Wry & Dry

Tsar Trump's tax plan. Active investment fails? Australia's best NPS?

Politics trumps economics.  Again. 

In a short week in Melbourne (Friday is one of two sporting-event holidays in Melbourne: this one is for a football final; the other for a horse race), election outcomes dominated economic news. 

Across the Ditch, Kiwi voters allowed telegenicism to overwhelm common-sense.  And under their Italian-like voting system, they will end up with an Italian-like government, with the 72-year-old Winston Peters (he was New Ziland's Donald Trump 20 years before Donald Trump) from the populist New Zealand First Party as king/ queen-maker.  Oh, dear.

Cartoon NZ 

Further north, the ever-reliable Germans voted against telegenicism and instead for reliability.  Well, mostly.  They again elected, albeit with a reduced vote, the unsmiling but shrewd Angela Merkel as Chancellor.  However, the far-right wing party got 13% of the votes.  There are shouts of 'Nazi-ism has returned', but those shouts are nonsense.  The AfD vote is a protest against the 1,000,000 refugees that Ms Merkel allowed into Germany in 2015.  Like the Brexit vote, the ordinary people want control of their borders and a more measured integration policy.

Cartoon Germany open borders

But not to have their headlines stolen by such matters, Tsar Trump and the Rocket-Man again exchanged rude words, their never-ending war of global impoliteness.  Sigh.

At least Tsar Trump today moves back to domestic issues that also go global, with an announcement of major tax cuts.  See more, below.

Modestly: sorry Macquarie Telecom, you are not the best in Australia...

The Macquarie Telecom Group announced earlier this year that it had the best Net Promoter Score (NPS) in Australia.  (NPS is a statistical measure used to assess the willingness of clients to recommend a company to their friends, colleagues, etc.  It's statistically better than Client Satisfaction as a measure of a company's success in serving its clients' needs and client loyalty.  NPS can range between -100 to +100.  Simply put, a positive score means a company has more promoters than detractors.  An NPS above zero is 'good'; above 50 is considered 'excellent' and above 70 is 'world class').

In January 2017, Macquarie Telecom announced its NPS of 63 as the best in Australia (see link here).  As there is no public ranking mechanism, this was a curious announcement.  

At the time First Samuel's NPS was 69, somewhat ahead of Macquarie.

And now, First Samuel's FY-17 NPS has been decided by its clients.  It is 78.  

First Samuel doesn't claim to be #1 in Australia, yet.  But if we were in the United States, First Samuel would be equal second with Costco (see link here).  

Full details of First Samuel's annual client survey will be published next week.

Traveler's Tales

W&D's travels last week took him to Moscow, London, Zurich, Hong Kong and Singapore.  In each, and with a stiff upper lip, W&D had an eye to keyholes and ear to the ground on the big issues.  And these will appear next Wednesday in the latest edition of Wealth Intelligence.

Suffice for now to say that:

  • Moscow is amazing, but the concept of queuing and politeness is unknown
  • London is amazing as ever, but the whole Brexit thingy is like deconstructing an omelette
  • Zurich: the trains run exactly as scheduled - say no more
  • Hong Kong: locals hate Beijing and don't like mainlanders
  • Singapore: even less English spoken than 12 months ago 

Tsar Trump's tax plan

Tsar Trump today took time out from being rude to the Rocket-Man and announced a massive plan to change the way US companies and individuals are taxed.

The highlights are:


  • Company tax rate cut to 20% from 35% (OECD average is 22.5%, Australia's is 30% for anything but small companies)
  • Immediate full tax deduction for capital spending for at least 5 years
  • Shift to territorial taxation and end to taxing future offshore profits
  • Tax concessions for any of the $1.3 trillion company profits currently held offshore (e.g by Apple, Google, etc in Ireland)


  • Tax categories collapsed to three from seven
  • Rates to be 12%, 25% and 35% (current top = 39.6%)
  • Eliminate most tax deductions except for charities and mortgages

Well, at least he has a plan.  But that's all it is.  The nine-page framework is more extensive than the one-page White House tax proposal that was widely ridiculed in April.

W&D sees it as aspirational.  And there's a bit of excitement about it.  

However, there are two problemos:

Firstly, nine pages of aspiration is not legislation upon which Congress could vote.

Secondly, the Democrats will scream blue murder: tax-cuts for the wealthy and increased budget deficit.

But it's better than being rude to Rocket-Man.

Venerable bank closes

Readers will know that W&D is somewhat of a sentimentalist.  Especially when it comes to that quintessentially British shopping institution, Harrods [1].  And so a small tear was shed with the closing of Harrods Bank.  The 124-year old bank was a favourite amongst celebrities and wealthy Middle Eastern types.  The latter held large cash accounts to fund their annual shopping sprees to London.

But the bank, with a mere 81 employees, kept losing money.  Readers will know that the branch was on the second floor, on the Brampton Road side, next to the Luxury Home department.


Cartoon Harrods Bank CBA

Active investment management

The latest research by S&P Dow Jones of the Australian investment management regime confirms that most 'active' investment managers don't add value.  For example, since 2007, 75% of retail Australian share managers failed to match the ASX200 index.

W&D hasn't seen the underlying S&P Dow Jones Data.  And First Samuel doesn't provide performance data to research houses (as it manages portfolios individually.  

But is happy to present the following: 

First Samuel v Chant West

Some caveats: a) Chant West data doesn't cover all retail funds, just managers that provide for superannuation funds; and b) past performance is not a guarantee of similar future performance.  

Saudi Prince-dom: The other side

Warning: don't read this if you have a weak stomach

W&D's last edition had a piece on the Saudi Princes and their entitlements.  But there are other sides to Saudi Arabia.

How about Raif Badawi, who ran a website called Free Saudi Liberals?  He was convicted in 2013 of "insulting Islam through electronic channels.".  He got 10 years jail.  And 1,000 lashes.  And a charge of apostasy is still pending.

He barely survived the first 50 lashes, given in public in 2015.  A staggering 950 to go; the next batch of 50 has been postponed 12 times, the most recent postponement was last week. 

And if that makes Readers sick in the stomach... Saudi Arabia is on the United Nations Human Rights Council.  

On a lighter note, and there is one, on Tuesday, King Salman decreed that Saudi Arabia will allow women to drive for the first time.  From June 2018.  Women were banned from driving because conservatives argued that it would lead to promiscuity. One cleric even suggested that driving would damage women’s ovaries.

Good grief.

CBA tries to win back favour

Imagine the meeting (sort of like that meeting in What Women Want, in which Helen Hunt's character challenges the room of advertising executives, including Mel Gibson's character, to come up with bright ideas to sell women's 'personal' items).

Scene:  CBA Regaining-Public-Trust-Think-Tank meeting.

Venue:  Secret location, but somewhere in the bowels of CBA Head Office.

Team Leader:  "Okay, what bright ideas did you guys, gals and LGTB-folk come up with?"

Follower #1:  "Change the name of the bank to something friendly, like The Elephant."

Team Leader:  "Well that's the vacancy in the Alice Springs' branch filled."

Further around the table...

Follower #43:  "Change the colours of the bank.  They're too much like those of the Richmond Football Club."

Team Leader:  "What if Richmond do win the AFL Premiership?  Surely we want to be associated with winners?  Next?

Further around the table...

Follower #99:  "Why not eliminate the $2 ATM fee for non-CBA customers.  The $2 we make for every transaction is less than 0.1% of revenue.  And with people using Paywave on their credit cards for small transactions, we have been making less and less from these fees.  The goodwill will be enormous."

Team Leader:  "Good thinking 99.  What the great unwashed don't know is that we charge 1.5% of the sale price for every cashless Paywave transaction.  And we get that fee from both CBA and non-CBA customers.  This is a win-win."

Follower #1: "Win-win? For us and our customers?"

Team Leader:  "No.  Win-win.  CBA wins twice. Let's go to lunch."

Camera fades.

Of course, there's nothing like an oligopoly.  CBA made its announcement at 8.30am last Sunday.  As the venerable Alan Kohler pointed out, ANZ followed at 1.53pm; Westpac at 2.31pm and NAB, just in from Yum Cha, at 3.12pm.

But wait there's more CBA news

W&D's overseas trip included meeting with a director of one of the larger UK banks.  In this person's words, CBA is smoking dope if it thinks that it will get off with a $10m or $20m fine for its Austrac compliance breaches (i.e. money laundering).  

The fine might be as high as $500m.  And that is before the US authorities get their teeth into things.  The US body considering the CBA is the Financial Crimes Enforcement Network, which is the federal regulator directly responsible for enforcing Anti-Money Laundering regulations.

Boston Consulting Group calculated that banks around the world have paid about US$321 billion in fines since 2008.  In 2014, BNP Parisbas paid US$8.9 billion for breaching money laundering regulations.

No-voters 'not as intelligent' 

In one of the more extraordinary claims of the never-ending Same-Sex Marriage plebiscite is that Australians who plan to vote No are less intelligent than those who are going to vote Yes.

According to research undertaken by a sociologist at the University of Queensland [2], "support among the least intelligent members of society for equal rights for gay couples is 45%, while among the most intelligent it is 83%."

The results were derived from the Household, Income and Labour Dynamics in Australia (HILDA) survey, undertaken in 2015.  In that survey, people were asked how much they agreed (scale 1-7) with a number of statements, including:

1.  "Homosexual couples should have the same rights as heterosexual couples."

2.  "Women are as good as leaders as men."

3.  "It is better if men are providers and women raise the family"

In each case, according to the published analysis, over 80% of the 'more intelligent' people supported each proposition.

W&D admits he spent more time at the Notting Hill Hotel than in Statistics' lectures.   But even to his rheumy eyes, there seem to be inherent contradictions between the three sets of data. 

And like thousands of others, W&D received a text message, urging him to vote Yes.  And wonders the lengths to which the Yes campaign will go...

Cartoon Yes text on desert island


Ryanair, a European discount airline has had to ground 18,000 flights until March, affecting 710,000 passengers, as it messed up its pilots' rosters.  Passengers are lawyering up.

Iraqi Kurds voted overwhelmingly (93%) for independence in a referendum that has angered Baghdad.  If only WA could get those numbers...

iPhone X (i.e. ten)'s facial recognition doesn't work for children under 13, Apple says.  So, who spends $1,300 on a mobile phone for a child under 13?  

And, to soothe your troubled mind...  


Last words...

"Nambia's health care system is increasingly self-sufficient.

-   Donald Trump, President of the United States, speaking at the United Nations, conflating Namibia, Zambia and Gambia.

The White House later clarified that he means Namibia. 

First Samuel client events calendar

See below       
Chief Investment Officer Dinners
Invitations Sent
Tue-10-Oct Centenove, Kew Filling
Wed-11-Oct Donovans, St Kilda Lunch (Filling) or Dinner (FULL)
Wed-25-Oct Quaff, Toorak Spaces
Tue-14-Nov Centenove, Kew Spaces
Wed-22-Nov Donovans, St Kilda Lunch (FULL) or Dinner (FULL)
Tue-28-Nov Elyros, Camberwell Filling 
Wed-29-Nov Bottega, Melbourne CBD Filling
Tue-24-Oct Stillwater at Crittenden Estate Spaces 

Some lightly salted absurdities from all over...

At the extreme left-hand end of the Bell Curve

Ebony Lerra Holland-Harris was running late for a court appearance.  So she put false flashing red and blue lights on her car.  And raced through the traffic.  A police car going the other way noticed the flashing emergency lights on a Kia (police cars in South Australia are not made in Korea).  And pulled the offending car over.

Sadly, the police searched the car.  And found a massive amount of illicit drugs in the boot.  And stolen goods.  But wait, there's more.  The police searched her home and found even more trafficking qualities of drugs.


Had she taken the bus, she would have been spared three years in the slammer.   

Guess the outcome

Austin White, an 18-year-old student stole a massive bulldozer.  And drove it through the streets of Bradley, Illinois.  The police were keen to stop the slow moving 'dozer and arrest the driver.  And so followed procedure and set up a road block of police cars.  What happens next:

a.  Austin stops the 'dozer short of the roadblock;

b.  Austin skillfully manoeuvres the 'dozer around the roadblock; 

c.  The 'dozer runs out of fuel just before the road block; or

d.  Austin drove the 'dozer right over the top of a police car and kept on driving.

Close.  But no cigar.  The correct answer is d.  You gotta see the video (click here).  Sadly the police got very grumpy with Austin.  The mug shot suggests some rough treatment in the cells.


Why is it that if you put a uniform on a man with low self-esteem he thinks he can suddenly dominate all around him. 

Climb every mountain... 

Nathan French, a 19-year-old from Merseyside (UK) completed the 1,085-metre climb of Snowdon), the highest mountain in Wales, wearing only a pair of Superman underpants.

He developed hypothermia.


He lived.  Just.  Nathan was raising money for charity.  But the rescue service that was called out to rescue him was also a charity.  Did the funds raised for charity exceed the cost of rescuing him?  Data waited.

Have a wry and dry weekend



[1]  It's not just that Harrods is one of Mrs W&D favourite places to drain W&D's wallet.  W&D's late mother used to work at Harrods. And told many a story of its customers.

[2]  Published in the Australian Financial Review, Wed-27-Sep-17.