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Money to invest, anyone?

September 4th, 2010 admin Leave a comment Go to comments

4 septembre 2000 : the CAC40, the French equivalent of the Dow Jones or FTSE index, reached 6922 points.

4 septembre 2010: it closes at around 3672, barely over half of the level of 10 years earlier.

Source : Les Echos, 3/9/10

Source : Les Echos, 3/9/10

Now, Lean Thinkers generally agree that the Lean journey is far more difficult in those companies permanently fighting off shareholders pressures. Don’t you think that, with hindsight, shareholders 10 years ago may have been pushing longer-term Lean improvements rather than demanding short-term financial gain?

For the decline in value of French shares is far more acute than that of either the U.S. or Germany, as indicated by the diagram on the right. The U.S. and Germany are two countries where Lean Thinking has caught on far more than in France (I also read this week that unemployment has dropped in Germany for the 13th successive month).

OK, there have been three waves of crisis in the last years – the Internet bubble bursting, the subprime phase, and more recently international debt. However, contrary to the Dow Jones and Dax 30, the peak in 2000 has never again been reached since.And what is also worrying is that, back in 2000 (as is the case today), technology and innovation were seen as the way forward. 10 years later, technology stock accounts for only 6% of the CAC 40, against 40% at the time.

There have been successes, notably in industry : Air Liquide has increased by 87% and Michelin by 78%. However in the 10 leading stocks in terms of value at this moment, (Total, BNP Paribas, Sanofi-Aventis, EDF, GDF Suez, L’Oréal, LVMH, France Telecom, AccelorMittal, Société Générale), there is only one we could consider as belonging to industry.

Anyone with money to invest? I can only suggest putting it where Lean Thinking is rife, and sitting back with confidence that this is the best investment you can make for the next ten years.

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