Issues facing shareholders

This week in The Money Café, James Kirby, Wealth Editor at The Australian and Stephen Mayne from The Constant Investor discuss issues facing shareholders and more.


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

And I’m Stephen Mayne from The Constant Investor.

And we are The Money Café.

And this is The Money Café.

Well, thank you very much for joining us this week, Stephen, it’s great to have you with us.  This week, of course, a special edition of The Money Café because it’s Easter.  Alan has been off for a week or two, he’s back with us next week, and I thought this week since it’s a joint venture of course, The Money Café, between The Constant Investor and The Australian – so last week The Australian produced Ben Butler, of course, who had been sitting inside every day at the bank inquiry and this week, folks, we’ve got Stephen Mayne from The Constant Investor squad.  Now, if you don’t know Stephen, which you probably do I’m sure but just to bring you up to date, he’s a director, of course, of the Australian Shareholders Association and a strong advocate for shareholder rights.  He’s also not an advocate but the opposite, I suppose, an anti-gambling activist, of course a financial journalist once upon a time and still active but as the editor of some of the newspapers’ financial sections.  We first met Stephen a long time ago. 

But, today we’re going to actually talk about some of the big issues.  Because it’s the Easter break let’s stand back a little bit and have a look at some of the really big issues that you as an investor, particularly as a shareholder, are facing.  Now, Stephen, with the Australian Shareholders Association you run all these campaigns, you’re on top of the companies, making them behave better, trying to get chairmen and CEOs to do the right thing.  What’s the number one issue on your plate right now?

Well, I think any shareholder it has to be Bill Shorten’s raid on the cash franking refunds from the ATO.  So, ASA is very exercised by this as you would expect on behalf of our members.  It’s a major withdrawal of the income of many retirees, investors.  Good to see partial pullback from Bill Shorten this week but ultimately it is still a major cash grab for the shareholders of Australia.

If ALP get elected this is going to happen because he has gotten emboldened by it, he has been backed by his own party, he has now managed to sort of top and tail it by inadvertently excluding the very rich, obviously, who can use franking credits but also protecting, he says, pensioners and part-pensioners.  So, your argument is that there is, what?  How many people are stuck in the middle there?

Still a large number of shareholders, particularly in the SMSF community.  So, I think despite the tinkering this week at the politically vulnerable in terms of the ALP’s assessment of the politics of it, it is still a major point of difference going into the next election and I think for shareholders it will be pretty clear, is if you vote for Bill Shorten you’ll be worse off.  I think in an era of lib/lab duopolies and everyone complaining there isn’t much of a difference between the major parties this will be a very clear-cut difference.

You’ll be worse off because if you’re retired you won’t be able to get a cash rebate cheque for the franking dividends in your shares and what?  They just get wasted, they just get sort of terminated do they?

Yeah, you don’t get the full benefit, because you’re not a higher tax payer yourself you don’t get the full 30% benefit yourself.

Right, so what can you do?  As an advocate what can you do if this is a key plank of their promises?

Well we’re writing letters to the politicians, we’re in the media advocating for this.  I mean, I have to say it’s not the easiest political campaign to run because there is quite a sentiment in the community about fairness and there is a sentiment about intergenerational inequities and older Australians have generally had a pretty good run from the tax system within super and some of the Howard reforms.  There aren’t many countries in the world that do the franking system as generously as we do it.  So, you have to say all that at the outset but as the ASA we have to be very clear about our constituency and defend anyone or anything which is attacking the returns of direct investors in the share market and that’s what we’ll be doing right through to the next election. 

Do you think Australian shareholders won’t wait for Shorten to get in, instead will start to review their portfolios and actively pull away from fully franked shares?

Well, it is interesting.  I mean why does Australia not have a functioning retail listed bond market like the Kiwis have?  And the answer to that is probably because of the super tax treatment of shares and franking.  So, it is tax preferred from an asset allocation point of view hence there’s the massive asset allocation to Australian equities and you could even argue it distorts companies from investing overseas, so being like a CSL because investors really do want the franking credits.  We learnt that four years ago when Woodside tried to do a selective buyback with Shell and that was when we all learnt gee whiz, Australian shareholders…

And they’ve been trained, I mean over 17 years they’ve been told by every advisor in the country, haven’t they?  Get franking credits, get your fully franked shares, etcetera.  Okay, well then one of the things that struck me is, and tell me if I’m wrong here, but for something like the shareholders association I just wonder about the number of people who really care anymore about individual shares because ETFs are becoming so popular and they are the hottest thing, if you like, in the local market in terms of inflows.  If you have an ETF, Stephen, I doubt you care as much anymore about individual shares, is that fair?

Well, that is true but you can say the same thing for index investing.  Basically, it’s a non-stock picking approach to having exposure to the equity markets and through the Blackrocks and the Vanguards of the world there’s a lot of index investing.  Whenever someone comes out and tells you well if you don’t like the stock just sell it, and people like Gerry Harvey still like to say this, that’s absolute bullocks.  Because, with compulsory super forcing every working Australian to have exposure to the super sector and with the asset allocation into Aussie equities being so high…

Your super fund must have…

…you’re exposed to everything and that’s the same story with ETFs.  I think what’s amazing about all the statistics is that in spite of compulsory super there is so many Australians, 800,000 on the register at CBA, over a million at Telstra – so many Australians, more than any other country in the world, who choose to own direct stocks.

Okay, so directly play in the market.

Yeah.

Yeah, so it’s still healthy and alive and kicking, the retail shareholder universe, if you like.

Absolutely, it’s a history of the demutualisations, the big floats, the Telstras, the AMPs, the Colonials, the NRMAs, the Woolworths, the CSLs.  I mean CSL – I think it’s got over 100,000 shareholders now, it’s created thousands of millionaires.  It’s now a $71 billion company that was a popular float and you didn’t get exposure to that, you didn’t become a millionaire through an ETF.

But, actually CSL was more organic, wasn’t it?  I mean, there’s nobody in the original float back in ’93 compared to the numbers that went into Telstra and CSL, or at least CBA. 

The numbers into the float weren’t but the numbers now as it has outperformed and retail investors have chosen to get on board.

Okay, so what you’re saying is when really good companies come along individual investors will go to them.

They flock to them.  I mean AFIC has got 100,000 shareholders.  These are big, no other country in the world has such a large proportion, it’s often 30% to 40%.  APA Group recently did a capital raising, a PAITREO, and it came out from that PAITREO – because you can tell the split between institutions and retail when a company does a pro rata offer because they don’t…

Sorry, Stephen, explain what PAITREO is?

PAITREO is a way to raise capital.  It’s a rights issue which is pro rata with on-market rights trading.  So, APA did a PAITREO to raise $500 million and that showed us that 42.4% of that company was owned by 75,000 retail investors, that’s a lot of people.

And, of course, that’s a pipeline, that’s like a utility, yeah?

Yeah, that’s Australia’s biggest, so we were able to find out that 55,000 of those 75,000 didn’t bother to take up the shares so we were concerned about that, saying we need more education with retail investors.

Did you think it was apathy, do you think they were actively rejecting it or what was it?

It was a narrow premium, it was a small cheque to write so it was one for 17. 

It might be a couple hundred dollars for people.

Yeah, so why bother, just sit back and take the compensation payment through the book build at the end.  That was why we were happy they did that because the worst people who get hit in the share market is the retail investor who does nothing in a capital raising situation where you’ve got to do something to protect your interest.  The beautiful thing about the PAITREO, and we’ve seen Transurban, Woodside and APA all do them in the last three months, is that you get compensation if you do nothing and so that looks after the majority of shareholders who usually do nothing.

And are there stocks that you are disappointed with or have tried for them to do these PAITREOs that are fair and have let you down?

Where do I start, James?

Name some big ones.

Worley Parsons last year did a non-renounceable, Gerry Harvey did one where he was the underwriter a couple of years ago and he made a couple of million picking up cheap discounted stock from the 60% of his shareholders who didn’t bother to take it up.  Even the small caps.  There’s a company called Catapult Group which this week has announced a $25 million institutional placement, not even a share purchase plan for retail investors.  Then even when they do a share purchase plan a company called Elmo this week $40 million institutional placement at a discount, and the share purchase plan for retail capped at $5 million.  Why do instos get $40 million and retail only gets $5 million.

Small shareholders in these situations continually basically get done over in these complex mechanisms of which the companies themselves raise money.

Constantly getting diluted.

You mentioned a few companies there and I know you’ve watched them over the years, there’s some very interesting ones.  Now, why don’t we talk about one or two of them individually.  Just to start with Harvey Norman I find that interesting because, of course, Gerry Harvey is always railing against the shorts and I think he’s called them – well he’s called them criminals, I think.

Criminals, yeah.

Now, this week you’ve had a spectacular story in the ASX.  Blue Sky, the very popular alternative investment fund, possibly the most popular has a US group called Glaucus has come in, they’re the guys who did the short on Quintus so successfully last year, they’ve announced Blue Sky is their short, Blue Sky fell so fast it had to be suspended on the stock exchange and we have to think when it comes back on the stock exchange it’s going to keep falling.  What do you think of these guys, of the shorting squads coming into Australia and doing these exercises?

I don’t mind them at all because they keep the bastards honest and I’ve heard everyone from Slater and Gordon to Eddie Groves at ABC learning complaining about shorters and blaming shorters but usually the shorters are right.  I mean, they weren’t with Aconex which got taken over last year at a hefty premium and the shorters got taken out but there’s been a bit of smoke and fire at Dominoes where there’s been a heavy shorting position.  They were wrong with JB Hi-Fi which has gone through the roof.  Harvey Norman, it’s back down to 3.50, $60 million smoked on this stupid dairy play. 

Do you think they are healthy addition to the workings of the market for retail shareholders?

If you’ve got nothing to hide you’re not worried about being shorted.

Right.

The only time I worry about the shorters is when a company’s reputation – so, when people were shorting Macquarie during the GFC and there were insolvency risks.

This is the Jim Chanos short?

Yeah, and this was a time when there was panic.  It’s like crying fire in a theatre.  If you do it with a financial stock during a financial crisis I think it’s in a different category but in normal stable market conditions an ordinary company which is not totally dependent on its reputation…

But, you can’t tell these guys when they can and can’t turn the hose on, they’re going to.  If they can make money out of a short they’ll do it irrespective of the occasion. 

Yeah, that’s right.  The thing is I’m more worried about companies like BigUn which are talking up their prospects unrealistically.  If the shorts can be a bit like ASIC on steroids and can actually expose some of this ordinary behaviour.  It’s not proxy advisors, proxy advisors is when they go around and do a hatchet job on a company, that’s keeping the market honest, that’s catching out people who are talking up their company prospects above and beyond what potentially they really deserve and there’s a massive propensity, particularly in the bull market, for the sharp suits to talk the place up too much and the shorts come in and blow the bubble sometimes.  That’s a good discipline on the market and I welcome the shorts.

Okay, now let’s look at a company – and I’m going to jump around here, folks, but I think it’s worth it because I’m sure lots of people listening have shares in these various companies and it’s interesting to hear your perspective, Stephen.  So, let’s look at something that’s perhaps a bit more upbeat.  The CSL story, and you mentioned how big CSL have become, what were the numbers there again, how many shareholders do they have?

Over 100,000 shareholders.

100,000 shareholders, yeah.

Look, I interviewed the Chairman, John Shine, this morning for 30 minutes.  I said to him, John, the market cap of CSL is now $71 billion, you’re within $7 billion of overtaking ANZ and NAB who are both capped at $78 billion.

They’re about the same size, yeah.

When that happens this will be – there’s only ever been in the last decade BHP and maybe you can argue News Corp before the de-merger and sort of Telstra that have had a market cap above the big four.  So for CSL…

And it’s not a bank and it’s not a bank and it’s not a miner.

That’s right.  We’re so used to the service sector oligopoly in Australia; Coles, Woolies and the big four and Telstra, and then throw in a couple of miners and that’s the story of our market.  CSL is such a different story, a global big pharma company using its traditional monopoly in blood to become the number one plasma company in the world and having had the most successful vaccine development ever in Gardasil and an incredible conversion of R&D like no other big pharma company. 

Would it be a fair observation to say it would appear to be more successful now, even on a year on year basis to what we thought were the golden years under Brian McNamee.

Well, this is the great thing about Brian coming back.

Coming back as Chairman, yeah.

As Chairman.  I mean, the stock has tripled since he left in five years showing that people like the fellow called Cuthbertson who’s an absolute genius who has run the R&D business.

Andrew, is it?

Andrew I think.  Number one R&D executive in the world I would argue.  Paul Perreault, the current CEO, another terrific guy.  I think it’s great that Brian is coming back, it’s interesting that he has sold off about 85% of his shareholding.  If he had kept the lot he’d have had $230 million worth of stock coming back as chair, instead he’s only got about $28 million.  Still a lot of skin in the game.

Did he explain why?

Well, we haven’t heard from him yet because he’s not chair until the AGM.

Because he’s perfectly entitled, I suppose, to cash out, he built that company up and as you say, he didn’t entirely cash out.  Okay, well let’s just look at I want to try to get through a couple of issues with you, Stephen, but on the individual stocks I suppose there’s two others that are very interesting and interlinked though people wouldn’t think so but they are through people and through their senior executives.  I’m talking about Qantas and Wesfarmers.  Let’s just look at Qantas first, and then Wesfarmers.  The link, of course, is that Richard Goyder, ex-CEO of Wesfarmers, has been seen as a potential replacement of Leigh Clifford who is in turn the Chairman of Qantas for a long time.  But, how do you rate Qantas now?

It’s just one of the great success stories, it’s been sort of a seven-year partnership between Clifford and Joyce, just brilliant, remarkable turnaround.

Brilliant in the end.

But look, it was hard decisions on the Emirates Deal and taking cost out, grounding the airline, they haven’t lost a day’s work since then.  Seeing off the Virgin attack and milking their big data and their Frequent Flyer scheme to the max.  The partnerships with Jetstar, the partnerships in Asia.  I think overall, it’s been an absolute great success story and traditionally airlines eat capital globally and requirement government…

I know, it is a great story and very few people dispute that but what about Qantas looking forward?

Well, I mean there’s great margins, they’re making well over a billion a year.  Finally, they’ve worked through all the tax losses, they’re going to start paying some fully franked dividends coming up.  Look, I don’t know if it can sustain a $5 plus share price in such a cyclical industry, they’ve made a truckload out of a falling oil price, they could be exposed to shocks.

Which is unlikely to fall so much again.

That’s right, so you take your chances in the airline game but I really rate Leigh Clifford, did a great job at Rio Tinto, in his final year there he made a $10 billion profit.  I thought his comments when I interviewed him were interesting where he was a bit sceptical about Rio’s exit from coal which has just wrapped up this week with almost $10 billion raised, Australian dollars.

Have Rio given confronted the question of whether they are a non-believer in coal and it’s future or have they couched it in purely technical terms, that it’s strategic?  In other words, has the climate issue come into this? 

I think the climate issue is the number one driver as to why they’re doing this but they can’t come out and say that.

But they haven’t confirmed that, yeah.

They can’t come out and say that because they obviously want to encourage everyone else to buy in.  So, the Whitehavens and the New Hopes…

So, once it’s sold they might say something.

I think they might, and I think you will see them getting a premium on their rating from the index huggers and the other ethical funds who can now buy Rio and know they’re not in the dirty coal game unlike BHP, Anglo, Valet and Glencore and all the other big boys.

So, you’re saying Rio may appeal to a wider audience?

They are much more attractive.  It’s the most high-profile divestment in carbon globally, I think.  To have one of the world’s powerhouses in coal completely sell out at the same time as they’re very heavily interested in renewable powered aluminium smelters courtesy of the Alcan acquisition a few years back.

What was the counter-argument from Leigh Clifford, who had nothing to lose apart from his reputation?  Well, apart from his historic reputation if he built those coal mines he probably doesn’t like to see them sold off.  But, what was his argument against it?

He simply said that he regretted that he didn’t sell off a few more assets when he was running Rio and he cited a few smallish divisions.  He said I note that they’re doing it now and I support that although I’m not so sure about coal, that was his comment.  So, I think the point being is that coal wasn’t a small subscale division, it was the second or third biggest division after iron ore.

Yeah, and at times the biggest earner.

Yeah, that’s right.  So, if you’re fundamentally a miner why would you jettison one of your two biggest divisions, particularly when it’s also twinned in with steel.  Obviously with iron ore it needs coal and iron ore to make the steel so normally you’ll be in both and that’s what most players are.

You’re putting forward the idea that the global funds are going to like this, they’re going to like a big miner that doesn’t have coal because they can still have a miner without the complications of coal.

And they’ve got $10 billion.  I mean I do agree with the concept that there’s going to be a lot of stranded assets out there and Rio will not be left holding any babies and they’ve raised $10 billion in cash in reaching an impregnable position of never being left with a stranded asset.

Right, yeah it’s a good story, isn’t it? 

Yes.

Okay, now we mentioned Wesfarmers because of course Richard Goyder, who had looked so good for so long at Wesfarmers, he is out now and Wesfarmers is going to de-merge its Coles operations but basically, we could say lots of things but the share price, that’s been going over for years, that’s the thing about Wesfarmers.  Do you think Goyder is still the number one choice as Qantas Chairman?  Number one tip, I should say.

He probably will still get it because I think he came onto the board with a view to him being Chair.  I don’t think he would have come on just to be another garden variety Director.  So, I think that was the plan, the question is do we get a repeat of Sir Rod Eddington and ANZ where he’s announced as the Chair post GFC and then everyone said hang on, Allco billions lost and then it got unscrambled.

So, everyone says your track record isn’t as good as we thought.

Well, having blown up a couple of billion with the Bunnings UK play, which was he and Chaney.

Yeah, on his watch.

He and Chaney did that together, the old firm, and then it’s all a bit cosy in Perth because at Woodside Chaney has just handed over to Goyder, at Wesfarmers Goyder has retired and Chaney has come back as Chair.  So, it’s all a bit clubby and Bunnings UK is a major step back.  So, I think that you can’t unscramble Woodside because he’s already been announced as the Chair, so I think there will be some pressure.

Do you think they might pay a price for Bunnings failure?

Yeah, and I love the fact that he runs so hard, that Goyder runs so hard against the poker machines as the AFL President but I was very disappointed this week to read in The Australian’s excellent Margin Call column that he has decided to make Gillon McLachlan’s salary, as the AFL CEO, secret.  So, he has done an Aussie Post Ahmed Fahour and has regressed on disclosure, I suspect at the end of a long-term incentive scheme which has delivered the CEO a record pay packet that he has now chosen to make secret to avoid the embarrassment.

Because it’s going to look outlandish, yes, right.

In my mind this is a black mark against Goyder as a Chair because you never regress on transparency.

Okay, now tell me about gambling.  Let’s start at the start, where do you fit in on gambling?  I mean, as a stock market investor I don’t have a problem with gambling and I am interested, where do you start?  Do you not like gambling at all, do you wish to see it banned, do you wish to see it quarantined, where do you come from?

Well, I’m certainly not a prohibitionist, I love the Melbourne Cop and lotteries are harmless but we’re the world’s biggest gamblers.  $25 billion a year is lost.  In per capita terms we’re 40% worse than the second worst country which is Singapore, and much of the Singapore losses is destination tourism to their casino.  At the end of the day it’s the $14 billion lost on the pokies across 5,000 pubs and clubs which is unprecedented in the world and is at the heart of our troubles.

I don’t want to simplify it but is pokies your biggest issue?

Yeah, it’s the majority, it’s $14 billion out of $25 billion.

Okay, and then from in our world, in the investment world, the outstanding issue I assume is Woolworths.  Just tell people about Woolworths because believe it or not some people don’t realise Woolworths is a pokies owner.

Well, Woolworths own 330 pubs more than 300 of which have pokies where punters lose between $1.5 billion and $2 billion a year out of the $14 billion lost on the pokies and Australia has got 76% of the world’s poker machines in pubs and clubs.  Woolworths is five times bigger than the second biggest player which is Wesfarmers.  So, they are an absolute gigantic player in the pokies market.

Woolworths are the biggest player in the pokies market?

In Australia, 12,000 machines.

And did you say Wesfarmers are in the pokies market?

Wesfarmers are second biggest but they’ve only got about 3,000 machines.

Through which operation?

Through pubs.

Through pubs.

They’ve got about 90 pubs.

When you go into these pubs it’s not obvious, right, there’s no sign saying this is owned by Woolworths or Wesfarmers?

Woolworths, they don’t even put ALH up there which is the name of the joint venture with Bruce Matheson, the pokies billionaire, they just have the names of the pubs and the division is called ALH.  They’re embarrassed, the fresh food people don’t want to be known as the pokies people, so they hide it.

Well, what do you want them to do?

Divest.

Divest?

So, it’s now 11.5% of their profit and we want them to be so embarrassed, we want them to be treated like tobacco, pokies like tobacco.

But isn’t that just shunting it across the road to someone else who owns the pokies?

But they’re the most brutal and ruthless operator.  If you’ve got blue chip corporates owning pokies it’s acceptable in society.  I mean, the Labor Party runs 1,000 machines, the CMFEU owns 400 machines, the Catholic Church owns a couple thousand machines.  It’s so embedded in many of our respectable institutions, that’s why we suffer world record levels of loss from a fundamentally addictive and predatory product.

Do the Catholic Church directly own pokies machines?

Yeah, they have a club in Liverpool, they’ve got about ten venues, a couple thousand machines.  It’s everywhere.  There’s 17 venues in Victoria owned by AFL clubs, the NRL is basically a wholly owned subsidiary of the pokies industry.

But, what leads you to believe there would be any real – I don’t know who owns the pokies machines or I don’t care and I go into a pub on a Thursday evening for a few hours and I play the pokies what difference is it going to make to me if Woolworths owns it or someone else owns it?

Well, we’ve just seen in Tasmania and in South Australia that the industry is incredibly powerful, they can make and break election results because they don’t want their…

Certainly, regional elections, yes.

Yeah, so they don’t want their franchise damaged.  So, we want all sorts of reforms like $1 maximum bets as opposed to $10.  We just want to reduce the $14 billion in losses to less than $10 billion.  At the moment it’s going up about half a billion dollars a year so it’s already at world record levels and it’s going up.  This is causing hundreds of suicides a year, massive family breakdown, huge amounts of crime where people who are addicted end up stealing off their employers, just massive social damage.  Imagine if $25 billion was spent at Harvey Norman or JB Hi-Fi or in the restaurants and cafes rather than just being blown up propping up the profits of multinational gambling companies like Ladbrokes and Sportsbet and Woolworths.

Okay, tell us something that you have achieved in this area, leave us on a happy note, Stephen.

Federal legislation has been good, it’s made credit betting illegal for some of the offshore players registered in the Northern Territory like Sportsbet and this weekend we’ve got the introduction of the television restrictions so you won’t see any more ads on the TV during live sport siren to siren before 8:30pm starting this weekend.  So, they’re two wins.  Lotto Land has just been blown out of existence by the federal government and some of the states as well.

Right, the ban on ads, is that just football?

No, it’s most of the major codes.

After 8:30, like cricket, etcetera?

Before 8:30, so it’s lined up with liquor advertising rules.

Before 8:30, yes, they’re banned?

Yeah.

Okay, right.

Yeah, so you can watch a football game on Saturday afternoon.  I mean, after 8:30 many kids are still watching so there’s lots of holes in this.  The industry is spending $250 million a year on commercial advertising so it’s become – old media is very, very vulnerable and gambling has been the fastest growing sector.  The industry fought a really tough ban, there’s no prohibition like with tobacco but it is something and there will be less, and that’s a good start but we think it’ll need to go further and we still will be too deluged with gambling messaging even when the new rules start on April Fool’s Day.

Okay, very good.  Stephen, thank you very much for joining The Money Café this week, great to talk to you.  I’ve wanted to do this for a long time and it’s great to cover all the bases there.

Thanks James, absolute pleasure and I hope everyone enjoyed listening.

Now, we have a few questions and I must say just looking at them it prompts the BT Mega Trend of the week.  BT, of course, is our sponsor here on The Money Café.  The question is from Alistair and it says I have a query for The Money Café podcast, what will the effect of a company tax cut have on franked dividends?  Then Alistair details the various issues around that and he says look forward to your clarification.   Great question, Alistair, and actually I think it is our Mega Trend this week and I think what we’ll call the Mega Trend is the effect of tax policy on successful share investing.  Now, if you were listening earlier, of course, Stephen Mayne brought up that point and it’s the biggest issue today, is franked dividends.  Though the ALP seems to have settled on its policy of scrapping cash rebates for retirees the story is not over yet. 

On the specific issue, Alistair, of what effect the company tax cut will have the effect is that, of course, if the tax is lower then the franked dividends, the franking, won’t be quite as good.  That’s not something that big companies have been shouting from the rooftops in recent times as they’ve been trying to get these cuts through Canberra though for the moment they’re on ice and we don’t know where the company tax cut debate has left us so far.  Parliament is not back for a while now. 

Also, a question from James.  I just wanted to add my five cents to your colourful debate.  I believe in a combination of active management, especially outside of the top 20 of the ASX.  This concept is known as a core satellite approach and it’s worked for me so far.  Love the podcast and have a happy Easter.  Thank you, James.  Yes, I see where you’re coming from.  It’s absolutely true, I think all the studies show you can make more money from small caps than large caps.  The issue, of course, is you need to be very alert and very diligent and that is a problem for a lot of us, especially as we go into a long weekend. 

But, thank you all for the last few weeks.  I hope you enjoyed our guests, Stephen Mayne this week and of course Ben Butler last week.  Alan and I will be back with you next week, until then I’m James Kirby, Wealth Editor at The Australian.  Happy Easter.