The Secret Broker: Got cash to invest? Step into my time machine…
The Secret Broker
The Secret Broker
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After 35 years of stockbroking for some of the biggest houses and investors in Australia and the UK, the Secret Broker is regaling Stockhead readers with his colourful war stories — from the trading floor to the dealer’s desk.
If you could go back in time, what would you bring back and reintroduce into today’s modern trading world?
Dr. James Riddle,
Newcastle University, NSW.
Dear Dr. Jimmy,
Thank you for writing to me with what would seem a simple question.
In fact, simple is what I like, as many things get way too complicated and as you get older and more experienced, you crave to have things just like they used to be.
For example, the remote to our TV has 41 buttons on it and I would only use about four of them.
Some young bright spark has decided that we all need these buttons when all I need is the on/off button, the sound up/down button and the channel up/down button.
The mute button comes in handy when it’s election time and the politicians are on the news, out and about and promising money for made up on the spot lies, just to get our vote.
Recently, I myself have gone back 30 years in time and am now back to cooking steaks on real charcoal, thanks to the great British chef, Heston Blumenthal.
He is mad enough on TV but on this one occasion he managed to calm down a bit and bring back a simple portable BBQ, called the Cube.
Even its name is simple. And being portable, it is easy to take down the beach and battle the Lebanese with their homemade contraptions, massive extended families and dabke music blasting out.
But with the Cube, Mrs Broker and I can produce a far better smell than their kebabs, whilst blasting them away with Pink Floyd Bluetoothed to our duff duff machine.
Bring it on!
However, in answer to your question, it may not be so simple. You see, in the good old days in London, we used to have ‘account periods’ which would either last for two or three weeks, starting on a Monday and ending on the Friday in two or three weeks’ time.
In this period of time, you could buy and sell to your little heart’s content as long as you closed out your positions on the last Friday of that particular ‘account period’.
Everything was then settled on the Monday, with either a cheque (I would drop this bit) from them or you.
You would instruct a broker like me to sell some of your shares if you were bearish and you had two or three weeks in which to decide if you would buy them back or just honour the sale and get paid out.
The beauty about this setup was that if you sold and then bought back, your original in-cost would remain the same.
If you could have done this in Australia and had some pre-1985 CGT-free shares, then your special exemption would remain intact.
Going the other way, you could punt a share and close it out, without even needing to stump up any cash.
You just settled the difference on the Monday after the ‘account period’ ended.
Of course, as a broker, you had to use your discretion when taking the orders, as your arse was on the line if your client couldn’t cough up on settlement day.
On the other hand, you and your mates could punt away and have very little in the bank and just pray that your punt would come good.
You could even roll over your punt into the next ‘account period’ for a small cost.
So, in answer to your question, I would bring back a settlement window of two weeks, instead of the T+2 settlement period which we all enjoy today.
It would be much more fun!
Dear Sexy Brokerman,
If you had $10,000 to invest, what would you do with it?
I am 31 years old, single and just got a small inheritance from a distant Aunt and though I am experienced in certain things, investing is not one of them.
Byron Bay, NSW
Thank you for your letter and the enclosed photo with your number on the back.
It was very kind of you to do that, though somehow I seem to have mislaid it, though I think you-know-who has seen it and hidden it somewhere.
Anyhow, I am not allowed to give direct advice and can only give general advice and in your case, I am certainly not allowed to even give out any hands-on advice.
Some young ladies like yourself would take a sum like this and go over to Thailand and have ‘some work done’ but looking at your photo, I certainly don’t think you need anything enhanced.
So, you have many choices and it really depends on what your personal circumstances are and what your financial goals are.
With inflation still running high, you don’t really want to leave it on a term deposit, as they currently pay out less than the inflation rate, so your money goes backwards.
Living in Byron Bay means $10,000 also won’t go very far. Maybe a few nights out, a couple of takeaway almond lattes and two weeks of pilate lessons.
You could buy some bank shares, but again it will take many years before you will really see a decent return.
No, if I were you, I would buy a campervan on credit and spend the $10,000 on decking it out in a chilled out beach theme style and rent it out.
You are in the ideal spot to do this and with the right camper van (auto not manual) you could either ‘Airbnb’ it out via Camplify or let it out to someone who can’t find a permanent rental property. I’ve heard that they are hard to come by, up your way.
You could easily get a return of $300 a week and if you set it up as a business, your interest payments could be tax deductible.
That would be a much better return on your money and if all goes well, you could end up with a fleet of them.
I wish you the best of luck and if you need any help with advice for the ‘blokey’ bits of the van, I could certainly help you out, especially with the BBQ selection and the size of the beer fridge etc.
PS. You always need a good name for your van, so I was thinking of Marty McFly, as in ‘like my wardrobe’ and BBQ collection – very back to the future!
Feel free to contact him with your best stock tips and ideas.