On May the 14th of this month an article in the Age entitled ‘Rate of Bulk Billing hits record high’ caught my immediate attention. The Labour Health minister Tanya Plibersek is on record citing that the spike in bulk billing rates was a result of long term concerted effort on the part of this government to incentivise Doctor’s to offer bulk billing services. I on the other hand viewed this spike very differently.
I viewed the spike in bulk billing as an indicator of consumer spending sentiment, if more people are seeking out bulk-billing doctors, this means that they are willing to move away from their family doctor or convenient medical centre because they are unwilling to spend money. People are concerned, people are uncertain and insecure about the economy, and people are trying to hold on to their money, that’s what a spike in bulk billing rates says to me.
Three days before on Saturday, May the 11th for the first time in nine months the Australian Dollar fell below parity. Some who keep track of global financial news may have been cognisant of the fact that from the 7th of May rumours started circulating that billionaire George Sorros was planning to raid the Aussie Dollar and start short selling it like he had done with the British Pound back in 1992.
For those of you who don’t understand short selling but perhaps heard the term over and over again during the fallout of the global financial crisis, let me explain it for you. The premise is simple; one way to short sell is to have either a lot of stock in a company or a hell of a lot of currency. Enough of it in fact, that when you dump it on the market you more or less create more supply than there is demand. As a result while you are selling it the price drops, as a short seller, you want it to drop as far as it could go, the further the better!
Once you have sold all your security, if you are lucky it will fall even further. Then when the price has completely bottomed out, you swoop on in and buy it all back. There you go, you have the same stock as when you started but now you have a few million or billion dollars in the bank also. Awesome eh! It became an issue during the GFC because traders were short selling securities they didn’t own, betting that they of course would go down, which they did. Like pass the parcel though, someone always ends up with a lame useless toy at the end.
Just to close things off Sorros did short sell the Aussie Dollar at the start of the month, and pocketed $55.95 million for his troubles. No short change when the average Australian worker earns $3 million dollars in their entire lifetime. George knew that the surprise RBA announcement of 25 basis points would cause the dollar to drop, his gamble paid off. $1 billion dollars down and he is now $60 million richer.
What was I doing at this time you may be thinking? I was watching the Voice and browsing for Hi-Fi equipment on E-bay, if only I had been keeping a close eye on foreign currency markets and whether any board members were entering the Reserve Bank Headquarters for a meeting my outlook may look a little different today. As a side note I did pick up an excellent bargain on a 6 Head VHS Player that has a built in DVD burner, I no longer have to sell my Video 8 Camcorder as I can now burn directly to DVD. That’s another 12 years I will get out of that amazing little device!
Anyway, so thanks to the RBA rate cut interest rates are the lowest they have ever been, ever! I mean in history of interest rates they have never been as low as they are now. That is cheap money, any minute now you would expect the citizens of Australia to rise up and start borrowing money in some kind of lending frenzy. Wouldn’t you, surely? It surely is going to be difficult to even get into banks now with all these people lining up to borrow money, as if banks didn’t have enough of a problem with queue’s already. Banks may even have to stay open until 5, just imagine!
However, I have noticed that there are no lines running out of the banks, no bank concierges run off their feet. No rush on the cheap money seems to be happening at all! In fact, property prices really aren’t going anywhere except Darwin and Perth but they have a supply issue as all the people who once worked in manufacturing now have moved interstate to work in the mines, riches awaits! Just ask Lindsey Fox, he pays his drivers over $200,000 per year to work in Western Australia’s Pilbara Region, most of them live in Bali and work six days on and six days off. $200,000 per year and living in a 3rd world country, sure beats clocking on the Ford Assembly line in Broadmeadows, doesn’t it?
Now if you are somebody trying to make a buck, this is a challenging time. Optimistic people will tell you that these are times filled with opportunities. It’s easy to make a buck when people are rolling in the money and the general consensus at the time is that the good times are never going to end! That is why some Doctor’s will rob you blind during boom periods because they know you are willing to pay more for the convenience of not having to travel thirty minutes and wait nearly an hour for a bulk billing doctor! This same doctor is suffering now though.
Simple rule to survival during periods like this, get old school. Remember now that business is about doing, identify problems that your customers are facing and find ways to solve them. If you have solved a customer problem, go and see them and tell them that you have done so, with any luck they will pay you something for it. Do it daily!
It’s going to be a rough ride in Australia for the next few months so make sure to be disciplined, loads of self-discipline. Make sure you keep the commitments you make to yourself, don’t put anything off or it will only make everything more difficult. This is boots and all period, you tell yourself you are going to make ten calls today, make twelve! Think value, value, value, how do I create value! In times like this, only the strong, disciplined and valuable survive. All the others get thrown the way side as a managers start bringing the bottom line into sharper focus!
Most importantly watch out for the devil inside, the little bustard we all have in us that tells us to focus on that thing we need to do, tomorrow. You know, the little devil that tells us that we have loads of time! I have seen procrastination end people in companies not because they weren’t talented people, just that the idiot at the next desk was (at the time) more focussed on getting more things done!
More importantly, get up when you are knocked down. Get straight back on the horse, get back in the ring, pick the toast that fell on the floor with the butter side down straight up and fucking eat it. And eat it every day while you are closing deals, kicking arse and taking fucking names. Oh and one more thing, don’t lose focus on creating value, achieving sales targets or closing deals otherwise the entire house of cards will fall apart. Be mindful of distractions and get ready for a wild ride, I think the next twelve months is going to be very interesting for any individual trying to make a dollar on this planet.