Finance & Fury Podcast

Welcome to Finance and Fury. In this week’s episode, we will be looking at the demand for property in Australia. If you haven’t listened to last week’s episode – it may be worthwhile – discussed supply of property in Australia – this week we will be focusing on demand – which in conjunction with supply = the price of property When looking at property price movements – there is an equation to crack – low supply and high demand = price gain e where has limited supply but lots of demand is likely to see some rise in the property price over the medium to long term the reverse is true – if you have areas with high levels of supply – or the potential for supply to increase over time at a capacity beyond demand – then prices may not rise and at worse, actually fall. As part of this equation – it is important to look at not what is happening now, but what is likely to happen in the future – If you are looking at what is happening now – then you will be buying into a market based around current dynamics – which m

Welcome to Finance and Fury. In this episode we look at the future of the supply of property in Australia. We will talk about the availability of land in Australia, look at the population density and supply of developments, as well as what the future supply has in store – assuming that the demand stays constant, then the areas with under supply will see price gains – those with supply abundance will see price stagnation Australia is a unique country – outside of places like Antarctica, or Greenland with massive land masses but with relativity greater areas of unliveable space – compared to many other nations, we have a high rate of urbanisation with high levels of unused land Looking at the land use in Australia – Area KM2 and portion of Australia as a % Land for Intensive uses (mainly urban) 16,822  0.22% Rural residential 9,491    0.12% Australia’s population is estimated to be 25.5m - of this population around 86% of people are living in urban areas – This is fairly similar to many other western nati

Welcome To Finance and Fury. Is the market at risk of de-risking? Bit of a mouthful – but over the past 12 months the share markets has been going on a run with higher flows of capital going to higher risk shares over those that could be considered defensive shares – those with lower historical risks due to the backing of fundamentals, such are earnings In this episode – we look at the cycles of share markets – looking at the longer-term trends of periods of risk taking and periods of risk avoidance – in which prices of different segments of shares can move independently from the overall index price movement – index may be going up but segments of the market can decline in prices As previously mentioned, certain sectors of the market have performed very well over the past 12 months – Tech sectors, financials, commodities and other highly leveraged share sectors have performed well - This has seen segments of the market start to underperform the index in Australia – as a massive chunk of the ASX is made up of

Welcome to Finance and Fury. What does your future have in store for you? It is hard to say exactly – so instead, what does your ideal future look like? You might be thinking about next year, the year after that, or 20 to 40 years in the future – Let’s say that in regards to this question – think about once you have achieved financial independence – i.e. finished your working life and are retired – where are you, how are you living, what are you doing and how are your funding this? Have you become a grey nomad, are you living by the beach, spending your time playing golf?    This is a big question – if you have never really thought about this before then you probably can’t form a good mental image of this without taking the time to think about it – In this case, it may be worthwhile to stop listening now and spend some time to figure this out – if you need help, or some templates, we have some at the website – financeandfury.com.au – register to the members section for free and get all the handouts and tools

Welcome to Finance and Fury - Is ESG investing the way of the future and good for your portfolio? Within the last few years, large publicly listed companies and investment managers investment are really paying attention to what is known as an ESG score – which stands for environmental, social and governance – it is meant to be used as a determinant on the sustainability of investments – the concept of sustainability it is growing in prominence in every sector of the economy, but particularly within institutional investments and publicly listed companies   In this episode – I want to look at what is ESG, how it is determined and scored, and can following this trend and only investing in ESG companies help your bottom line when it comes to long term returns?   To take a step back – society has been moving towards greater levels of sustainability and environmentalism – with this shift – Publicly listed Companies are becoming concerned with where they fit into this – as well as investment managers wishing to purc

Welcome to Finance and Fury - The big question on many investors minds at the moment is if inflation is going to be transitionary, or something that is going to set into the economic framework for the long haul – maybe not for the next decade, but for the next few years at least – if you listen to Central Bankers, the inflation within the economy is transitionary i.e. going to last a few quarters then revert back to normal, if you listen to investment pundits, it is something that could set into the economy for the long haul – i.e. the next few years – so who is right?   In this episode – we will look at inflation – an often-misunderstood concept – because when talking about higher inflation it is important to focus on what type of inflation is occurring – as well as what is important to the economy – so we will look at the core concept and types of inflation, the current causes of inflationary pressures and try to see if this is something that is just going to be a momentary shock to the economy and your pur

Welcome to Finance and Fury. This episode is to look at Central bank digital currencies - Central banks releasing digital currencies is an inevitability at this stage - proof-of-concept programmes are currently in the works across the globe - with more than 80% of central banks looking at digital currencies – The RBA is one of them There is a lot of cover in this topic – we will define a central bank digital currency and go through why central banks are looking at pure digital currencies as an option – We will also look at what is happening in China with their plans for the distribution of the digital yuan – but also look at the alternatives the RBA is looking at   Defining the different forms of currencies in the modern monetary economy – physical and digital Physical money is easy - Think of cash in your wallet – either in notes or coins – this is physical money – when you log into your bank account and see digits on a screen – this could be considered a digital currency – but you can still convert these d

Welcome to Finance and Fury. This episode we will continue looking at the crypto markets. In particular, we focus on the regulatory frameworks that have been released by the Bank for international settlements, BIS for short. One division of the BIS - the Basel Committee on Banking Supervision - released a consultation paper this month to provide a framework to every nation’s regulator of financial institutions on how to treat cryptocurrencies - Now – the Basel Committee on Banking Supervision is the world's most powerful regulator of banking standards and rules – it gets to decide what capital adequacy banks should focus on, as well as what assets should be classified as capital – if you have been listening for a while, you would have heard me mention this group – they are who APRA, who regulates superfunds and banks in Aus take their directions from So this recent release is meant to provide the framework for banks on how to treat different forms of cryptocurrency on their balance sheets - if they wish to

Welcome to Finance and Fury. This episode we will continue to look at what is happening in crypto markets. After last episode, we are starting a bit of a mini-series on crypto and digital currencies. This wasn’t originally intended but I have been doing more of a deep dive into this topic and there has been some timely news articles that I want to cover. In this series, we will look at a few factors in relation to the crypto markets. Mainly governmental and financial institutional adoption of mainstream cryptocurrencies, like BTC. This series will cover the topics of firstly, el Salvador and other potential Latin American countries accepting BTC as legal tender, then Basel Regulations updates on banks/financial institutions accepting cryptos as assets and the implications this has on markets, and then to finish things off, China rolling out a digital currency that has been in the works since 2014. This may change over the weeks if I uncover any more interesting topics, but at this stage, this is the gameplan.

Welcome to Finance and Fury. This episode we will look at crypto markets as there is a fair amount of noise being generated in this space at the moment. Just a heads up that this will be a bit of a longer episode as there is a lot to unpack. I have made my position on crypto markets fairly obvious in the past – if you haven’t listened to any of those episodes, I will provide a bit of a summary of where I stand in relation to cryptocurrencies – and whilst markets price dynamics has changed substantially over the past 3 years – my position hasn’t As an overview – I am not for or against them – many people have been able to create wealth through trading crypto – and all the power to them – this is great If people can successfully trade coins profitably, then this is fantastic – cryptos offer an alternative form of monetary conversion beyond traditional asset classes First – I have to explain my overall view when it comes to crypto - I like the concept of the blockchain – I also like the concept of cryptocurr

Welcome to Finance and Fury. This week we will be looking at the Mississippi bubble. I find it a very interesting story of speculation and devaluation – creating a situation of loss of confidence in an early form of fiat currencies –– Lessons to learn from this – I get asked the question a fair bit – what happens to the value of every asset when denominated in fiat currency if fiat currency fails – and it is a good question - But in this instance the Mississippi Company bubble can help to provide some direction for an answer when it comes to what happens when people are no longer willing to sell assets in exchange for a fiat currency – This story is similar to the south sea bubble episode I did – the Mississippi bubble can actually be confused as the South Sea bubble as the collapse occurred in the same year - during this period many millionaires would be created – and the French actually came up with the term millionaire a result of his most famous scheme – but these millionaires didn’t last long But the Mi

Welcome to Finance and Fury. Today, signs of financial instability that are emerging in markets – why are inflation and rising bond yields affecting fiat currencies – and what this means for markets – modern economy is interconnected and complex – so do my best to break these all down There is a growing recognition that price inflation has the potential to increase significantly in the near future It has already increased significantly in certain areas – timber/wood, food, and petrol especially in the US with the hacking of colonial pipeline The official estimates state that this inflation will be a temporary phenomenon – with it reverting back to limited to an average of 2% p.a. But the markets are more worried about the fact that this may not be a transitional phase in the short term, but that inflation is going to linger for years – hence there is increasing speculation about the need for interest rates to rise – creating further uncertainty in markets and sectors starting to de-risk from growth shares

Welcome to Finance and Fury. This episode is a little outside of the box, the topic comes from a listener, Mario. He asked the question of how does someone both manage and protect their wealth in times of war? and are there actual strategies that one can implement if a war was to break out? So, in this episode we will look at if there are strategies that are implemented as part of managing a portfolio to safeguard against the impacts war has on share markets and other asset classes.   Before we get into that – there are some things to consider when looking at this topic – Wars are not all built the same – you can have civil war, boarder conflicts, or even major conflicts like a world war – since WW2 there has also been the potential for a full-scale nuclear war – leasing to a mad max/fallout post-apocalyptic world scenario There are always wars going on – 3 wars saw 10k more combat related deaths last year, 14 with 1k to 10k, 33 other conflicts The major consideration out of all of these - is your country a

Welcome to Finance and Fury. This episode we’ll be talking about latest federal budget that was announced this week - and the implications this will have for individual There were many announcements in the budget – few good things like the reduced tax on innovated products – but we will be focusing on individuals Many of these announced changes haven’t passed legislation yet – but very likely they will – the budget for individuals focused on taxation, superannuation and housing Personal Income Tax cuts – not too much has changed here The Government continues its Personal Income Tax Plan with the announcement of a number of measures targeted towards low and middle-income earners – the changes to the tax rates is still expected to continue as planned The aim of this is to provide immediate relief to individuals and support economic recovery by boosting consumer spending Comes from the demand side of economics – allowing people additional income to spend more within the economy to boost GDP – as the majority o

This week, the episode will be delayed until later in the week so that we can do a budget summary and to look at the policy flow on effects.

Welcome to Finance and Fury. There are concerns at the moment when it comes to investing – and that is that markets are at their all-time highs – concerns aren’t that markets continue to go to new all-time highs, but that the market falls through in the short term – what goes up must come down – the major concerns are around how far this may go down This episode – want to go through how to minimise timing risks – in other words, how to still invest now and if you see the market go down, minimise any loss but also take the opportunity to profit out of this situation To understand this concept and market timing risks – need to understand the concept of probability – which comes back to market timing risks - I get the question a lot - Is it a good time to invest at the moment? This is at the core of timing risks - the speculation that an investor enters into when trying to buy or sell an investment based on future price predictions – fer examples - I think the market is going to go up so I go all in, but then

Welcome to Finance and Fury. A few weeks ago we went through the NZ government tasking the RBNZ with looking at property prices with monetary policy. in that episode, we went through why it probably isn’t going to really work well – politically the perception is that the Government is trying – but for the CB to make housing affordable through monetary policy, their only real recourse is to increase interest rates which would potentially put many households into default – leaving to an oversupply in property and property prices dropping – but this may not actually create ‘affordability’ – it would create people who have declared bankruptcy, who then have a hard time getting another loan, plus it may lower the household incomes – affordability of property is the price of property measured against the average household income what was mentioned in this episode is that the central bank has basically said as much – and would refer back policy tips for governments to try and implement – this is the other end of th

Welcome to Finance and Fury. This week the topic is from a listener, Gabriel. That is “how do you change your investment strategy over time as the portfolio value increases? more specifically, how do you see someone building a growth portfolio starting with $10,000 and what would they change when they get to $100,000? What about $1,000,000?” This is a great topic, thank you for suggesting it. Everyone is different- no one right way to go about this – I have clients invested in a similar manner with $300k to $2m – because it is the right option to meet there needs – the only difference is how much is invested in each of the types of investments that make up their portfolios I also have clients with vastly different allocations – but again, this is depending on your needs Some want long term leveraged growth, so we looked at property or geared share funds there are some factors that can be used to help determine where someone should invest – which helps to determine an investment strategy based around the

Welcome to Finance and Fury. Firstly, sorry for the delay in episode, been over a week now – daughter was born last week, so been pretty busy helping care for her and trying to find a time to record in between work – should be back to normal from next week Interesting episode today – as one central bank in particular has now been tasked with the problem of housing affordability – This is the New Zealand central bank (RBNZ) – Can Central banks make property more affordable? If you are familiar with CBs – you would be familiar with the mandates that they get from the government – it is generally to keep annual inflation between a target range (1 and 3% for the RBNZ) and to also support maximum sustainable employment – trying to help job growth But in February 2021 - the NZ government formally added a clause to the RBNZ’s mandate, instructing it to consider housing prices in making monetary policy decisions The change has drawn attention – firstly, what this actually means from a policy decision point of view

Welcome to Finance and Fury. Today’s episode is lessons from the nifty fifties – bit of a history lesson as well as looking back to lessons that can be learnt from this, to help not make mistakes of the past. This is a particular bubble and market correct that most people wouldn’t be familiar with – especially when compared to the 1929, 1989, or 2008 crashes which were more world wide or a complete systematic risk This mini-bubble occurred in the US back in the 1970s – the term Nifty Fifty is an informal designation that was given for fifty popular large-cap stocks on the NYSE These shares were particularly popular in purchases between the 1960s and early 1970s This basket of shares was widely regarded as solid buy and hold growth stocks – they were essentially Blue-chip stocks - your large companies that were considered lower risk The group included names like Revlon, Procter & Gamble, Philip Morris, Pepsi, Pfizer, Merck & Co, Eli Lilly, Coca-Cola, IBM, Gillette, Wal-Mart, Disney, Eastman-Kodak,