Hedge Clippings | Friday, 21 August 2020

Last week's Hedge Clippings pondered the difference between "complete" and "finished" - two words which unfortunately aren't going to be used in reference to the current focus on COVID. Having said that, we, like most others, have seemingly become obsessed with, or by, COVID, hanging on every update, briefing, newspaper, or bulletin on TV or radio. So much so that we'd like to propose a COVID-free front page or news bulletin day (or maybe a week?) where updates are relegated to a small "need to know" section somewhere towards the back, or end, as the case may be.

We certainly don't want to suggest the situation is not serious, or to trivialise the dangers or predicament of those directly affected whether by illness or lockdown, or the efforts of politicians and those on the front line. However, we're rapidly approaching the stage of being "completely over" the media's seeming obsession with it, including whizbang interactive charts showing trends of cases per day, curves, and sadly deaths. The reality is that life continues beyond COVID, and until there's a vaccine we need to get on with it as best we can, thankful that we're in Australia - even if in Victoria - and not Europe, the US or worse.

Equity and other markets have certainly got on with life, with punters (sorry, "day trading investors") reportedly flocking to open online broking accounts with the likes of Comsec and others, presumably because they can't get to the pokies or the race track. How much of the government assistance handed out since March or April, or how much of the $30 billion (expected to reach $40 to $50 billion according to one estimate by Rice Warner) withdrawn from Super by 480,000 Australians, over 80% of whom are under 35, will end up being put to "good" use? We can understand early withdrawal if the proceeds are used to say, pay down credit card debt which is accruing interest at around 20% pa, or for essentials, but it tells the story that most workers don't appreciate (or bother) with super until it is too late to accumulate enough to cover retirement.

While the media, and most of the rest of us, have been distracted by our daily dose of COVID, that certainly can't be said for ASIC, in spite of reportedly finding that ex-AMP chair Catherine Brenner had done nothing wrong in spite of her successor Mike Wilkins offering an unreserved apology at the company's AGM in May 2018 for AMP's behaviour, which he described as "absolutely unacceptable". Not so lucky this week was Westpac, who declared they would not be defending ASIC's charges relating to fees for no service at Westpac's BT Funds Management and Asgard. Meanwhile, ASIC has commenced proceedings against RI Advice for failing to have adequate cybersecurity systems following illegal access to a server containing sensitive client information.

Elsewhere in the naughty corner this week was the colourful founder of Mayfair 101, James Mawhinney, who according to the AFR was defending his accounting treatment of various expenses which involved writing up the value of investments based on expenses such as office rent, flowers for staff, and wine. Many moons ago in a previous edition of Hedge Clippings we mentioned the antics of Mayfair 101, the IPO Wealth Fund and Mawhinney in not particularly glowing terms. There's an old adage - "when something sounds too good to be true, it probably is", although we're disappointed we weren't the recipients of Mawhinney's generosity in the wine department.

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