Hello, and welcome to The Australian's Money Positive podcast. I'm James Kirkby. Welcome afore everybody. My guest today is Jackie Clark. She's a Charge of Accountant, a Family Office board member and author of a very successful book, Stop Worrying About Money, which she has reminded me to remind you, has now won several awards since she was on the show the last time. But she's also particularly good on investment markets and I've wanted to talk to her particularly, and I've
wanted to talk to you particularly about crypto. Now. I know we've had people on about crypto regularly and bitcoin, and to some extent it's been what we say. Some listeners have thought I've been a bit dismissive of crypto. I haven't. I've been terribly skeptical about crypto to a
point I have to say not anymore. By that, I mean there are things happening, particularly at the top end of the market, particularly the world that Jackie Clark operates in, that I think will really make you reconsider the whole area if you haven't already about deeply.
How are you, Jackie, I'm great James on this brisk morning brisk.
Morning, indeed brisk morning and Melbourne as well, I can tell you that. But you know, I've been thinking something cut my arm. I mean a few months ago. I think the outstanding thing that I noticed was amp unlikely perhaps of all the big institutional managers, was, as I understand, the first fund manager to formerly buy a crypto. They
bought bitcoin. And then I saw a fascinating piece a couple of days ago where Amazon and Walmart are talking about issuing their own crypto coins stable coins, that is the come convertibook two dollars. And then this morning, just so happens, this morning, JP Morgan is launching They're all crypto coin, and I think something really is starting to happen inside financial markets. What tell us your review as a conservative investor, I expect tell us your view.
Bitcoin. I don't invest in it, I don't have clients who invest in it. I have friends, though, who chat about it, and some who play with it. I guess the big question with bitcoin is it's some type of economic bubble? Is it? And people often talk about it as the online goal, but perhaps the bit that's the difficulty I find with it. And you know, one of the things I talk a lot about when we discuss things like financial literacy. My caution to people always is
doing your due diligence on the investments. So don't invest in something you don't understand. And it is very difficult to get to the bottom of what the bitcoin actually represents. And so sure conscious that AMP and others, including super funds in Australia have started to contemplate bitcoin or actually add bitcoin to their portfolios. And is that perhaps just a why is it a way of diversifying risk? I don't know the answer to that, but perhaps the bigger
question is what does it really represent? And there is some contemplation that it's considered a treasury asset, but it's not cash and if the bitcoin price drops, your cash has gone. Now that's not a treasury asset as far as myself is a chartered accountant would consider. So it represents lots of conflicts in it. Yes there is, yeah, I know, including with the energy usage and everything else.
Sure super funds I read now have there's a billion dollars Australia inside look self managed super funds. It our so many people are taking I think they're just taking a bet that the fear of missing out. That's my gut feeling. But just looking at it a little bit deeper as to why it may become more important because it's becoming embedded in the financial system and the way perhaps we might ever have imagined. I mean, first of all, you have Trump talking about going into the strategic Reserve
in the US, which is extraordinary. He's totally pro crypto. But more than that, when you see the majors and when you see JP Morgan entering the market, it tells you there's more going on than simple bitcoin betting.
Yes, perhaps it has stood the test of time. You could argue perhaps since its introduction, it has generally increased. Since its introduction, there is a limit apparent limit to the supply when the system was established, which I kind I've find fascinating as well, because with the bermin Ai, I would expect that bitcoin per se would actually grow.
So with this limited market, I think it's one hundred and twenty one million, so to speak, and I think we're only at not even at twenty percent penetration yet, is that right? We're under twenty million, I think, So we've got a long way to go in this market of picking up this coin for one of a better word. So I guess there's potentially it, but it does feel like it does feel like a bet. And if you were looking at a portfolio spread, this would be The people I work with won't go near it.
They will go neared state.
It isn't a case correct. Yes, So the advisors, certainly in say Sydney Melbourne markets who look after wealth, are not going near bitcoin. They may on request if you say that's what I want to hold because I think there's something in it. It's very speculative in the context of traditional investment. You know, it's not not bricks and water.
There exceptions in the family officer, high networth.
No, only in terms of attitude, which is what it comes down to you, doesn't it. So if you're a betting person, if you're if you've got horses, for example, bitcoin might be just adjacent to the racetrack.
That is. That's the skeptical view. Really, yeah, but I'm just looking at a little bit, just taking it a little bit more central and economic and saying, well if Amazon, Walmart and JP Morgan in the last couple of weeks have announced their plans to issue their version of stable coins, which are convertible to dollars, right, So it hasn't got
that wildness to it, right, So it's pegged. And then if they can find economies of scale or productivity gains from that, then it is a different story, isn't it to some expect And maybe bitcoin is just a proxy for all this activity. But even if it is, then it's then it becomes a different piece. Truly.
Yeah, it's still going to be very difficult. And I made I guess I made that almost joke about horses and horse racing. But at least with the horse racing, you've got a horse. I'm still unclear with bitcoin what you've really got and what does that mean to you in terms of value compared to me. But again, whilst the predictions are that it will rise, the question remains
what kind of treasury or monetary asset is it? And the worst thing about it for US individuals, us mere individual investors is if we lose the data, if we lose the bitcoin, it's gone. It's not like we have a deposit in the bank and there's a balance that says you've got one hundred dollars, it's gone. You've basically lost it. So if you lose if you store your data off site somewhere your bitcoin and you lose the password or you lose the device. Yep, if you lose that,
it's gone done. So there's some perhaps risks like that with it that people may not be considering. And someone like Buffett is obviously famously said he's never going near bitcoin, and he continues to support that view and look at you can't. Not everyone agrees with him, but that's a particular point. And I think in the context of someone like Trump, the federal reserves in a pretty tough spot. I think we all know, and perhaps like most things with Trump, it's a bit of distraction.
Right you think it's a decoy from the broader issue of US deaths, US dollars. We won't go there because I want to take a short break. And what I wanted to come back to is that the access to bitcoin and crypto is changing so rapidly, and we can go in now through ETFs and to some extent that's commoditized collateralized. We don't have to worry really if someone loses the key to their particular crypto holding. That's one thing. And also when we just look at at the opportunities
across the board. We're seeing more and more people coming in from all angles on this and we just want to pick up on what is it? Is it gold, is it correlated? Is it just another ascid that generally rises, or is it non correlated? Which was the original proposal. If you like that, you could take bitcoin and it would serve you when traditional assets go awry. But I wonder about that. Let's talk about that in the moment. Hello, welcome back to The Australian's Money Puzzle podcast. James Kirby
here talking to Jackie Clark. Now, Jackie, let's just look at the other part of this that. First of all, you were talking about advisors don't like it, but advisors love ETFs, and money has been pouring into crypto ETFs and all the major ETF houses have crypto and this gives everyone a sort of an easy way in. So the advisor will say, look, I don't know anything about bitcoin or those exchanges, but there is an ETF you
can use. And of course, in saying so, the ETF takes all the boxes from a regulatory point of view. So the advisors okay with that. The client says, well, that's an easy way in, just like ETFs or an easy way into everything. It's a commoditized liquid, conventional asset, which is actually packaging and nonconventional asset. But it has changed, hasn't it. It's taken the bitcoin and crypto play from the margins into the very center, which brings us back to what we said at the start of the show.
A billion dollar in SMSs, a billion dollars in crypto in SMSFS now and key funds like AMP a sort of an icon for all its feelings of major institutional money in Australia. So does that change things?
Well, it doesn't change it for me. But perhaps if there was an asset class that you didn't represent, and perhaps that's the question that these organizations have asked themselves, which is this an asset class that we should hold? And there's no doubt a lot of demand for it, and in terms of perhaps the nature of assets going forward, this could be representative of more of the types of assets we might have access to in the future.
What are you thinking there? What are you think of that?
Just the context for me is really about information and how powerful access to information or data is, and it always has been getting access to data information, so perhaps there's something more in the marketability of that down the track. And so this is also something that's a little bit mysterious, is it not. And given it's had such a good track record, I think that it will demonstrate appeal to
people because of the quick gain. I guess, you know, I'm saying, I guess because it's difficult for me to get on board with it because I'm having trouble. Maybe I'm materialistic and I'd like to see something from my money other than again exactly. So yeah, still is it's not regulated, right, so it still is pretty rough.
It's increasingly regulated, though, particularly in the world's most important money market, which is the US. And there's two things I'm thinking of. One is that it seemed to me for a long time there was two types and I'm going to generalize here dangerously. I'm sure that there was two types of investor that were very interested in crypto
and bitcoin. There were people who actually didn't engage in conventional markets anyway, and they saw this as a new thing, basically a new thing that they could get an edge in this, and they didn't actually have shares properly, but they had bitcoin, and there was often this market were much younger. They were online Sammy et cetera, et cetera. But then there was another market which were very sophisticated investors, the very top of the tree, and they wanted to
know everything about it. And they see it, they see looting to use single names. But there are prominent investors in our own market. There's very many problems to best result this indus. Mark Carnegie obviously been standing I suppose an earlier and people will say, well, look, Mark Carnegie has got right so many times, he must know something I don't know. So so I think this, first of all, there's that dichotomy between who who is prepared to back
it and get involved and learn it. But what I want to ask you is whether this idea of the general idea that it's an alternative and so that it's so you mentioned that the very stars the idea of digital gold. How do you view that proposal.
Yeah, I mean I think there's it's got some lenks to it in the context of it being this online asset. Yeah, and look, maybe if you're proactive with it, I mean, it's recognized as a currency that you can trade for things. And perhaps if you were able to do that, and that could be used in your own business model somehow that might also have some additional value to you. But again I think it requires then to understand that market really well and recognize where you can trade the bigcoin
and what for? And does that is that all value to you? Because quite? I mean if you can have a product or an asset that growsing value quickly and you can offload it quickly for something else, then I see some benefit in that, which perhaps is where someone like Mark can tubby.
Do you see it as a correlated asset? And folks, I'm sure just to make that clear, what we're saying is the jury is still out. It seems above bitcoin. I mean, it's established now, it's an acid class. I don't think it's going to go. I think we assume that it's got for our lifetime. It's going to be here. It's been severely tested in many ways. It survived all those tests. So let's take that on put that on the table. But then the issue is whether it's digital goal.
And if it is, that would mean that basically, if markets crumbled, if currencies in the US dollar classic case, that the US dollar in ten years time is a sad reflection of what it is was ten years ago to say or and in that context, then the proposal is that bitcom will stand alone, basically that it will be like gold, it will be they will win. That's one. That's the non correlated asset argument. And then the outariasive argument is it's just becoming. It's just another asset. And
if the markets are good, it's good. The markets are bad, it's bad. We haven't got a sufficient track record have we really to test that? So it's simply live debate. Where are you on that one, Jackie?
I guess only a bit what's been fifteen years, It's been around four now, so there's not a lot of evidence that it's very short periods.
But it's part sufficient volume and interest to we even stand as some sort of proxy with gold.
Yeah, and look, I find it fascinating with the market to how some things don't always hold value like they should, even when they've got brilliant balance sheets. It's just that can humor sentiment where people are at and it might be the same with bitcoin. But there's still I guess a lot of growth potential in bitcoin. And if in fifteen years we're at under twenty percent takeup of what's
available there. It's got a long way to go from growth potential in terms of accessibility, and so perhaps it will become more normal and I think, as you say, with the likes of amp, Walmart and Superinneation, fun State starting to pick it up or recognize it as an asset, that maybe helps normalize the mystery a little bit.
But I'm not.
Any clearer that the mystery has shifted, and so does it move with the markets. I don't know. There's a whole lot of evidence that it has at the moment.
There's a lot of you're seeing there's lack of evidence that it's correlated. Correct, So you're suggesting this non correlated well implication.
It's yes, that's how I would see it.
Okay, that's interesting, right, Okay, So since we're talking about that and the markets, it seems to me obviously here we are at the end of just to switch gears for a moment and bring us back into a conventional, traditional space where we are more sure. Yes, well, value, that's what you're looking for, isn't this. You don't like the fact that there's no intrinsic value there isn't it really for me?
That's right? Yeah, absolutely, yeah. It's very hard to be a nausey and say any other way.
Actually, well gold, I mean, what's the intrinsic value of gold?
Yeah, well, I mean that's a genuine mineral, isn't it gold?
Okay, but it gets it gets a down high price for a genuine mineral.
Doesn't Yes, yeah it does. It's done really well. But I probably won't be going there either.
Okay, very good. So just on the market. It's what I have you because you have a finger of so many pies, fingers, so many pies. I'd like to just see where you're coming from in that. Our market here we are right coming to the end of the financial year, shares a up eleven percent, the average balanced super funders out thereat point five percent. How on earth this wasn't
supposed to happen with the market? Is our market is now a point where the most positive forecast at the start of the year said it might reach by December. What's your view on the share markets?
Yeah, it's a good time. It's a really good time to have this conversation. It's there's a broadly positive view of the market now we are in an unusual spot. The tariffs aren't settled and our bow needs to get his meeting.
At some point.
But perhaps we're a little fish in a big.
Sea enough priority.
Yes, so there's definitely some positives that we have and perhaps the Reserve Bank has certainly now got some genuine sort of firepower. The RBA is in a good spot, and I think with the disruption, if you like, between the US and China, Australia generally will benefit from that tariff war, if you like, because people will start will be the beneficiary of that.
Tell us a bit bit more as to how.
Just in terms of the way trade will work, we will be saying as probably easy pickings as a partner in that respect. Yeah, and perhaps, like I say, it's a bit of a distraction, we're a bit easier to deal with in the context of those tariffs, so we simply should benefit and that would come down to what items we're trading with each party. But I think we benefit from that, right, Yeah.
Do you think that to some extent that depends the buoyancy in the ESX.
I think that's definitely out there. But perhaps the other option is that if money leaves the US, it might come, it might find its way here. Now there's two reasons why you invest in Australia. We have a fairly narrow band, which is really banking and resources. But that's a good reason perhaps to have your money leaves, for example, the US and come to Australia. So that could be an upside benefit of.
With the US institutions are buying come bank at a one hundred eighty.
Dollars would be one of the reasons. Yeah, So that's something that I think would be appealing for people to come to Australia. But typically when I think about sort of revenue sources, most Aussie companies have a lot of domestic revenue as well less overseas revenue. So perhaps we're isolated. So we have it's so like the pros and the cons of being isolated this.
Time or this sort of til it's.
Almost independence in its own way.
The banks are domestic, aren't there.
They are.
Domestic focus.
Yeah, So if you were looking that's right and narrow your investment focused or isolate impact of particular things such as US China tariff arrangements, then that's something you can do through an Australian asset so, so there could be some upside from that for Australia. But we're in a pretty good spot right now with the RBA, and I believe that the China and the US wherever that conversation goes, I'm sure it's going somewhere that neither you know, China
won't be happy with. Then they'll respond accordingly, but might have a slightly deflationary impact as well, which again is good for US. So I think that strengthens the RBA's position as well. So yeah, so, I mean it's all it seems generally good, and that's in the absence of anything more serious happening on the world front.
I know it's a tough question, but it doesn't five founded or so markets up eleven percent over twelve months, it's up four percent for the year, and we get four and a half. It's up four and a half for six months. I should say, you know for the year. The calendar of today's checking your four percent evidence, les's three eight percent already. If you stopped right now, selling mayn't go away. I know it's tuning, but do you think this is as good as it gets? Is the room for for are?
You know there's no crystal ball that can respond right now. There's too many sort of geopolitical matters occurring that could have any number of impacts. So it's just very hard I think for anybody like it always is.
Really it sounds like you're not you're certainly not saying this market is this market's want too fast or anything like that.
No, No, because there's evidence that there's wind in it or puff in it, wan, a bit of puff in it.
Actually the wind is behind it. Perhaps, is that perhaps where we're coming from as.
Opposed to we will it's not a wet sile put it that way.
Okay, very interesting. I've got really good questions this week, folks. I've selected some absolute corkers, I think, and I want to have Jackie on board when I'm dealing with them, and we will be back in the board. Hello, Welcome back to The Australian's Money Pustle podcast, James Kirky with Jackie Clark. Who is, may I say, a chartered accountant, she's a tax advisor. She's a member of the Institute of Company Director, she's an author. She's a board member
on some very interesting private family office boets. Hence the sophisticated view on the market. Okay, quickly, Ryan, who actually, Ryan, We're not dealing in any great detail with your question, but you actually kicked off the whole concept of today's show about bitcoin. Ryan had originally asked he had basically met the point that the price some of the crypto related investments were going so well. He told that he couldn't believe that the money puzzle hadn't covered it yet.
So hopefully we've met a start Ryan, on that of what I would call the post Trump crypto reality, which is quite different I think than the pre Trump crypto scene. Okay, and asks your article in the Australian, which was by the way, the seventh of June says industry funds pulled money, but all investors taxed in the same way. This was my piece where I was just saying that the nature of industry funds and how they are, how it all works, is that the tax is polled. Consequently, folks on the
new supertax, that polling of requirements, tax requirements. I mean, some people are going to be better off in big industry funds simply the older ones with lots of money will in some way cross subsidized the younger ones who are in the same fund. This is a particular issue for funds where there is a lot of older, wealthier members, and we actually had a list of the top ten funds with the most exposure. My broader point on all
that is that no one escapes this fund. No one escapes this tax Division two ninety six because it's a new At face value, it's a simple fifteen percent tax that's a new one on top of the original taxes
and super it only affects people with more than three million. However, in reality it's going to infect a help a lot more people than that because it's on realized games, which is just completely daft I think as a way to tax people as personally and Treasure shows no sign of changing on that, and more importantly, is not prepared to index it, and that means a lot of people are going to get caught in it very quickly as the years go by and people say, oh, you are scare mongering.
These always get indexed, No, they don't. The sophisticated investor, for instance, requirements are unchanged for twenty years. Division two ninety three tax, which is another super tax on high salary earners is unchanged. I think it's for twelve years. There's no rules about this. I just wanted to that also stem there jacking. Is there anything else anything you want to add to that?
No, probably just to answer question. I know that just in terms of calculating it and understanding how to work through it yourself, to get your head around it and how members in big funds might be impacted. The Association of Superannuation Funds of Australia has given quite a bit of guidance on the impact of Section two ninety six and I've had look at the different calculations they're provided.
They're quite helpful instead of explaining this, but I think you hit the nail on the head with your article actually, you know, indicating how assets are pulled for the benefit of all members. But actually even the administration of this, all the costs of this will actually fall on the weight of all members of super funds to some extent to the end of the day additional compliance any organization has, somebody has to pay for that.
So when i's to be for it exactly, and I think you know, I hope you know you know. And one of the things you did mention was that you know is had nothing to do with with two net six most but in fact it permeates it. It does perculate right through the system. I hope I've met that clear and as sincerely mean it.
That's the other thing just add to that giant is I think I've determined what something like half a million salaried employers around Australia are actually impacted by.
The super immediately.
It's quite substantial. Yeah, immediately, and I will baying big fans I were all being self managed fans by a long shot.
Yeah, but this is a key point I was making that it was aimed at self managed superinvestors without a doubt. But it is the nature of it, this construction of onrealized gains and then the nature of how big super funds work mean they are pulled into it. They are complaining much, but I better complaining behind the scenes. Okay, Andrew.
Interesting question from Andrew. Great question Andrew. He says it would be good to talk about the virgin IPO later this month and so detail and to compare it with other recent large years, and to discuss the impact on Quantus, which has touched eleven dollars and it's paying dividends for the first time in years. Okay, Marvel's question so interesting the virgin ipo. This is what I think about the
virgin ipeo in three numbers. It's listed at two fifty the first time, and when it was taken off the boards it was nine cents. It's coming back at two ninety three after that. It's a question of this. I have no idea what you think of it watching.
My Headshine, which the listeners, well, well, I think the first thing pats for Andrew is I don't think it was a retailer. For it all only to holdstyle investors. So it's it's all being taken up for starters.
It's a tiny it's a tiny amount, which is right. I won't say a trick, but the mathematics of when you float a tiny amount of stock, it's not to waye about it. The price gets supported easier, let's be yea yeah.
So Baying came in with evaluation two dollars ninety and morning Star came in with evaluation at two dollars sixty. So perhaps that's an indication of where things might head. But you know, the question is it is a they've taken advantage perhaps at the time, so it is relatively buoyant. If you look at the trends coming out of the COVID era and you look at all the statistics on
Australian travelers, there's definitely been a rise. I think we've pretty much met, if not exceeded, there's sort of pre pandemic times of travel. So it is the right time, is it opportunistic? So have they taken advantage of that?
I'd be interested to see, mind you, if the implications of Israel, Iran, Ukraine and so on may start to have the reverse impact on the airline world as well all people, perhaps because I'm feeling less inclined to travel as a result of what's going on, because it's pretty hard to avoid the Middle East when you fly out of Australia. Yes, exactly.
They have to go around to Ukraine. They have to.
Yeah, so look, and that may be a small thing in the scheme of just having to get around the world. We've all got family to visit, paper all things.
Happen, I mean, yeah, I mean more pointedly, the history of the Second Airline in Australia is woeful. And I'm sure these are great people. I'm sure they've got it in a great shape. I don't doubt for a moment they've optimized their moment and their numbers for the float goes without saying, here's the thing. Answer collapsed, Virgin Mark one collapsed. Brokers not brokers. To be fair, researchers Morning Star are already saying this, this float is too high.
Yeah. I would agree with that, and we've got to meet a bit careful. Yeah, well I can't. Sorry, I can't see how you can because it may may have been at its peak.
Okay, very good, we will leave it right there, Andrew, I think the answer is very clear. None of this is investment advice ever. It's information only, and I'm sure you all know that. Okay, final question, fam Sam, as I said in really good questions today, I was hoping you can explain to me how I can deal with the suspended trading stock in my portfolio.
It's actually a great question to have. If he mentioned this.
One, there's no point actually naming it because there's plenty of them out there. There's a whole part of zombie stocks. And he says it's been suspended for years. My money, you're stuck in this. I can't sell it. What are my options.
This is really frustrating if you've ever been this position with suspended training stock, because you can't take crystallize the capital loss from a tax perspective until it's actually liquidated. And so there is a small little opportunity. There's a these be a company which I think still exists called the listed dot com dot au. You can go on to that website and see getting up to date read
on what's happening with the company. You might be able to take that information to your accountant to determine whether it's realistic that you can actually take that crystalize. You can crystallize that capital loss from a tax perspective, so that might be the thing to do. Obviously you need to continually review it. But it's very frustrating. It does happen often.
How does it work. Does it run to zero obesity or a zero point one center or something?
Oh sorry, when they're suspended your main yeah?
Or is it valued at the amount that was suspended.
That's a good question. I wouldn't know that. I'd have to look at each individual case actually to work that out, and you can obviously the conservative approach is whatever they close that you could take a loss to that level and then do a subsequent loss, you know, take a reasonably arguable position, which is what the Australian tax officers would be looking for in the situation. But technically, until it's actually in liquidation or formally wound up, you actually
can't do anything. It's very annoying so here, but you could at least do some research.
You have value and possibly possible in there, especially if it was the nineteenth of June and you had two weeks to go try and find so and I hear that the markets up eleven percent.
People may be doing to find.
As usual one maybe, yeah, especially with our market. Yes, yeah, yeah, Well it's a good time so we're able to say that terrific. Hey, look, thank you very much, Jackie. Great have you on the show again.
Good to be here, James, thank you.
And the book Stop worrying about money, which you somehow manage time to rise on top of everything else. You've won a couple of awards for it, a.
Few international awards. It's been incredible. Actually. The last one was the Money Awareness and Inclusion Award Program, which is a global awards program, so forty five countries participating. They announced it out of Singapore about a month ago, which is wonderful.
Are you shipping vast quantities out around the world now?
Of course maybe Amazon is, I'm not.
It is the royalty checks from financial books. We've had some fun with those on the show before. Let's see that you couldn't live on. Not worth the conversation, barely relevant in your tax returns. All right, very good. Thanks for a lot, Jackie Clark. Great to have you on the show. We're talking again soon. Thanks James, and thank you everybody. And great question today. Keep them rolling the money puzzle at the Australian dot com dot a talk to yourself Sam the Room sub