Wry & Dry

"You call that a wall?" Arabian fights. ASX 6000 hysteria misses point.

ASX 6000 hysteria

'ASX surges past psychologically critical 6000 mark.' This fatuous media-headline exemplar greeted W&D as he wearily arose from another wallet-draining Melbourne Cup Day [1].

Mrs W&D's wine money had been punted on Sebring Sun in the 9th at Flemington.  The nag didn't surge past anything, psychological or otherwise.  They've sent out a search party.  The only news W&D gave to Mrs W&D was the ASX200 surging past that psychologically critical 6000 mark. 

And she couldn't give a fig.  It was all about the lost wine money.  Which is as it should be. 


Let W&D give Readers the whisper: 6000 doesn't matter.  Rather like in cricket, where a score of 100 is lauded, but one of 99 is ignored.  But there is a mere 1% difference between the two scores. 

The media story-line was that 6000 hasn't been reached since before the GFC, some 10 years ago.  In fact, the ASX200 has returned -1.3% p.a. (excluding dividends) since the pre-GFC peak on 1st November 2007.  But how many folk invested at the summit?  Not many. 

ASX not again scaled

And the psychologically critical 6000 mark? Well, it's only 13.5% to go from here to back to that other psychologically critical mark of 6828.71, the market peak.  Who gives a fig?

W&D recommends that Readers ignore the simplicity of meaningless milestone numbers.  Readers need simply ask, what has been my return over 5, 10 and 15 years, after all fees, costs and charges?  And has that done better than my benchmark?

By the way, would someone please again remind W&D about the benefits of index (passive) investing?    

One year later

From the country that brought such business disrupters as Uber, Apple, Google and digital photography [2], it should have come as no surprise that 12 months ago this week that the folk of the Yoo-Ess-Ay would elect the most disruptive President in its history.

Tsar Trump has certainly re-written the rule book on Presidential behaviour.  And on impromptu comments.  Take this week's beauty, in a speech to Japanese dignitaries on his Asian tour:

"And after I had won, everybody was calling me from all over the world. I never knew we had so many countries.”

Wry & Dry, and Readers would see no surprise there.  The average American thinks there are just 11 countries in the world:  USA, Canada, Mexico, Europe, England, China, Russia, Korea, Africa, Latin America and Muslim-land.

And Tsar Trump is, well, just an average American.

Deepak, W&D's Uber driver...

...was talking company tax rates.  Deepak asked W&D about all the fuss.

Well, W&D responded, it's all about international competitiveness and the beneficial outcomes from lower tax rates.  W&D handed him a copy of a chart:

Company tax rates"Good grief," Deepak cried, "even socialist France has cut its company tax rate from 33% to 25%." 

And the proposed US tax reform aims to reduce the company tax rate there to 20%.

W&D pointed out that the OECD average company tax rate was 24% and that for Asian countries was 21%. 

Consider an international company assessing where to make its next investment.  The US at 20% looks a good bet.  Or the UK at 19%.  Even those bastions of socialism - Finland, Norway and Sweden - are between 20% and 24%. 

"So why is Australia's still at 30%?," Deepak asked.  

W&D replied that the government wishes to lower it to just 25% and that over 10 years. Hardly radical.  But the Opposition and Greens oppose the move, on the basis that it would bring negligible benefit for its cost.

However, during the week, the Federal Treasury released a research paper that showed the tax cut would have a net $30 billion in extra revenue, because of stronger economic growth. 

But the sand-pit fight over dual-citizenship will ensure that the sensible tax-reform proposal will be avoided by the Opposition.

Venezuela - Beauty turns to Beast 

Readers will know that Venezuela dominates the planet's beauty contests: 7 Miss Universe titles, 6 Miss World titles and 7 Miss International titles.

But the rest of the country is now a Beast.  If only former President Hugo Chávez were alive today so he could see the consequences of his socialist policies.  Well, the end is not far away.

W&D expects that the event of default by the government-owned oil company, PDVSA, will be declared (by ISDA - the International Swap Dealers Association) later today.   At this point the decision is trivial: the 5-year implied probability of a PDVSA default climbed to 99.99% on Wednesday from 93.25% a year ago.

Venezuela’s President Nicolas Maduro said last week that the country planned to restructure some $60 billion of debt, much of it owed by PDVSA.  The country is struggling to meet interest repayments. 

So what?  Whilst it is hard to ignore the plight of the people of Venezuela, it just goes to show that massive mineral resources do not amount to much if the economy is badly managed.  Venezuela has the world's largest oil reserves and is its 11th largest producer.  

iPhone problem: "Ssshhh, darling.  I just want to borrow your...

...thumb. So that I can access your iPhone whilst you are asleep."

So she did.  And because this is W&D, Readers will know what happens next.  She found out that he was having an affair.

But rather than serving the dish-of-revenge when cold, she heatedly turned to her dozing husband and started beating him.

Trouble #1 was that the couple were on an aeroplane at the time.

Trouble #2 was the old saw, "Hell hath no fury like a women scorned."  And so in between whacking her by now awake husband, she attacked the flight attendants who tried to calm things down.

Outcome: plane diverted to Chennai.  Couple plus child offloaded.  And eventually returned home to Iran.  No news on the fate of the husband.

Arabian fights

W&D always prides himself on his knowledge of history and of geopolitics.  But aside from devouring T.E. Lawrence's Seven Pillars of Wisdom [3] and 'Orenece's letters, W&D's knowledge of Arabia is as empty as its vast desert.  But this gap is filling quickly, with the news of political purge in Saudia Arabia.

Readers will have read that, essentially, in a kingdom where change comes only glacially if at all, the drama of recent days in Saudi Arabia is astounding. Some 201 princes, ministers and officials have been arrested or sacked, mostly accused of corruption. Many of those arrested are being held in the splendour of the Ritz-Carlton hotel in Riyadh ('ardship).  About $800 billion of assets may have been frozen. 

Princes in the tower

It's a bold move by Crown Prince Mohammed bin Salman, ('MbS') aimed at his consolidating power, sidelining potential rivals and dismantling alliances built with other branches of the royal family.

The net net, as W&D see it, are:

Firstly. a dramatic escalation in Sunni-Shia tensions.  Saudia Arabia (and Egypt and the Gulf States) is Sunni,  Iran is Shiite.   But this is not only about Iran, which MbS has singled out as Arabia's enemy, but also Syria and Yemen.

Secondly, a re-positioning within Arabia of political influence away from clerics.

Thirdly, whilst Arabia will remain an autocratic-theocracy, a loosening of social restrictions, especially on women, will slowly occur.

Fourthly, a hastening of the move to reduce the country's economic dependence on oil.

Bubblin crude

Of these, the first bears close scrutiny.   It was Russia (Iran's ally) that brokered an agreement with Saudi Arabia and OPEC in November 2016 to reduce production to stop the oil price falling.  The fiscal imperative over-rode religious hatred, then. 

But MbS may have no more of this.  For example, expect chaos in Lebanon, where the Iranian backed Lebanese Shiite group, Hezbollah is part of the government.

Oil: the return of inflation? 

Readers will be aware that the price of oil is now back over US$64 per barrel.  Don't believe any nonsense about world economic growth or a run-down in stocks levels.  Sure, there's a bit of that.  But this recent spike is all about old-fashioned geopolitics - see the previous article.

It may be that prices will settle at this higher level.  Or maybe not.

Central banks around the globe have been crying out for more inflation, so they can put interest rates back up.  But, be careful what you wish for.   A rise in the price of oil is going to do just that.  And maybe then some.

Oil strikes inflation

W&D recalls the sanguine visages of economists who on Tuesday, when they should have been at the Melbourne Cup, responded to the RBA's decision to leave interest rates unchanged.   That response was that's the way it will be for another 12 months.

That's a big call.  Monetary economists have trouble forecasting what happened last year; what hope of 12 months' in the future? 

"You call that a wall?"

Apparently, there are no plans for Tsar Trump to tour the Great Wall of China whilst he is visiting Premier Xi Jinping.  W&D urges him to reconsider.  Premier Xi Jinping should tell Tsar Trump that the Ming Dynasty emperors didn't ask the Mongols to pay for the Wall.  They got Mexico to pay for it.

W&D thinks that Trump would believe him.  And then resume his haranguing of Mexico.  Imagine the Twitter: "If Mexico can pay for the Chinese Wall they can pay for the Mexican Wall".

But W&D senses that Premier Xi Jinping doesn't have a sense of humour.  

Bitcoin: so, this is not a bubble...

Bitcoin chart2

That's a 918% price increase in 12 months.  Oh, dear.

Spot the turncoat

Tue-7-Nov (morning of US state election for governor): "(Republican) Ed Gillespie will totally turnaround the high crime and poor economic performance of Virginia.  MS-13 and crime will be gone."

Wed-8-Nov (morning after Ed Gillespie lost): "Ed Gillespie worked hard but did not embrace me or what I stand for."

Twitter sometimes works in China.


The Louvre Abu Dhabi was opened yesterday.  The Emirate will pay the Louvre some $1 billion over 30 years for the use of its name and to borrow some 300 objects (including, for example, Whistler's Mother).  W&D notes the initials: LAD.  

And, to soothe your troubled mind...  


Last words...

"With more background checks you might not have had that very brave person who happened to have a gun or a rifle in his truck go out and shoot him and hit him and neutralize him. I can only say this: If he didn’t have a gun, instead of having 26 dead, you would have had hundreds more dead." 

-   Donald Trump, US President, responding to a question about tougher background checks on people buying guns.

Hundreds more dead?  Hello.  Had there been tougher background checks, the mass-shooter would not have been able to buy guns.  In fact, had it been illegal to buy guns 26 people would not have been killed.  But that's just a detail.

First Samuel client events calendar




See below       
Chief Investment Officer Dinners
Invitations Sent
Tue-14-Nov Centenove, Kew FULL
Wed-22-Nov Donovans, St Kilda Lunch & Dinner (FULL)
Tue-28-Nov Elyros, Camberwell Filling 
Wed-29-Nov Bottega, Melbourne CBD FULL
Sometimes cancellations occur, so please call Jess if you now wish to attend.

2018 Events  (Invitations not yet sent)


Eat Street - food & wine fest



NGV Winter Masterpieces Exhibition

Masterworks from Moma (New York)



Forum - guest speaker TBA


Some lightly salted absurdities from all over...

At the extreme left-hand end of the Bell Curve

Laura Loomer, a far right-wing activist and internet personality, blamed her tardiness on a new culprit...

"I'm late to the NYPD press conference because I couldn't find a non-Muslim cab or Uber Lyft driver for over 30 min!" she said. 

(The Independent - UK)  

The press conference was about the recent terrorist attack in New York.  And her problem has been solved: each of Uber and Lyft have banned her.  

Guess what happens next 

Galileo Francisco became upset after his wife tripped over a small shopping cart being pushed by a young child inside a supermarket in Pennsylvania. What happens next?

a.  The child apologised and all is well;

b.  The child burst into tears and is comforted by Galileo;

c.  Galileo's wife burst into tears and an ambulance is called; 

d.  Galileo pulled a gun and threatened the young child's father.  

Close.  But no cigar.  The correct answer is d.  No shots were fired.  The store manager talked Galileo out of any more foolishness.  But Galileo was arrested and charged with possession of a weapon, recklessly endangering another person, resisting arrest, simple assault, and disorderly conduct.

(WFMZ-TV News)

Clearly, Galileo threatened the wrong person.  He should have pointed the gun at the young child, as it was she that caused the problem.  


Eddlie Ledsham, 22, from Wallasey in the UK, a newly-qualified primary school teacher has revealed he quit in tears after just one term because he regularly didn’t get home until after 6.30pm.

He added that university had not prepared him for the reality of the job of teaching eight-year-olds.

(Metro UK)

It never does, old son.  It never does. 

Have a wry and dry weekend



[1]  A public holiday in Melbourne is given for a horse racing meeting, the main event being the Melbourne Cup.  Melbourne (and the entire state) also give a holiday for the eve of the AFL Final.  But who says Australia's productivity is falling?  

[2]  Digital photography was invented in 1975 by Eastman Kodak, but the product was dropped for its fear that it would threaten Kodak's photographic film business.  By the time Kodak got back into the digital field, it was playing catch up behind especially Japanese companies.  In 2012 Kodak filed for bankruptcy protection and its assets subsequently sold off.

[3]  The basis of the film Lawrence of Arabia, with Peter O'Toole portraying Lawrence.  O'Toole's looks in the film prompted Noel Coward to remark to him, "If you had been any prettier, the film would have been called Florence of Arabia".