Wry & Dry

EOFY: Wot? W&D worry? Accidental UK chaos. Canberra rises.

Just look what happens when Wry & Dry is away for three weeks.  Chaos.  And the inevitably predictable.

EOFY.  Wot [1]?

But, firstly, the EOFY (End of Financial Year) approaches.  Like a five-year old with Christmas upcoming, this is the time when car salesmen and accountants get very excited.  And so do some investment managers.

It's an exciting 365 days since the last 30th of June!

W&D predicts that come Monday 3rd July the Financial Review will be full of the investment winners for FY-17.  The stocks that rocked.  And the stocks that were rolled.  And the investment managers that picked the stocks that rocked.

Well, Readers will know that that is a mug's game.  Because investment is a long-game.  So, investment returns for FY-17 really don't matter.

Similarily, the media will be full of stories of how Turnbull, Trump, Brexit, May, Macron and Merkel all affected the market.  Well, let W&D give Readers the whisper, these people and events really, really don't matter to your long-term wealth.  

Nonetheless, and contrarily, W&D is moved to excitement by events and short-termism.  Well, before lunch.

So, at the risk of being accused of focussing on the short-term (and of stealing a chart from his colleagues at Investment Matters), this is how FY-17 is shaping up for the share market (with First Samuel's performance modestly overlaid).

ASX v First Samuel

The possible 12% market return for FY-17 makes the last few years sort of okay:

ASX since FY 07

The unpredictable #1 – UK voters vote for chaos

Now, turning to an event of FY-17: the UK election.  In the end, it was the intersection of two masterstrokes.

Firstly, UK Labour leader Jezza Corbyn was so far behind in the pre-election polls he had nothing to lose.  So why not buy the votes of those who had been brought up to think that the world owed them?  University students, obviously.  So Jezza offered absolutely free university education.  Hang the expense.  And so Labor locked in the 18-25 year-old vote.

Actually, it was a little more subtle than that.  Jezza offered this group a sense of acknowledgement that decades of politicians had ignored.  The focus had always been on ‘the working families’, ‘the elderly’, 'the working poor' or the Scots.  But Jezza pulled the ‘students, we luv ya’ lever.  And it worked a treat.

The other masterstroke was the stupidity of the English voter, who wanted May to win, but not by a landslide of 200 seats (as was the polling when the election was called).  So, in an exercise in collective stupidity not seen since Victorian voters wanted to give Jeff Kennett a bloody nose [2], enough voters pushed May into the mud, to form a minority government.

Cartoon May

W&D hastens to add that the polling was so close in four marginal seats that a mere 93 votes separated May from a workable majority.Yes, yes, yes.  May campaigned poorly.  But Readers will not be fooled by the shrill cries from the far right of Australian media, who somehow wanted May to become a latter-day Margaret Thatcher.  The politics, the economics and the world are so different the comparison is odious, if not brainless.   And the far-right’s response again shows that the far-left doesn’t have a monopoly on empty headedness.

The election has left the UK is a state of chaos.  Blend the minority government with Brexit and terrorism and W&D sees a nation astride a slowly collapsing three-legged stool.

The last minority government (as distinct from a coalition) in the UK was in the disastrous 1970s, when Labour's Harold Wilson managed for seven months, before his Labour successor (James Callaghan) ruled with a three seat majority.  This was the time when the UK economy was in tatters and was bailed out by the IMF.  And effectively saved by a woman doing what was previously thought to be a man's job.

But all is not lost.  The Poms might well win the Ashes series this summer.

The unpredictable #2 – Tsar Trump actually achieves something

Good grief!  Tsar Trump has ordered the US government to stop work on the Y2K bug, 17 years later.  

Yes, the Tsar Trump administration announced last week that it would eliminate dozens of paperwork requirements for federal agencies, including an obscure rule that requires them to continue providing updates on their preparedness for a bug that afflicted some computers at the turn of the century. 

W&D is pleased that, after six months in office, Tsar Trump has achieved something really, really significant.

The predictable – Abbott's mind continues to decline

Even from the Greek ruins in Sicily W&D heard of the continued downward spiral of Tony Abbott’s mental health. 

His divisive and contradictory statements on the Finkel Report on energy policy are evidence of a man whose mind is like an aged general re-telling stories of battles of long ago to a diminishing audience.  Each time the enemy is different, the facts different, but in each case the general was absolutely right in every decision he made.

And as happened to the aged general, sooner or later someone in a white coat will come up to Abbott and quietly take him to a restful home, with expansive lawns and pretty flowers.    

Cartoon Tony Abbott 

Canberra rises

On Planet Canberra, Readers should be thankful that parliament has 'risen' for its winter recess.  Now we can get sport back on the front pages.  But allow W&D to remind Readers that the Autumn session saw the ultimate political purchase.

Work with W&D on this.  The government was attempting to negotiate Gonski 2.0 (the new education funding package) through the Senate.  And deals were being done left, right and far right.  On 3rd May Greens leader Richard Di Natale and Green Senator Sarah Hanson-Young announced support for Gonski 2.0.  Then along came the Australian Education Union.  What transpired in the meeting between the AEU and The Greens will never be known.  But suddenly the Greens opposed Gonski 2.0.

Call W&D cynical, but W&D now expects a better funded Greens' election campaign in 2019.     


The impoverished government of the blacked-out state of South Australia has announced that it will have its own bank tax, aiming to raise $370m over four years.  Predictably the big banks are furious.  Even the Business Council of Australia weighed, saying that "Australia is rapidly becoming the laughing stock of the world in global investment circles."  

Nuh.  Let W&D give Readers the whisper: No-one outside of Australia gives a fig about Australia.

W&D well remembers the somewhat hyperbolic statement of former World Vision CEO, Tim Costello, when speaking of Australia's pending response to something: "The whole world is watching Australia..."

Err, no.  No-one is watching Australia.  


The US stock market hit a new record high earlier this week.   

The price of oil fell to $43 per barrel, its lowest since OPEC cut production in November, and 20% below its 23rd February peak. 

Uber fired its CEO, Travis Kalanick.  Time for fewer lawsuits and sexual-harassment claims. 

Saudi Arabia has announced that Muhammad bin Salman is the new Crown Prince.  Hmm.  The lad is somewhat green (not environmentally, but wet behind the ears) and impetuous.  Watch that space.

The US state of Illinois is close to bankruptcy.  It hasn't had a budget since 2015, has $15 billion of unpaid bills and more than 90% of its monthly revenue is being commandeered for court ordered payments. 

And whilst W&D and Mrs W&D were aiding the hitherto ailing economy of Sicily:

*  Australia's unemployment rate dropped to 5.5% - which surprised everybody and delighted the Treasurer.

*  Australia has now equalled the Netherlands' record of the most quarters without a recession: 103.  Australia has not had two successive quarters of negative GDP growth since 1991 (the recession Australia had to have, when Westpac was effectively broke).


Next week, W&D will be in hospital recovering from a new hinge being inserted into his right leg.  But Investment Matters will continue.  W&D will return as soon as possible. 

In this world of troubles, Miscellany will soothe your troubled mind.     

[1]  Wot: Some readers will know that 'wot' is the first and third person singular present tense of 'wit': to know. For example: "The maiden may have the soul of a fiend, for aught wotyet hath she the face of an angel." Earl Hubert's Daughter, Emily Sarah Holt (1836-93).  But English Readers will recall the cartoon of a long-nosed person, peering over a brick wall, saying 'Wot, no (insert missing item)".  For example, "Wot, no money." But W&D uses Wot in the sense of a person from South London, Clapham perhaps, using it as an expression of surprise or as a substitute for 'what".  Know wot I mean?

[2]  In the 1999 state election Kennett was kilometres ahead in the polls when the election was called.  But on election day the voters wanted to give him a message about his arrogance.  Result: a hung parliament.  The independents were bought by the Opposition and Kennett got the DCM (Don’t Come Monday).