Students of disruption in big companies will be familiar with how this is playing out. Big company comes to party late after realising another company is poised render it obsolete. Announces significant changes aimed at addressing new business model/dealing with emerging problems (as VW did this week with its US$10b diesel cheating scandal settlement). Share price does not react. Directors wonder why. So do shareholders. And then the real damage starts. In the case of VW (and we could substitute GM, Ford or Fiat, or any one of a number of other "safe" companies in investor smsf's held in the "overseas shares" category) the company has announced a significant increase in the number of electric vehicles set to be rolled out under the Audi brand (the largest profit contributor to VW). This is to prove the company now has a viable, post-diesel business model. Maybe. But in reality, the better that Audi does, the worse it will it does. Here's why... (VIEW LINK) Caption: Under the Tesla bonnet - "Look ma, no engine!"
CEO of Loftus Peak, a specialist global fund manager with a track record of successful investment in some of the world's fastest-growing listed businesses.