BREAKING NEWS: Planet Earth Plc Due Diligence

Following on from my last blog, we took a quick look at Planet Earth Plc’s performance over the last two millennia (or so) and found the results were a little disappointing in Q4.

Now if I were an (Alien) Investor, looking to invest in Planet Earth Plc, I’d need to do my 'due diligence' as is customary in any business transaction. I would need to investigate and evaluate the business and relevant aspects of the past, present and predictable future of the opportunity.

Initially an Investor carrying out due diligence would need to create a checklist of required information and thorough research would then be conducted using external sources. Appropriate investigation and verification into the most important issues often must be balanced by a sensible level of trust from the various departments involved.

The major players in this example have been broken down as follows:
The Customer (You)
The Suppliers (Corporates)
Management (Governments)
Experts (Scientists)
Finances (Bankers and Investors)

There are many reasons for conducting due diligence, including confirming that the business (or Planet!) is what it appears to be. It's important to identify any potential deal breaker or problems on the horizon and gain all the relevant information that will be useful for valuing the assets and deciding on the viability of the project. On the face of it Planet Earth Plc seems to be a uniquely beautifully blue piece of intergalactic real estate with an abundance of natural resources and resourceful inhabitants - but appearances can, as we know, be deceptive.

The results can be seen here at http://planetearthplc.com/

On first inspection, initially everything looked fine with Customer relations and the Human population was increasing at a very impressive rate and clearly human activity looked calm and progressive. Global GDP was up which suggested that productivity was thriving, however, that wasn’t really telling the whole story.

There were worrying signals which seemed to show an increase in refugees, unemployment, aggressive behaviour and a lack of co-operation. Full scale fighting between sovereign states and between internal factions was taking place in various power struggles across the planet. The trend seems to be for the population to be turning away from well established moral guidance and to be questioning previously trusted and respected leadership values.

Moving onto the Suppliers, again productivity was excellent with higher than expected outputs. Profits were rocketing and, with seemingly endless demand, the picture couldn’t have looked better. However again there was an underlying indication of resource shortages that opportunistic entities were prepared to exploit for their own gain. Prices of valuable commodities were rising beyond the pocket of the ordinary consumer with Global conglomerates and even Governments controlling output to consolidate their powerbase.

Evaluating the Management report, closer inspection revealed serious flaws in succession planning in terms of environmental mitigation and financial direction. There seems to be a far greater emphasis on reacting to crises, both natural and manmade, rather than on innovation and proactive development to prevent, or at least ameliorate, potential disasters which can be reasonably predicted. This lack of foresight is a worrying lapse in forward planning and would be a cost effective means of addressing issues of which the relevant governments are now aware.

We then reviewed the Expert evaluation which highlighted a worrying trend towards future growth at the expense of the planet's natural resources and the means of potential recovery following the wholesale plundering of the essential assets and materials critical to life. It was found that there were grave concerns as to the supply of those most basic of requirements for human life - air quality, food and water - without which the Human population simply could not survive into the future.

Finally but optimistically we digested the Financial Statement. With Suppliers struggling to cope with demand and unprecedented profits, why were the Global Markets as they were? The development of thriving new markets in Brazil, Russia, India and China were masking heavy downturns in more traditional areas of the New and Old Worlds. Swamped by the devastation caused by the global financial crash of 2007/8, the US and Europe were drowning in the manmade crisis caused by greedy bankers effectively gambling away their clients' money by predicting that markets would fall and taking the profits from their bets. Even when given government rescue support to protect their customers, those same bankers consolidated their assets to rebuild their own balance sheets rather than extend the government largesse to their clients.

From the investor's point of view, the jury has to be out on the way forward for Planet Earth Plc. On the one hand the resources of Earth and both the initiative and talents of its inhabitants give cause for optimism. However the blatant exploitation of the planet is simply unsustainable at present levels and the coming years will lead to a 'tipping point' beyond which the situation could become irretrievable without consolidated intervention on a global scale.

Innovation will be a major factor with technological advances and smarter use of existing resources. The urgent need for greater awareness and a respect for the planet from all quarters, if harnessed properly, could be a tremendous force for good but failure to appreciate this very urgent need will further destabilise the situation. The contrast between the 'have' and 'have not' nations, already a potential area of conflict, if left unchecked will inevitably lead to a prolonged struggle in which the main loser is Planet Earth Plc. The difference, in my opinion, between complacency, scaremongering and well founded concern is the overwhelming evidence in support of urgent action for global alliance, co-operation and direction.