URBANDRIVER 27 CONFIDENCE IS ONE OF THE MOST ELUSIVE of all assets. But an asset it most certainly is. It can be seen, post-election, that some confidence in the community has returned. There is a sense by many that uncertainty about prospective tax changes have disappeared, allowing businesses and people to make more certain decisions. A few examples that point to this confidence include the stock market - at the time of writing - sitting at 11-year highs. There has also been a flurry of takeover activity on our market; again something that does not happen without confidence. One example of this is Wesfarmers, a diversified industrial company that owns, among other things, Bunnings Warehouse, K-Mart, Officeworks and Target. Last year it sold most of its stake in Coles, citing its lower return on shareholders’ funds as a clear reason. This year already, Wesfarmers has embarked on a series of small takeovers: for lithium miner Lynas, then for another lithium miner Kidman Resources and, after that, for online shopping business Catch (which runs Catch of the Day). Understand that, for decades, Wesfarmers has been lauded for its astute judgement when buying businesses (though, just as the Global Financial Crisis hit, the giant Coles acquisition might not have been its finest moment). That Wesfarmers is now prepared to embark on a series of takeovers says plenty about its view of the long-term returns, its confidence. But this is the point that all of us must remind ourselves about, repeatedly. This is a long- IT’S ALL ABOUT HAVING THE CONFIDENCE (THERE’S THAT WORD AGAIN) TO SET ASIDE THE SHORT-TERM NERVES TO LOOK TO THE BIGGER PICTURE. ROI Confidence builder term game, and the short-term worries and nerves might prevent you from making otherwise brilliant investment decisions. It’s all about having the confidence (there’s that word again) to set aside the short-term nerves to look to the bigger picture. So, if we look forward, what is there we can already see? In Australia, for starters, you can see a bigger population (yes, housing markets will recover in the future; with rising populations they almost always do) and an increasing reliance on smart technology (some massive fortunes will be created from the implementation of the new 5G mobile phone technology). There will, for the very long-term, be a need for carbon-based fuels including oil, gas and coal but – as the decades pass – there will be more emphasis on battery-technology and other emerging energy sources to power our lives. That’s what Wesfarmers’ interest in those lithium companies is all about. In the future, and it’s coming sooner rather than later, we will shop differently, be entertained using different devices and our healthcare will increasingly be monitored by personal technology. And yet, there are some things that will always remain staples of our lives: the demand for fresh food and water, the importance of family and friends, and the challenge and opportunity from work. We also know that the demand will grow for Australian products from China and India; we know that there will be increasing enrolments in our schools and universities by foreign students; we should understand that more tourists from these rapidly emerging economies will visit our shores. So while there’s, right now, a lull in our economic growth story, don’t for a minute think that it’s all over for Australia. There will always be cycles that mean booms and/or busts for housing, commodities or the overall economy. The great trick of life is to have the confidence (and the cash) at the right time to cut a deal and to see the brighter future. It’s not that hard, if you try.