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