In Search of the Perfect Investment

Australia is magical. There’s lots to do and see. The weather is good. The people are friendly. The place is safe. And it’s on sale. The Aussie dollar has fallen 34% in the past year or so. Once it was $1.05 to the yankee dollar. Now it’s 70 cents.

Don’t believe me about Australia? Conde Nast Traveler gave it the “Destination of the Year” for 2016.

Read Conde Nast on Australia here.

We only got to Sydney, Pittwater, Melbourne, and the Mornington Peninsula:

There’s a million other places, including the Great Barrier Reef, Bryon Bay, and Tasmania with its brilliant MONA — Museum of Old and New Art, which is Australia’s largest privately funded museum:

Australia has the koala bear, the kangaroo, the platypus and the magpie. I found this sign on a tree outside my nephew’s house in suburban Rose Bay in Sydney:

One of my favorite features of Australia is public art placed along roads and highways. This “Hotel” is planted alongside a highway going south from Melbourne.

You can’t get to the hotel from the highway. It doesn’t take guests. It’s designed purely as highway art. It cost $1.2 million! It’s magnificent. There’s lots of highway art alongside highways in and around Melbourne. But this is my favorite.

Is Australia a good investment?

Australia escaped 2008, but got slammed by the commodities/minerals bust of the last 18 months, , viz what happened to the stocks of Australia’s two largest miners:

Visiting Australia, you’d never know of mining problems — unless you visit Perth, which is a “ghost town.” But the rest? Land values are high. They rose by over 10% last year in almost all of Sydney. The fastest increase was in the suburb of Blacktown. Land prices there rose 47%.  House prices are ridiculous. The restaurants and the shops are full. And everyone who wants one has a job.

China was (and still is) Australia’s big market for iron ore, et al.

I did some “research.” It seems as though  Australia may have escaped the full commodities/mineral catastrophe (about 8% of its economy) and made up it with huge Chinese capital inflow for businesses, houses and horses, education of foreign students, tourism, and exploding financial services. I floated this idea around and got a “maybe.”

Unemployment in Australia is 5.8% — which is pretty well full employment for a country with a huge cash (i.e. no tax-paid) economy. Cash gets tradees to work. Tradees are tradesmen and women.

There are jobs available for people who will kill the feral cats, dogs and camels which are ruining the outback. Particularly bad are the camels which die at water holes and pollute the water holes. I’m told there are over a million camels in Australia — far more than in the Middle East. You hunt the camels with helicopters and let them have it with submachine guns. You kill the feral cats with a crowbar and, should you wish, eat them. Apparently they taste like chicken. Not so the kangaroo, which is also a pest, and has become somewhat of a delicacy since its meat is less fatty than cows. I ate a kangaroo hamburger. It tasted like a normal beef hamburger. But, then, I’m no foodie, though many Australians are. Kangaroos are farmed in Australia. I ate a farmed one. So I was told.

BHP is “cheap” according to my sources.

Australia is a huge generator of investible funds. It has a government mandated superannuation policy under which each business must contribute 9.5% of an employee’s gross income into a fund. That money and its appreciation is tax-free to the employee until he retires. Or reaches what’s known in Australia as “preservation age.”

The employee can contribute even more money into the fund (at a low 15% tax rate) and put all his retirement money into a self-managed fund or hand it over to a fund manager — of which there are thousands.

The money in the fund can be invested “in any asset anywhere.” Yes, that includes virtually everything imaginable. Horses. Rare cars. Land. Houses, Shares. Bonds. Domestic or foreign, etc.

The program is hugely popular and is going to 12% in the next few years.

It puts America’s social security program to shame.

I left America for Australia on Sunday December 20. You can see that the market went up nicely for a few days, then cratered badly. It clearly missed me!

My sagest Australian investor says markets always overreact. He thinks this one is no different.

And since blood is running in the street, it’s a good time to jump in. But not into Australia equities. Apparently leading Aussie stocks (excluding BHP and Rio) are selling at a forward P/E of 19.7, which is high.

Harry’s Top  Travel Tips

1. Take a Duxiana travel pillow. The thing costs a fortune — $135 — but is worth every penny in sound sleep on planes and in hotels. No hotel, no airline, nobody gives you a pillow as wonderful as the Duxiana. I’ve bought one for everyone in the family. They all think it’s my best discovery.

Get yours here.

2. Don’t check on a plane anything you’ll need on arrival. Carry a 22 inch roll-on with toiletries, underwear, clothes, laptop, etc. Eagle Creek makes the best. The airlines will lose your bags. You should be prepared for 24 hours without your checked luggage. Qantas lost ours twice. Here’s a sample of an Eagle Creek 22 inch. They make zillions of models like this. You’ll find them on sale for $160 or so.

3. How much you pack depends on how close you’ll be to a washing machine. Relatives and friends all have them. It’s a new world. You need remarkably little. Take a Uniqlo lightweight down jacket. Easy to pack. Women should also take scarves. Planes can be cold.

4. Your U.S. cellphone will work overseas, but expensively. Like nearly $1.79 a minute for incoming and outgoing phone calls. If you’re making few calls, that per minute price won’t matter. If you’re making lots of local calls, get a local SIM card and plug it into your U.S. iPhone (check it’s unlocked. Most are.) Don’t buy the minimum charge. Buy a decent amount — like $40. That will give you cheap phone calls and some decent data — for Google Maps. Do all your emailing, messaging and surfing when you’re on WiFi.

Understand: your new SIM card simply changes your cellphone service provider from say Verizon to the Australian Telstra. When you pull the Telstra SIM out and put Verizon back in, it will revert to the Verizon (or AT&T, T-Mobile, etc.) it was before you left. But while you’re in Australia, all the iPhone features, like Contract, Calendar, Mail and Messaging will work as they do in the U.S.

SIM cards are available at every airport and most newsagents — at least in Australia. You buy the card for $2, then activate and charge it online. It takes longer these days since Telstra and others think all tourists buying pre-paid SIM cards are terrorists, not tourists.

5. Say NO to food. Traveling is not an excuse to gorge. Get exercise. Move every hour on planes.

6. Everything about traveling is waiting — specially if you’re going overseas. TSA Pre works well domestically. Global Entry works great internationally. They help you get faster onto and off planes in the U.S. But overseas, the only solution is a new American passport with a chip. Update yours immediately, if not sooner.

Take a new, improved Kindle Paperwhite. Load it with books. It’s the only way to kill time in lines and on long flights. Don’t rely on watching airline movies, some of which were older than me.

7. Being a tourist is not a reason to pay retail. Even the ritziest stores will bargain. Make like you’re leaving, They’ll come down another 10%. Offer an outrageously low amount. Keep bargaining. It’s part of the fun of traveling.

8. Some credit/debit cards don’t charge 3% currency conversion. One Australian bank ATM charged only $3 to give me $600 in Aussie money. I suspect they made something on the conversion rate. Hard to check.

9. Sometimes your favorite credit/debit card doesn’t work. Hence you need to carry several, including American Express. My Chase Visa debit card worked most of the time. Credit cards with chips work better.

10. Sometimes it’s better not to rent a car. Get a limo. Borrow a car when you get there. Or get a taxi. If you do rent, be careful of sneaky add-ons, like insurance your credit card already covers. Priceline is still the cheapest place for car rentals.

11. Cheap USB chargers that say 240 volts can and will burn up. I burnt one up in Melbourne. The stink was overwhelming. This one, however, is unbelievably useful:

It has five USB ports to charge your phone, your iPad, your camera, your wife’s phone and Kindle. If that’s not enough, they also make a ten-port model. I like the long cord. I can plug it into the wall and have the thing on my night table charging away through the night.

12. This is most useful. I got mine at Radio Shack.

13. Take a roll of black electrical tape. You’ll need it for attaching U.S. plugs to foreign connectors.

14. Everything about travel is planning and patience. Some airline seats are better than others. Check www.seatguru.com for bad, good and better seats. Flat seats were last year’s preference. This year I’d like to see wider, more comfortable flat seats. Qantas’s flat seats in business class are awful. Too narrow and too uncomfortable. Delta’s are much better.

15. Airlines have bargain days. American, Delta, Virgin Australia, Emirates (and others) are now flying to Australia. Check the web. Use the airline web sites. Much better to have bought your ticket directly from the airline. Gives you status to an upgrade. Fiddling around with dates, times and airlines is seriously time-consuming. Don’t expect real help from sites like Expedia or Kayak. They’re only good for getting you oriented, not booked. Do not book with hem.

16. Take lots of old clothes. Throw them out as you go. That’s often cheaper than having the hotel wash them.

17. AirBNB is useful, but quirky. You’re staying in someone’s home. They’re probably poor. Otherwise why would they be renting their home? They set their home up the way they like. One family is opposed to microwave ovens. Another doesn’t like rubbish bins. Another adores hard, cheap plastic pillows. Another doesn’t believe in lighting at the side of beds or in bathrooms. What they advertise about their palace is always an exaggeration. For example, “we have air conditioning” means one room is air conditioned, often not the master bedroom.

Figure what you must have — WiFi, washing machine, microwave oven, air conditioning — and ask do they have it?. Bring what you need. For me, that includes a Duxiana Travel Pillow, a myriad of extension cords, and flashlights.

18. Don’t ever order a special meal on a plane. It will stop the airline upgrading you at the last minute. They won’t have an upgraded special meal.

19 . If you find a special meal in front of you on your next trip, it’s probably because you treated your travel agent poorly and she paid you back by ordering you the blandest, more boring meal possible — something that looks a blob of tasteless brown mush. So there.

Easiest way to transfer large files

Gmail won’t take or send a file greater than 22 megs (or so). Movies of the children I take on my iPhone are always bigger. There are a million ways of sending big files. The absolute best is WeTransfer.com. No software to download. No stupid passwords. No sharing. No nothing. Just a simple transfer of one file from me to you.

Harry Newton, whose trip to Australia included a little family history checking. My father and mother ran away from Europe as refugees, landing in Australia several days before the outbreak of the second World War. He came from Romania. When Germany invaded Romania, the Australians treated him as an enemy for and interned him. Something changed their mind and later he got inducted into the Australian Army. Before he died, he told me his job as a prisoner or a soldier was the same — peeling potatoes.

Mother was a looker. She was born in Vienna.

Mother and father’s first job in Australia was running a hamburger shop. Mother once told me she changed my diapers on the same table they cut the onions for the hamburgers. After they sold the hamburger shop, father never ate another onion again.