As our befuddling year comes to a close, it pays to remember which companies can rely on the magic pudding formula – ensuring hefty profits no matter what the financial conditions – and which ones cannot.
The Reserve Bank may have kept rates on hold, but our big banks are already in the process of raising interest rates on mortgages to protect multi-billion-dollar profit margins. Because they can.
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Is Bellamy's baby formula disappearing?
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"We don't make these decisions lightly, and these changes reflect the increasingly challenging environment we are currently operating in as we seek to meet the needs of all our customers and our shareholders," said NAB's chief operating officer, Antony Cahill.
He was wheeled out to do Andrew Thorburn's dirty work on Monday after NAB announced plans to lift its variable rate for housing investors.
By pure coincidence, Westpac raised raised rates for all interest-only home loans across the board on Monday.
Last week it was the Commonwealth Bank that raised some of its fixed home loan rates.
Unfortunately, there is no such magic formula to save investors who put their loot into Bellamy's Organic.
Short sellers – like the prescient Lloyd Moffatt – feasted on a share price rout that continued Monday, following the Friday disaster that signalled this China market fairy tale is over.
The stock went from a high of $15 in August to a low of $6.20 on Monday.
The lesson for other Bellamy's investors is, don't look to the blue sky when a company refers to the "luggage channel" as one of its major sources of distribution.
This a reference to the peak of the baby formula craze when people were people were buying product off supermarket shelves and literally channelling it overseas in their luggage.
Investors should have instead been reading the tea leaves when senior management started lugging cash out by the suitcase.
The organic group's chief executive, Laura McBain, and chairman, Rob Woolley, rebalanced their investment portfolios in August with a combined $5 million share sale – realising a 1450 per cent gain on the stock since its 2014 listing.
"Laura and Rob will be investing in personal assets and supporting private family investments," the company said at the time.
McBain clinched a sale price of $14.55 a share for her stake, and her chairman Woolley did better at $14.60 for nearly half his stake in the group.
Did we mentioned Bellamy's shares are currently trading at around the $6 mark?
To be fair to McBain, her remaining shares in Bellamy's have tanked in value by $19 million since her big sale in August.
If some of the sceptics like Moffatt are correct, McBain and her fellow Bellamy's investors may not get an opportunity like that ever again.
Phone switch
You've got to admire Telstra CEO Andy Penn's unceasing efforts to ensure the telco does not suffer another bout of network wobbles on his watch.
And he is turning Telstra into the Real Madrid of the telco world with his big name recruitment.
It started earlier this year with Nokia boss, Stephen Elop – who famously, and correctly, described the telecoms vendor as a "burning platform".
No such inflammatory remarks about Telstra, so far.
It also recruited telco industry's man for all seasons, Kevin Russell, who has stints as Optus' CEO, and the man who headed Li Ka-Shing's multi-billion-dollar 3G gamble at Hutchison.
On Monday Penn snapped up the well regarded Aussie, Robyn Denholm, as his new chief operations officer. She cut her teeth for the best part of a decade in a similar role as telco equipment provider, Juniper Network.
Robyn Denholm is a world class appointment to oversee next gen development of @Telstra operational environment https://t.co/1E4qK89dtn
— Andrew Penn (@andy_penn) December 5, 2016
Denholm takes over from Kate McKenzie who retired in August – following the embarrassing outages.
And Penn has not closed his cheque book just yet. He is still on the lookout for a chief information officer to replace Erez Yarkoni, who returned to the US in October.
It got CBD wondering about another Galacticos, who recently departed the telco. Former chief technology officer, Vish Nandlall, whose greatest innovation was demonstrating that Telstra's CV checking process has as many holes as its network.
According to Nandlall's LinkedIn profile, he is currently working with a "stealth mod startup company" if you believe it.
Got a tip? ckruger@fairfaxmedia.com.au
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