The Secret Broker: Note to billionaires – you’re just another zero
The Secret Broker
The Secret Broker
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.
This week has been a week full of billionaires playing up and billions being torn up.
It always seems to me that when adding a nought to your fortune, it tends to make fully grown men act as if God has somehow selected them as the Chosen Ones.
Their opinions become headline news as they decide that they can muscle their way into the room and push their personal agenda to the forefront, backed up with their very fat wallets.
Clive Palmer has been spending more on advertising this election than McDonald’s spent last year on pushing their products.
As we all know, no one in history has actually been served a burger the way it looks like in the advert. They sell you the dream but all you get is something that looks like the car in front has run over it.
The only thing missing in Clive’s adverts of promises are the ‘but wait there’s more’ set of run-over steak knives.
Then we have Mike Cannon-Brookes pushing his views on AGL and their demerger plans.
He has actually arrived in the room with $600m worth of shares to back his opinion and needs investors holding a slightly bigger parcel to join their vote to his.
Though he may have to offer them eco-friendly steak knives. Sustainably sourced wooden handles with recycled steel blades made by an indigenous tribe living in the Amazon may do the trick.
Who knows, but good luck to him.
Then we have Andrew Forrest who just can’t help himself.
He’s arrived in the room and elbowed his way back to the head of the table, as only he can push his green agenda and no one else can be trusted to be as competent as him to do this.
He would be better off splitting up FMG and running the green bits himself in a new IPO. That way he would draw a line in the sand and reward shareholders in a freshly minted company, with a free pair of RMs for each 100,000 shares they pony up for.
He has already done a fantastic job with setting up FMG and then sitting back and cashing in the big dividends, so what more can he add?
The share price reaction tells you what the market thinks. The $19.00 shares have added 7c since the announcement hit the screens.
Finally we have Elon (he doesn’t need a surname) sending out tweets which add and subtract billions of dollars to the company he is bidding for.
I think the first person he should ban if he gets control of Twitter should be himself, or I think the SEC will do it for him.
Talking of the SEC, it’s just requisitioned 100 personal mobile phones from traders who work for five different Wall Street firms.
It turns out there’s been a big ring of traders swapping sensitive information via WhatsApp groups.
As WhatsApp has end-to-end encryption, no one knows what those messages were, unless of course you hold the phone in your hand.
These personal phones are now being looked at and it is a massive operation, involving 100s of SEC investigators and legal observers.
Those 100 traders should be very nervous as the SEC has actually shown a full set of teeth this week.
It handed out a fine and a client reimbursement order totalling US$5.8bn to a German company that misled the SEC and investors.
The official statement was brilliant and had all the hallmarks of a smiling assassin – one of the greatest official observations (with added commentary) in regulatory history:
‘Defendants reduced losses under a market crash scenario in one risk report sent to investors from negative 42.1505489755747% to negative 4.1505489755747% — by simply dropping the single digit 2.
In another example, defendants “smoothed” performance data sent to investors by reducing losses on one day from negative 18.2607085709004% to negative 9.2607085709004% — this time by cutting the number 18 in half.’
What a simple fraud.
1) adjust the figures in the performance report sent out to investors; 2) hope everyone focuses on all the decimal points and not the important figures at the front; 3) pray for a market recovery.
Those performance figures, that got adjusted by a slight slip of the keyboard, were on a fund that was managing US$11bn in investors’ funds.
114 US pension funds were sold a ‘safe’ investment that offered very little downside and a steady income and the fees generated by this fund for its German parent totaled over US$500m.
When the SEC turned up to interview the fund’s main man, halfway through the interview he said he had to go to the bathroom. He never returned.
He just left the building and went home.
His two deputies rolled over and he is now defending his good name, though as a betting man I would say he is facing 45 years in jail.
So an interesting observational week for me which is going to be capped off with our traditional Sunday steak BBQ ‘TG It’s Over’ election celebration lunch.
I’m just wondering which steak knives will be appropriate- eco-friendly or run-over?
Feel free to contact him with your best stock tips and ideas.