Five favourite funds. Why global share markets are moving higher. Stagefright or something worse – online lender Prospa perplexes.

This week in The Money Cafe, James Kirby and I discuss the following:

  • Are we are living in an era of regulation on the front page? 
  • ANZ charges, names named, scared the crap out of the industry.
  • The float that sunk 15 mins before launch.
  • Fortescue: the resources story to watch right now.
  • A sadder, wiser Wesfarmers looks for growth options.
  • Ruslan Kogan could be the next Gerry Harvey, if he doesn’t blow it.
  • James Kirby’s favourite listener question in months!
  • Alan picks his five favourite funds.


Hi, I’m James Kirby, Wealth Editor at The Australian.

And I’m Alan Kohler, Publisher of The Constant Investor.

And we are The Money Café. 

I was going to say Money Café, I was dreaming.

Our producer says keep going, oh lord.  Okay, sorry about that, folks, but I’m sure we’ll dovetail again.

No, I was just dreaming about the Dreamtime at the G game that I invited you to.

Yes, it was very nice of you.

Which you didn’t come to.

I didn’t…

Because you were too busy otherwise engaged…

But it was very nice of you.

The seat remained empty.  It was good that you didn’t go because it was terrible.

Well, you weren’t to know that.  In fact it has great razzmatazz, that game and that event, but it was a fizzer?

Well, it was for Essendon, it was clearly not a fizzer for the Richmond Tigers.

Okay, but it wasn’t even a great match, it wasn’t…

Well, they played well and they were just too good.

Gee, I came down yesterday from Sydney on the plane with a lot of rugby league fans going to the State of Origin.  It’s amazing, they’ve been doing it for 20 years now, they have this huge game here at the MCG and nobody in Melbourne pays any attention to it whatsoever.

Well, of course.

And all these people fly down and they fly back.

Because it’s a dreadful game.  Look, it’s a terrible game, come on. 

Well, I tell you what if they think they’ve made a dent in the AFL obsessed hoards of Melbourne honestly, I see no evidence.

This week we want to start with the Mega Trend Moment, the BT Financial Group Mega Trend and you have in the notes here, James, written regulators run rampant.  Now, I would have thought it was banks run rampant, the regulators are just mopping up and I think that’s an extremely colourful biased…

See, you’re going on the ethical front foot there, aren’t you?

Biased language, regulators run rampant, what are you talking about?

You’re such a good person, thinking of the good guys all the time.  Well, let me rephrase that.  It is definitely an era of regulation on the front page, Alan, you’ll agree with that, it just keeps coming, doesn’t it?  I mean on top of everything else, and in the same week, actually, that the Commbank pay out $700 million on the AUSTRAC incident the ANZ, in what does not sound like a spectacular incident but the ANZ have been caught up in a spectacular court case now which is alleging criminal charges against some of the biggest investment bank names in the land.

So, back to your headline which is an interesting one, because essentially the government body, virtually every government body you can think of, is joining in a little queue of people to line up to kick the banks.

Yes, and why didn’t they do it before and why are they all doing it at the one time?  It seems like that though, looking at it some of these cases are running a long time, like even the ANZ ones three years ago that that share placement, that funny share placement, occurred. 

Yeah, so it’s all coming out now, right?

Yeah, it’s all coming out now, is that a coincidence?

Well, they’re kicking them while they’re down, are they not?

And they have the public onside.

And it’s all about the Royal Commission because the Royal Commission has set up this environment in which the banks look terrible, really.

I think it’s worth even just – Devil’s advocate here, you can’t defend yourself in the Royal Commission, you don’t get time.  You certainly don’t get time to prepare a defence like you do in a traditional court case.  So, in no way am I excusing any of it or any of them but it’s interesting that legal people do say that if you put any profession up, including ours – let’s put that on the table straight away, put us up in front of the Royal Commission and grill us for five hours non-stop, you’re not going to look quite as good.

I was up late last night composing my Saturday column for The Australian, would you like a preview?

I would.

Because, I’m saying that it all goes back to the Wallace Inquiry in 1997.

Which I attended.

There you are.

There you are, I remember it all quite clearly.

Wallace recommended the removal of the four pillars, it was actually six pillars then, it was the big four banks plus AMP and National Mutual.

That’s right.

Wallace recommended the creation of APRA which did happen, which the government followed up on, however it did not remove, as recommended, the four pillars.  The four pillars, to remind everybody, was something introduced by Paul Keating in 1990 that would prevent the big four banks and AMP and National Mutual merging with each other.

And it’s not a law it’s a convention.

No, it’s not a law it’s a policy.

Yeah.

And also Wallace recommended that consumer protection and competition laws apply to superannuation and wealth management and that wasn’t taken up either.  What it seems to me happened out of that, out of Wallace, was that the regulation of banks and financial services was all about APRA’s regulation which is designed to ensure the safety of the system.

Prudential stability, yeah.

What happened was that from that moment on the regulation of banking and financial services was all focussed on coddling them and protecting them and preventing them from merging with each other.  What the result of that is was a comfortable oligopoly that resulted directly from the Howard Government’s decision not to selectively implement Wallace.

Just kicking it around if you scrap the four pillars and if you had open season, and let’s say Westpac could take over ANZ tomorrow, is that in any way going to improve the scenario that’s unfolding in the inquiry?

No, I’m not saying that and it is true that probably it would have turned from an oligopoly to a duopoly as a result of that.

A reinforced oligopoly, yeah, perhaps.

But I’m just saying that an unintended consequence of that has been to establish this kind of oligopoly of four banks that were able, really – because what the government didn’t do at the same time was to take action to increase competition against those four either from – so, they could have done things that would enable other banks.

And they had tried to, 16 foreign banks came into Australia just before Wallace and really none of them got mainstream.

And the government would have had to actually do something to encourage either the foreign banks or the regional banks, the smaller banks or the non-banks, to provide competition against the big four and they didn’t.

In fact, Alan, the opposite happened.  The four banks withdrew from overseas substantially, ANZ particularly, they all withdrew into the market and they actually reinforced the oligopoly in recent times.

That’s right, so their profits, the bank profits in Australia as a percentage of GDP is about twice or three times what it is in most other countries, and I’m saying as a result of what happened with Wallace.

Yeah, the accidental or inadvertent coddling.  That’s really interesting, actually.

Just looking at the ANZ criminal charges, which has absolutely shocked the crap out of the whole industry.

It has because names were named and they’re big names.

Big names, yeah.

Stephen Roberts, absolutely.

Poor old Stephen Roberts, he announced his retirement a month before the ANZ Chair issue in 2015 and he wanted to go immediately but the replacement they hired had to do gardening leave for six months and there he was, so he was stuck there.

He clipped his toe at the last fence at the last jump.

And now he could be off to jail.

He could be, well you wonder.

Because the maximum penalty for these offences is ten years jail.

I know, ten years or $420,000 which I reckon someone like Stephen Roberts would pay right now just to stop the entire thing if he could.

He’d barely notice it.  But, imagine all these characters with arrows on their suits pointing upwards.

We’ll see.  Will anyone face criminal charges.  Without going too deeply into this at the same time we’re talking about the Royal Commission I saw where Sam Henderson, who was also at one stage at risk of facing charges beyond what had happened at the Royal Commission, that it was noted he’s resigned entirely, he’s gone from financial planning.  It’s amazing how these people can get shot out of the sky, really.  If you think of someone like Alex Malley a year ago where you could get away from Alex Malley, he was everywhere, and an incident occurred and he’s gone, he’s just disappeared.

He’s nowhere.

Sam Henderson has closed down and left the financial planning industry, and four months ago he was everywhere.  He was in papers, he was on TV…

And he didn’t even get to sell his practice.

Well he had sold it.

Had he?

To an Italian conglomerate a few months earlier.

Do you know what he got?

No, I don’t know what he got but I’ll tell you one thing, if there was earn out provisions then I don’t think he even made them.

It was cut short.

Okay, well why don’t we move on.  That is definitely the Mega Trend of this week, isn’t it, the rise of the regulator and the regulators’ moment in the sun if you want to put a positive spin on it.  One of the things I’m going to look at this weekend, though we did this very ambitious exercise on superannuation last week people are so interested.  I don’t think most people realised.  We’re so kind of inside the tent, if you like, in terms of understanding all this I don’t think people realised the gap in super, how some were so good, how some were so bad, how industry funds were so much better than retail funds over ten years.  This weekend we are looking at it afresh and just looking at some of the options that people want to do.

What are you doing?

We’ve got a number of people coming in, Peter Switzer is coming in to give us a hand as well, he is appearing for the first time in the wealth section which I’m quite happy to have him.  I’ve been doing a few shows with him of late on Sky, we did four shows actually of late and a lot of them were on the broader issue of super.  We’re going to look at what do you do, how do you switch, if you’re going to switch how do you make the decision, that’s what we’ve got on the agenda.  What else has been happening this week?

Well, we had the amazing situation of an IPO, a float, being pulled 15 minutes before they were meant to start trading.

15 minutes.

Heavens.

I know, what on earth?  I’ve seen big floats pulled on the morning of due but I’ve never seen a company pull a float on the day and fulfil their promise.

I haven’t had a chance to see what happened, why did they pull it?

It is unclear why they pulled it.  In fact, my colleague, Supratim Adhikari, who is the Technology Editor on The Australian this morning has a story where basically ASIC are saying well it wasn’t us.

Because the only thing I did know is that they blamed ASIC.

This is the point I’m making, well ASIC have said this morning quite clearly we just did a routine – they said they did routine checks that they do with every float and they implied very heavily that they didn’t call Prospa and say listen, you go ahead and you’re in trouble.

But I think they said it was going to be put off for two days and it’s now more than two days.

It’s not more than two days, it was yesterday midday being Wednesday, so Friday afternoon they should come on but the other thing was it gave everyone a second chance to look at what on earth they were doing and how did they work charging 41% annualised interest rates to small business.

I tell you what, they can’t blame a weak share market because the share markets are going bloody beautifully.  How’s that for a segue?  Magnificent.

It’s good.

The share market is going great.

Well, if you stand back from it you’ve got strong GDP quarterly figures that were better than expected, you’ve got the American market with big profit upgrades coming through the ranks on all the big US corporates so there is momentum there.  You’ve got globalised synchronised GDP.  But, the problem for us is that not all but many of our big favourites, the banks, Wesfarmers, Woolworths, AMP, they’re a drag, they’re all down.

Yeah, so what’s holding our market up are the resources stocks because commodity prices are doing okay and China is fine until Donald Trump blows things up.

Yeah, until he does but for the moment he’s doing the opposite, actually, because those tax cuts are kicking into the American market and the commodities are going up.  Yeah, that’s right, it should be interesting to see.  One of the companies I find so interesting is Fortescue.  They have reshaped themselves so many times and they’ve survived just about everything but it’s interesting, this time around they’re not getting the lift like Rio and BHP because their iron ore is dirtier basically and it’s a lower grade.  They said for weeks and weeks to all their shareholders this will pass, it’ll be fine and now they’re saying actually we’ve got to upgrade our iron ore.  Today they bought a stake in Atlas just an hour or so ago.

15%.

Where it’s a big call to try and upgrade your iron ore quality fast and the mines are there working away, but that’s what they’re going to try and do.  I reckon it’s one of the great stories locally in the resources market just now, Fortescue.  BHP and Rio are tracking away nicely, especially Rio.  Woodside also, I think, are going pretty well.  The ones we’re waiting for is that next phase of the resources boom, the resource services, the mining services stuff, that should be the next wave.

It was last time, that’s true.

It tends to be, it was the last time, it was absolutely fantastic as a sector.

Yeah, but then they collapsed.

Yeah, I know.  They run and then they blow up tends to be how they do it.

That’s because of their operational leverage which is good when things are going great but because of their fixed costs when they start losing contracts it’s disastrous.

Well, if you’re looking for a trade mining services might be somewhere to look at.  Why don’t we just have a look at Wesfarmers and Kogan, Alan, and there’s lots of good questions, we should hop onto those.  Tell us about Wesfarmers.

Well, they’re going to have a war chest.  So, they’re spinning off Coles, they’ve shut down UK Bunnings, I think they’ve raised a couple of other things and so they’re going to have a war chest of about $12 billion to make takeovers.  I was just recalling that the Coles takeover in 2007, 11 years ago, which was the biggest takeover in history at the time was $19.3 billion.

And what did you say they have to spend, 12?

Now they’ve got 12 so it’s not that much of a war chest, not as compared to what it was in 2007.

Of course, and if you index it the point is even stronger.

Actually, no, I did the exercise, if you index it at 2% a year, which is the rate of inflation, it’s $30 billion now.

Okay, yeah.

The equivalent of the Coles acquisition now would be $30 billion so they’re talking about less than half of that and actually Rob Scott, the CEO, is saying no we’re not going to make one big takeover, we’re not going to do that.  We might take strategic stakes in things.  It’s a sadder and wiser Wesfarmers now.  Really, I think Coles was not a great deal for them.

No, well the issue is that the UK stuff was so appalling.  Roger Montgomery, who of course writes for the wealth section every fortnight and a very popular writer in the section, he says that the UK thing alone, the UK exercise Home Base, cost $1.50 per share.  That’s how much a loser it was, $1.50 per share on Wesfarmers.  This new guy, he’s doing things.

Sure, and we’re all waiting now.  He’s doing negative things in the sense that he is closing things, he’s getting rid of stuff so the question is what’s he going to do positively that he’s going to set Wesfarmers up for growth.  That’s what everyone is waiting for.

I wonder what it could be because as you say he’s not going to go off and do Coles again or indeed Home Base again, that’s for sure.  Why don’t we look at the questions?  Hang on, I’m sorry, we have Kogan.

You were going to say something about Kogan, what’s going on?

Yeah, well just like we were talking about Prospa, Kogan – just so everyone is up to speed on it I think Ruslan Kogan is very impressive and boy oh boy, if anyone had that stock a year ago it’s up 500%, hear me on that one.  But, this week him and his partner went to sell shares in the market and then they withdrew them and it was a bit of an embarrassment really, I don’t know what they’re up to.  It’s about 9% of the whole company but the stock fell 10% straight away off the back of it. 

I think it had previously gone up 10% because they were going into appliances.

Yes, and I think that sounds really smart that he moves from the consumer electronics to whitegoods and takes on Harvey Norman.  In a way Ruslan Kogan has the potential to be the Gerry Harvey of his time.

Yeah, of course.

If he doesn’t blow it on something like controversial share sales which is exactly what happened this week.

He does good interviews like Gerry Harvey does.

Yeah, he is a great talker.

Like Gerry Harvey, you love getting him on.

Great retailers are great talkers, I think, they often are.  Okay, who has the questions.  Why don’t we do them alternately.  Will we start with this one from…

I need to ask you the one from Charles.

Okay, shoot.

He says I know the table on page 18 of the Weekend Australian showing the increase in value of assets in various super funds in the year to March 2018, for example industry funds increased 16%, SMSFs up 4%.  This bloke wants to know how do they know about SMSFs because he says I only show the value of my assets in my SMSF June 30 each year and how the hell do they know?

Charles, it is a superb question.  Personally, I would pick it as my favourite question for a long time because it’s a point I’ve been trying to make all week.  You cannot measure SMSFs against each other, you can only make the broadest and vaguest of estimates on it.  That table you referred to – by the way, Alan, if you didn’t see it an entire broadsheet page, one single table last week we ran the APRA numbers of every super fund in the country and how they were going.

I never read print.

Well, I’ll tell you it has its advantages.  You couldn’t do this online, you just couldn’t do it online.  It was a fabulous use of a broadsheet page if I may say so because you could just see them all, you could just sit down and compare them.

This is apart from fish and chips.

In any event the point I’m making there about the SMSFs, yes everyone is different Charles, you are absolutely correct.  But, people are forced to compare them and I think you find the super ratings, for instance, will compare them and the various associations will make these stabs in the dark but that’s all they are.  How are SMSFs doing, it’s like how are individual people doing, each one is different.  Okay, question from David for you.  I notice that Genworth Australia share price has fallen around 20% since late last year.  Do you think mortgage insurers still have a viable business model?  Genworth is a mortgage insurer, of course.  That’s from David.  What do you think, Alan?

Well, I think it’s another excellent question because mortgage insurers make money, their business improves, when banks make risky loans, high value to loan to value ratio loans because they all have to be insured.  Genworth makes a lot of premiums on that basis and you’re absolutely right, David.  Now, whether they’ve got a viable business model going forward I think what we’re seeing is a cycle here and I do believe that high loan to value ratios will come back.

But the cycle is against them just now?

Just at the moment the cycle is against them.

Yeah, it is isn’t it.

Because they’re cutting back their LVRs from 100% back to below 80% in general.

And the volumes are down.

That’s right, so fewer of the loans have to be insured and so Genworth is getting less business.  I do think it’s a cycle and they’ll come back at some point but for the meantime whether they’ve bottomed yet I don’t know.  It may be a little while before they bottom.

Yeah, and there’s no good news for them in their area.  Mortgage Choice has been absolutely hit for six in recent times thanks to investigative work.

Here is one for you from Cillian, I think.

Cillian.

Cillian?

Yeah, I would think so.

Is that an Irish name?

It’s Celtic anyway, yeah.  You know, the actor Cillian, he’s in everything, Murphy.  Cillian Murphy.

Cillian Murphy.

Peaky Blinders, etcetera.

You say it so much better than I do.

It takes 25 years to learn how to say it.

I’ve been listening to your podcast since the very beginning and it is one of the highlights of my week.  You’re a very sad man, Cillian.  You make economics and the financial markets understandable and interesting, thanks for doing what you do.  Given the main index, the all ordinaries in this case, has been hovering around the 6,000 level for quite some time where do you believe we are heading looking forward for the remainder of this year and going into 2019?  Well I’ll be fascinated to hear this too, Cillian.  Where are we heading, James?

Let me think.  I don’t know, no one knows, Cillian, sorry, I wish we did.  I think everyone’s a bit disappointed that we are still at 6,000.  I mean, honestly, how miserable can this local market be.  It’s unbelievable it’s still at 6,000 but there it is.

Yeah, that’s true. 

What is it?  Is it skewed towards the banks now?

It’s the banks.

Yeah, it is the banks, they were like 35% of the market.

And Telstra’s gone down.  You said it before.

And Telstra, that’s about 40%.

And AMP is down 25%.  I mean, a lot of our biggest companies have had a shocking time.

Yeah.

That’s the problem.

Which is an argument against blindly buying the blue chips and it’s also an argument against ETFs.

Exactly.  Mind you, it’s not an argument against say a resources ETF.

Sure, yeah.

And this is the point, Cillian, there isn’t one share market.  It is fallacious to talk about the share market as a whole because there’s such a difference between the resources sector and the banks and the industrials, also so many of our big companies and small companies are virtually international stocks.  CSL is up 50% in the past 12 months but it is not an Australian company, CSL.  It’s based here but it is a global business.

But that’s what you want.

Of course, that’s what I’m saying.  It is a global biotech business up 50% in the past 12 months, it’s now the third or fourth biggest stock on the ASX, it is completely fallacious to just whack it all together.

Yes, but having said that we have to answer the question.  Sorry, Cillian, we don’t know.  I can get you a broker report tomorrow that will tell you it’s going to go to 6.2 or 6.3, or whatever, they basically invariably pitch it up about 7%.

You won’t be able to give us a broker report saying it’s going to go down I don’t think.

No, it will be very hard to find one of those.  Now, there’s actually quite a few good questions, just jump that Twitter one, Alan, and let’s go to Scott.  Hi gents, keep up the great work.  My questions are after the AUSTRAC $700 million fine, which we mentioned a few minutes ago, again CBA, is the CBA dividend under pressure?  The second part of that is would you explain why the DPP lodged criminal charges against ANZ, Citi and Deutsche Bank?  Okay, well I might try and take the second one because I have been covering it. 

I just found all the other questions, goodness gracious there’s lots of them.

I told you there was loads.

Heavens, we’re going to be here for ages.

No, because we’re going to do them very succinctly and efficiently, Alan.  The criminal charges against the investment banks was to do with a capital raising by ANZ some years ago, it wasn’t actually a gigantic raising but it had key investment banks in there and the questions that have arisen are about there was a shortfall, it wasn’t all placed and what happened to the money.  That’s about as simple as I think you could put it.  As for the CBA dividend well, I haven’t seen any report to that effect.

The $700 million fine won’t cause the dividend to be under pressure.

It won’t.

The dividend might be under pressure anyway.

Yeah, a very poor housing market could hit CBA, they are down, I think they’re proportionally down more than any of the other banks but then they ran very high for a long time.  I think they’re back around $70 now. 

Household earnings in Australia is among the highest in the world and a record high for Australia, so these banks, and clearly CBA, have been stuffing loans down everyone’s throat and everyone is now choc-a-block, can’t eat any more.

Can’t eat any more, exactly.  Okay, the question from Scott, you can have a go with that one if you like.

What are your thoughts on AMP growth bonds or equivalent products, I have two kids – we don’t want to know, Scott, what your personal details are because we can’t give you personal advice.  James might offer a general opinion about AMP growth bonds.

I will.  But I must, Alan, read the last sentence of Scott’s question which says the 20,000 is currently invested in Apple and Google shares.  Well, good on you, Scott.  Can I just say to you don’t take your money out of Apple and Google and put it into AMP growth bonds, that much I could say.  Growth bonds, for what it’s worth, they’re an unusual little thing.  You put the money in and you must leave it in there for ten years and when it comes out the far end you don’t pay tax on it.  But, there’s a whole pile of strings attached to that, there’s a whole pile of fees, the earnings don’t tend to be great.  Regularly I’ve asked people to have a look at these, I’ve commissioned people to study them and it seems to me they’re pretty ordinary in their performance and the fees really weigh against it.  But, it is tax free and if you wanted an alternative to super they have their uses.  But, gee I must say if I was in Apple and Google and I had them for any length of time I’d be very happy with that.

And they’re running hard at the moment so you wouldn’t sell now.

Yeah, off they go again.  Okay, question from Justin.

You forgot about what’s Alan’s top five managed funds.

Sorry, what is Alan’s top five managed funds?

Okay, here they go.  You ready?

Yes.

Number one, Bennelong Concentrated Australian Equities Fund.  Number two, Loftus Peak, our mate Alex Pollak.

I know both of them, yes.

Number three, Munro Partners, Nick Griffin.

Don’ know that one.

Well, it’s a global technology kind of fund.  Number four, Wilson Asset Management, WAM Capital, it’s a listed equity thing.  Number five, which is actually the best performing fund in the last quarter, is something called Selector but I can’t remember the rest of the name of it, Selector something or other.

It’s very impressive, Alan has no notes here by the way, folks, just telling you.  Can I just ask you on what basis do you pick that five?  Pure returns was it?

Yeah, returns.

Yeah, over what period?

Yeah, and it’s actually not necessarily in that order.  The best performing fund in the last quarter was Selector.

Yeah, but it’s just a quarter.

That’s one quarter.  The number two performer, who’s much more consistent over long periods of time, is the Bennelong Concentrated Australian Equities Fund and I’ve interviewed the Fund Manager, Mark East, he’s terrific.  I know Alex Pollak very well and Loftus Peak’s performance over I think it’s five years is 22% per annum compound. 

Yeah, interesting list.

Nick Griffin has got a terrific portfolio and he is really investing quite a lot in videogames, e-gaming.

What’s the company called again, the fund?

Munro Partners and it’s named after Munros which are mountains in Scotland.

There you are, never heard of them.

Are they not?  Come on, you should know that.

Very good, and we must say to our listeners past performance is no guarantee of future performance but they are impressive and they’re all available…

And we should also say I don’t get any commercial benefit by naming them, they’re not paying me an absolute cent.

Tell me one thing, they’re all available to anyone, are they?  There’s no minimum?

Well, I can’t remember.  So, Loftus Peak has a couple of funds, one is a $50,000 minimum, one is a $5,000 minimum.  The minimum in the Bennelong Fund is $10,000 minimum.  They’re okay, they’re achievable.

That’s not crazy.

And WAM Capital is listed so you can invest $1,000 if you want to.

You can just buy on the market.  Okay, that was very interesting.  Now, Justin asks I’m a relatively new listener and I’m a finance broker.  I’m interested to know what changes you think the Royal Commission into banking will bring about for my industry and how these changes could create opportunities for people like me.  Well, that’s a good question and interesting for a finance broker.

I think you’re going to end up, Justin, with a requirement in the law for you to behave in the best interest of your clients which is in the rules for financial planners but not so much at this point for finance brokers and mortgage brokers.  I think that will probably come in.  I’m sure, Justin, it will make no difference to the way you operate because I’m sure that you operate in the best interest of your clients but it’s another piece of compliance that everyone is going to have to watch I believe.  Whether commissions are banned for finance broking or not is another question and I think it’s an interesting question.  I don’t know the answer to it, I don’t even know whether I think that they should be banned.

I think qualifications and independence will really be rated from hereon in.

Yeah, of course.

Much more than they have been.  Okay, maybe final question from Tim.  Hi, Alan and James, I read with interest the table in the Weekend Australian.  This is the same table I mentioned at the start, that huge table we ran of all the funds.  Tim says the Vanguard US total stock market index fund had a 9.24% annualised return and he makes the point that this beats all these high ranked funds.  Why shouldn’t we all just invest in a US stock market index?  Well, Tim, because we shouldn’t all do the one thing and you shouldn’t put all your eggs in one basket.  Having said that nothing wrong with the US stock market index, in fact I have two of them, a big cap one and a small cap one, both ETFs.  It makes a lot of sense, a nice way into the US market if you don’t want to get specialised but obviously you never put all your money into anything.  Would you think that’s a fair answer, Alan?

It’s an excellent answer, James.

Thank you very much.

As I would expect.

Alright, I think we’ll leave it there, thank you, folks.

Hang on, we’ve got one from Twitter.

We have one from Twitter.

Tim on Twitter.  Can you recommend a data service for current and historic ASX financial disclosures?  Morningstar seems expensive for a small time investor and as far as I can tell does not allow me to programmatically screen companies.

Yes, okay, Tim.  He has to spend some money, if he wants to get that sort of service he’s got to pay.

Yes, but I just think that’s outrageous.

What?

Because Morningstar is expensive, it’s like $600 a year and there are three other services that do similar things, there’s Lincoln Indicators, there’s My Climb and there’s Roger Montgomery’s Scaffold.  Each of them is more than $600, I think, so they’re all quite expensive. 

$600 isn’t expensive if you’re a serious investor and you want to get some software.

You’re a hard man, James.

Bloomberg – I’ll get into trouble here but it’s true, a Bloomberg Desk is – well, the last time I paid for one it was something like $25,000 US a year so there you go.

That’s what it is, so is Thomson Reuters.

So, I’m afraid you have to spend a bit, Tim, but it’ll be worth it.  Okay, I think we’d better leave it there for today, Alan, we’ll be getting towards a record breaking Money Café.  Don’t forget you can subscribe to The Money Café, folks, on Apple Podcasts or your app of choice and if you’re there it’s very helpful to leave a review or rating.  Please send in some questions, we really did enjoy the range of questions this week.

Hey, what have you got coming up in the wealth section?

I have a very good exercise on super and how you choose super.  Now that we know all about super and who’s doing well and who’s doing bad, how to make a decision how to choose this weekend.

Very good.  Before I come here today I do an hour long Q&A with my subscribers on The Constant Investor.  So, tonnes of questions and answers.

Facebook Live?

Facebook Livestream.  Lots of people listen to it and any questions are answered, and so if you’re interested in questions being answered I do it in the Facebook Livestream on The Constant Investor.  That’s the plug, there you go.

That was a big plug.  Okay, remember to e-mail this show, folks, it’s hello@theconstantinvestor.com.  Until next week, I’m James Kirby, Wealth Editor at The Australian.

And I’m Alan Kohler, Publisher of The Constant Investor.

Talk to you soon.