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A billion reasons to reconsider crypto · The Money Puzzle

0:09
Speaker 1: Hello, and welcome to The Australian's Money Positive podcast. I'm
0:12
Speaker 1: James Kirkby. Welcome afore everybody. My guest today is Jackie Clark.
0:17
Speaker 1: She's a Charge of Accountant, a Family Office board member
0:20
Speaker 1: and author of a very successful book, Stop Worrying About Money,
0:26
Speaker 1: which she has reminded me to remind you, has now
0:28
Speaker 1: won several awards since she was on the show the
0:31
Speaker 1: last time. But she's also particularly good on investment markets
0:36
Speaker 1: and I've wanted to talk to her particularly, and I've
0:41
Speaker 1: wanted to talk to you particularly about crypto. Now. I
0:45
Speaker 1: know we've had people on about crypto regularly and bitcoin,
0:49
Speaker 1: and to some extent it's been what we say. Some
0:53
Speaker 1: listeners have thought I've been a bit dismissive of crypto.
0:56
Speaker 1: I haven't. I've been terribly skeptical about crypto to a
0:59
Speaker 1: point I have to say not anymore. By that, I
1:03
Speaker 1: mean there are things happening, particularly at the top end
1:06
Speaker 1: of the market, particularly the world that Jackie Clark operates in,
1:10
Speaker 1: that I think will really make you reconsider the whole
1:15
Speaker 1: area if you haven't already about deeply.
1:18
Speaker 2: How are you, Jackie, I'm great James on this brisk
1:21
Speaker 2: morning brisk.
1:23
Speaker 1: Morning, indeed brisk morning and Melbourne as well, I can
1:26
Speaker 1: tell you that. But you know, I've been thinking something
1:29
Speaker 1: cut my arm. I mean a few months ago. I
1:30
Speaker 1: think the outstanding thing that I noticed was amp unlikely
1:34
Speaker 1: perhaps of all the big institutional managers, was, as I understand,
1:40
Speaker 1: the first fund manager to formerly buy a crypto. They
1:44
Speaker 1: bought bitcoin. And then I saw a fascinating piece a
1:49
Speaker 1: couple of days ago where Amazon and Walmart are talking
1:55
Speaker 1: about issuing their own crypto coins stable coins, that is
1:59
Speaker 1: the come convertibook two dollars. And then this morning, just
2:04
Speaker 1: so happens, this morning, JP Morgan is launching They're all
2:08
Speaker 1: crypto coin, and I think something really is starting to
2:12
Speaker 1: happen inside financial markets. What tell us your review as
2:18
Speaker 1: a conservative investor, I expect tell us your view.
2:22
Speaker 2: Bitcoin. I don't invest in it, I don't have clients
2:25
Speaker 2: who invest in it. I have friends, though, who chat
2:28
Speaker 2: about it, and some who play with it. I guess
2:31
Speaker 2: the big question with bitcoin is it's some type of
2:35
Speaker 2: economic bubble? Is it? And people often talk about it
2:39
Speaker 2: as the online goal, but perhaps the bit that's the
2:44
Speaker 2: difficulty I find with it. And you know, one of
2:46
Speaker 2: the things I talk a lot about when we discuss
2:49
Speaker 2: things like financial literacy. My caution to people always is
2:52
Speaker 2: doing your due diligence on the investments. So don't invest
2:56
Speaker 2: in something you don't understand. And it is very difficult
2:59
Speaker 2: to get to the bottom of what the bitcoin actually represents.
3:05
Speaker 2: And so sure conscious that AMP and others, including super
3:10
Speaker 2: funds in Australia have started to contemplate bitcoin or actually
3:14
Speaker 2: add bitcoin to their portfolios. And is that perhaps just
3:18
Speaker 2: a why is it a way of diversifying risk? I
3:22
Speaker 2: don't know the answer to that, but perhaps the bigger
3:24
Speaker 2: question is what does it really represent? And there is
3:28
Speaker 2: some contemplation that it's considered a treasury asset, but it's
3:32
Speaker 2: not cash and if the bitcoin price drops, your cash
3:37
Speaker 2: has gone. Now that's not a treasury asset as far
3:40
Speaker 2: as myself is a chartered accountant would consider. So it
3:43
Speaker 2: represents lots of conflicts in it. Yes there is, yeah,
3:47
Speaker 2: I know, including with the energy usage and everything else.
3:51
Speaker 1: Sure super funds I read now have there's a billion
3:56
Speaker 1: dollars Australia inside look self managed super funds. It our
3:59
Speaker 1: so many people are taking I think they're just taking
4:04
Speaker 1: a bet that the fear of missing out. That's my
4:07
Speaker 1: gut feeling. But just looking at it a little bit
4:10
Speaker 1: deeper as to why it may become more important because
4:14
Speaker 1: it's becoming embedded in the financial system and the way
4:16
Speaker 1: perhaps we might ever have imagined. I mean, first of all,
4:19
Speaker 1: you have Trump talking about going into the strategic Reserve
4:21
Speaker 1: in the US, which is extraordinary. He's totally pro crypto.
4:27
Speaker 1: But more than that, when you see the majors and
4:31
Speaker 1: when you see JP Morgan entering the market, it tells
4:36
Speaker 1: you there's more going on than simple bitcoin betting.
4:41
Speaker 2: Yes, perhaps it has stood the test of time. You
4:45
Speaker 2: could argue perhaps since its introduction, it has generally increased.
4:50
Speaker 2: Since its introduction, there is a limit apparent limit to
4:54
Speaker 2: the supply when the system was established, which I kind
4:58
Speaker 2: I've find fascinating as well, because with the bermin Ai,
5:04
Speaker 2: I would expect that bitcoin per se would actually grow.
5:12
Speaker 2: So with this limited market, I think it's one hundred
5:14
Speaker 2: and twenty one million, so to speak, and I think
5:16
Speaker 2: we're only at not even at twenty percent penetration yet,
5:19
Speaker 2: is that right? We're under twenty million, I think, So
5:21
Speaker 2: we've got a long way to go in this market
5:23
Speaker 2: of picking up this coin for one of a better word.
5:27
Speaker 2: So I guess there's potentially it, but it does feel
5:29
Speaker 2: like it does feel like a bet. And if you
5:32
Speaker 2: were looking at a portfolio spread, this would be The
5:35
Speaker 2: people I work with won't go near it.
5:37
Speaker 1: They will go neared state.
5:38
Speaker 2: It isn't a case correct. Yes, So the advisors, certainly
5:43
Speaker 2: in say Sydney Melbourne markets who look after wealth, are
5:47
Speaker 2: not going near bitcoin. They may on request if you
5:51
Speaker 2: say that's what I want to hold because I think
5:53
Speaker 2: there's something in it. It's very speculative in the context
5:56
Speaker 2: of traditional investment. You know, it's not not bricks and water.
6:00
Speaker 1: There exceptions in the family officer, high networth.
6:03
Speaker 2: No, only in terms of attitude, which is what it
6:05
Speaker 2: comes down to you, doesn't it. So if you're a
6:07
Speaker 2: betting person, if you're if you've got horses, for example,
6:11
Speaker 2: bitcoin might be just adjacent to the racetrack.
6:15
Speaker 1: That is. That's the skeptical view. Really, yeah, but I'm
6:18
Speaker 1: just looking at a little bit, just taking it a
6:20
Speaker 1: little bit more central and economic and saying, well if Amazon,
6:26
Speaker 1: Walmart and JP Morgan in the last couple of weeks
6:30
Speaker 1: have announced their plans to issue their version of stable coins,
6:36
Speaker 1: which are convertible to dollars, right, So it hasn't got
6:40
Speaker 1: that wildness to it, right, So it's pegged. And then
6:44
Speaker 1: if they can find economies of scale or productivity gains
6:49
Speaker 1: from that, then it is a different story, isn't it
6:52
Speaker 1: to some expect And maybe bitcoin is just a proxy
6:55
Speaker 1: for all this activity. But even if it is, then
6:58
Speaker 1: it's then it becomes a different piece. Truly.
7:01
Speaker 2: Yeah, it's still going to be very difficult. And I
7:03
Speaker 2: made I guess I made that almost joke about horses
7:06
Speaker 2: and horse racing. But at least with the horse racing,
7:08
Speaker 2: you've got a horse. I'm still unclear with bitcoin what
7:12
Speaker 2: you've really got and what does that mean to you
7:15
Speaker 2: in terms of value compared to me. But again, whilst
7:19
Speaker 2: the predictions are that it will rise, the question remains
7:23
Speaker 2: what kind of treasury or monetary asset is it? And
7:27
Speaker 2: the worst thing about it for US individuals, us mere
7:31
Speaker 2: individual investors is if we lose the data, if we
7:36
Speaker 2: lose the bitcoin, it's gone. It's not like we have
7:39
Speaker 2: a deposit in the bank and there's a balance that
7:41
Speaker 2: says you've got one hundred dollars, it's gone. You've basically
7:44
Speaker 2: lost it. So if you lose if you store your
7:47
Speaker 2: data off site somewhere your bitcoin and you lose the
7:50
Speaker 2: password or you lose the device. Yep, if you lose that,
7:54
Speaker 2: it's gone done. So there's some perhaps risks like that
7:59
Speaker 2: with it that people may not be considering. And someone
8:02
Speaker 2: like Buffett is obviously famously said he's never going near bitcoin,
8:05
Speaker 2: and he continues to support that view and look at
8:09
Speaker 2: you can't. Not everyone agrees with him, but that's a
8:11
Speaker 2: particular point. And I think in the context of someone
8:14
Speaker 2: like Trump, the federal reserves in a pretty tough spot.
8:18
Speaker 2: I think we all know, and perhaps like most things
8:20
Speaker 2: with Trump, it's a bit of distraction.
8:23
Speaker 1: Right you think it's a decoy from the broader issue
8:25
Speaker 1: of US deaths, US dollars. We won't go there because
8:30
Speaker 1: I want to take a short break. And what I
8:32
Speaker 1: wanted to come back to is that the access to
8:36
Speaker 1: bitcoin and crypto is changing so rapidly, and we can
8:39
Speaker 1: go in now through ETFs and to some extent that's
8:42
Speaker 1: commoditized collateralized. We don't have to worry really if someone
8:46
Speaker 1: loses the key to their particular crypto holding. That's one thing.
8:49
Speaker 1: And also when we just look at at the opportunities
8:53
Speaker 1: across the board. We're seeing more and more people coming
8:56
Speaker 1: in from all angles on this and we just want
8:59
Speaker 1: to pick up on what is it? Is it gold,
9:01
Speaker 1: is it correlated? Is it just another ascid that generally rises,
9:06
Speaker 1: or is it non correlated? Which was the original proposal.
9:10
Speaker 1: If you like that, you could take bitcoin and it
9:12
Speaker 1: would serve you when traditional assets go awry. But I
9:16
Speaker 1: wonder about that. Let's talk about that in the moment. Hello,
9:28
Speaker 1: welcome back to The Australian's Money Puzzle podcast. James Kirby
9:32
Speaker 1: here talking to Jackie Clark. Now, Jackie, let's just look
9:35
Speaker 1: at the other part of this that. First of all,
9:37
Speaker 1: you were talking about advisors don't like it, but advisors
9:40
Speaker 1: love ETFs, and money has been pouring into crypto ETFs
9:44
Speaker 1: and all the major ETF houses have crypto and this
9:48
Speaker 1: gives everyone a sort of an easy way in. So
9:51
Speaker 1: the advisor will say, look, I don't know anything about
9:54
Speaker 1: bitcoin or those exchanges, but there is an ETF you
9:56
Speaker 1: can use. And of course, in saying so, the ETF
9:59
Speaker 1: takes all the boxes from a regulatory point of view.
10:02
Speaker 1: So the advisors okay with that. The client says, well,
10:05
Speaker 1: that's an easy way in, just like ETFs or an
10:08
Speaker 1: easy way into everything. It's a commoditized liquid, conventional asset,
10:14
Speaker 1: which is actually packaging and nonconventional asset. But it has changed,
10:19
Speaker 1: hasn't it. It's taken the bitcoin and crypto play from
10:22
Speaker 1: the margins into the very center, which brings us back
10:26
Speaker 1: to what we said at the start of the show.
10:28
Speaker 1: A billion dollar in SMSs, a billion dollars in crypto
10:32
Speaker 1: in SMSFS now and key funds like AMP a sort
10:37
Speaker 1: of an icon for all its feelings of major institutional
10:43
Speaker 1: money in Australia. So does that change things?
10:47
Speaker 2: Well, it doesn't change it for me. But perhaps if
10:49
Speaker 2: there was an asset class that you didn't represent, and
10:54
Speaker 2: perhaps that's the question that these organizations have asked themselves,
10:57
Speaker 2: which is this an asset class that we should hold?
11:00
Speaker 2: And there's no doubt a lot of demand for it,
11:02
Speaker 2: and in terms of perhaps the nature of assets going forward,
11:05
Speaker 2: this could be representative of more of the types of
11:08
Speaker 2: assets we might have access to in the future.
11:11
Speaker 1: What are you thinking there? What are you think of that?
11:14
Speaker 2: Just the context for me is really about information and
11:18
Speaker 2: how powerful access to information or data is, and it
11:21
Speaker 2: always has been getting access to data information, so perhaps
11:24
Speaker 2: there's something more in the marketability of that down the track.
11:28
Speaker 2: And so this is also something that's a little bit mysterious,
11:32
Speaker 2: is it not. And given it's had such a good
11:35
Speaker 2: track record, I think that it will demonstrate appeal to
11:39
Speaker 2: people because of the quick gain. I guess, you know,
11:44
Speaker 2: I'm saying, I guess because it's difficult for me to
11:46
Speaker 2: get on board with it because I'm having trouble. Maybe
11:50
Speaker 2: I'm materialistic and I'd like to see something from my
11:53
Speaker 2: money other than again exactly. So yeah, still is it's
11:58
Speaker 2: not regulated, right, so it still is pretty rough.
12:01
Speaker 1: It's increasingly regulated, though, particularly in the world's most important
12:05
Speaker 1: money market, which is the US. And there's two things
12:08
Speaker 1: I'm thinking of. One is that it seemed to me
12:11
Speaker 1: for a long time there was two types and I'm
12:13
Speaker 1: going to generalize here dangerously. I'm sure that there was
12:16
Speaker 1: two types of investor that were very interested in crypto
12:19
Speaker 1: and bitcoin. There were people who actually didn't engage in
12:26
Speaker 1: conventional markets anyway, and they saw this as a new thing,
12:30
Speaker 1: basically a new thing that they could get an edge
12:32
Speaker 1: in this, and they didn't actually have shares properly, but
12:36
Speaker 1: they had bitcoin, and there was often this market were
12:39
Speaker 1: much younger. They were online Sammy et cetera, et cetera.
12:43
Speaker 1: But then there was another market which were very sophisticated investors,
12:47
Speaker 1: the very top of the tree, and they wanted to
12:51
Speaker 1: know everything about it. And they see it, they see
12:54
Speaker 1: looting to use single names. But there are prominent investors
12:58
Speaker 1: in our own market. There's very many problems to best
13:00
Speaker 1: result this indus. Mark Carnegie obviously been standing I suppose
13:03
Speaker 1: an earlier and people will say, well, look, Mark Carnegie
13:06
Speaker 1: has got right so many times, he must know something
13:10
Speaker 1: I don't know. So so I think this, first of all,
13:12
Speaker 1: there's that dichotomy between who who is prepared to back
13:16
Speaker 1: it and get involved and learn it. But what I
13:19
Speaker 1: want to ask you is whether this idea of the
13:22
Speaker 1: general idea that it's an alternative and so that it's
13:26
Speaker 1: so you mentioned that the very stars the idea of
13:28
Speaker 1: digital gold. How do you view that proposal.
13:32
Speaker 2: Yeah, I mean I think there's it's got some lenks
13:34
Speaker 2: to it in the context of it being this online asset. Yeah,
13:38
Speaker 2: and look, maybe if you're proactive with it, I mean,
13:43
Speaker 2: it's recognized as a currency that you can trade for things.
13:48
Speaker 2: And perhaps if you were able to do that, and
13:51
Speaker 2: that could be used in your own business model somehow
13:54
Speaker 2: that might also have some additional value to you. But
13:58
Speaker 2: again I think it requires then to understand that market
14:01
Speaker 2: really well and recognize where you can trade the bigcoin
14:04
Speaker 2: and what for? And does that is that all value
14:07
Speaker 2: to you? Because quite? I mean if you can have
14:10
Speaker 2: a product or an asset that growsing value quickly and
14:13
Speaker 2: you can offload it quickly for something else, then I
14:16
Speaker 2: see some benefit in that, which perhaps is where someone
14:20
Speaker 2: like Mark can tubby.
14:21
Speaker 1: Do you see it as a correlated asset? And folks,
14:24
Speaker 1: I'm sure just to make that clear, what we're saying
14:26
Speaker 1: is the jury is still out. It seems above bitcoin.
14:30
Speaker 1: I mean, it's established now, it's an acid class. I
14:32
Speaker 1: don't think it's going to go. I think we assume
14:34
Speaker 1: that it's got for our lifetime. It's going to be here.
14:37
Speaker 1: It's been severely tested in many ways. It survived all
14:40
Speaker 1: those tests. So let's take that on put that on
14:42
Speaker 1: the table. But then the issue is whether it's digital goal.
14:45
Speaker 1: And if it is, that would mean that basically, if
14:49
Speaker 1: markets crumbled, if currencies in the US dollar classic case,
14:53
Speaker 1: that the US dollar in ten years time is a
14:58
Speaker 1: sad reflection of what it is was ten years ago
15:00
Speaker 1: to say or and in that context, then the proposal
15:06
Speaker 1: is that bitcom will stand alone, basically that it will
15:08
Speaker 1: be like gold, it will be they will win. That's one.
15:13
Speaker 1: That's the non correlated asset argument. And then the outariasive
15:16
Speaker 1: argument is it's just becoming. It's just another asset. And
15:19
Speaker 1: if the markets are good, it's good. The markets are bad,
15:22
Speaker 1: it's bad. We haven't got a sufficient track record have
15:26
Speaker 1: we really to test that? So it's simply live debate.
15:30
Speaker 1: Where are you on that one, Jackie?
15:34
Speaker 2: I guess only a bit what's been fifteen years, It's
15:36
Speaker 2: been around four now, so there's not a lot of
15:38
Speaker 2: evidence that it's very short periods.
15:42
Speaker 1: But it's part sufficient volume and interest to we even
15:47
Speaker 1: stand as some sort of proxy with gold.
15:50
Speaker 2: Yeah, and look, I find it fascinating with the market
15:53
Speaker 2: to how some things don't always hold value like they should,
15:57
Speaker 2: even when they've got brilliant balance sheets. It's just that
15:59
Speaker 2: can humor sentiment where people are at and it might
16:02
Speaker 2: be the same with bitcoin. But there's still I guess
16:04
Speaker 2: a lot of growth potential in bitcoin. And if in
16:09
Speaker 2: fifteen years we're at under twenty percent takeup of what's
16:13
Speaker 2: available there. It's got a long way to go from
16:16
Speaker 2: growth potential in terms of accessibility, and so perhaps it
16:20
Speaker 2: will become more normal and I think, as you say,
16:23
Speaker 2: with the likes of amp, Walmart and Superinneation, fun State
16:26
Speaker 2: starting to pick it up or recognize it as an asset,
16:30
Speaker 2: that maybe helps normalize the mystery a little bit.
16:33
Speaker 1: But I'm not.
16:34
Speaker 2: Any clearer that the mystery has shifted, and so does
16:38
Speaker 2: it move with the markets. I don't know. There's a
16:40
Speaker 2: whole lot of evidence that it has at the moment.
16:45
Speaker 1: There's a lot of you're seeing there's lack of evidence
16:47
Speaker 1: that it's correlated. Correct, So you're suggesting this non correlated
16:52
Speaker 1: well implication.
16:54
Speaker 2: It's yes, that's how I would see it.
16:56
Speaker 1: Okay, that's interesting, right, Okay, So since we're talking about
17:02
Speaker 1: that and the markets, it seems to me obviously here
17:05
Speaker 1: we are at the end of just to switch gears
17:07
Speaker 1: for a moment and bring us back into a conventional,
17:10
Speaker 1: traditional space where we are more sure. Yes, well, value,
17:17
Speaker 1: that's what you're looking for, isn't this. You don't like
17:19
Speaker 1: the fact that there's no intrinsic value there isn't it
17:22
Speaker 1: really for me?
17:23
Speaker 2: That's right? Yeah, absolutely, yeah. It's very hard to be
17:28
Speaker 2: a nausey and say any other way.
17:30
Speaker 1: Actually, well gold, I mean, what's the intrinsic value of gold?
17:34
Speaker 2: Yeah, well, I mean that's a genuine mineral, isn't it gold?
17:38
Speaker 1: Okay, but it gets it gets a down high price
17:41
Speaker 1: for a genuine mineral.
17:42
Speaker 2: Doesn't Yes, yeah it does. It's done really well. But
17:45
Speaker 2: I probably won't be going there either.
17:48
Speaker 1: Okay, very good. So just on the market. It's what
17:51
Speaker 1: I have you because you have a finger of so
17:53
Speaker 1: many pies, fingers, so many pies. I'd like to just
17:58
Speaker 1: see where you're coming from in that. Our market here
18:01
Speaker 1: we are right coming to the end of the financial year,
18:03
Speaker 1: shares a up eleven percent, the average balanced super funders
18:06
Speaker 1: out thereat point five percent. How on earth this wasn't
18:10
Speaker 1: supposed to happen with the market? Is our market is
18:13
Speaker 1: now a point where the most positive forecast at the
18:18
Speaker 1: start of the year said it might reach by December.
18:22
Speaker 1: What's your view on the share markets?
18:25
Speaker 2: Yeah, it's a good time. It's a really good time
18:27
Speaker 2: to have this conversation. It's there's a broadly positive view
18:32
Speaker 2: of the market now we are in an unusual spot.
18:35
Speaker 2: The tariffs aren't settled and our bow needs to get
18:39
Speaker 2: his meeting.
18:39
Speaker 1: At some point.
18:41
Speaker 2: But perhaps we're a little fish in a big.
18:43
Speaker 1: Sea enough priority.
18:45
Speaker 2: Yes, so there's definitely some positives that we have and
18:50
Speaker 2: perhaps the Reserve Bank has certainly now got some genuine
18:53
Speaker 2: sort of firepower. The RBA is in a good spot,
18:56
Speaker 2: and I think with the disruption, if you like, between
19:00
Speaker 2: the US and China, Australia generally will benefit from that
19:04
Speaker 2: tariff war, if you like, because people will start will
19:07
Speaker 2: be the beneficiary of that.
19:09
Speaker 1: Tell us a bit bit more as to how.
19:11
Speaker 2: Just in terms of the way trade will work, we
19:14
Speaker 2: will be saying as probably easy pickings as a partner
19:17
Speaker 2: in that respect. Yeah, and perhaps, like I say, it's
19:20
Speaker 2: a bit of a distraction, we're a bit easier to
19:22
Speaker 2: deal with in the context of those tariffs, so we
19:26
Speaker 2: simply should benefit and that would come down to what
19:29
Speaker 2: items we're trading with each party. But I think we
19:31
Speaker 2: benefit from that, right, Yeah.
19:34
Speaker 1: Do you think that to some extent that depends the
19:36
Speaker 1: buoyancy in the ESX.
19:38
Speaker 2: I think that's definitely out there. But perhaps the other
19:42
Speaker 2: option is that if money leaves the US, it might come,
19:47
Speaker 2: it might find its way here. Now there's two reasons
19:50
Speaker 2: why you invest in Australia. We have a fairly narrow band,
19:54
Speaker 2: which is really banking and resources. But that's a good
19:58
Speaker 2: reason perhaps to have your money leaves, for example, the
20:02
Speaker 2: US and come to Australia. So that could be an
20:04
Speaker 2: upside benefit of.
20:05
Speaker 1: With the US institutions are buying come bank at a
20:09
Speaker 1: one hundred eighty.
20:10
Speaker 2: Dollars would be one of the reasons. Yeah, So that's
20:15
Speaker 2: something that I think would be appealing for people to
20:17
Speaker 2: come to Australia. But typically when I think about sort
20:21
Speaker 2: of revenue sources, most Aussie companies have a lot of
20:24
Speaker 2: domestic revenue as well less overseas revenue. So perhaps we're isolated.
20:30
Speaker 2: So we have it's so like the pros and the
20:32
Speaker 2: cons of being isolated this.
20:34
Speaker 1: Time or this sort of til it's.
20:36
Speaker 2: Almost independence in its own way.
20:39
Speaker 1: The banks are domestic, aren't there.
20:41
Speaker 2: They are.
20:43
Speaker 1: Domestic focus.
20:44
Speaker 2: Yeah, So if you were looking that's right and narrow
20:47
Speaker 2: your investment focused or isolate impact of particular things such
20:51
Speaker 2: as US China tariff arrangements, then that's something you can
20:54
Speaker 2: do through an Australian asset so, so there could be
20:57
Speaker 2: some upside from that for Australia. But we're in a
20:59
Speaker 2: pretty good spot right now with the RBA, and I
21:02
Speaker 2: believe that the China and the US wherever that conversation goes,
21:08
Speaker 2: I'm sure it's going somewhere that neither you know, China
21:11
Speaker 2: won't be happy with. Then they'll respond accordingly, but might
21:14
Speaker 2: have a slightly deflationary impact as well, which again is
21:17
Speaker 2: good for US. So I think that strengthens the RBA's
21:22
Speaker 2: position as well. So yeah, so, I mean it's all
21:25
Speaker 2: it seems generally good, and that's in the absence of
21:28
Speaker 2: anything more serious happening on the world front.
21:31
Speaker 1: I know it's a tough question, but it doesn't five
21:34
Speaker 1: founded or so markets up eleven percent over twelve months,
21:38
Speaker 1: it's up four percent for the year, and we get
21:41
Speaker 1: four and a half. It's up four and a half
21:45
Speaker 1: for six months. I should say, you know for the year.
21:47
Speaker 1: The calendar of today's checking your four percent evidence, les's
21:50
Speaker 1: three eight percent already. If you stopped right now, selling
21:53
Speaker 1: mayn't go away. I know it's tuning, but do you
21:56
Speaker 1: think this is as good as it gets? Is the
21:58
Speaker 1: room for for are?
22:01
Speaker 2: You know there's no crystal ball that can respond right now.
22:04
Speaker 2: There's too many sort of geopolitical matters occurring that could
22:10
Speaker 2: have any number of impacts. So it's just very hard
22:13
Speaker 2: I think for anybody like it always is.
22:15
Speaker 1: Really it sounds like you're not you're certainly not saying
22:18
Speaker 1: this market is this market's want too fast or anything
22:21
Speaker 1: like that.
22:22
Speaker 2: No, No, because there's evidence that there's wind in it
22:26
Speaker 2: or puff in it, wan, a bit of puff in it.
22:28
Speaker 1: Actually the wind is behind it. Perhaps, is that perhaps
22:34
Speaker 1: where we're coming from as.
22:35
Speaker 2: Opposed to we will it's not a wet sile put
22:40
Speaker 2: it that way.
22:42
Speaker 1: Okay, very interesting. I've got really good questions this week, folks.
22:46
Speaker 1: I've selected some absolute corkers, I think, and I want
22:50
Speaker 1: to have Jackie on board when I'm dealing with them,
22:52
Speaker 1: and we will be back in the board. Hello, Welcome
23:00
Speaker 1: back to The Australian's Money Pustle podcast, James Kirky with
23:03
Speaker 1: Jackie Clark. Who is, may I say, a chartered accountant,
23:09
Speaker 1: she's a tax advisor. She's a member of the Institute
23:12
Speaker 1: of Company Director, she's an author. She's a board member
23:14
Speaker 1: on some very interesting private family office boets. Hence the
23:20
Speaker 1: sophisticated view on the market. Okay, quickly, Ryan, who actually, Ryan,
23:26
Speaker 1: We're not dealing in any great detail with your question,
23:28
Speaker 1: but you actually kicked off the whole concept of today's
23:31
Speaker 1: show about bitcoin. Ryan had originally asked he had basically
23:36
Speaker 1: met the point that the price some of the crypto
23:40
Speaker 1: related investments were going so well. He told that he
23:43
Speaker 1: couldn't believe that the money puzzle hadn't covered it yet.
23:47
Speaker 1: So hopefully we've met a start Ryan, on that of
23:51
Speaker 1: what I would call the post Trump crypto reality, which
23:55
Speaker 1: is quite different I think than the pre Trump crypto scene. Okay,
24:00
Speaker 1: and asks your article in the Australian, which was by
24:03
Speaker 1: the way, the seventh of June says industry funds pulled money,
24:06
Speaker 1: but all investors taxed in the same way. This was
24:09
Speaker 1: my piece where I was just saying that the nature
24:13
Speaker 1: of industry funds and how they are, how it all works,
24:18
Speaker 1: is that the tax is polled. Consequently, folks on the
24:23
Speaker 1: new supertax, that polling of requirements, tax requirements. I mean,
24:30
Speaker 1: some people are going to be better off in big
24:32
Speaker 1: industry funds simply the older ones with lots of money
24:37
Speaker 1: will in some way cross subsidized the younger ones who
24:43
Speaker 1: are in the same fund. This is a particular issue
24:47
Speaker 1: for funds where there is a lot of older, wealthier members,
24:49
Speaker 1: and we actually had a list of the top ten
24:52
Speaker 1: funds with the most exposure. My broader point on all
24:55
Speaker 1: that is that no one escapes this fund. No one
24:59
Speaker 1: escapes this tax Division two ninety six because it's a
25:03
Speaker 1: new At face value, it's a simple fifteen percent tax
25:06
Speaker 1: that's a new one on top of the original taxes
25:09
Speaker 1: and super it only affects people with more than three million. However,
25:14
Speaker 1: in reality it's going to infect a help a lot
25:17
Speaker 1: more people than that because it's on realized games, which
25:21
Speaker 1: is just completely daft I think as a way to
25:24
Speaker 1: tax people as personally and Treasure shows no sign of
25:28
Speaker 1: changing on that, and more importantly, is not prepared to
25:32
Speaker 1: index it, and that means a lot of people are
25:35
Speaker 1: going to get caught in it very quickly as the
25:37
Speaker 1: years go by and people say, oh, you are scare mongering.
25:41
Speaker 1: These always get indexed, No, they don't. The sophisticated investor,
25:46
Speaker 1: for instance, requirements are unchanged for twenty years. Division two
25:51
Speaker 1: ninety three tax, which is another super tax on high
25:54
Speaker 1: salary earners is unchanged. I think it's for twelve years.
25:58
Speaker 1: There's no rules about this. I just wanted to that
26:01
Speaker 1: also stem there jacking. Is there anything else anything you
26:04
Speaker 1: want to add to that?
26:05
Speaker 2: No, probably just to answer question. I know that just
26:08
Speaker 2: in terms of calculating it and understanding how to work
26:12
Speaker 2: through it yourself, to get your head around it and
26:13
Speaker 2: how members in big funds might be impacted. The Association
26:17
Speaker 2: of Superannuation Funds of Australia has given quite a bit
26:20
Speaker 2: of guidance on the impact of Section two ninety six
26:23
Speaker 2: and I've had look at the different calculations they're provided.
26:26
Speaker 2: They're quite helpful instead of explaining this, but I think
26:29
Speaker 2: you hit the nail on the head with your article actually,
26:32
Speaker 2: you know, indicating how assets are pulled for the benefit
26:36
Speaker 2: of all members. But actually even the administration of this,
26:39
Speaker 2: all the costs of this will actually fall on the
26:42
Speaker 2: weight of all members of super funds to some extent
26:46
Speaker 2: to the end of the day additional compliance any organization has,
26:48
Speaker 2: somebody has to pay for that.
26:50
Speaker 1: So when i's to be for it exactly, and I
26:52
Speaker 1: think you know, I hope you know you know. And
26:54
Speaker 1: one of the things you did mention was that you
26:57
Speaker 1: know is had nothing to do with with two net
27:00
Speaker 1: six most but in fact it permeates it. It does
27:04
Speaker 1: perculate right through the system. I hope I've met that
27:07
Speaker 1: clear and as sincerely mean it.
27:09
Speaker 2: That's the other thing just add to that giant is
27:11
Speaker 2: I think I've determined what something like half a million
27:14
Speaker 2: salaried employers around Australia are actually impacted by.
27:17
Speaker 1: The super immediately.
27:19
Speaker 2: It's quite substantial. Yeah, immediately, and I will baying big
27:22
Speaker 2: fans I were all being self managed fans by a
27:24
Speaker 2: long shot.
27:25
Speaker 1: Yeah, but this is a key point I was making
27:27
Speaker 1: that it was aimed at self managed superinvestors without a doubt.
27:30
Speaker 1: But it is the nature of it, this construction of
27:35
Speaker 1: onrealized gains and then the nature of how big super
27:38
Speaker 1: funds work mean they are pulled into it. They are
27:41
Speaker 1: complaining much, but I better complaining behind the scenes. Okay, Andrew.
27:47
Speaker 1: Interesting question from Andrew. Great question Andrew. He says it
27:51
Speaker 1: would be good to talk about the virgin IPO later
27:54
Speaker 1: this month and so detail and to compare it with
27:57
Speaker 1: other recent large years, and to discuss the impact on Quantus,
28:02
Speaker 1: which has touched eleven dollars and it's paying dividends for
28:04
Speaker 1: the first time in years. Okay, Marvel's question so interesting
28:08
Speaker 1: the virgin ipo. This is what I think about the
28:11
Speaker 1: virgin ipeo in three numbers. It's listed at two fifty
28:14
Speaker 1: the first time, and when it was taken off the
28:16
Speaker 1: boards it was nine cents. It's coming back at two
28:20
Speaker 1: ninety three after that. It's a question of this. I
28:25
Speaker 1: have no idea what you think of it watching.
28:27
Speaker 2: My Headshine, which the listeners, well, well, I think the
28:32
Speaker 2: first thing pats for Andrew is I don't think it
28:34
Speaker 2: was a retailer. For it all only to holdstyle investors.
28:38
Speaker 2: So it's it's all being taken up for starters.
28:41
Speaker 1: It's a tiny it's a tiny amount, which is right.
28:44
Speaker 1: I won't say a trick, but the mathematics of when
28:47
Speaker 1: you float a tiny amount of stock, it's not to
28:49
Speaker 1: waye about it. The price gets supported easier, let's be
28:52
Speaker 1: yea yeah.
28:53
Speaker 2: So Baying came in with evaluation two dollars ninety and
28:56
Speaker 2: morning Star came in with evaluation at two dollars sixty.
28:59
Speaker 2: So perhaps that's an indication of where things might head.
29:04
Speaker 2: But you know, the question is it is a they've
29:06
Speaker 2: taken advantage perhaps at the time, so it is relatively buoyant.
29:10
Speaker 2: If you look at the trends coming out of the
29:12
Speaker 2: COVID era and you look at all the statistics on
29:15
Speaker 2: Australian travelers, there's definitely been a rise. I think we've
29:18
Speaker 2: pretty much met, if not exceeded, there's sort of pre
29:21
Speaker 2: pandemic times of travel. So it is the right time,
29:25
Speaker 2: is it opportunistic? So have they taken advantage of that?
29:29
Speaker 2: I'd be interested to see, mind you, if the implications
29:32
Speaker 2: of Israel, Iran, Ukraine and so on may start to
29:37
Speaker 2: have the reverse impact on the airline world as well
29:40
Speaker 2: all people, perhaps because I'm feeling less inclined to travel
29:44
Speaker 2: as a result of what's going on, because it's pretty
29:47
Speaker 2: hard to avoid the Middle East when you fly out
29:49
Speaker 2: of Australia. Yes, exactly.
29:51
Speaker 1: They have to go around to Ukraine. They have to.
29:53
Speaker 2: Yeah, so look, and that may be a small thing
29:57
Speaker 2: in the scheme of just having to get around the world.
29:59
Speaker 2: We've all got family to visit, paper all things.
30:01
Speaker 1: Happen, I mean, yeah, I mean more pointedly, the history
30:03
Speaker 1: of the Second Airline in Australia is woeful. And I'm
30:07
Speaker 1: sure these are great people. I'm sure they've got it
30:08
Speaker 1: in a great shape. I don't doubt for a moment
30:10
Speaker 1: they've optimized their moment and their numbers for the float
30:14
Speaker 1: goes without saying, here's the thing. Answer collapsed, Virgin Mark
30:19
Speaker 1: one collapsed. Brokers not brokers. To be fair, researchers Morning
30:23
Speaker 1: Star are already saying this, this float is too high.
30:26
Speaker 2: Yeah. I would agree with that, and we've got to
30:28
Speaker 2: meet a bit careful. Yeah, well I can't. Sorry, I
30:31
Speaker 2: can't see how you can because it may may have
30:35
Speaker 2: been at its peak.
30:37
Speaker 1: Okay, very good, we will leave it right there, Andrew,
30:42
Speaker 1: I think the answer is very clear. None of this
30:44
Speaker 1: is investment advice ever. It's information only, and I'm sure
30:47
Speaker 1: you all know that. Okay, final question, fam Sam, as
30:50
Speaker 1: I said in really good questions today, I was hoping
30:53
Speaker 1: you can explain to me how I can deal with
30:55
Speaker 1: the suspended trading stock in my portfolio.
30:59
Speaker 2: It's actually a great question to have. If he mentioned this.
31:02
Speaker 1: One, there's no point actually naming it because there's plenty
31:05
Speaker 1: of them out there. There's a whole part of zombie stocks.
31:07
Speaker 1: And he says it's been suspended for years. My money,
31:10
Speaker 1: you're stuck in this. I can't sell it. What are
31:12
Speaker 1: my options.
31:12
Speaker 2: This is really frustrating if you've ever been this position
31:15
Speaker 2: with suspended training stock, because you can't take crystallize the
31:19
Speaker 2: capital loss from a tax perspective until it's actually liquidated.
31:23
Speaker 2: And so there is a small little opportunity. There's a
31:26
Speaker 2: these be a company which I think still exists called
31:29
Speaker 2: the listed dot com dot au. You can go on
31:33
Speaker 2: to that website and see getting up to date read
31:36
Speaker 2: on what's happening with the company. You might be able
31:39
Speaker 2: to take that information to your accountant to determine whether
31:42
Speaker 2: it's realistic that you can actually take that crystalize. You
31:45
Speaker 2: can crystallize that capital loss from a tax perspective, so
31:49
Speaker 2: that might be the thing to do. Obviously you need
31:51
Speaker 2: to continually review it. But it's very frustrating. It does
31:54
Speaker 2: happen often.
31:56
Speaker 1: How does it work. Does it run to zero obesity
31:58
Speaker 1: or a zero point one center or something?
32:01
Speaker 2: Oh sorry, when they're suspended your main yeah?
32:03
Speaker 1: Or is it valued at the amount that was suspended.
32:07
Speaker 2: That's a good question. I wouldn't know that. I'd have
32:10
Speaker 2: to look at each individual case actually to work that out,
32:13
Speaker 2: and you can obviously the conservative approach is whatever they
32:16
Speaker 2: close that you could take a loss to that level
32:18
Speaker 2: and then do a subsequent loss, you know, take a
32:21
Speaker 2: reasonably arguable position, which is what the Australian tax officers
32:24
Speaker 2: would be looking for in the situation. But technically, until
32:27
Speaker 2: it's actually in liquidation or formally wound up, you actually
32:30
Speaker 2: can't do anything. It's very annoying so here, but you
32:34
Speaker 2: could at least do some research.
32:36
Speaker 1: You have value and possibly possible in there, especially if
32:42
Speaker 1: it was the nineteenth of June and you had two
32:44
Speaker 1: weeks to go try and find so and I hear
32:47
Speaker 1: that the markets up eleven percent.
32:49
Speaker 2: People may be doing to find.
32:50
Speaker 1: As usual one maybe, yeah, especially with our market. Yes, yeah, yeah,
32:55
Speaker 1: Well it's a good time so we're able to say
32:57
Speaker 1: that terrific. Hey, look, thank you very much, Jackie. Great
33:00
Speaker 1: have you on the show again.
33:01
Speaker 2: Good to be here, James, thank you.
33:02
Speaker 1: And the book Stop worrying about money, which you somehow
33:05
Speaker 1: manage time to rise on top of everything else. You've
33:08
Speaker 1: won a couple of awards for it, a.
33:11
Speaker 2: Few international awards. It's been incredible. Actually. The last one
33:15
Speaker 2: was the Money Awareness and Inclusion Award Program, which is
33:18
Speaker 2: a global awards program, so forty five countries participating. They
33:22
Speaker 2: announced it out of Singapore about a month ago, which
33:25
Speaker 2: is wonderful.
33:26
Speaker 1: Are you shipping vast quantities out around the world now?
33:30
Speaker 2: Of course maybe Amazon is, I'm not.
33:36
Speaker 1: It is the royalty checks from financial books. We've had
33:39
Speaker 1: some fun with those on the show before. Let's see
33:41
Speaker 1: that you couldn't live on. Not worth the conversation, barely
33:47
Speaker 1: relevant in your tax returns. All right, very good. Thanks
33:50
Speaker 1: for a lot, Jackie Clark. Great to have you on
33:51
Speaker 1: the show. We're talking again soon. Thanks James, and thank
33:54
Speaker 1: you everybody. And great question today. Keep them rolling the
33:57
Speaker 1: money puzzle at the Australian dot com dot a talk
34:01
Speaker 1: to yourself Sam the Room sub