounting experience on my resume.

Micro-economics is interesting, the final two weeks of a twelve week course were spent on macro-economics, a very important skill-set for both entrepreneurs and managers. I didn't mind accounting so much to begin with, then it got real hard real quick and I struggled a little at the end. Moving onto finance, it really hurt and that was a real struggle with the exception of the financial analysis based on reading financial statements, valuing shares and bonds as I had already been doing that for some time.

Decision-making was by far the most interesting unit, this could possibly be because I did really well in terms of results although one could argue I enjoyed the unit and my interest was reflected in the results. Marketing management was really interesting, there is more to marketing than I initially thought. This was a thoroughly interesting unit and although I don't really see myself engaging in too many marketing activities anytime soon as I'm not involved in small business anymore, this knowledge is helpful for future endeavors. 

I undertook a couple of project management units and this was done in conjunction with the global project management course at the university. In many ways, this was great because we were exposed to full-time project managers who were seeking formal qualifications. These were guys undertaking the Graduate Certificate in Global Project Management and I believe you learn well from peers as the learning environment is less formal and more relaxed.

I had less of a relaxing learning experience undertaking operations management and the strategic management capstone project as I had plenty of issues with the lecturer. This was the only units with the same lecturer - the only staff member I had an issue with. As I am getting to the point where I am paying the last of the course fees off, I need to begin thinking about my return on investment.

I had hoped to have fully paid off my tuition fees before graduation, I have already failed on that goal so I have to be be very careful about my next decision in regards to job hunting. I am looking forward to job hunting and although I had been stressed in regards to future job opportunities in such a depressed job market - offers are not coming in as hoped.

Ring your f___ing bell

Bicycle riders are gaining a poor reputation in Perth, a cyclist after riding through a red traffic light struck a pedestrian causing her significant injuries including traumatic head damage. She had to learn to talk, walk and eat again; this was a life threatening injury that will change her life.

The incident once again sparked public debate over licencing and registration of cyclists using both roads and dual use pathways. I think it is fair that cyclists carry mandatory insurance so that pedestrians who are injured are not left financially crippled, motor vehicles are required to carry mandatory insurance so why not bicycles? Cyclists struck by motor vehicles are covered by the mandatory third party insurance carried by that vehicle.

I am a runner, well more of a jogger these days and like to run on dual purpose pathways that do not have dedicated bike lanes. We have these cyclists roaring past runners doing around 40 kph. I have had two just brush me and the potential for serious injury is very real. Vehicle drivers now have to keep a metre between the vehicle and the cyclist, why shouldn't riders keep a metre distance from pedestrians?

I really like the oldies out on their bikes getting exercise, they are courteous, ride at an acceptable speed and always ring their bells when overtaking. When I hear their bell ring, I always move over and acknowledge their signal with a wave as I want to be as courteous to them as they are to me. Now the Department of Transport is erecting speed signs, speed humps and other signage on dual use paths to prevent cyclists from gaining the same reputation as cyclists on the roads.

49 and still running

This doesn't happen every morning, but I do try to perform this ritual at least twice a week, once on my day working from home and on the weekend. At 49 years of age, I still get up and undertake a 5 km run twice a week. These days I run to my heart rate monitor as the purpose is to increase my cardio-vascular activity to ensure my heart and lungs remain a degree of fitness.

The speed isn't fast nor are the times quick, once what took me about 20 minutes now takes about 40 minutes but I am happy to get through a session. I read that people over 40 shouldn't be running anymore, they should engage in less impact intensive activities but I like a run in the morning. My left knee hurts, I have hamstrings issues resulting from the knee and associated strain. My right kidney hurts along with my right ankle, probably my feet are feeling the stress too as I'm not 75 kg anymore but closer to 100 kg.

I normally cool down by watering the front lawn and garden by hand before upping the intensity again for a short free weights session. At this stage I wouldn't change my running habits, I live close to Lake Monger and really enjoy the circuit around the lake, the views are fantastic, the wild life interesting and I use the time to think. I can nearly author a blog post in a single run and need to quickly shower up after the free weights to hit the keyboard whilst the sentence is still coherent in my head. Yep, I wouldn't give up my running sessions however slow and lacking rhythm anytime soon.

Just an evening in Singapore

I transit through Changi Airport a number of times a year just like many others; this excellent airport hub has plenty to offer weary travelers. But owing to the number of times I traverse through Changi; I prefer to get out of the airport if I have any more than six hours to blow. I have wandered through the terminal enough times to be bored with spending more than a couple of hours there. I have no interest in pulling up a bar stool at the airport for the sole purpose of getting on the booze and I have looked through most of the duty free stores in the terminal.

Terminals one, two and three are connected in a horseshoe arrangement with light driverless rail connecting all terminals at multiple locations. Actually, the underground MRT is driverless as well. From Terminal two, the East/West line will take you into the city connecting with other lines to get you pretty much where ever you want in Singapore. This is achieved at a very good cost in very quick time. The MRT station also directly connects to Terminal one and three as well via light rail; it's a very good and efficient service.

I'm finding I'm getting to the Bayside MRT at the Marina Bay Sands for just $2.40 SGD; likewise, a connection to Clarke Quay, Chinatown or Boat Quay is just a couple of interchanges. There are some absolutely decent curries available at Little India for such a tiny outlay. Once, I thought they had undercharged me and I had to get them to recheck the bill - the bill was correct. The Chinese hawkers stalls just off Bencoolen Street offer pretty good food options as well at a very reasonable outlay although getting a seat is sometimes tricky.

On one trip I decided to duck over to Gordon Ramsay's Bread Street Kitchen in the Marina Bay Sands for dinner in the upstairs section with an amazing view overlooking Marina Bay. Sure, you pay for the view but as a one off, you don't mind too much. I don't mind saving money on the transport to spend on food and drink, that's more than a fair compromise. On this occasion I didn't mind drinking a glass of full bodied red with my meal.

Ironically, I have plenty of credits from missed connections due to Singapore Airlines running behind schedule, these days I just request to be given a pass to the SilverKris Lounge. Clearly this isn't local Singapore knowledge, I have been informed the East Coast restaurants are outstanding but I have never had the time to explore between flights, but with a few hours to blow on a late night flight can relieve the boredom.

The Omega boutique is getting exclusive

As a luxury goods manufacturer, Omega is a strong international brand with a strong product and heritage. Omega has undertaken Olympic timing duties since 1932, the collaboration with NASA and the Speedmaster, the nautical heritage with the Seamaster, the luxury of the DeVille and Constellation ranges.

From what I have had explained to me by staff at authorised distributors, Omega is seeking to rationalise their distribution outlets and make their product more exclusive. A luxury goods manufacturer is not happy when retailers discount their product, that's understandable as they expend huge resources marketing their products to carefully cultivate their reputation and heritage.

From what I understand, Omega has been brutal realigning retail distribution chains with some authorised distributors under pressure and losing their distribution rights. The Omega boutique is becoming very exclusive with what appears to be the new Omega boutiques owned by the Swatch Group, the holding company of Omega and older boutiques remaining under the control of existing distributors - for the time being at least.

Is there such a thing as a cash poor millionaire?

Do cash poor millionaires exist? Maybe the terminology is a little subjective as vast differences exist between millionaires and high net worth individuals. I prefer the term high net worth individual as a millionaire is certainly a different proposition, homeowners with near million dollar debts are not as wealthy as many would think.

With real estate prices currently driving the nation along in terms of wealth, is this wealth really driving growth and jobs. The major east coast cities of Sydney, Melbourne and Brisbane have median house prices exceeding a million dollars more households are now entering million dollar status. This is net wealth, most households are highly leveraged carrying significant debt, gross assets are great but also carry significant risk especially with historically low interest rates eventually to rise.

Whilst a number of measurements exist, the definition of the high net worth individual generally denotes individuals with liquid assets exceeding one million United States dollars not including their primary residence. When families hold 10% - 30% equity in their house, that is plenty of debt to carry so while people might want to use the term millionaire, they are certainly not high net worth individuals or families.

Households are feeling mortgage stress with low wages growth, rising utilities, school fees, healthcare, groceries and probable soon to be rising interest rates. The reasons the Reserve Bank of Australia set interest rates is due to economic activity, lower rates are designed to stimulate economic activity whilst rising interest rates limit inflationary forces leading to severe downturns and recessions. We are a long way from that, but since these loans are long-term families are expected to feel greater stress throughout the full economic cycle.     

An alternate MBA return on investment

So the general MBA return on investment revolves around determining starting salary, calculating the full tuition costs, determine opportunity costs and finally determine the increase in salary post MBA. After determining the increase in salary, calculate the time it takes to repay the investment in costs and you have your ROI. A part-time MBA negates the effects of opportunity cost if you keep full employment the whole way through the tuition period so I have an advantage there.

If I take an alternate strategy for determining MBA return on investment, I calculate the funds directly invested in my education, give the education a miss and instead invest the funds in equities or bonds. My choice would be Wesfarmers (WES); whilst the price is a little higher than I hoped, I am working on saving the sum for the period of my education and investing the sum at the completion of the course.

The $20,000 I have allocated is invested at an average price of $41.00 giving me 488 shares in WES. This will allow me to track both capital appreciation and dividends paid over the next 12 years to determine my return on investment or at the very least estimate the capital appreciation (or loss) and dividends received.

Whilst it is too late now in many respects as I have already invested the funds in education, I will take a five year and ten year view to see if I would have been better off just investing the funds and keep plodding on in my current employment.