Sell everything! My challenge to Andrew Roberts of RBS

Wed, 13 Jan 2016  |  

Andrew Roberts, the “sell everything” analyst at RBS, has certainly gained a lot of coverage for himself and his business. If that was the aim, it was a great success to write such headline grabbing 'research' on the hope the media would run with it.

So ten out of ten for Andrew.

But the work prompted me to think about what Andrew was actually saying and I am wondering whether he is will to put his money where his mouth is. To that end, I sent his the following email.

Dear Andrew

I note with interest your “sell mostly everything” note from earlier this week. I think you will be wrong and in the spirit of the market and healthy competition would like to offer you a chance to personally benefit from your forecast.

How about a bet of, say, A$10,000, that more than half of the items in list below will be stronger on 31 December 2016 than they have been in recent days? I am open to a different amount to wager, just let me know what you are comfortable with.

I note with each the recent level or market price and if it is higher on 31 December, chalk that one to me, if it is lower, that is for you. I have 11 variables that you imply are a “sell” – they cover a range of asset classes and locations and if you are correct with your forecast, most will be lower than today. SO the winner will have six or more go in their favour.

US stocks (S&P 500) 1925.0 points

Brazil stocks (Ibovespa) 39,500 points

China stocks (Shenzhen) 1,850.0 points

Japan stocks (Nikkei) 17,200.0

US house prices (Case-Shiller 20 city) 182.83 points

UK 20 city house prices (Hometrack measure) GBP228,800

Sydney House prices (Corelogic index) 915.00

Iron Ore US$40.50 a tonne

Oil WTI $US31.50 a barrel

Copper US$4,325 a tonne

AUD/USD 0.7000

Please let me know if you are happy to take up the offer. I am will to put my hard earned money where my mouth is – I hope you are too.

All the best



Andrew has yet to respond to my very generous offer. After all, he only has to get six out of 11 to win – not “everything”. I will confirm whether or not Andrew is up for the challenge.

Either way, I will track this post from time to time.

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Peter Costello and the Future Fund Fiddle

Mon, 24 Oct 2016

This article first appeared on The Adelaide Review website at this link: 


Peter Costello and the Future Fund Fiddle

The latest portfolio update from the Future Fund confirmed that the average annual return on its investments has been 7.7 percent since it was established in May 2006.

Former Treasurer Peter Costello, who is the Chair of the Future Fund Board of Guardians, judged this return to be good to the point where he claimed that it was successful in “exceeding the return objective”.

That is an expansive claim.

In the media release – that included details of the fund return up to June 30, 2016 – there was a table that showed the 7.7 percent annual return that Costello referred to. It also noted that the ‘target return’ or objective for the Future Fund since inception was 6.9 per cent, which no doubt leads Costello to his conclusion that the 7.7 percent was larger and had exceeded the objective.

Alas, that target return for the Future Fund in its own media release is misleading. According to the Future Fund Act 2006, the investment objective or target return is at “least the rate of inflation (measured by the change in the CPI) plus 4.5 to 5.5 percent”.

This return was designed to be achieved “over the long term” which is prudent and sensible given the inherent short-term volatility and variability in many market values.

The real reason young Aussies are struggling to get on the property ladder

Fri, 21 Oct 2016

This article first appeared on the Yahoo 7 website at this link: 


The real reason young Aussies are struggling to get on the property ladder

I thought kids stopped screaming and being blindingly selfish when they turned 3 or maybe 4. I was wrong. It could be that 30 is the new 3.

Having witnessed, first hand, some of the froth and bubble surrounding the issue of consumption patterns of millennials, that they prefer spending money on lattes and smashed avocado on toast rather than a dwelling, there is an irrational, self centered discussion that blames anyone and everyone for their inability to get into the housing market.

If Twitter and some of media articles are anything to go by, a bevvy of millennials have explicitly expressed their overwhelming desire to spend their money on avocado, ubers, the latest phones and travel rather than saving to buy a house. I have noted, ad nauseam, that this is fair enough – it’s their money, spending it whichever way floats your boat is a fundamental tenet of economics. It is all part of that basic choice we all have about where we wish to spend our money.

Rather than leaving it there, the millennial group then unrelentingly complain about their perceived in ability to tap into the housing market. This is incongruous given they have just said they are no longer looking to buy a house. Why would anyone care about the price of a Brett Whitely painting, for example, when you aren’t looking to buy one? But the millennials are vocal about their insistence of unapologetically wanting to spend their money on lattes, pulled pork and a mascarpone pancake stack whilst still moaning about their inability to buy a house.

It’s this juxtaposition that leaves me wondering what the fuss is about.