Hello from Main Ridge.
Main Ridge touts wineries, farms and orchards — strawberries, apples, avocadoes, cherries, blueberries, huge produce — like foot long zucchini. This place is as close to paradise as it gets.
I’m in love with these things:
Australians call these lady fingers. They’re designed for people who are threatened by large bananas.
Main Ridge is in a state called Victoria, the capital of which is Melbourne:
This is an old photo. It’s much expanded since then. There is enormous wealth in real estate. A developer left the tennis court this morning in a new Aston Martin costing well over $330,000. I was impressed with the noise it made as he accelerated down the narrow country road.
Australia’s BIG wealth is from mining — iron ore, black coal, gold, copper, bauxite, nickel, diamonds, uranium, zinc and lithium..
Australia supplies about 60 per cent of the world’s lithium and has one of the largest lithium deposits.
Australia is the world’s mine. It has attracted major attention from the U.S. Department of Defense as a reliable source of critical minerals.
Eons ago Donald Horne, a journalist, wrote a book attacking Australian complacency.
The name stuck. Australia, the lucky country.
Australia’s incredible retirement
Your employer is required by the Australian government to put 10.5% of your earnings into a fund for your retirement.
You choose the fund. There are zillions of them.
You pay a flat 15% tax on the 10.5%. Each year, you’ll pay up to 15% (but no more) on your earnings in the fund.
Many of the funds have earned a handsome 9% compounded annual rate over many years. (This year it’s lower.)
When you retire, you don’t pay any taxes on the monies you take out of the fund — lump sum or by the year.
This system was set up to ensure Australians had a happy retirement.
It works. More than 16 million Australians are in what they call super (as in superannuation) funds.
The 10.5% is going to 12% by 2025.
Here’s an example of what Australians call super funds:
You can reach the Aware’s web site here.
Australia has a Sovereign Wealth Fund
It’s called Future Fund. It invests for future generations of Australians. It has had a compounded return of 9.2% over the past ten years. Its allocation is broad. Which is impressive.
You can read more about Future Fund here.
Not sanguine about North America
Here’s the last miserable month in North America. This chart shows the three indices — Dow, S&P and Nasdaq:
I’m not sanguine about a Santa Claus rally. I’m not sanguine about our chances of fighting the fed. In short.
I’m being very very selective of what I invest — few stocks, lots of shorts, perhaps a little energy (XLE) and my favorite — six month and one year treasuries.
Fun cartoons
Flying to Australia
It took me 40 hours to get from upstate New York to Main Ridge. The only mitigation for long trips is to drink gallons of water, sleep as much as you can and avoid airline “food.” Which is easy since it’s awful.
Most fun is prying goodies out of people on the plane. One guy told he was once a Goldman Sachs partner who left them (in disgust) with all his money. He told me the Marcus consumer bank startup decision was a disaster and Morgan Stanley was eating Goldman’s lunch in the high net worth client business.. Meantime, Goldman is firing everybody and their uncle.
See you soon. — Harry Newton
