1 00:00:08,080 --> 00:00:11,040 Speaker 1: Hello, and welcome to The Australian's Money Puzzle podcast. I'm 2 00:00:11,119 --> 00:00:14,960 Speaker 1: James Kirby Fund the Australian. Welcome aboard everybody now. My 3 00:00:15,080 --> 00:00:17,079 Speaker 1: guest today is one of the best known figures in 4 00:00:17,160 --> 00:00:20,119 Speaker 1: the investment markets in Australia. It's Jeff Wilson and he 5 00:00:20,200 --> 00:00:25,400 Speaker 1: runs the six billion dollar Wilson Asset Managed Group. It 6 00:00:25,480 --> 00:00:28,520 Speaker 1: is a group which has funds listed on the stock market. 7 00:00:28,520 --> 00:00:31,400 Speaker 1: It also has an operation aside operation if you like, 8 00:00:31,400 --> 00:00:34,599 Speaker 1: which is the Future Generation Fund. It's a charitable operation 9 00:00:34,720 --> 00:00:37,120 Speaker 1: and we had Caroline Gurney on the show a few 10 00:00:37,120 --> 00:00:39,599 Speaker 1: months ago who runs that side of things. Now, in 11 00:00:39,640 --> 00:00:43,120 Speaker 1: recent years Jeff has come to prominence because more than 12 00:00:43,280 --> 00:00:45,320 Speaker 1: just acting as a fund manager, he does act as 13 00:00:45,320 --> 00:00:49,680 Speaker 1: something of an investor representative for momandell investors across Australia 14 00:00:49,720 --> 00:00:52,560 Speaker 1: because he has about one hundred and thirty thousand investors 15 00:00:52,600 --> 00:00:55,400 Speaker 1: on the books. And he came to prominence in the 16 00:00:55,440 --> 00:00:58,600 Speaker 1: public domain some years ago in the Frank Dividends of affair. 17 00:00:58,680 --> 00:01:00,840 Speaker 1: We might call it the ill fated attempt to change 18 00:01:00,880 --> 00:01:04,720 Speaker 1: Frank dividend rules, which he mounted quite a successful campaign on. 19 00:01:05,160 --> 00:01:09,160 Speaker 1: Now today, with the ALP almost certain to be re 20 00:01:09,240 --> 00:01:12,640 Speaker 1: elected in the new parliament. He's come to prominence again 21 00:01:13,560 --> 00:01:18,880 Speaker 1: because the reelection of Albanesi Chalmers combination will mean it 22 00:01:18,920 --> 00:01:21,800 Speaker 1: will mean, folks, the reintroduction of an attempt to put 23 00:01:21,800 --> 00:01:24,600 Speaker 1: in a new tax on super And it's not so 24 00:01:24,680 --> 00:01:27,080 Speaker 1: much that it's a new tax, okay, but it's the 25 00:01:27,200 --> 00:01:30,679 Speaker 1: nature of this tax based on realized gains, unrealized gains, 26 00:01:30,720 --> 00:01:33,920 Speaker 1: that is, paper gains, that's going to cause all sorts 27 00:01:33,959 --> 00:01:36,640 Speaker 1: of trouble down the track. Since I've got him in 28 00:01:36,640 --> 00:01:38,600 Speaker 1: the studio, first of all, I just want to take 29 00:01:38,640 --> 00:01:42,360 Speaker 1: the opportunity to ask him about how he sees investment 30 00:01:42,400 --> 00:01:43,160 Speaker 1: markets right now. 31 00:01:43,160 --> 00:01:47,080 Speaker 2: How are you, Jeff James. I'm in good form, good, 32 00:01:47,680 --> 00:01:49,960 Speaker 2: a little bit stressed because I know everyone's going to 33 00:01:50,000 --> 00:01:52,120 Speaker 2: buy it in a couple of days time. And the 34 00:01:52,160 --> 00:01:55,960 Speaker 2: consequences what you said of this new tax, the tax 35 00:01:56,000 --> 00:01:59,720 Speaker 2: on unrealized guains, I think will be pretty devastating for 36 00:01:59,760 --> 00:02:02,680 Speaker 2: number people and probably not for the reasons people think 37 00:02:02,720 --> 00:02:04,280 Speaker 2: that we can talk about that lighter. 38 00:02:04,560 --> 00:02:07,360 Speaker 1: Yeah, yeah, we will. And first of all, we mentioned 39 00:02:07,360 --> 00:02:10,400 Speaker 1: how you run Wilson Asset Management and it has sort 40 00:02:10,400 --> 00:02:12,400 Speaker 1: of fingers and all sorts of pies these days, since 41 00:02:12,440 --> 00:02:14,519 Speaker 1: even since I told you last year, have a whole 42 00:02:14,639 --> 00:02:18,120 Speaker 1: range of funds. But tell me got feeling. I mean, 43 00:02:18,160 --> 00:02:19,840 Speaker 1: one of the big debates at the moment is not 44 00:02:19,919 --> 00:02:22,800 Speaker 1: just about Trump and tariffs and what's happened with the 45 00:02:22,840 --> 00:02:26,400 Speaker 1: share markets and how they're particularly volatile, but a sense 46 00:02:26,480 --> 00:02:29,640 Speaker 1: that and a debate, open debate among the big super funds, 47 00:02:29,680 --> 00:02:32,400 Speaker 1: that this golden era that we've known all our lives 48 00:02:32,440 --> 00:02:35,080 Speaker 1: for the US is the be all and end all 49 00:02:35,120 --> 00:02:37,840 Speaker 1: of investment markets where it's seventy percent or so of 50 00:02:37,960 --> 00:02:41,280 Speaker 1: the global index, that that might be coming to an 51 00:02:41,400 --> 00:02:44,680 Speaker 1: end waning, and that people shouldn't be in the US 52 00:02:44,720 --> 00:02:47,320 Speaker 1: as much as they used to be. That's you or 53 00:02:47,400 --> 00:02:49,400 Speaker 1: me or anyone. What's your view on that? 54 00:02:49,840 --> 00:02:52,239 Speaker 2: I think that's a little bit more on the extreme side. 55 00:02:52,520 --> 00:02:55,720 Speaker 2: I think no doubt over the next period of time. 56 00:02:56,440 --> 00:02:58,919 Speaker 2: If you're looking in the next six months, where would 57 00:02:58,960 --> 00:03:01,720 Speaker 2: you prefer to have your mind? One of the places 58 00:03:01,760 --> 00:03:03,760 Speaker 2: I prefer to have my money is actually in Australia. 59 00:03:05,080 --> 00:03:07,280 Speaker 2: When I look at countries, I try to look at 60 00:03:07,280 --> 00:03:10,560 Speaker 2: them similarly to how I look at companies. So if 61 00:03:10,560 --> 00:03:13,239 Speaker 2: I'm buying shares in a company, like what we try 62 00:03:13,280 --> 00:03:16,320 Speaker 2: to do is buy undervalue growth companies when we can 63 00:03:16,360 --> 00:03:19,160 Speaker 2: see a catalyst is going to change the valuation. And 64 00:03:19,200 --> 00:03:21,760 Speaker 2: we've got a rating system, and on our rating system, 65 00:03:22,240 --> 00:03:26,960 Speaker 2: one of the significant parts of that rating system is management. Now, 66 00:03:27,000 --> 00:03:29,160 Speaker 2: if I looked at the US and thought, do I 67 00:03:29,200 --> 00:03:32,200 Speaker 2: want to invest in the US? I really like the business, 68 00:03:32,520 --> 00:03:35,840 Speaker 2: I like the structure, I like the entrepreneurial spirit, I 69 00:03:35,960 --> 00:03:39,240 Speaker 2: like a lot of things. But do I like the CEO? 70 00:03:40,320 --> 00:03:42,320 Speaker 2: And how would I rate him? And we rate our 71 00:03:42,360 --> 00:03:47,120 Speaker 2: CEOs out of ten, I'd probably rate him four. Okay, 72 00:03:47,720 --> 00:03:51,240 Speaker 2: maybe I'm generous, right, he wouldn't rate a buy on 73 00:03:51,320 --> 00:03:55,000 Speaker 2: our rating system. Okay, But the management is only a 74 00:03:55,040 --> 00:03:57,920 Speaker 2: part of it, and that's probably about twenty five percent 75 00:03:57,960 --> 00:04:01,120 Speaker 2: of our rating system. The other is the underlying the 76 00:04:01,160 --> 00:04:05,000 Speaker 2: position it is, and also the valuation you're paying. So 77 00:04:05,680 --> 00:04:09,200 Speaker 2: the US is in a very good position the underlying earnings. 78 00:04:09,240 --> 00:04:11,560 Speaker 2: Even though there's going to be a bit of pain 79 00:04:11,640 --> 00:04:15,240 Speaker 2: in the short term with the economy when instruments continue 80 00:04:15,240 --> 00:04:18,839 Speaker 2: to come down, then you've got a one of the 81 00:04:18,839 --> 00:04:24,239 Speaker 2: biggest consumers globally. To me, medium long term, I'm still 82 00:04:24,320 --> 00:04:27,120 Speaker 2: positive about the US. The thing is, we've just got 83 00:04:27,120 --> 00:04:31,000 Speaker 2: this bad CEO for four years. Let's hope it's twenty 84 00:04:31,040 --> 00:04:31,559 Speaker 2: four years. 85 00:04:31,800 --> 00:04:36,000 Speaker 1: I've got to see. Yes, yes, he might be planning 86 00:04:36,000 --> 00:04:38,760 Speaker 1: something different, all right, And tell me looking at the 87 00:04:39,040 --> 00:04:43,480 Speaker 1: ESX then on the raw numbers that is ourn X 88 00:04:43,560 --> 00:04:47,240 Speaker 1: estimate's GDP of the country, the dividend yield that the 89 00:04:47,320 --> 00:04:49,920 Speaker 1: AX doesn't seem to be outstanding the attractive this year. 90 00:04:50,000 --> 00:04:50,960 Speaker 1: What is it that you like? 91 00:04:51,400 --> 00:04:54,400 Speaker 2: No, I mean it's a fair comment. I suppose what's 92 00:04:54,440 --> 00:04:57,239 Speaker 2: my view on the market per se, and this includes 93 00:04:57,279 --> 00:05:00,880 Speaker 2: global markets. We've all learned, and we've been around the 94 00:05:00,920 --> 00:05:03,520 Speaker 2: markets long enough is it's very hard to market time 95 00:05:03,560 --> 00:05:05,480 Speaker 2: and I can never guess the top of the bottom, 96 00:05:05,480 --> 00:05:08,520 Speaker 2: and I don't think anyone really can. And what you 97 00:05:08,640 --> 00:05:11,080 Speaker 2: learn is it's really time in the market rather than 98 00:05:11,080 --> 00:05:14,920 Speaker 2: timing of the market. And so that's the logic. But 99 00:05:15,000 --> 00:05:17,040 Speaker 2: if you wanted to time the market a little bit 100 00:05:17,240 --> 00:05:19,840 Speaker 2: and watch your view, I think things are going to be. 101 00:05:20,080 --> 00:05:23,080 Speaker 2: You know, I remember my dad who's now somewhere else, 102 00:05:24,560 --> 00:05:27,120 Speaker 2: passed away, but he loved the selling may and go away. 103 00:05:27,400 --> 00:05:30,880 Speaker 2: Oh yes, we're just in May. Looking at the US market, 104 00:05:31,200 --> 00:05:32,919 Speaker 2: it is a bit of a selling may and go away. 105 00:05:33,480 --> 00:05:37,360 Speaker 2: The economic numbers are going to be very challenging over 106 00:05:37,400 --> 00:05:40,080 Speaker 2: the next month or two, and we're going to see 107 00:05:40,480 --> 00:05:46,120 Speaker 2: a lot of the negative impacts from the Trump taroff tantrums. Now, 108 00:05:46,360 --> 00:05:48,479 Speaker 2: if I was in the US, anything I want for 109 00:05:48,480 --> 00:05:49,719 Speaker 2: the next two or three months, I'll be. 110 00:05:49,720 --> 00:05:52,000 Speaker 1: Buying now, right, So why is that, Jeff. 111 00:05:52,080 --> 00:05:56,799 Speaker 2: Well, not shares, but no, this is actually just consumables, okay, 112 00:05:57,080 --> 00:06:01,520 Speaker 2: because it takes about fifty to fifty five days for 113 00:06:01,600 --> 00:06:03,440 Speaker 2: the inventores to dry. 114 00:06:03,320 --> 00:06:06,160 Speaker 1: Up, and then the tariff extra sort of procula through 115 00:06:06,160 --> 00:06:06,800 Speaker 1: the systems that. 116 00:06:06,920 --> 00:06:10,560 Speaker 2: Well, effectively, anything you're buying from China, like they got 117 00:06:10,600 --> 00:06:13,880 Speaker 2: turned off a few weeks ago, So anything that's made 118 00:06:13,880 --> 00:06:17,680 Speaker 2: in China in fifty to fifty five days from the 119 00:06:17,800 --> 00:06:20,240 Speaker 2: day they were turned off, there's going to be no stock. 120 00:06:21,560 --> 00:06:24,239 Speaker 2: I think the next month or two from a US 121 00:06:24,400 --> 00:06:27,880 Speaker 2: perspective is going to be very challenging. Our higher inflation 122 00:06:28,839 --> 00:06:31,600 Speaker 2: maybe like lack of inventory. You know, there's going to 123 00:06:31,600 --> 00:06:34,600 Speaker 2: be a lot of confusion from CEOs you're better off. 124 00:06:34,640 --> 00:06:37,599 Speaker 2: When does that uncertainty sit on the sideline? I still 125 00:06:37,600 --> 00:06:39,760 Speaker 2: think medium long term it's positive and it all work 126 00:06:39,839 --> 00:06:42,760 Speaker 2: its way out. But then if you look back at Australia, 127 00:06:43,080 --> 00:06:47,560 Speaker 2: we're going to be exported deflation from particularly China, so 128 00:06:47,920 --> 00:06:50,800 Speaker 2: our products if anything, might become cheaper. 129 00:06:50,720 --> 00:06:52,920 Speaker 1: You mean our televisions and are got to come down. 130 00:06:53,320 --> 00:06:56,960 Speaker 2: Yeah, exactly, it could. Well, like maybe it's not deflationary, 131 00:06:56,960 --> 00:06:59,880 Speaker 2: but it's definitely not inflationary from ours. 132 00:07:00,560 --> 00:07:03,800 Speaker 1: Yeah, they've got the prices will be stable. Tell me 133 00:07:03,880 --> 00:07:06,800 Speaker 1: what you think about the there's a theory abroad of 134 00:07:06,800 --> 00:07:09,320 Speaker 1: course also that one of the reasons the ASX is 135 00:07:09,360 --> 00:07:12,800 Speaker 1: holding up so well is not so much the raw numbers, 136 00:07:13,160 --> 00:07:17,040 Speaker 1: but that global fund managers see us as a safe 137 00:07:17,080 --> 00:07:19,040 Speaker 1: place and that's one of the reasons. For instance, they 138 00:07:19,040 --> 00:07:23,400 Speaker 1: come well bank is defining all criticism, all speculation, and 139 00:07:23,440 --> 00:07:25,320 Speaker 1: it's sitting up there at one hundred and sixty bucks 140 00:07:25,360 --> 00:07:28,640 Speaker 1: when people think its value with thirty percent lower. What's 141 00:07:28,680 --> 00:07:29,480 Speaker 1: your view? 142 00:07:29,520 --> 00:07:32,440 Speaker 2: I think the valuation is probably a lot lower than lower. 143 00:07:32,560 --> 00:07:33,800 Speaker 1: Is that right? Okay to me? 144 00:07:34,320 --> 00:07:37,920 Speaker 2: Unfortunately it's the passive money, like it's trading on what 145 00:07:37,960 --> 00:07:40,760 Speaker 2: three and a half times assets. But just going back 146 00:07:40,800 --> 00:07:43,880 Speaker 2: to Australia on the big picture, Yes, you know how 147 00:07:43,920 --> 00:07:47,120 Speaker 2: the market is forecasting say three or four in straight 148 00:07:47,520 --> 00:07:51,880 Speaker 2: cuts on our information, and we've just created a new 149 00:07:51,920 --> 00:07:56,200 Speaker 2: fund where income maximizer when known for being equity people. 150 00:07:56,720 --> 00:07:58,840 Speaker 2: We've employed some people that used to work at the 151 00:07:58,840 --> 00:08:01,559 Speaker 2: Reserve Bank, et cetera, helping us on the debt side. 152 00:08:01,600 --> 00:08:04,720 Speaker 2: The income maximizer has equity and debt, and we're getting 153 00:08:04,760 --> 00:08:07,960 Speaker 2: really good information on the dead side. Now we would 154 00:08:07,960 --> 00:08:10,000 Speaker 2: be saying there's going to be five or six interest 155 00:08:10,080 --> 00:08:13,320 Speaker 2: rate cuts in Australia, we think it is going to 156 00:08:13,320 --> 00:08:18,560 Speaker 2: be signifantly more similarary and more positive for equities than 157 00:08:18,640 --> 00:08:23,000 Speaker 2: the market's anticipating. We think that's very good quality information 158 00:08:23,200 --> 00:08:24,320 Speaker 2: that we're getting there. 159 00:08:24,680 --> 00:08:27,160 Speaker 1: Right when we look at the expectations for interest rates, 160 00:08:27,160 --> 00:08:31,360 Speaker 1: there's something rare. Three to four is the most I've heard. Yes, 161 00:08:31,400 --> 00:08:33,720 Speaker 1: what is it that is suggesting that they could be 162 00:08:33,760 --> 00:08:35,479 Speaker 1: deeper than the consensus? 163 00:08:35,840 --> 00:08:38,880 Speaker 2: Now, speaking to people very close to the decision making process, 164 00:08:39,280 --> 00:08:43,200 Speaker 2: we think they are obviously concerned from an Australian context, 165 00:08:43,240 --> 00:08:47,160 Speaker 2: about the fact that we have deflation and they are 166 00:08:47,160 --> 00:08:50,679 Speaker 2: not concerned about inflation at all. So that's a big change. 167 00:08:51,280 --> 00:08:54,720 Speaker 2: So they are ready to cut whenever they can. 168 00:08:55,480 --> 00:08:59,880 Speaker 1: Okay, and then this then underpins an optimistic view of 169 00:09:00,000 --> 00:09:06,280 Speaker 1: Australian share price valuations. Okay, but reversing that in some ways. 170 00:09:06,280 --> 00:09:09,080 Speaker 1: The bell Weather stock for our market is Comebank, and 171 00:09:09,120 --> 00:09:11,640 Speaker 1: I didn't mean to talk about one stock, but banks generally, 172 00:09:12,000 --> 00:09:14,360 Speaker 1: you think the true valuation is more than thirty percent 173 00:09:14,440 --> 00:09:16,880 Speaker 1: lower than where they are. At the same time, we've 174 00:09:16,880 --> 00:09:21,840 Speaker 1: got stimminus coming, so that valuation might remain academic one percent. 175 00:09:21,920 --> 00:09:23,360 Speaker 2: People are going to go for yield. I go for 176 00:09:23,440 --> 00:09:27,200 Speaker 2: the banks. Shall the passive money. We think it's that 177 00:09:27,480 --> 00:09:31,800 Speaker 2: phenomenal amount of money that is passive these days. So 178 00:09:31,920 --> 00:09:35,199 Speaker 2: to me, that's been a big driver of the significant 179 00:09:35,200 --> 00:09:36,640 Speaker 2: overvaluation of Combank. 180 00:09:37,200 --> 00:09:39,400 Speaker 1: Okay, very interesting, Jeff, Thank you. Look, I think we'll 181 00:09:39,400 --> 00:09:41,440 Speaker 1: go for a break and we will come back and 182 00:09:41,520 --> 00:09:47,680 Speaker 1: talk about the issue at hand for all investors ultimately, 183 00:09:47,800 --> 00:09:50,679 Speaker 1: if they don't make some changes to the plan tax 184 00:09:50,800 --> 00:10:03,480 Speaker 1: back in a moment. Hello, Welcome back to The Australian's 185 00:10:03,520 --> 00:10:07,000 Speaker 1: Money Puzzle podcast. James Kirby talking to Jeff Wilson of 186 00:10:07,080 --> 00:10:11,480 Speaker 1: Wilson Asset Management. Now, folks, to introduce the issue. You 187 00:10:11,600 --> 00:10:14,080 Speaker 1: may have heard, I'm sure you have that there's a 188 00:10:14,120 --> 00:10:18,200 Speaker 1: lot of controversy around a new supertax which is planned 189 00:10:18,280 --> 00:10:22,320 Speaker 1: by the government, and the government plans to reintroduce this 190 00:10:22,480 --> 00:10:24,720 Speaker 1: tax or at least have a second go at bringing 191 00:10:24,720 --> 00:10:27,240 Speaker 1: it in if they're re elected. It looks very likely 192 00:10:27,280 --> 00:10:29,839 Speaker 1: they will be re elected. So here's the thing. It's 193 00:10:29,920 --> 00:10:34,400 Speaker 1: a tax on earnings in SUPER above three million. Most 194 00:10:34,400 --> 00:10:36,439 Speaker 1: people say, well, who cares? 195 00:10:36,480 --> 00:10:36,680 Speaker 2: You know? 196 00:10:36,679 --> 00:10:40,560 Speaker 1: How many people have earning above three million per capita? 197 00:10:40,600 --> 00:10:43,080 Speaker 1: I might add per capita, right, so that's like a 198 00:10:43,120 --> 00:10:45,679 Speaker 1: couple could have six million. But the thing is, well, 199 00:10:45,720 --> 00:10:47,679 Speaker 1: what most people I have found I'm going to ask 200 00:10:47,760 --> 00:10:50,000 Speaker 1: Jeff this I have found in almost everyone I speak to. 201 00:10:50,080 --> 00:10:54,439 Speaker 1: It's not that they're crazy angry about attacks. It's the 202 00:10:54,480 --> 00:10:58,200 Speaker 1: scheme and nature and design of this tax. Jeff, could 203 00:10:58,200 --> 00:11:02,000 Speaker 1: you explain what's so problem about the plan tax to 204 00:11:02,120 --> 00:11:06,200 Speaker 1: basically tax wealthy people and super who have earnings above 205 00:11:06,240 --> 00:11:06,720 Speaker 1: three million. 206 00:11:07,440 --> 00:11:12,480 Speaker 2: I don't think anyone is concerned that they've increased double 207 00:11:12,520 --> 00:11:14,560 Speaker 2: the tax rate on people that have more than three 208 00:11:14,600 --> 00:11:17,400 Speaker 2: million dollars in SUPER. I mean one of the big 209 00:11:17,440 --> 00:11:21,839 Speaker 2: concerns is for younger people, people that worked hard, people 210 00:11:21,880 --> 00:11:24,280 Speaker 2: that have their money in Super. The fact that that 211 00:11:24,360 --> 00:11:26,160 Speaker 2: three million dollars isn't indexed. 212 00:11:26,880 --> 00:11:29,760 Speaker 1: To explain to people why that's a big problem. It 213 00:11:29,960 --> 00:11:33,400 Speaker 1: means that every year, as inflation kicks in more and 214 00:11:33,440 --> 00:11:36,439 Speaker 1: more people get into the net, So three million if 215 00:11:36,440 --> 00:11:40,360 Speaker 1: it isn't index in effect they say in ten years time, 216 00:11:40,440 --> 00:11:42,679 Speaker 1: that's going to be two millions a day or one 217 00:11:42,720 --> 00:11:43,960 Speaker 1: half inter the day. Is it is going to come down, 218 00:11:44,040 --> 00:11:45,320 Speaker 1: So bas it's going to come down and trap more 219 00:11:45,360 --> 00:11:47,560 Speaker 1: people every year. That's a big problem, isn't it that 220 00:11:47,600 --> 00:11:48,959 Speaker 1: it's not indexed. 221 00:11:48,760 --> 00:11:51,680 Speaker 2: One oundred percent? And we did a little white paper 222 00:11:51,800 --> 00:11:55,280 Speaker 2: for discussion that we published this week, and in it 223 00:11:55,480 --> 00:11:59,000 Speaker 2: we talked about Anthony Albernici. I mean, he's in a 224 00:11:59,080 --> 00:12:01,680 Speaker 2: defined benefit scheme so he doesn't get impacted by this, 225 00:12:02,480 --> 00:12:05,120 Speaker 2: but it's nearly the equivalent of him having half a 226 00:12:05,120 --> 00:12:09,839 Speaker 2: million dollars in today's dollars in super So eventually, if 227 00:12:09,880 --> 00:12:13,600 Speaker 2: you're young enough, everyone will get caught because of inflation. 228 00:12:13,840 --> 00:12:17,000 Speaker 2: So I'm lucky. I suppose I come in the category. 229 00:12:17,040 --> 00:12:19,640 Speaker 2: You probably do two James in the boomer category. 230 00:12:19,960 --> 00:12:20,800 Speaker 1: Just about. 231 00:12:22,760 --> 00:12:26,760 Speaker 2: We've done well. And to me, how can a government 232 00:12:27,200 --> 00:12:30,800 Speaker 2: disadvantage the younger people that are in theory going to 233 00:12:30,840 --> 00:12:32,679 Speaker 2: have more of the tax burden to look after us 234 00:12:32,720 --> 00:12:34,040 Speaker 2: in our old age. 235 00:12:33,760 --> 00:12:36,320 Speaker 1: Because they've got to put thirty percent to effectively thirty 236 00:12:36,360 --> 00:12:39,040 Speaker 1: percent on super for people coming down the line. But 237 00:12:39,240 --> 00:12:42,760 Speaker 1: the issue that's driving people people are literally enraged about 238 00:12:43,040 --> 00:12:47,439 Speaker 1: is that the tax, the new tax. Specifically, folks, Okay, 239 00:12:47,440 --> 00:12:51,000 Speaker 1: the new tax is fifteen percent for over three million 240 00:12:51,040 --> 00:12:53,720 Speaker 1: on top of the existing fifteen percent for over two million, right, 241 00:12:53,800 --> 00:12:56,840 Speaker 1: so it's thirty percent over three million. Effectively, put fifteen 242 00:12:56,880 --> 00:12:59,840 Speaker 1: percent the new tax. This is daft the way it's just, 243 00:13:00,840 --> 00:13:04,120 Speaker 1: but it's got to be applied on realized games. Can 244 00:13:04,160 --> 00:13:07,480 Speaker 1: you explain to the everyday investor what that means, Jeff, 245 00:13:07,640 --> 00:13:09,439 Speaker 1: and it's complications? 246 00:13:09,880 --> 00:13:13,320 Speaker 2: Yes, Okay, So if I was fortunate enough, I'm sixty 247 00:13:13,360 --> 00:13:16,640 Speaker 2: seven now, but say twenty seven years ago when I 248 00:13:16,679 --> 00:13:20,160 Speaker 2: started my business, so I didn't Yeah, I put some 249 00:13:20,240 --> 00:13:22,280 Speaker 2: of them my money in Super. I didn't have much 250 00:13:22,320 --> 00:13:24,880 Speaker 2: money in Super then, and maybe I put it in 251 00:13:24,920 --> 00:13:29,280 Speaker 2: some shares of Promticus and I think they were trading 252 00:13:29,320 --> 00:13:32,439 Speaker 2: around sixty or seventy cents. Then now say I put 253 00:13:32,440 --> 00:13:34,600 Speaker 2: one hundred thousand dollars in Yeah, I don't know the 254 00:13:34,600 --> 00:13:37,960 Speaker 2: exact numbers, but that would be now tens of millions 255 00:13:38,000 --> 00:13:38,520 Speaker 2: of dollars. 256 00:13:38,720 --> 00:13:39,800 Speaker 1: Yeah, you hit the jackpot. 257 00:13:39,920 --> 00:13:43,920 Speaker 2: So then what would happen is I added myself managed 258 00:13:43,960 --> 00:13:46,560 Speaker 2: Super fun. Of course, I've got more than that three 259 00:13:46,600 --> 00:13:49,400 Speaker 2: million dollars and I want to keep it for the 260 00:13:49,400 --> 00:13:51,160 Speaker 2: rest of my life because I think he's such a 261 00:13:51,200 --> 00:13:55,160 Speaker 2: great manager and it's going to keep going well. But 262 00:13:55,400 --> 00:13:58,680 Speaker 2: the government saying, now, no, you can't. Well you can, 263 00:13:59,280 --> 00:14:01,840 Speaker 2: but you've got to pay thirty percent tax on the 264 00:14:01,920 --> 00:14:05,600 Speaker 2: increase in value above the three million dollars. So how 265 00:14:05,600 --> 00:14:07,720 Speaker 2: are you going to pay that tax? You either pay 266 00:14:07,760 --> 00:14:09,720 Speaker 2: me personally, so I've got to go and borrow money 267 00:14:09,760 --> 00:14:12,080 Speaker 2: and I don't want to do that and pay or 268 00:14:12,120 --> 00:14:13,680 Speaker 2: I've got to get the money out of my super 269 00:14:13,679 --> 00:14:16,200 Speaker 2: fund and I don't want to sell my shares. 270 00:14:16,400 --> 00:14:18,600 Speaker 1: So it's a paper again, you haven't got the money. 271 00:14:18,679 --> 00:14:20,920 Speaker 1: It's a paper gain. And pro Medicus, for all we know, 272 00:14:21,440 --> 00:14:24,480 Speaker 1: could have a scandal and it could fall fifty percent one. 273 00:14:24,600 --> 00:14:26,800 Speaker 2: Dred percent and at the end of June, you know, 274 00:14:26,800 --> 00:14:29,320 Speaker 2: like we've seen the volatility in the market we've had recently, 275 00:14:29,360 --> 00:14:33,200 Speaker 2: and pro Medicus did fall tens of dollars, and they 276 00:14:33,240 --> 00:14:35,600 Speaker 2: work it out of the end of June, and then 277 00:14:36,040 --> 00:14:39,320 Speaker 2: crashes tend to be in October, like remember the eighty 278 00:14:39,360 --> 00:14:40,720 Speaker 2: seven crash, in the eighty. 279 00:14:40,560 --> 00:14:42,720 Speaker 1: Nine crash, Yes, sure, so. 280 00:14:42,960 --> 00:14:46,000 Speaker 2: I've got to pay tax on this pretend gain. Yes, 281 00:14:46,480 --> 00:14:49,360 Speaker 2: and then by the time I'm ready to pay the tax, 282 00:14:50,120 --> 00:14:52,600 Speaker 2: the share price could have fallen thirty or forty percent. 283 00:14:53,080 --> 00:14:55,720 Speaker 2: And to me, it's more brutal than that. It will 284 00:14:55,880 --> 00:15:00,800 Speaker 2: destroy all the risk taking. It's the unintended consequences. And 285 00:15:01,080 --> 00:15:06,240 Speaker 2: there's four point two trillion dollars in superannuation that supports that. 286 00:15:06,280 --> 00:15:11,200 Speaker 2: It's the lifeblood of the Australian economy. Currently. I'm talking 287 00:15:11,200 --> 00:15:14,960 Speaker 2: to you from a technology hub and I was talking 288 00:15:14,960 --> 00:15:18,280 Speaker 2: to the founder of this technology hub and he was 289 00:15:18,320 --> 00:15:22,360 Speaker 2: saying that fifty to sixty percent of their money that 290 00:15:22,440 --> 00:15:28,200 Speaker 2: they get people putting into these exciting startups is from superannuation, 291 00:15:28,360 --> 00:15:32,840 Speaker 2: self managed superannuation. I know an individual who put two 292 00:15:32,880 --> 00:15:35,840 Speaker 2: million dollars into a technology business. He's the major funder, 293 00:15:35,880 --> 00:15:40,440 Speaker 2: the major shareholder. It's now worth thirty million dollars. And 294 00:15:40,480 --> 00:15:44,200 Speaker 2: he said, what can I do. I can't sell, there's 295 00:15:44,200 --> 00:15:46,440 Speaker 2: no liquidity, the company doesn't make any money. 296 00:15:46,680 --> 00:15:49,840 Speaker 1: Yeah, he can't sell, but he's going to be taxed 297 00:15:50,160 --> 00:15:54,200 Speaker 1: under this plan every year for the paper improvement and 298 00:15:54,240 --> 00:15:56,880 Speaker 1: the value of the business. And this is the CrOx 299 00:15:56,920 --> 00:15:58,440 Speaker 1: of the issue, isn't it this is what everyone is 300 00:15:58,480 --> 00:16:01,480 Speaker 1: curious about. So, but it seems the government is dead 301 00:16:01,520 --> 00:16:05,600 Speaker 1: set on this unrealized gains. Well, maybe we'll briefly say 302 00:16:05,600 --> 00:16:07,760 Speaker 1: that the theories as to why they are. One theory 303 00:16:07,880 --> 00:16:11,560 Speaker 1: was that the big super funds couldn't give individual member numbers, 304 00:16:11,560 --> 00:16:14,000 Speaker 1: so they just went with a disc Another theory that 305 00:16:14,040 --> 00:16:17,200 Speaker 1: you it's a theory is that they said, well, really, 306 00:16:17,200 --> 00:16:18,720 Speaker 1: well to people who have more than three million and 307 00:16:18,720 --> 00:16:21,360 Speaker 1: supertend to have lots of different money in different places, 308 00:16:21,760 --> 00:16:23,480 Speaker 1: and so we want to make sure we capture it. 309 00:16:23,520 --> 00:16:25,040 Speaker 1: But you said, look, you can put them all into 310 00:16:25,040 --> 00:16:27,480 Speaker 1: one fund and nominate that fund and people will be 311 00:16:27,520 --> 00:16:29,960 Speaker 1: honest in that and they'll have to. But the thing 312 00:16:30,080 --> 00:16:33,880 Speaker 1: is cut to the chase. Your whole premise is that 313 00:16:33,920 --> 00:16:38,040 Speaker 1: they should just tax actual gains is common practice across 314 00:16:38,080 --> 00:16:41,120 Speaker 1: the super system. But when I look at my own 315 00:16:41,200 --> 00:16:43,840 Speaker 1: SMSF Jeff, and I'm sure everyone's is the same, and 316 00:16:43,920 --> 00:16:47,080 Speaker 1: I'm not retired far from it, But the actual gains 317 00:16:47,120 --> 00:16:51,120 Speaker 1: in my SMS each year and the unrealized gains, the 318 00:16:51,160 --> 00:16:53,400 Speaker 1: actual gain is only a fraction of the unrealized games 319 00:16:53,440 --> 00:16:55,640 Speaker 1: on a good year like it was last year. So 320 00:16:55,840 --> 00:16:58,280 Speaker 1: in the government saying if we just tax actual gains, 321 00:16:58,280 --> 00:16:59,800 Speaker 1: we won't get the money we're looking for. 322 00:17:00,200 --> 00:17:03,480 Speaker 2: Well, unfortunately, what they don't realize is they're not going 323 00:17:03,520 --> 00:17:06,400 Speaker 2: to get the money they're looking for anyway. Okay, right, 324 00:17:06,520 --> 00:17:11,040 Speaker 2: what is that because everyone changes their behavior. Yes, and 325 00:17:11,080 --> 00:17:13,480 Speaker 2: we've done a study and we actually think the negative 326 00:17:13,520 --> 00:17:18,440 Speaker 2: impact on the Australian economy will be ninety four point 327 00:17:18,440 --> 00:17:23,439 Speaker 2: five billion dollars. And that's people not investing in technology 328 00:17:23,480 --> 00:17:27,960 Speaker 2: companies which employ people, et cetera, et cetera. And also 329 00:17:28,520 --> 00:17:31,760 Speaker 2: on our analysis, we think a lot of people will 330 00:17:31,800 --> 00:17:34,840 Speaker 2: take their money out of super I think everyone who 331 00:17:34,960 --> 00:17:39,040 Speaker 2: was a tax on realized gains everyone sort of accepted, hey, 332 00:17:39,040 --> 00:17:41,879 Speaker 2: look we've had a very good run. It's been very 333 00:17:41,920 --> 00:17:44,560 Speaker 2: good for us. We're happy to pay more tax. The 334 00:17:44,640 --> 00:17:48,560 Speaker 2: fact that it's on unrealized gains is now changing everyone's behavior. 335 00:17:48,840 --> 00:17:51,639 Speaker 2: You mentioned we've got one hundred and thirty thousand investors 336 00:17:51,680 --> 00:17:55,320 Speaker 2: that we manage money on their behalf. I've had hundreds 337 00:17:55,320 --> 00:17:58,000 Speaker 2: of them contacting us. There was one I was talking 338 00:17:58,040 --> 00:18:02,120 Speaker 2: to just the other day. He's a grandfather, worked hard 339 00:18:02,160 --> 00:18:05,360 Speaker 2: all his life, had his self managed super fun. He's 340 00:18:05,400 --> 00:18:07,520 Speaker 2: got a reasonable amount of money in that self managed 341 00:18:07,560 --> 00:18:10,200 Speaker 2: super fund. He said, what I'm going to do is 342 00:18:10,240 --> 00:18:11,639 Speaker 2: I'm going to take it all out down to the 343 00:18:11,680 --> 00:18:14,359 Speaker 2: three million dollars. He's in his early eighties where he 344 00:18:14,400 --> 00:18:17,879 Speaker 2: can do that without any penalties. He said, I'm probably 345 00:18:17,880 --> 00:18:20,400 Speaker 2: too old to upgrade my own principal place of residence, 346 00:18:20,400 --> 00:18:23,239 Speaker 2: which is no tax. Yes, what I'm going to do 347 00:18:23,320 --> 00:18:25,720 Speaker 2: is I'm going to give the money to my grandchildren 348 00:18:26,200 --> 00:18:28,320 Speaker 2: to buy their principal place of residence. 349 00:18:28,680 --> 00:18:29,120 Speaker 1: Yes. 350 00:18:29,440 --> 00:18:31,320 Speaker 2: So it's actually going to be negative. And we've seen 351 00:18:31,359 --> 00:18:35,080 Speaker 2: this in the UK. The UK increased the capital gains tax. 352 00:18:35,440 --> 00:18:37,919 Speaker 2: I think it was close different rates, but close to 353 00:18:37,960 --> 00:18:41,160 Speaker 2: twenty percent. So you'd think, oh, if you've increased the 354 00:18:41,280 --> 00:18:44,879 Speaker 2: capital gains tax by twenty percent, you'd be receiving twenty 355 00:18:44,880 --> 00:18:47,960 Speaker 2: percent more tax. The numbers just came out the other day. 356 00:18:48,680 --> 00:18:53,159 Speaker 2: The tax take is down the equivalent of three billion 357 00:18:53,200 --> 00:18:55,280 Speaker 2: Australian dollars. It's down ten. 358 00:18:55,119 --> 00:18:58,439 Speaker 1: Percent because people changed, because people knew it was coming 359 00:18:58,560 --> 00:19:00,960 Speaker 1: and they said, listen, I'm going to have that. Okay, 360 00:19:01,080 --> 00:19:04,840 Speaker 1: what about you mentioned in your paper about Norway where 361 00:19:04,840 --> 00:19:08,679 Speaker 1: they had a particular specific unrealized gains tax and the 362 00:19:08,720 --> 00:19:10,320 Speaker 1: money just flooded out of the country. 363 00:19:10,960 --> 00:19:13,640 Speaker 2: I mean, just what a disaster for any risk take 364 00:19:13,880 --> 00:19:16,920 Speaker 2: to me, the effect will be as significant. So everyone 365 00:19:17,000 --> 00:19:19,760 Speaker 2: works out, hey, we don't want to take significant risk 366 00:19:19,880 --> 00:19:22,640 Speaker 2: in inliquate assets. We're not going to back any Australian. 367 00:19:22,960 --> 00:19:25,920 Speaker 2: We're not going to support Campbell or Alassian in their 368 00:19:25,960 --> 00:19:30,800 Speaker 2: early days. And what exactly happened with the unrealized caval 369 00:19:30,880 --> 00:19:34,639 Speaker 2: gains tax in Norway their first unicorn, the first person 370 00:19:34,720 --> 00:19:38,119 Speaker 2: that has crowded a company worth a billion dollars but 371 00:19:38,160 --> 00:19:41,040 Speaker 2: it made no money. He was one of the co founders, 372 00:19:41,080 --> 00:19:42,840 Speaker 2: a big shareholder, and he was going to have to 373 00:19:42,880 --> 00:19:47,679 Speaker 2: pay tax on a theoretical value that he couldn't do, 374 00:19:48,400 --> 00:19:50,600 Speaker 2: and he left. He left Norway. And I think that 375 00:19:50,720 --> 00:19:53,280 Speaker 2: people with the greatest amount of money, I think one 376 00:19:53,359 --> 00:19:57,320 Speaker 2: hundred of them have left Norway. The impact on Australia 377 00:19:57,720 --> 00:20:02,320 Speaker 2: will be seeing multiples of what they might get from 378 00:20:02,720 --> 00:20:06,640 Speaker 2: the people that get trapped, you know, like the technology investor. 379 00:20:06,720 --> 00:20:09,199 Speaker 2: I said, also, I had a farmer that rang me 380 00:20:09,240 --> 00:20:11,960 Speaker 2: the other day. You know, there's three thousand and five 381 00:20:12,160 --> 00:20:17,280 Speaker 2: hundred farms. These are sort of generational farms that the 382 00:20:17,320 --> 00:20:19,960 Speaker 2: people have put them in the super fun there's three thousand, 383 00:20:20,040 --> 00:20:22,959 Speaker 2: five hundred above three million that will be caught by this, 384 00:20:23,440 --> 00:20:26,320 Speaker 2: So there'll be three thousand, five hundred farms for sale. 385 00:20:26,760 --> 00:20:29,520 Speaker 2: I had someone a farmer ring me the other day. 386 00:20:29,840 --> 00:20:32,120 Speaker 2: He's got a farm about eight k out of Goldwin. 387 00:20:32,680 --> 00:20:35,520 Speaker 2: He had alone on it. During the GFC the banks 388 00:20:35,560 --> 00:20:37,520 Speaker 2: called in the lane. He nearly went under. He sold 389 00:20:37,560 --> 00:20:40,479 Speaker 2: half the farm, and then he did, I'm not going 390 00:20:40,520 --> 00:20:42,960 Speaker 2: to get caught again. So what did he do? He 391 00:20:43,000 --> 00:20:45,080 Speaker 2: put in hisself managed super fun He thought he was 392 00:20:45,119 --> 00:20:46,440 Speaker 2: safe for the rest of his life. 393 00:20:46,720 --> 00:20:49,000 Speaker 1: That's probably the extreme version, isn't it. Where you got 394 00:20:49,000 --> 00:20:52,960 Speaker 1: a farm, it's a relatively little return on assets in 395 00:20:53,000 --> 00:20:55,639 Speaker 1: the farm is but the assets go up because the 396 00:20:55,720 --> 00:20:57,399 Speaker 1: landry value said, doesn't mean you're going to sell it, 397 00:20:57,440 --> 00:20:59,399 Speaker 1: but you'd have to pay tax on it. Okay, I 398 00:20:59,400 --> 00:21:01,040 Speaker 1: think people will understand that now, Jeff. 399 00:21:01,200 --> 00:21:01,360 Speaker 2: Yes. 400 00:21:01,640 --> 00:21:04,760 Speaker 1: So here's the thing. Is there any chance we'll assume 401 00:21:04,800 --> 00:21:06,679 Speaker 1: the government get back in. We know the treasure has 402 00:21:06,720 --> 00:21:09,680 Speaker 1: said it's unfinished business. He is determined to bring this in. 403 00:21:10,080 --> 00:21:12,040 Speaker 1: He needs the revenue. It's one of the few big 404 00:21:12,119 --> 00:21:16,080 Speaker 1: ticket revenue items. There was some alternatives proposed. One is 405 00:21:16,160 --> 00:21:19,040 Speaker 1: actual just tax actual gains, which was your one. What 406 00:21:19,160 --> 00:21:22,960 Speaker 1: about the notion of a deeming rate like they have 407 00:21:23,040 --> 00:21:23,959 Speaker 1: for pensions anyway? 408 00:21:24,320 --> 00:21:27,119 Speaker 2: Yeah, Look, anything, I'm incredibly open. 409 00:21:27,240 --> 00:21:29,040 Speaker 1: Anything is better than what's on the table. 410 00:21:29,160 --> 00:21:31,920 Speaker 2: Anything that taxing a profit that you might never make 411 00:21:32,119 --> 00:21:36,359 Speaker 2: or may never have. Yeah, and destroying people's livelihoods and 412 00:21:36,400 --> 00:21:42,480 Speaker 2: impacting significantly the entrepreneurial spirit of Australia which we've flourished 413 00:21:42,480 --> 00:21:45,280 Speaker 2: on for tens of hundreds of years. 414 00:21:45,560 --> 00:21:48,640 Speaker 1: Okay, And it sounds to me your campaign's really only 415 00:21:48,680 --> 00:21:51,320 Speaker 1: starting because it's alda start again, isn't it. 416 00:21:51,640 --> 00:21:54,879 Speaker 2: Well one hundred percent. The unfortunate thing is we actually 417 00:21:54,920 --> 00:21:59,600 Speaker 2: started when it was announced in February twenty three. And 418 00:22:00,000 --> 00:22:02,880 Speaker 2: on any reason it's getting a lot of airplane now 419 00:22:03,359 --> 00:22:06,000 Speaker 2: is they've already got it through one House and they've 420 00:22:06,000 --> 00:22:08,040 Speaker 2: got to get it through the Senate. And we've been 421 00:22:08,160 --> 00:22:12,160 Speaker 2: talking to the various cross benches each of the parties. 422 00:22:12,480 --> 00:22:15,240 Speaker 2: We send a letter to the two and twenty eight politicians. 423 00:22:15,840 --> 00:22:18,359 Speaker 2: We're going to send our report to them. We're trying 424 00:22:18,359 --> 00:22:20,399 Speaker 2: to work out whether we send it before the election 425 00:22:20,440 --> 00:22:23,000 Speaker 2: are after. The reason it's getting a lot of play 426 00:22:23,040 --> 00:22:25,399 Speaker 2: this week is obviously PI is an election and the 427 00:22:25,400 --> 00:22:28,800 Speaker 2: beautiful thing is it's bringing it to everyone's front of mind, 428 00:22:28,920 --> 00:22:31,840 Speaker 2: and from my perspective is the government they actually should 429 00:22:31,880 --> 00:22:35,919 Speaker 2: lose the election on this. Now, the election occurs on 430 00:22:35,960 --> 00:22:38,920 Speaker 2: the weekend. Whatever happens happens, but we've got to keep 431 00:22:38,960 --> 00:22:42,240 Speaker 2: fighting to have it stopped going through the Senate. And 432 00:22:42,320 --> 00:22:45,240 Speaker 2: what we need is the Libs there, We need Pocock, 433 00:22:45,640 --> 00:22:48,160 Speaker 2: we need Lamby and the Cross benches to hold firm 434 00:22:48,200 --> 00:22:50,760 Speaker 2: because it's only by one vote and. 435 00:22:50,680 --> 00:22:53,840 Speaker 1: Of course those numbers might be turned upside down in 436 00:22:53,880 --> 00:22:56,200 Speaker 1: the election. Okay, we leave that for the moment. We'll 437 00:22:56,240 --> 00:22:57,919 Speaker 1: be back in a moment. We have some quick questions 438 00:22:57,920 --> 00:22:59,879 Speaker 1: and Jeff's going to stay with us, which I'm delighted 439 00:23:00,400 --> 00:23:02,480 Speaker 1: to be able to have him to cover these all. 440 00:23:02,560 --> 00:23:14,359 Speaker 1: Right back in the moment. Hello, Welcome back to The 441 00:23:14,359 --> 00:23:18,400 Speaker 1: Australian's Money Puzzle. James Kirby here with Jeff Wilson. Okay, Jeff, 442 00:23:18,440 --> 00:23:20,560 Speaker 1: we take listener questions every week. I just have kept 443 00:23:20,600 --> 00:23:23,199 Speaker 1: two for you. Actually one listen to question. I'll just 444 00:23:23,600 --> 00:23:27,679 Speaker 1: briefly read it, but you might well. I think most 445 00:23:27,720 --> 00:23:30,239 Speaker 1: people are mystified by this. And even though you're an 446 00:23:30,240 --> 00:23:32,399 Speaker 1: experienced for manager, I bet you don't have the answer, 447 00:23:32,720 --> 00:23:34,720 Speaker 1: or at least you don't have the answer that the 448 00:23:34,720 --> 00:23:37,840 Speaker 1: banks would try and justify it. What happens to money 449 00:23:37,880 --> 00:23:40,879 Speaker 1: in the banking system when there are transfers on public holidays. 450 00:23:41,000 --> 00:23:44,480 Speaker 1: This is from Paul. My daughter transferred money that left 451 00:23:44,480 --> 00:23:46,720 Speaker 1: for Saint George account on Good Friday, and it had 452 00:23:46,720 --> 00:23:49,359 Speaker 1: not arrived in my account by Tuesday, the twenty second 453 00:23:49,359 --> 00:23:51,560 Speaker 1: of April, that's six days later. I asked the bank 454 00:23:51,640 --> 00:23:54,159 Speaker 1: what happened, and they said they do not process transferreds 455 00:23:54,400 --> 00:23:58,320 Speaker 1: on weekends or public holidays. I asked where the money 456 00:23:58,400 --> 00:24:00,600 Speaker 1: was kept for those five days. I was told they 457 00:24:00,600 --> 00:24:03,320 Speaker 1: couldn't answer that. The bank is obviously doing very well 458 00:24:03,320 --> 00:24:05,960 Speaker 1: from this archaic practice. Now, once upon a time, when 459 00:24:06,000 --> 00:24:09,760 Speaker 1: money was pushed around, perhaps carried in little paper bags 460 00:24:09,760 --> 00:24:12,040 Speaker 1: from one bank to another, we could understand a couple 461 00:24:12,080 --> 00:24:15,040 Speaker 1: of days. It's now I expect a bush of a button. 462 00:24:15,119 --> 00:24:18,120 Speaker 1: I expect it takes about two microseconds from money beta transferred. 463 00:24:19,600 --> 00:24:21,320 Speaker 1: Is that the answer? Do you reckon, Jefford? Do you 464 00:24:21,359 --> 00:24:22,000 Speaker 1: know anything else? 465 00:24:22,400 --> 00:24:24,560 Speaker 2: Yeah? I think that's a good answer, and to me, 466 00:24:24,920 --> 00:24:27,720 Speaker 2: that's right. Who made the interest over that period of time? 467 00:24:27,880 --> 00:24:29,480 Speaker 1: There's a lot of money washing around. 468 00:24:29,320 --> 00:24:31,040 Speaker 2: I know that's what he's got to drill down with. 469 00:24:31,160 --> 00:24:34,120 Speaker 2: I mean someone would have Yeah, that's probably pretty good analysis. 470 00:24:34,440 --> 00:24:36,600 Speaker 2: Find out who made the money and invest in them. 471 00:24:38,800 --> 00:24:42,160 Speaker 1: That sounds like a bank, all right. Gary asks what 472 00:24:42,200 --> 00:24:45,080 Speaker 1: are the best defensive stocks on the ASX during this 473 00:24:45,240 --> 00:24:47,720 Speaker 1: very wild period on the share market? Yeah, asked that 474 00:24:47,920 --> 00:24:49,440 Speaker 1: all the time. Of course, I don't know if you 475 00:24:49,480 --> 00:24:51,440 Speaker 1: want to go quite selective on stocks, but you could 476 00:24:51,440 --> 00:24:52,679 Speaker 1: talk about sectors whatever. 477 00:24:52,880 --> 00:24:55,240 Speaker 2: Yeah, I think I think more big picture, like our 478 00:24:55,359 --> 00:24:58,639 Speaker 2: view is the interest rates dropping. There's going to be 479 00:24:58,720 --> 00:25:01,919 Speaker 2: more interest right falls over the next twelve months than 480 00:25:01,960 --> 00:25:06,960 Speaker 2: the market's anticipating. So there, what you want is you 481 00:25:07,000 --> 00:25:10,920 Speaker 2: want those high yielding, defensive stocks, you know that will 482 00:25:10,920 --> 00:25:16,160 Speaker 2: benefit from lower interest rates. I haven't got any individual stocks, shirt, 483 00:25:16,240 --> 00:25:19,000 Speaker 2: We've got twenty people back at the office that drill 484 00:25:19,080 --> 00:25:22,040 Speaker 2: down in the individual stocks. A more bigger picture of 485 00:25:22,080 --> 00:25:23,479 Speaker 2: these days. 486 00:25:23,160 --> 00:25:26,399 Speaker 1: Okay, but high yielding stocks in good shape obviously with 487 00:25:26,760 --> 00:25:32,080 Speaker 1: decent fundamentals as well. Okay, very good. Hey, great to 488 00:25:32,080 --> 00:25:33,600 Speaker 1: have you on the show, Jeff, and thank you very 489 00:25:33,720 --> 00:25:34,640 Speaker 1: much for coming on. 490 00:25:35,000 --> 00:25:38,439 Speaker 2: I thank you, James. I've really enjoyed it, and I 491 00:25:38,480 --> 00:25:42,600 Speaker 2: really appreciate everything. You've done in terms of keeping the 492 00:25:42,640 --> 00:25:46,560 Speaker 2: Australian community up to date with investing, and you've been 493 00:25:46,640 --> 00:25:49,960 Speaker 2: a great voice insanity. You know where there can be 494 00:25:50,119 --> 00:25:51,520 Speaker 2: a lot of insanity out there. 495 00:25:53,480 --> 00:25:56,040 Speaker 1: I'm flattered by the same part at least. Okay, thank 496 00:25:56,080 --> 00:25:57,680 Speaker 1: you very much, love you to have you, and love 497 00:25:57,680 --> 00:26:00,720 Speaker 1: you to have Jeff on the show that was Jeffs Management. 498 00:26:01,680 --> 00:26:04,880 Speaker 1: Keep the correspondence coming, please love to have some more questions. 499 00:26:05,440 --> 00:26:08,560 Speaker 1: We have unusually a bit of space to answer more questions, 500 00:26:08,600 --> 00:26:11,080 Speaker 1: so let's have them the Money Puzzle at the Australian 501 00:26:11,160 --> 00:26:14,800 Speaker 1: dot com dot au. Talk to you soon.