The Secret Broker: What a pain in the Rs
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.
Well all the Rs seem to be rolling in at once this week.
In the headlines we have had Rate Rises, Roaring Unemployment Numbers, Recession Coming, RBA, Rain and a Revolution.
All that seems missing is Rambo 10, the new box office hit, where Sylvester Stallone breaks everyone out of the retirement village where he now lives, so they can all escape Covid.
It’s all getting so depressing.
I’ve been having a go at the twits at the RBA over here, only to find this week that over in Canada, they have not only been even more incompetent than our RBA, they are also proud of their achievements.
How’s this for a pumped tweet from an official government agency?
— Bank of Canada (@bankofcanada) July 13, 2022
As someone pointed out, it wasn’t too long ago when they were saying this:
There's no doubt we needed rate increase but it's more about the timing and why BoC acted so late. I think BoC misestimated the inflation rate and its impact. So some people from BoC should step down for these mistakes. pic.twitter.com/Z9QM4hTmuw
— Amir Vasebi (@AmirVasebi) July 14, 2022
Now all markets are getting the wobbles overnight again and expectations are even as high as the RBA possibly following Canada’s lead.
However, we are not alone.
Singapore, the Philippines, Korea and New Zealand also raised rates this week, all of this coming on the back of the highest US inflation rate for 41 years.
No wonder the A$ is falling as the USD gets stronger.
Another one of my Christmas predictions is one cent from coming true.
Then we have had a revolution in Sri Lanka and you have to feel for their people and also for all the newsreaders around the world, when an Asian country goes bust.
You see, Gotabaya Rajapaksa has resigned and Ranil Wickremesinghe was appointed Prime Minister (for the sixth time) plus Dr Nandalal Weerasinghe and K.M. Mahinda Siriwardena got government promotions.
I can’t wait for Biden to name them all in a welcoming speech, as I reckon it would make a great one shot drinking game, though I’m not sure one bottle of vodka would cover it.
He couldn’t even remember Scott Morrison’s name in a televised speech:
🇦🇺 'I want to thank that fella down under.'
🇺🇸 President Biden appears to forget the name of Australian PM Scott Morrison 😬 pic.twitter.com/2aCUbUBjdz
— GB News (@GBNEWS) September 15, 2021
But hey, over in Europe it’s not all doom and gloom as they have come up with a way to ease the pain of higher energy prices, by Brussels ordering all public buildings to turn the heating down to 19C and air cooling to 25C.
They also ordered turning coal-fired power stations back on and to keep nuclear power plants going for at least five more years.
So much for climate control targets.
Then recession got a headline mention over here, after Coles lifted the price of milk by 20% and the other worries on how all these new home owners are going to cope with all their self-inflicted debt bingeing.
The last recession in Australia was in 1991, so if you were born in that year, you would now be 31 years old and now getting ready to go back to the same milk your mother was financially forced to feed you in 1991.
It always amazes me how this fear of missing out (FOMO) plays out in the housing market and also in the stock market.
The amount of times I’ve witnessed people holding off buying a falling, yet recommended share, only to come back and put in a buy order as it was rising…
Human nature means that most brains are wired backwards when emotions take over.
Many of the guys at the golf club became guarantors on their children’s mortgages because of family pressure.
The Australian government has encouraged first time buyers with handouts worth A$20bn and by doing so, they helped fuel prices even higher as FOMO fever took hold.
As the ABC reported:
‘The present research estimates that more than $20 billion was spent this way by Australian governments over the past decade, allowing households already close to attaining ownership — including, in a growing number of cases, by virtue of gifts and loans of parental wealth — to set a new higher price in the market.’
Now a few of them will be hitting me up for some free advice on what they should do now.
Seeing as they didn’t listen (or want to listen) the first time round, I don’t see why I should get dragged into their problems.
A financial planner mate of mine just got dragged into one and he had to handle 28 phone calls from a distressed member’s daughter in one day alone, as she couldn’t settle on property because the banks had knocked her back.
He helped her out, though she was shocked at his $6,000 fee.
So was I.
I said it was too cheap.
In 2016, Bernard Salt once wrote an article for The Australian about observing “young people who order smashed avocado with crumbled feta on five grain toasted bread at $22 a pop and more”.
He suggested that this money could have gone towards a deposit on a house instead of frequenting hipster cafes.
No wonder avvos are now $1 each.
Maybe it’s time for the old ‘property to avocado’ switch.
Feel free to contact him with your best stock tips and ideas.