September 28, 2025 • 41 mins
A new governor has been appointed for the Reserve Bank of New Zealand - all the way from Sweden.
Dr Anna Breman has already received criticism from economists who find themselves concerned that someone with such little knowledge of the New Zealand economy will hold such a high stakes position.
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Speaker 1 (00:05):
You're listening to the Weekend Collective podcast from News Talks
at B.
Speaker 2 (00:41):
And welcome and welcome back Weekend Collective. I'm Tim Beverage
and we're inviting your calls for this hour and participation
on one eighty ten eighty or in text nine two nine.
So I do mention my email Tim bet News Talk
said be dot ca Z. But that's only if you're
not in a hurry because I haven't opened email yet. Anyway, Look,
this hour is welcome to smart money. So look that
(01:02):
if I had been in charge of the unvail of
the new Reserve Bank governor, I would have had her
walk into money, money, money by Abbott because she's Swedish.
It's about money and that's pretty much. It's a good
little tune anyway. So we've got a new governor for
the Reserve Bank, all the way from Sweden, doctor Arna
Breman is. She has received a lot of criticism from
(01:23):
economists who find themselves concerned that someone with such little
knowledge of New Zealand economy will hold such a high
stakes positioner. Anyway, but how much will her appointment really
impact the everyday person. We're going to dig into that,
and you can to give us your calls on eight
hundred and eighty ten eighty does it? Does it? Bobby?
I can't, I have to. I'll be honest with you
(01:45):
just quickly before I introduce my guest. I don't care
as long as she does a good job. I mean,
money is money, isn't it. Do we need to understand
a particular economy or do we just need to understand economics?
And in fact it's a committee decision anyway when it
comes to the cash rate. So but you can climb
in any time and give us your recons on what
you think about doctor Arna Breman, the announcement from apparently
(02:08):
I think hundreds of candidates, so anyway, and to discuss
that and other things, because we're also going to look
at not just you know, the news about the Reserve Bank,
which we have got excited about because I think Adrian
Or sort of did stick his head above the parapet
quite a bit. Maybe it's the sort of appointment where
if we hadn't had an Adrian Or we wouldn't care.
It'd be like ore those new Reserve Bank governor bingo,
(02:31):
who cares? But anyway, we're also going to a chat
about you know, when you should actually let that investment
go one that you may be quite like toy. You
think this share has done really well. Or maybe you've
got that investment property which is done all right, but
all of a sudden, you know what, it's hard getting tenants.
Maybe you're not getting the wrench. Want when is it
time to give up that investment and move your money elsewhere?
(02:52):
I eight one hundred and eighty ten eighty and to
discuss it. I've taken a long time to introduce him,
but he needs no introduction. Really, He's written a truckload
of books. He's been a regular guest on nawshown is
Martin RS. Hello Martin?
Speaker 3 (03:03):
How are you? Yeah? Come, how are you?
Speaker 2 (03:06):
I'm glad you didn't know. I did not off during
that time. I kept you waiting, didn't I? Hey? I
mean I know that you're not you're a finance writer
and financial author, and you know not so much an economist.
But do you have a take on the Reserve Bank governor?
That does? Because I wonder if who cares something that
(03:30):
she's you know, she knows what she's talking about. She
must have beaten off a lot of people to get
that position. Oops, we've just lost you for a second.
Hang on a second, we've just we've just lost you
on the feed, Martin's I can't hear you yet, so
I might just check that you haven't muted yourself. So, yeah,
(03:50):
we do have a little bit of a technical issue.
We're just trying to fix it right now. But we
want your calls as well on eight hundred and eighty
ten eighty while we're try and sort that connection with
Martin out and no, still not coming through. So there's
something being muted somewhere anyway. So I'll just give you
my take on it. I I've got it. I didn't
(04:10):
really read a lot into the appointment of the Reserve
Bank governor. That's someone from Sweden. She's looking forward to
getting around and meeting us and looking at meeting a
lot of New Zealanders and getting a feel for things.
But what do you reckon? Does it bother you that
she's from Sweden? Some economists have criticized the appointment, but
(04:30):
I don't know. I just tend to have a bit
more faith that we've chosen someone who interviewed very well,
and I think we've got them. What happened there, Martin?
What did you do?
Speaker 3 (04:40):
I don't. I don't know. I don't think I did anything.
I just unplugged it and pushed the club back and
it worked. But Bingo didn't see it didn't seem to
be out. Okay, have in doubt turn the thing off
and then turn it back on, and there we go.
She works, and you were doing a great job. What's
the word extemporizing?
Speaker 2 (04:59):
Yeah, something I was busting, yes, but yeah, what do
you think you ever take on the appointment? And really
we shouldn't. It should be almost irrelevant to the average
New Zealander, shouldn't it.
Speaker 3 (05:11):
No, No, no, no, I don't think that it's a
really really big appointment. That's a really important appointment. I
guess a couple of things. First of all, she's got
a pronounceable name, you know, I had. I looked it
up when she was first appointed and she was Swedish,
and I thought that it will be a name that
we can't get our hang around. But the second thing
(05:33):
is that I don't forget and that that would have
radio people especially.
Speaker 2 (05:39):
It was like Aneath from the Ever if it was
no it's at.
Speaker 3 (05:44):
Yeah, that's right, the whole Scandinavian thing. Uh, don't forget
she only has one vote on the Monetary Policy Committee,
so you know it's not all over her. So people
are saying, look, she doesn't have a good feel for
the New Zealand economy and so forth. She won't. She
probably will hardly know a thing about at the moment.
(06:06):
She'll be reading like anything. I'm quite sure she would.
And you know, ultimately they will make their decisions on
the basis of the research that's put in front of
front of and my guess is in a lot of
cases the ball might be close to the line, but
it will be it will be in one on one
(06:26):
side of the court or the other. Most of the
decisions they make will be reasonably straightforward. She gets the
casting vote. I think I've got this right. She gets
the casting vote if they cannot, if the other members
cannot come to consensus. She's got a great track record.
(06:47):
She was her first deputy of the Swedish Reserve Bank,
the reichs Bank. I think it's pronounced. She sounds like
a couple of people making comments. Now where these came from,
it would be hard to tell. Is that she's first
quite dove. That means that she would have a bias
(07:09):
towards putting interest rates down, not hiking them too fast,
and she might be a little bit more transparent than
has been the case in the past. But where people
are getting this stuff from, you know, and I don't
have any any particular insight, but it's a really important role,
(07:30):
you know. I mean, I think back to the I
think he was the first government was Don Brash and
he rather made his name in economics and then pop
politics as the bank governor. And it's important because it's
really is the deciding what infistrates are going to be
(07:52):
an interestrates push on sort of all parts of the economy.
There're aimed at lowering prices. We'd probably get Laura exchange
rates if we push infestrates down and we're trying to
lower inflation expectations, but were inflation rates does make a
big difference to a huge amount of things, not the
(08:14):
least of which, in fact by far the greatest one
of which is inflation.
Speaker 2 (08:19):
How much what I mean, what is her role because
as you say, she has a casting vote, there's a
committee who make the call on the cash rate. And
that's the thing that you know, that's the thing that
most New Zealanders, yeah, or respond to whether they be
investors or borrowers, but especially especially borrowers.
Speaker 3 (08:37):
That's a that's a really good question. I did think
about that, and I didn't have time this afternoon to
look it up, but I see the Reserve Bank has
other roles. For example, it regulates life insurance companies, and
she would probably act as a CEO, so you know,
(09:02):
she will make she will have a role in appointments
of senior staff and that sort of thing. They have
several hundred people who work in there. In Inflation is
not their only remap they do do. They do do
other things. And we've had as a bank governor, not
(09:22):
Christian hawks Peatment, the one before Adrian or who who
you mentioned, you know, who's been quite activist and who's
been quite out there. My guess is they were looking
for somebody who would settle things down. Just look, let's
make this a lot calmer. And she may even be
trying to stay out of the out of publicity as
(09:45):
far as she can. She'll never be able to do
that completely because it's too big a role and it's
always going to she's always going to have the public
eye on her.
Speaker 2 (09:53):
Yeah, it's interesting. There's some comment I've been reading about it.
In fact, one of the first things I've read about
it was talking about that she doesn't have a particularly
high bar to clear because of the chaos of the
of the end of the adrian Ors first adrian Os term,
where you know, we didn't have any transparency as to
and then we found out more and more about what
(10:14):
happened and what led to his departure, and everyone was
we had Quigley resigned, who was the chair. Nicol Willis
was talking about the process and so the bars, I mean,
probably she keeps her head down and oh, well she's
not going to keep her head down because she's going
to get around news land, doesn't she.
Speaker 3 (10:34):
But well she'll have her and she'll be doing big
news conferences when she's announcing OCRs and such like. But
those who are saying somebody from the same jurisdiction or
who's lived in the same economy can't do it. You
need to look at Mark Conney. Mark Corney was a
Canadian as a Canadian, and he's he's the Prime Minister
(10:57):
of Canada, isn't he Prime minister? Is he is now?
But before that he was the he was what do
they call it the chair? I don't think it's the chairman,
the Governor of the Bank of England. Effectively her Arna's
role in the UK is right now is the same.
(11:18):
And now he's gone back to Canada and become Prime Minister,
and he did a pretty reasonable job as far as
I could see in the UK, and we've now got
a remap for hours of bank where inflation is the
only thing that matters.
Speaker 2 (11:35):
There was a jewelry on an employment which was counted
as the whole inflation, which was problematic anyway.
Speaker 3 (11:42):
Yes, and I'm always suspicious of split objectives. You know,
when you've got more than one objective, one usually has
to take precedence over the other. Either that or we
get neither of them. And those of us who lived
through the seventies, eighties and into the nineties and suffered
terribly high inflation do not want to go back to that.
(12:05):
And the idea that we will target or the Reserve
Bank will target simply inflation, I think is a very
good one.
Speaker 2 (12:14):
In fact, I that's a diversion from where we're going
to go with this conversation. But I did wonder whether
that's sort of undermined Adrian or by having back in
his day by having the dual remitt and that was
the government's decision, wasn't It wasn't the remit went from
being just inflation to also having controlled unemployment and far
as from far as, what I have been told by
people who know more about it than me is that
those two things are completely at odds with each other.
Speaker 3 (12:36):
They yeah, or they sort of are one as the
inverse of the other. What we don't know with Adrian
Or is what I was going to say. Conversations probably
shouting matches went on the background between you know, the
Minister of Finance whoever it was, from time to time
and and Adrian Or that there will have been disagreements,
and that may well have been one of the disagreements.
(12:59):
Could even be the straw that broke the camel's back.
Speaker 2 (13:02):
I think I saw Michael Riddell's comments where he said
he's a former Reserve Bank economist, said that the officials
clearly had to go outside the Reserve Bank after all
that chaos, so they probably weren't going to be hiring
from within. But he's also said it's unfortunate they're going
overseas to someone who is really no exposure in New Zealand.
(13:26):
In the past. No networks here. But this is an
interesting comment, he said. But she is said she could
be excellent. Time will tell, but she is someone who
doesn't have the instinctive understanding of the New Zealand economy
and its challenges. Instinct sounds like, I don't know there's
instinct play much of a role in stuff when you're
(13:48):
responding empirically to data.
Speaker 3 (13:51):
As soon as you used the word, I thought, I
hope not, you know, because I really hope instinct doesn't
have a great role. I have my own I mean,
the Reserve Bank gets all the official data and they
and they look at that. They then have some real
time data, and you'd hope that would be the case,
because if you look at the latest GEDDP that came out,
(14:13):
that was the end of the June quarter. Came out
a few days ago, so it's basically three months after
the end of the period. We're very very slow at
getting that official data out, but they have some real
time data, like you know, trucks, you know, people are
standing up on motorways and countering and them the trucks
going by, and the amount of traffic and that sort
(14:35):
of thing. I have Tony and Tony is my judge
of how the economy's doing. Tony's a he owns a
smallsh business here in christ Church, not as real name,
and think of them as selling sparport. It's not, but
think of like that. So it's a it's a big
(14:55):
ticket item, but it's discretionary. You can buy it or not,
you can put it off for aver And for forty
years I've known Tony and I've known how his business
is doing. And you know, almost on a weekly basis.
Speaker 2 (15:13):
He's your litmus test on how things are going.
Speaker 3 (15:16):
Has been just so accurate over time. Now you know,
nine percent drop and GDP over that during quarter I
could have told Treasury that because Tony was doing really badly.
The really interesting point over is over the last two
to three weeks, Tony's got a business that's going well,
(15:41):
and it maybe and I'll bet Chris lux and it's
got his fingers crossed, but it just may be that
the economy is turning for the better.
Speaker 2 (15:51):
So instead of having a thorough analysis by Treasury on
all the FATS facts and figures, we can just give
to the Martin Tony index and how's he doing, and
you can make a call. Actually it will be interesting
to see how that number does turn around because it
was in the first half of the year. I know
we've slightly shifted sideways in the conversation, but it's all
(16:11):
part of the dialog. By the way, if you want
to give us a call and join us and with
your reckons on the Reserve Bank appointment, is it something
that you're I mean, what's you read on it? Do
you think the words that she's going to be dubvish
that we might see a slightly bigger drop in interest rates?
I would tend to think, by the way, just before
were on that, while we're on that is that we'll everything.
(16:33):
The next shift will be a gentle one, whatever it is,
it won't be anything more than point two five percent,
because I reckon, the new player to the job will
not want to have a major shift under her watch
straight away, would be my guess. But the other one
is the Tony Index. Do you I mean, because that
that GDP thing as we were talking about Martin, it
(16:53):
was from the first six months, you know, the first
part of the year. Sorry, when the tariffs were flying around.
I remember watching the you know, the the American shop
stock market or the shock market, should I say, because
really had some bad moments and I'm wondering if you know,
there's a bit of a delayed reaction, the good news
might still be coming hopefully.
Speaker 3 (17:13):
Yes, for Tony's I wouldn't say Tony's business is not booming,
but it's certainly a lot better than what it was
three months ago. Now, don't forget the rbn Z have
quite a lot of Tonies. You know, they've probably got
you know, a couple of hundred small and medium and
even large sized businesses that they pick up the phone
(17:34):
to every now and again say how's it going. So
that's their sort of real time stuff. But they also
and they use the real time stuff because they have
to predict the future with some changes of interest rates,
whether it's up or down. They don't change the economy quickly.
It's fairly slow for it all come through, so they
(17:55):
need some information in real time and they'll have you know,
the lot the counter trucks and cars and so on,
but they will have some businesses that they call to
and try to get a bit of the field for it.
Speaker 2 (18:07):
You've got a lot of people curious about what business
Tony is actually in. Tony's real names and what's he
selling because if you've sid spar polls, I don't know anyway.
We don't got to get sidetracked by that not telling no, no, no, no,
not fair enough. And even if you told me off air,
I'd keep it to myself, which you're welcome to do.
It is now I'm dying to know. It's twenty five
(18:29):
past five, though, what are your reckons on the new
Reserve Bank governor? They're from someone from outside the country.
Does it bother you or do you just think look,
truckload of people wanted the job she was you know,
the appointment was made because they were impressed with her
as the top contender. I'm quite relaxed about it. But
do you worry that she's from somewhere like Sweden or
(18:49):
do you think hell Sweden? Aren't we always touting Sweden, Finland,
Norway's being fantastic? Maybe we should be seizing the opportunity
with open arms to get a bit of influence from
that side of the world. Your reckons on eight hundred
and eighty ten eighty nine two them with Martin Howes.
It's twenty five and a half past five. Guess, welcome
(19:17):
back to Smart Money. I'm with Martin Hors, financial author
of about. Oh hang on a minute, how many boxs
is it? Nineteen? No?
Speaker 3 (19:23):
Twenty four?
Speaker 2 (19:24):
Oh? Okay, sorry, twenty four? And the last one you've
written one recently has recently released. What's it called again? Yeah?
Speaker 3 (19:34):
That was retirement Ready. There we go as sort of
a personal thing about what I did myself to keep
myself retirement ready. Not that I'm retiring.
Speaker 2 (19:44):
No. Indeed, I sometimes think retirement ready is from many
people as well, don't retire and whatever. I don't wonder
how many people actually do retire sixty five, But that's
not part of the conversation we're talking about. The Reserve
Bank governor has been announced. She's from Sweden. She was
the successful candidate from I think more than one hundred people.
I think I didn't quite get. I don't quite remember
(20:06):
the number that Nicola Willis mentioned. But anyway, I'm quite
relaxed about It doesn't matter if she's from somewhere else.
What do you reckon? I eight hundred eighty ten eighty Tom, Hello.
Speaker 4 (20:15):
Hi you guys, gentlemen. Hey, I don't care as long
as the lady does a good job, and it wouldn't
be hard to do better than the last pilla. So
I'm all in on this one a low bar. Yeah, yeah,
that was pathetic. What went on never to be repeated again,
I hope. What I would like to know, though, is
(20:36):
the amount of staff that that bank acquired while that
man was in power or at the helm, from three
hundred and forty nine to over six hundred and sixty
in his tenure. Do you think that my be clipped
and sent back to what it might have been more
manageable or what it was in the old days, and
(20:56):
the old days was only over a five year period.
Speaker 2 (20:59):
Well, that's an interesting one, Matt. What do you think?
Speaker 3 (21:01):
Yes, Yes, So I did see that figure two tom somewhere,
and I was very surprised that. My first thought was
has their remit expanded a bit? You know, did they
need to take on staff because they were doing something
else in there? Because we do focus probably overly much
on their role as being the o CR. They do,
they do do, as I said before, other stuff, but
(21:24):
the simple answers that I don't know, And it's very
hard from an outsider looking in to a fairly opaque
sort of organization.
Speaker 2 (21:35):
Yeah, do you think the fact that she's from outside
is that I wouldn't get people to hold their breath
about staff cuts because she's not going to go in
there waving a big stick.
Speaker 3 (21:44):
Is she wouldn't. We wouldn't. Wouldn't They wouldn't think No,
well maybe, but you wouldn't think you'd you'd be very carefull.
I would be very careful. Sometimes the opportunity is to
make the big changes right at the beginning, when you were,
when you and such like. One of the things about
(22:08):
this that we didn't talk about before was that financial
markets are happy with the appointment. They never bunched, And
I think that's a really good sign. Financial markets or
usually one of the most sensitive bell withs around around
the place. You can tell how good or how bad
things are by what how financial markets, especially the bond market,
(22:31):
reacts to these kinds of things.
Speaker 2 (22:36):
Yeah, actually actually should be to be also fair. On
the comments that I saw reported from Michael Roddell, he
said that, you know, he said it's unfortunate that they
went overseas, But then he also does say she could
prove to be an excellent call. Time will tell, and
she yes, she did beat out three hundred other candidates.
She's got a PhD in economics from Stockholm School of
Economics and was previously the Group Chief Group Chief Economist
(23:00):
swed Bank Sweede Banker leading Swedish commercial bank, also to
Street Finance the World Bank as an academic economist in
the United States. Sounds all right to meet, doesn't it, Martin?
Speaker 3 (23:13):
Yeah, well, and now with the job she's leaving his
first step Puty governor of Reichs Bank. So the sweet
the Swedish equivalent of the RB and Z. She was
the first steep pity. So I mean she said she's
done a few things, and she's done them well to
(23:33):
get to that sort of position. My guess is she'll
do two terms, yeah, maybe one term, maybe a five
year terms, and in ten years she'll go as number
one somewhere somewhere else. I should say she's number one here.
Speaker 2 (23:49):
Well, unless she falls in love with the New Zealand,
of course, But.
Speaker 3 (23:52):
Yeah, well that's right there you go.
Speaker 2 (23:54):
Hey, Now, by the way, give us a call with
your reckons on it as well. Does it bother you?
I mean, it's not, to be honest, I don't think
it's a big deal and it's not necessarily going to
get the phones ringing. But I thought we should at
least discuss it with Martin while we well, we had
the opportunity. But the other thing Martin that I want
to have a chat about is with the I've noticed
a little bit of a trend just on this show
(24:16):
that we can collective with the conversations we have you know,
have had in the past around property and conversations around
money in general and investments in the share market. And
one of the questions we want to look at is,
you know, there a lot of people who have investment properties,
but making that decision when something's not working out for
you or any investment, and when to move on because
(24:39):
it's one thing to invest in a particular product, or
maybe it's some sort of fund in the share market,
or you've got an investment property. Is it often a
challenge for investors to recognize when something's not really doing
particularly well because I would sometimes think that you've been thinking, oh,
(25:01):
I know, it's not doing great at the moment, but
probably if I sell my shares, now, if I sell
the property, all of a sudden, even that's going to go.
And that's just because just despite me. Is that a
big challenge for investors And I.
Speaker 3 (25:11):
Started writing an article in the middle of the week
on exactly this thing. I finished it this afternoon. It's
the sunk sunk cost fallacy, and the sunk cost fallacy
is that we tend to focus hugely on costs that
have been sunk that we can't recover. We're never going
to be able to recover. We're never going to get
(25:33):
that money back, and therefore we have to take a
very deep breath, admit that we're wrong, take the loss
on the chin, crystallize the loss by selling and moving
the money into somewhere, somewhere that's better. Now, I've got
a bit of a theory that in fact, it's more
than a bit of a theory, and it's got a
(25:55):
bit of a little bit of research and reason behind it.
I think that the property market over the next fifty
years will not be as good as over the last
fifty years. I think back to property you know, when
I was I first became involved in fifty years ago,
and it's been a very very sweet ride for my generation.
(26:19):
I don't think it will be anything like that in future,
either for investors or or for home ownus. And I
can say that was a good deal of confidence because
I'm pretty sure I won't be here and fifty years
for you or anybody else to say, well, you've got
that one wrong. But I think that's just a complete
(26:44):
change going on at a political level. And residential property
investment is housing and housing is a political a public
policy issue. It's a political issue, and so it should
be because people need to be housed. And we now
have basically consensus between our two main parties. They were
(27:04):
in National, both of whom think that housing prices should
at least remain stable, if not, in the case of
Cross Cross Bishop, that prices should actually fall. Now they
have different ways of going about National is looking at
it supply much more than and Labor has worked on
(27:29):
the on the tech system and uh and where the
infrastrate should be deductible and so forth. But they may
have different methods of going about it. But there is
now a political consensus in this country that house prices
are too high. They need to stop going up like that.
We need to reframe how we think of housing, that
(27:51):
it's not something that we speculate on, but in fact
it's something that keeps the weather out somewhere where we
sleep and live and so forth, and we need to
think about housing in that respect. That in that respect,
and that consensus I think will be important because politicians
usually do get their way.
Speaker 2 (28:10):
Yeah, I mean, I get well, you've actually mentioned something
sort of and you've alluded to something in a way
which is also the while it's the political will or
it's part of the political discussion that you know, it
shouldn't be the easy investment that has in the past been.
But the other thing around the politics is there's so
much uncertainty with regards to how investors are or will
(28:34):
be treated in the future that I'm not sure does
anything positive for the idea of property as a great
investment at the moment. So, I mean there'll be investors
who would be worried that suddenly the ability to deduct
interest or suddenly removed by the next government. Yes, that's right,
which actually might actually work against a dull market because
(28:57):
a whole lot of it. If you can't deduct, there's
a lack of investment the property market. You might end
up with more shortages, which you are don't know how it works,
but it's.
Speaker 3 (29:10):
Well, that's that's possible. Although I think a lot of
the shortage is driven by the building industry, and the
council's releasing land for our housing more than that property.
All markets actually hate uncertainty. And if you were sitting
here now, you'd say, well, I don't want to take
(29:31):
a bet, a multi hundred thousand dollars bet on whether
the housing market is going to go up or it's
going to go down. And then you cast your eye
around the world and see such fantastic returns from technology
companies in particular, but not solely, and you think, well,
that might be a better place for us to have
our money rather than committing to one asset for several
(29:56):
hundred thousand dollars if not more than that, and something
that you can't get into and out of quickly and easily.
Speaker 2 (30:05):
And we'll dig into this in just a minute. We'll
take a break. But I mean, I guess the question is,
you know, when when do people have to cut their losses?
Because if you're saying, if you're an investor and you're
brought into any investment, but let's say property, and it
hasn't worked out for you, I mean, how much does
that contribute to people just hanging on to something when
really they just need to work out it's time to
(30:27):
you know, bite the bullet, crystallize the loss and move on.
Speaker 3 (30:31):
Yes, well, you know for a lot of people that
would be the case. In my view. Now, I may
be completely long and maybe a huge bounce on the
property market, you know, off got sales like it has
done for the last fifty years. But I don't think so.
I think there wud be political ructions if we started
(30:52):
getting some of the house price growth that we've had
in the last even the last decade or two.
Speaker 2 (30:58):
Yeah, we'd love your cause on that. Actually, so Martin
reckons that the next fifty years are going to see
nothing like the games the pre fifty years have seen.
But also if you are you hanging on to an
investment because simply it costs you so much and maybe
it's not doing so well, you're thinking I'll just hang on,
hang on, hang on, Because that has been a lot
of the discussion and over the last couple of years,
(31:19):
is even through the tough times, just hang on, It'll
turn around. But does there come a point where you
have to go, well, sorry, I've got to get out.
Give us a call on that if you want our
recons or to give yours eight one hundred and eighty
ten and eighty text nine two nine two it's nineteen
to say yes news talks the'd be worth Martin Hawes
on that theme of cashing up your investments. Have you
ever crystallized a loss yourself, Martin, where you've just had
(31:41):
to go, oh god, it's not going to get any better.
I just have to sell and move on.
Speaker 3 (31:45):
Yeah. Often actually, but it's it's another parts of life
as well. One of the things where you see the
sunk cost fallacy is when you start to read a
book and you get a third of the way through
and you say, well, this is a dog I reading too,
but you keep reading because you have to finish up
the because you've sunk all that time into it. Eli,
(32:08):
and it's it's exactly it's exactly the same thing. But
you know, often I've bought something that you know, for
ten dollars, I share them talking about it, and you
know it goes down to seven dollars. I've trained myself
now to be ruthless and to say, have another look
at this is the investment thesis still there. If it's
still there, then I should buy some more because there
(32:30):
seven dollars now, rather than if they were good bye.
At ten dollars, then they must be really good bye
at seven. But if the thesis isn't there, then get
rid of it and get your money working on something else.
You know, we put stuff off all the time. We
go into the wrong key, we save for fund and
we we we carry on with it, hoping against hope.
(32:53):
But we really have to make decisions by looking at
the future rather than looking back and considering the past.
Speaker 2 (33:00):
Yeah. Actually, funny enough, I just changed my key we
save some funder after a conversation with one of our guests,
just went to a more aggressive fund and it kept
on telling me this is not recommended for you, and
I went, right, stuff it. I'm doing it, and it's
so far, so good. Actually I looked at the balance.
I went, oh, hell yeah, it's more than I've seen
in the past couple of years.
Speaker 3 (33:19):
Tell the robot to mind its own business and get
on with it.
Speaker 2 (33:23):
And conservative advice. Right, let's take some calls, Nigel High.
Speaker 5 (33:28):
I just wondered if that money doesn't that has gone
into residential property over the last fifty years, it doesn't
go into residential property, where does it go? Do you
think people will want to put it into bricks and
more to maybe commercial property or is shear market.
Speaker 3 (33:46):
Yeah, commercial property is pretty complicated for a lot of people,
and to get into the better part of commercial property
costs a lot of money, many millions. So I don't
think a little bit of it might find its way
into commercial property, but not an awful lot. I tend
to think it would go into sheer into businesses, and
(34:10):
that's both here at home, but also you know, the
bulk of my portfolio is actually an international shares and
largely what I'm playing there is the whole technology revolution
that's going on. I wouldn't say right around the world,
but in places like Europe and certainly the US. So
(34:30):
into businesses well, I think would be my aunt's and Nigel.
Speaker 5 (34:34):
But my property syndicates, you know, the big commercial property syndicators.
That's an easier way into commercial property.
Speaker 3 (34:42):
Yes it is, And in an easier way still are
the listed property companies. These companies that are listed on
the Sheer market. Just be a wee bit careful with
the syndicates because there's no liquidity there. You can't necessarily
get your money back out or not for some time. Anyway,
if if things change and you do and you do
(35:04):
want it back. So but yeah, synder cips provide a
reasonable a reasonable exposure to commercial property. Listed property I
think provides a better exposure to commercial property, and and Nigel,
I love commercial property. It would be my well, it's
(35:24):
probably not my favorite asset class anymore. I think technology
shares would be my favorite set class now. But I've
always been able to say up until today that commercial
property is my favorite sset class. But I don't do
it by buying individual properties myself. I do it by
buying buying property companies on that are listed on the
(35:49):
Sheer market, not just the New Zealand but also Australia,
the US, property, the UK.
Speaker 2 (35:55):
Yeah, okay, thanks Nigel chess matey just on that text
here says okay, so when you've cut loose, you know,
your investment, when you put your money where people putting
their money, if they've cashed up an investment, so for instance,
in a property, because that's one of the things I
wanted to just touch on because the cash rate is
going down. So for savers if they've just got their
(36:17):
money in the bank or in some sort of interest
related investment, they're not going anywhere flash are they? How
do you sort of find that happy balance between getting
some sort of guaranteed rate or return, but nothing that's
too pathetic.
Speaker 3 (36:34):
There's no use such thing as guarantee you greater. They're
a safer some are safe for the than others. Mostly
this is about time, not completely, but mostly it's about time.
If you've got money, Let's say you've sold a house
or something, and it might be six months before you
buy another one, you would you'd put your money in
(36:59):
the bank. And by the bank, I mean one of
the four majors. They've got the best ratings. You put
your money with one of them for that six months.
If you had money that you weren't going to want,
say within five years or ten years, then I'd be
arguing for a fierce wag of shares. That may be
(37:20):
a diversified portfolio with some and fixed interestal bonds and
some in cash, and some enlisted property and so forth,
but the bulk of it for say, say ten year money,
just to be safe, money that you're pretty confident, you
are very confident that you wouldn't want want in ten years.
(37:42):
I think that should go in shares. Yeah, okay, right,
that gives you the best return. It's just for evolve volatile.
Speaker 2 (37:49):
Not specific financial advice, but I'm magin. I wish that
i'd put my money with my mouth. Is when I saw,
you know, when Trump was being all sort of mercurial
and the bottom fell out of the S and P,
I thought to myself, that's probably quite a good time
to buy. I should listen to myself.
Speaker 3 (38:05):
Yes, yes, the number of times time I've done that,
and I thought the same there. In fact, I'm sounded
like a conspiracy theorist and I'm not. But you know,
I wondered whether Trump engineered that his mates. Now plenty
of people are saying that.
Speaker 2 (38:24):
Well, he's done pretty well out of his own sort of.
I think he's got his own bitcoin and all sorts
of funds as quite well out of so anyway, yes, right,
we'll be back in just a moment. Though it is
nine minutes to six news talks. He'd be news talk, said,
be with Martin, whorees untim beverage, just one. Actually, I
thought just to finish with only a couple of minutes there, Martin,
(38:44):
time flies when you're having fun. You talked about when
you talk. Now, Pete, this is radio, so you don't
get to see Martin's expressions. When Martin talked about technology stocks,
how he quite likes them, you were grinning like a
cheshire cat. You're looking quite quite happy. How do you
go about choosing technology stocks? Because it'd be great ideas
(39:06):
and there'll be absolute dogs. How do you There'll be
a lot of people who are peaked by that, and
it curis to know how do they look at getting
into that side of things?
Speaker 3 (39:16):
Tim The easy answer is I don't. I have a
large finance house managing my money for me. Now. I
made a decision four or five years ago that, after
forty odd years of managing my own money, I was
going to let somebody else do it for me. So
I don't have that pescial problem to worry about whether
(39:38):
I'll buy Apple or whether I'll buy Microsoft.
Speaker 2 (39:41):
Okay, So then it gets down to what I guess
would be making a decision over the risk profile of
their investments, isn't it? So how do you make your
decision about that?
Speaker 3 (39:51):
I fill in one of their forms and they tell
me what that, what that, Whether that has means a
balanced investor, a growth investor, and so on. But I
have written the questions on the question. Is that throw
up what sort of investor you are, and so I
can I can tell pretty well straight away, and it's
(40:12):
made up of your age or what's a nice way
of saying, how long are you investing? For your financial capacity,
what sort of state are you able to stand a shock?
And your psychological profile as your other one.
Speaker 2 (40:28):
Because I mean, while you are sort of around the
retirement age sort of thing, and we've only got forty
seconds left. But of course, if people can't afford to
lose anything, they are low risk, whereas if you have
been successful in investing, you might still have a higher
risk sort of tolerance. When even though you're you want
to you know you're close, you are at that retirement age.
Speaker 3 (40:48):
You could have a higher tolerance. Not I wouldn't say high, maybe,
but high Okay.
Speaker 2 (40:54):
So Martin's on the growth profile, I'd say anyway, have
maretn't great to talk to you ready? If people want
your book, isn't it Retirement Reaaldly by Martin res yea
and think for that? Okay, cheers, bye bye, and we'll
be back same time next week. Thanks to Tyre Award,
my producer and Sunday Out Sixers next. Enjoy the rest
of your evening. We'll catch you again soon.
Speaker 5 (41:17):
Hullo need it is a little
Speaker 1 (41:22):
For more from the Weekend Collective, Listen live to news
talks it'd be weekends from three pm, or follow the
podcast on iHeartRadio.
You're listening to the Weekend Collective podcast from News Talks
at B.
Speaker 2 (00:41):
And welcome and welcome back Weekend Collective. I'm Tim Beverage
and we're inviting your calls for this hour and participation
on one eighty ten eighty or in text nine two nine.
So I do mention my email Tim bet News Talk
said be dot ca Z. But that's only if you're
not in a hurry because I haven't opened email yet. Anyway, Look,
this hour is welcome to smart money. So look that
(01:02):
if I had been in charge of the unvail of
the new Reserve Bank governor, I would have had her
walk into money, money, money by Abbott because she's Swedish.
It's about money and that's pretty much. It's a good
little tune anyway. So we've got a new governor for
the Reserve Bank, all the way from Sweden, doctor Arna
Breman is. She has received a lot of criticism from
(01:23):
economists who find themselves concerned that someone with such little
knowledge of New Zealand economy will hold such a high
stakes positioner. Anyway, but how much will her appointment really
impact the everyday person. We're going to dig into that,
and you can to give us your calls on eight
hundred and eighty ten eighty does it? Does it? Bobby?
I can't, I have to. I'll be honest with you
(01:45):
just quickly before I introduce my guest. I don't care
as long as she does a good job. I mean,
money is money, isn't it. Do we need to understand
a particular economy or do we just need to understand economics?
And in fact it's a committee decision anyway when it
comes to the cash rate. So but you can climb
in any time and give us your recons on what
you think about doctor Arna Breman, the announcement from apparently
(02:08):
I think hundreds of candidates, so anyway, and to discuss
that and other things, because we're also going to look
at not just you know, the news about the Reserve Bank,
which we have got excited about because I think Adrian
Or sort of did stick his head above the parapet
quite a bit. Maybe it's the sort of appointment where
if we hadn't had an Adrian Or we wouldn't care.
It'd be like ore those new Reserve Bank governor bingo,
(02:31):
who cares? But anyway, we're also going to a chat
about you know, when you should actually let that investment
go one that you may be quite like toy. You
think this share has done really well. Or maybe you've
got that investment property which is done all right, but
all of a sudden, you know what, it's hard getting tenants.
Maybe you're not getting the wrench. Want when is it
time to give up that investment and move your money elsewhere?
(02:52):
I eight one hundred and eighty ten eighty and to
discuss it. I've taken a long time to introduce him,
but he needs no introduction. Really, He's written a truckload
of books. He's been a regular guest on nawshown is
Martin RS. Hello Martin?
Speaker 3 (03:03):
How are you? Yeah? Come, how are you?
Speaker 2 (03:06):
I'm glad you didn't know. I did not off during
that time. I kept you waiting, didn't I? Hey? I
mean I know that you're not you're a finance writer
and financial author, and you know not so much an economist.
But do you have a take on the Reserve Bank governor?
That does? Because I wonder if who cares something that
(03:30):
she's you know, she knows what she's talking about. She
must have beaten off a lot of people to get
that position. Oops, we've just lost you for a second.
Hang on a second, we've just we've just lost you
on the feed, Martin's I can't hear you yet, so
I might just check that you haven't muted yourself. So, yeah,
(03:50):
we do have a little bit of a technical issue.
We're just trying to fix it right now. But we
want your calls as well on eight hundred and eighty
ten eighty while we're try and sort that connection with
Martin out and no, still not coming through. So there's
something being muted somewhere anyway. So I'll just give you
my take on it. I I've got it. I didn't
(04:10):
really read a lot into the appointment of the Reserve
Bank governor. That's someone from Sweden. She's looking forward to
getting around and meeting us and looking at meeting a
lot of New Zealanders and getting a feel for things.
But what do you reckon? Does it bother you that
she's from Sweden? Some economists have criticized the appointment, but
(04:30):
I don't know. I just tend to have a bit
more faith that we've chosen someone who interviewed very well,
and I think we've got them. What happened there, Martin?
What did you do?
Speaker 3 (04:40):
I don't. I don't know. I don't think I did anything.
I just unplugged it and pushed the club back and
it worked. But Bingo didn't see it didn't seem to
be out. Okay, have in doubt turn the thing off
and then turn it back on, and there we go.
She works, and you were doing a great job. What's
the word extemporizing?
Speaker 2 (04:59):
Yeah, something I was busting, yes, but yeah, what do
you think you ever take on the appointment? And really
we shouldn't. It should be almost irrelevant to the average
New Zealander, shouldn't it.
Speaker 3 (05:11):
No, No, no, no, I don't think that it's a
really really big appointment. That's a really important appointment. I
guess a couple of things. First of all, she's got
a pronounceable name, you know, I had. I looked it
up when she was first appointed and she was Swedish,
and I thought that it will be a name that
we can't get our hang around. But the second thing
(05:33):
is that I don't forget and that that would have
radio people especially.
Speaker 2 (05:39):
It was like Aneath from the Ever if it was
no it's at.
Speaker 3 (05:44):
Yeah, that's right, the whole Scandinavian thing. Uh, don't forget
she only has one vote on the Monetary Policy Committee,
so you know it's not all over her. So people
are saying, look, she doesn't have a good feel for
the New Zealand economy and so forth. She won't. She
probably will hardly know a thing about at the moment.
(06:06):
She'll be reading like anything. I'm quite sure she would.
And you know, ultimately they will make their decisions on
the basis of the research that's put in front of
front of and my guess is in a lot of
cases the ball might be close to the line, but
it will be it will be in one on one
(06:26):
side of the court or the other. Most of the
decisions they make will be reasonably straightforward. She gets the
casting vote. I think I've got this right. She gets
the casting vote if they cannot, if the other members
cannot come to consensus. She's got a great track record.
(06:47):
She was her first deputy of the Swedish Reserve Bank,
the reichs Bank. I think it's pronounced. She sounds like
a couple of people making comments. Now where these came from,
it would be hard to tell. Is that she's first
quite dove. That means that she would have a bias
(07:09):
towards putting interest rates down, not hiking them too fast,
and she might be a little bit more transparent than
has been the case in the past. But where people
are getting this stuff from, you know, and I don't
have any any particular insight, but it's a really important role,
(07:30):
you know. I mean, I think back to the I
think he was the first government was Don Brash and
he rather made his name in economics and then pop
politics as the bank governor. And it's important because it's
really is the deciding what infistrates are going to be
(07:52):
an interestrates push on sort of all parts of the economy.
There're aimed at lowering prices. We'd probably get Laura exchange
rates if we push infestrates down and we're trying to
lower inflation expectations, but were inflation rates does make a
big difference to a huge amount of things, not the
(08:14):
least of which, in fact by far the greatest one
of which is inflation.
Speaker 2 (08:19):
How much what I mean, what is her role because
as you say, she has a casting vote, there's a
committee who make the call on the cash rate. And
that's the thing that you know, that's the thing that
most New Zealanders, yeah, or respond to whether they be
investors or borrowers, but especially especially borrowers.
Speaker 3 (08:37):
That's a that's a really good question. I did think
about that, and I didn't have time this afternoon to
look it up, but I see the Reserve Bank has
other roles. For example, it regulates life insurance companies, and
she would probably act as a CEO, so you know,
(09:02):
she will make she will have a role in appointments
of senior staff and that sort of thing. They have
several hundred people who work in there. In Inflation is
not their only remap they do do. They do do
other things. And we've had as a bank governor, not
(09:22):
Christian hawks Peatment, the one before Adrian or who who
you mentioned, you know, who's been quite activist and who's
been quite out there. My guess is they were looking
for somebody who would settle things down. Just look, let's
make this a lot calmer. And she may even be
trying to stay out of the out of publicity as
(09:45):
far as she can. She'll never be able to do
that completely because it's too big a role and it's
always going to she's always going to have the public
eye on her.
Speaker 2 (09:53):
Yeah, it's interesting. There's some comment I've been reading about it.
In fact, one of the first things I've read about
it was talking about that she doesn't have a particularly
high bar to clear because of the chaos of the
of the end of the adrian Ors first adrian Os term,
where you know, we didn't have any transparency as to
and then we found out more and more about what
(10:14):
happened and what led to his departure, and everyone was
we had Quigley resigned, who was the chair. Nicol Willis
was talking about the process and so the bars, I mean,
probably she keeps her head down and oh, well she's
not going to keep her head down because she's going
to get around news land, doesn't she.
Speaker 3 (10:34):
But well she'll have her and she'll be doing big
news conferences when she's announcing OCRs and such like. But
those who are saying somebody from the same jurisdiction or
who's lived in the same economy can't do it. You
need to look at Mark Conney. Mark Corney was a
Canadian as a Canadian, and he's he's the Prime Minister
(10:57):
of Canada, isn't he Prime minister? Is he is now?
But before that he was the he was what do
they call it the chair? I don't think it's the chairman,
the Governor of the Bank of England. Effectively her Arna's
role in the UK is right now is the same.
(11:18):
And now he's gone back to Canada and become Prime Minister,
and he did a pretty reasonable job as far as
I could see in the UK, and we've now got
a remap for hours of bank where inflation is the
only thing that matters.
Speaker 2 (11:35):
There was a jewelry on an employment which was counted
as the whole inflation, which was problematic anyway.
Speaker 3 (11:42):
Yes, and I'm always suspicious of split objectives. You know,
when you've got more than one objective, one usually has
to take precedence over the other. Either that or we
get neither of them. And those of us who lived
through the seventies, eighties and into the nineties and suffered
terribly high inflation do not want to go back to that.
(12:05):
And the idea that we will target or the Reserve
Bank will target simply inflation, I think is a very
good one.
Speaker 2 (12:14):
In fact, I that's a diversion from where we're going
to go with this conversation. But I did wonder whether
that's sort of undermined Adrian or by having back in
his day by having the dual remitt and that was
the government's decision, wasn't It wasn't the remit went from
being just inflation to also having controlled unemployment and far
as from far as, what I have been told by
people who know more about it than me is that
those two things are completely at odds with each other.
Speaker 3 (12:36):
They yeah, or they sort of are one as the
inverse of the other. What we don't know with Adrian
Or is what I was going to say. Conversations probably
shouting matches went on the background between you know, the
Minister of Finance whoever it was, from time to time
and and Adrian Or that there will have been disagreements,
and that may well have been one of the disagreements.
(12:59):
Could even be the straw that broke the camel's back.
Speaker 2 (13:02):
I think I saw Michael Riddell's comments where he said
he's a former Reserve Bank economist, said that the officials
clearly had to go outside the Reserve Bank after all
that chaos, so they probably weren't going to be hiring
from within. But he's also said it's unfortunate they're going
overseas to someone who is really no exposure in New Zealand.
(13:26):
In the past. No networks here. But this is an
interesting comment, he said. But she is said she could
be excellent. Time will tell, but she is someone who
doesn't have the instinctive understanding of the New Zealand economy
and its challenges. Instinct sounds like, I don't know there's
instinct play much of a role in stuff when you're
(13:48):
responding empirically to data.
Speaker 3 (13:51):
As soon as you used the word, I thought, I
hope not, you know, because I really hope instinct doesn't
have a great role. I have my own I mean,
the Reserve Bank gets all the official data and they
and they look at that. They then have some real
time data, and you'd hope that would be the case,
because if you look at the latest GEDDP that came out,
(14:13):
that was the end of the June quarter. Came out
a few days ago, so it's basically three months after
the end of the period. We're very very slow at
getting that official data out, but they have some real
time data, like you know, trucks, you know, people are
standing up on motorways and countering and them the trucks
going by, and the amount of traffic and that sort
(14:35):
of thing. I have Tony and Tony is my judge
of how the economy's doing. Tony's a he owns a
smallsh business here in christ Church, not as real name,
and think of them as selling sparport. It's not, but
think of like that. So it's a it's a big
(14:55):
ticket item, but it's discretionary. You can buy it or not,
you can put it off for aver And for forty
years I've known Tony and I've known how his business
is doing. And you know, almost on a weekly basis.
Speaker 2 (15:13):
He's your litmus test on how things are going.
Speaker 3 (15:16):
Has been just so accurate over time. Now you know,
nine percent drop and GDP over that during quarter I
could have told Treasury that because Tony was doing really badly.
The really interesting point over is over the last two
to three weeks, Tony's got a business that's going well,
(15:41):
and it maybe and I'll bet Chris lux and it's
got his fingers crossed, but it just may be that
the economy is turning for the better.
Speaker 2 (15:51):
So instead of having a thorough analysis by Treasury on
all the FATS facts and figures, we can just give
to the Martin Tony index and how's he doing, and
you can make a call. Actually it will be interesting
to see how that number does turn around because it
was in the first half of the year. I know
we've slightly shifted sideways in the conversation, but it's all
(16:11):
part of the dialog. By the way, if you want
to give us a call and join us and with
your reckons on the Reserve Bank appointment, is it something
that you're I mean, what's you read on it? Do
you think the words that she's going to be dubvish
that we might see a slightly bigger drop in interest rates?
I would tend to think, by the way, just before
were on that, while we're on that is that we'll everything.
(16:33):
The next shift will be a gentle one, whatever it is,
it won't be anything more than point two five percent,
because I reckon, the new player to the job will
not want to have a major shift under her watch
straight away, would be my guess. But the other one
is the Tony Index. Do you I mean, because that
that GDP thing as we were talking about Martin, it
(16:53):
was from the first six months, you know, the first
part of the year. Sorry, when the tariffs were flying around.
I remember watching the you know, the the American shop
stock market or the shock market, should I say, because
really had some bad moments and I'm wondering if you know,
there's a bit of a delayed reaction, the good news
might still be coming hopefully.
Speaker 3 (17:13):
Yes, for Tony's I wouldn't say Tony's business is not booming,
but it's certainly a lot better than what it was
three months ago. Now, don't forget the rbn Z have
quite a lot of Tonies. You know, they've probably got
you know, a couple of hundred small and medium and
even large sized businesses that they pick up the phone
(17:34):
to every now and again say how's it going. So
that's their sort of real time stuff. But they also
and they use the real time stuff because they have
to predict the future with some changes of interest rates,
whether it's up or down. They don't change the economy quickly.
It's fairly slow for it all come through, so they
(17:55):
need some information in real time and they'll have you know,
the lot the counter trucks and cars and so on,
but they will have some businesses that they call to
and try to get a bit of the field for it.
Speaker 2 (18:07):
You've got a lot of people curious about what business
Tony is actually in. Tony's real names and what's he
selling because if you've sid spar polls, I don't know anyway.
We don't got to get sidetracked by that not telling no, no, no, no,
not fair enough. And even if you told me off air,
I'd keep it to myself, which you're welcome to do.
It is now I'm dying to know. It's twenty five
(18:29):
past five, though, what are your reckons on the new
Reserve Bank governor? They're from someone from outside the country.
Does it bother you or do you just think look,
truckload of people wanted the job she was you know,
the appointment was made because they were impressed with her
as the top contender. I'm quite relaxed about it. But
do you worry that she's from somewhere like Sweden or
(18:49):
do you think hell Sweden? Aren't we always touting Sweden, Finland,
Norway's being fantastic? Maybe we should be seizing the opportunity
with open arms to get a bit of influence from
that side of the world. Your reckons on eight hundred
and eighty ten eighty nine two them with Martin Howes.
It's twenty five and a half past five. Guess, welcome
(19:17):
back to Smart Money. I'm with Martin Hors, financial author
of about. Oh hang on a minute, how many boxs
is it? Nineteen? No?
Speaker 3 (19:23):
Twenty four?
Speaker 2 (19:24):
Oh? Okay, sorry, twenty four? And the last one you've
written one recently has recently released. What's it called again? Yeah?
Speaker 3 (19:34):
That was retirement Ready. There we go as sort of
a personal thing about what I did myself to keep
myself retirement ready. Not that I'm retiring.
Speaker 2 (19:44):
No. Indeed, I sometimes think retirement ready is from many
people as well, don't retire and whatever. I don't wonder
how many people actually do retire sixty five, But that's
not part of the conversation we're talking about. The Reserve
Bank governor has been announced. She's from Sweden. She was
the successful candidate from I think more than one hundred people.
I think I didn't quite get. I don't quite remember
(20:06):
the number that Nicola Willis mentioned. But anyway, I'm quite
relaxed about It doesn't matter if she's from somewhere else.
What do you reckon? I eight hundred eighty ten eighty Tom, Hello.
Speaker 4 (20:15):
Hi you guys, gentlemen. Hey, I don't care as long
as the lady does a good job, and it wouldn't
be hard to do better than the last pilla. So
I'm all in on this one a low bar. Yeah, yeah,
that was pathetic. What went on never to be repeated again,
I hope. What I would like to know, though, is
(20:36):
the amount of staff that that bank acquired while that
man was in power or at the helm, from three
hundred and forty nine to over six hundred and sixty
in his tenure. Do you think that my be clipped
and sent back to what it might have been more
manageable or what it was in the old days, and
(20:56):
the old days was only over a five year period.
Speaker 2 (20:59):
Well, that's an interesting one, Matt. What do you think?
Speaker 3 (21:01):
Yes, Yes, So I did see that figure two tom somewhere,
and I was very surprised that. My first thought was
has their remit expanded a bit? You know, did they
need to take on staff because they were doing something
else in there? Because we do focus probably overly much
on their role as being the o CR. They do,
they do do, as I said before, other stuff, but
(21:24):
the simple answers that I don't know, And it's very
hard from an outsider looking in to a fairly opaque
sort of organization.
Speaker 2 (21:35):
Yeah, do you think the fact that she's from outside
is that I wouldn't get people to hold their breath
about staff cuts because she's not going to go in
there waving a big stick.
Speaker 3 (21:44):
Is she wouldn't. We wouldn't. Wouldn't They wouldn't think No,
well maybe, but you wouldn't think you'd you'd be very carefull.
I would be very careful. Sometimes the opportunity is to
make the big changes right at the beginning, when you were,
when you and such like. One of the things about
(22:08):
this that we didn't talk about before was that financial
markets are happy with the appointment. They never bunched, And
I think that's a really good sign. Financial markets or
usually one of the most sensitive bell withs around around
the place. You can tell how good or how bad
things are by what how financial markets, especially the bond market,
(22:31):
reacts to these kinds of things.
Speaker 2 (22:36):
Yeah, actually actually should be to be also fair. On
the comments that I saw reported from Michael Roddell, he
said that, you know, he said it's unfortunate that they
went overseas, But then he also does say she could
prove to be an excellent call. Time will tell, and
she yes, she did beat out three hundred other candidates.
She's got a PhD in economics from Stockholm School of
Economics and was previously the Group Chief Group Chief Economist
(23:00):
swed Bank Sweede Banker leading Swedish commercial bank, also to
Street Finance the World Bank as an academic economist in
the United States. Sounds all right to meet, doesn't it, Martin?
Speaker 3 (23:13):
Yeah, well, and now with the job she's leaving his
first step Puty governor of Reichs Bank. So the sweet
the Swedish equivalent of the RB and Z. She was
the first steep pity. So I mean she said she's
done a few things, and she's done them well to
(23:33):
get to that sort of position. My guess is she'll
do two terms, yeah, maybe one term, maybe a five
year terms, and in ten years she'll go as number
one somewhere somewhere else. I should say she's number one here.
Speaker 2 (23:49):
Well, unless she falls in love with the New Zealand,
of course, But.
Speaker 3 (23:52):
Yeah, well that's right there you go.
Speaker 2 (23:54):
Hey, Now, by the way, give us a call with
your reckons on it as well. Does it bother you?
I mean, it's not, to be honest, I don't think
it's a big deal and it's not necessarily going to
get the phones ringing. But I thought we should at
least discuss it with Martin while we well, we had
the opportunity. But the other thing Martin that I want
to have a chat about is with the I've noticed
a little bit of a trend just on this show
(24:16):
that we can collective with the conversations we have you know,
have had in the past around property and conversations around
money in general and investments in the share market. And
one of the questions we want to look at is,
you know, there a lot of people who have investment properties,
but making that decision when something's not working out for
you or any investment, and when to move on because
(24:39):
it's one thing to invest in a particular product, or
maybe it's some sort of fund in the share market,
or you've got an investment property. Is it often a
challenge for investors to recognize when something's not really doing
particularly well because I would sometimes think that you've been thinking, oh,
(25:01):
I know, it's not doing great at the moment, but
probably if I sell my shares, now, if I sell
the property, all of a sudden, even that's going to go.
And that's just because just despite me. Is that a
big challenge for investors And I.
Speaker 3 (25:11):
Started writing an article in the middle of the week
on exactly this thing. I finished it this afternoon. It's
the sunk sunk cost fallacy, and the sunk cost fallacy
is that we tend to focus hugely on costs that
have been sunk that we can't recover. We're never going
to be able to recover. We're never going to get
(25:33):
that money back, and therefore we have to take a
very deep breath, admit that we're wrong, take the loss
on the chin, crystallize the loss by selling and moving
the money into somewhere, somewhere that's better. Now, I've got
a bit of a theory that in fact, it's more
than a bit of a theory, and it's got a
(25:55):
bit of a little bit of research and reason behind it.
I think that the property market over the next fifty
years will not be as good as over the last
fifty years. I think back to property you know, when
I was I first became involved in fifty years ago,
and it's been a very very sweet ride for my generation.
(26:19):
I don't think it will be anything like that in future,
either for investors or or for home ownus. And I
can say that was a good deal of confidence because
I'm pretty sure I won't be here and fifty years
for you or anybody else to say, well, you've got
that one wrong. But I think that's just a complete
(26:44):
change going on at a political level. And residential property
investment is housing and housing is a political a public
policy issue. It's a political issue, and so it should
be because people need to be housed. And we now
have basically consensus between our two main parties. They were
(27:04):
in National, both of whom think that housing prices should
at least remain stable, if not, in the case of
Cross Cross Bishop, that prices should actually fall. Now they
have different ways of going about National is looking at
it supply much more than and Labor has worked on
(27:29):
the on the tech system and uh and where the
infrastrate should be deductible and so forth. But they may
have different methods of going about it. But there is
now a political consensus in this country that house prices
are too high. They need to stop going up like that.
We need to reframe how we think of housing, that
(27:51):
it's not something that we speculate on, but in fact
it's something that keeps the weather out somewhere where we
sleep and live and so forth, and we need to
think about housing in that respect. That in that respect,
and that consensus I think will be important because politicians
usually do get their way.
Speaker 2 (28:10):
Yeah, I mean, I get well, you've actually mentioned something
sort of and you've alluded to something in a way
which is also the while it's the political will or
it's part of the political discussion that you know, it
shouldn't be the easy investment that has in the past been.
But the other thing around the politics is there's so
much uncertainty with regards to how investors are or will
(28:34):
be treated in the future that I'm not sure does
anything positive for the idea of property as a great
investment at the moment. So, I mean there'll be investors
who would be worried that suddenly the ability to deduct
interest or suddenly removed by the next government. Yes, that's right,
which actually might actually work against a dull market because
(28:57):
a whole lot of it. If you can't deduct, there's
a lack of investment the property market. You might end
up with more shortages, which you are don't know how it works,
but it's.
Speaker 3 (29:10):
Well, that's that's possible. Although I think a lot of
the shortage is driven by the building industry, and the
council's releasing land for our housing more than that property.
All markets actually hate uncertainty. And if you were sitting
here now, you'd say, well, I don't want to take
(29:31):
a bet, a multi hundred thousand dollars bet on whether
the housing market is going to go up or it's
going to go down. And then you cast your eye
around the world and see such fantastic returns from technology
companies in particular, but not solely, and you think, well,
that might be a better place for us to have
our money rather than committing to one asset for several
(29:56):
hundred thousand dollars if not more than that, and something
that you can't get into and out of quickly and easily.
Speaker 2 (30:05):
And we'll dig into this in just a minute. We'll
take a break. But I mean, I guess the question is,
you know, when when do people have to cut their losses?
Because if you're saying, if you're an investor and you're
brought into any investment, but let's say property, and it
hasn't worked out for you, I mean, how much does
that contribute to people just hanging on to something when
really they just need to work out it's time to
(30:27):
you know, bite the bullet, crystallize the loss and move on.
Speaker 3 (30:31):
Yes, well, you know for a lot of people that
would be the case. In my view. Now, I may
be completely long and maybe a huge bounce on the
property market, you know, off got sales like it has
done for the last fifty years. But I don't think so.
I think there wud be political ructions if we started
(30:52):
getting some of the house price growth that we've had
in the last even the last decade or two.
Speaker 2 (30:58):
Yeah, we'd love your cause on that. Actually, so Martin
reckons that the next fifty years are going to see
nothing like the games the pre fifty years have seen.
But also if you are you hanging on to an
investment because simply it costs you so much and maybe
it's not doing so well, you're thinking I'll just hang on,
hang on, hang on, Because that has been a lot
of the discussion and over the last couple of years,
(31:19):
is even through the tough times, just hang on, It'll
turn around. But does there come a point where you
have to go, well, sorry, I've got to get out.
Give us a call on that if you want our
recons or to give yours eight one hundred and eighty
ten and eighty text nine two nine two it's nineteen
to say yes news talks the'd be worth Martin Hawes
on that theme of cashing up your investments. Have you
ever crystallized a loss yourself, Martin, where you've just had
(31:41):
to go, oh god, it's not going to get any better.
I just have to sell and move on.
Speaker 3 (31:45):
Yeah. Often actually, but it's it's another parts of life
as well. One of the things where you see the
sunk cost fallacy is when you start to read a
book and you get a third of the way through
and you say, well, this is a dog I reading too,
but you keep reading because you have to finish up
the because you've sunk all that time into it. Eli,
(32:08):
and it's it's exactly it's exactly the same thing. But
you know, often I've bought something that you know, for
ten dollars, I share them talking about it, and you
know it goes down to seven dollars. I've trained myself
now to be ruthless and to say, have another look
at this is the investment thesis still there. If it's
still there, then I should buy some more because there
(32:30):
seven dollars now, rather than if they were good bye.
At ten dollars, then they must be really good bye
at seven. But if the thesis isn't there, then get
rid of it and get your money working on something else.
You know, we put stuff off all the time. We
go into the wrong key, we save for fund and
we we we carry on with it, hoping against hope.
(32:53):
But we really have to make decisions by looking at
the future rather than looking back and considering the past.
Speaker 2 (33:00):
Yeah. Actually, funny enough, I just changed my key we
save some funder after a conversation with one of our guests,
just went to a more aggressive fund and it kept
on telling me this is not recommended for you, and
I went, right, stuff it. I'm doing it, and it's
so far, so good. Actually I looked at the balance.
I went, oh, hell yeah, it's more than I've seen
in the past couple of years.
Speaker 3 (33:19):
Tell the robot to mind its own business and get
on with it.
Speaker 2 (33:23):
And conservative advice. Right, let's take some calls, Nigel High.
Speaker 5 (33:28):
I just wondered if that money doesn't that has gone
into residential property over the last fifty years, it doesn't
go into residential property, where does it go? Do you
think people will want to put it into bricks and
more to maybe commercial property or is shear market.
Speaker 3 (33:46):
Yeah, commercial property is pretty complicated for a lot of people,
and to get into the better part of commercial property
costs a lot of money, many millions. So I don't
think a little bit of it might find its way
into commercial property, but not an awful lot. I tend
to think it would go into sheer into businesses, and
(34:10):
that's both here at home, but also you know, the
bulk of my portfolio is actually an international shares and
largely what I'm playing there is the whole technology revolution
that's going on. I wouldn't say right around the world,
but in places like Europe and certainly the US. So
(34:30):
into businesses well, I think would be my aunt's and Nigel.
Speaker 5 (34:34):
But my property syndicates, you know, the big commercial property syndicators.
That's an easier way into commercial property.
Speaker 3 (34:42):
Yes it is, And in an easier way still are
the listed property companies. These companies that are listed on
the Sheer market. Just be a wee bit careful with
the syndicates because there's no liquidity there. You can't necessarily
get your money back out or not for some time. Anyway,
if if things change and you do and you do
(35:04):
want it back. So but yeah, synder cips provide a
reasonable a reasonable exposure to commercial property. Listed property I
think provides a better exposure to commercial property, and and Nigel,
I love commercial property. It would be my well, it's
(35:24):
probably not my favorite asset class anymore. I think technology
shares would be my favorite set class now. But I've
always been able to say up until today that commercial
property is my favorite sset class. But I don't do
it by buying individual properties myself. I do it by
buying buying property companies on that are listed on the
(35:49):
Sheer market, not just the New Zealand but also Australia,
the US, property, the UK.
Speaker 2 (35:55):
Yeah, okay, thanks Nigel chess matey just on that text
here says okay, so when you've cut loose, you know,
your investment, when you put your money where people putting
their money, if they've cashed up an investment, so for instance,
in a property, because that's one of the things I
wanted to just touch on because the cash rate is
going down. So for savers if they've just got their
(36:17):
money in the bank or in some sort of interest
related investment, they're not going anywhere flash are they? How
do you sort of find that happy balance between getting
some sort of guaranteed rate or return, but nothing that's
too pathetic.
Speaker 3 (36:34):
There's no use such thing as guarantee you greater. They're
a safer some are safe for the than others. Mostly
this is about time, not completely, but mostly it's about time.
If you've got money, Let's say you've sold a house
or something, and it might be six months before you
buy another one, you would you'd put your money in
(36:59):
the bank. And by the bank, I mean one of
the four majors. They've got the best ratings. You put
your money with one of them for that six months.
If you had money that you weren't going to want,
say within five years or ten years, then I'd be
arguing for a fierce wag of shares. That may be
(37:20):
a diversified portfolio with some and fixed interestal bonds and
some in cash, and some enlisted property and so forth,
but the bulk of it for say, say ten year money,
just to be safe, money that you're pretty confident, you
are very confident that you wouldn't want want in ten years.
(37:42):
I think that should go in shares. Yeah, okay, right,
that gives you the best return. It's just for evolve volatile.
Speaker 2 (37:49):
Not specific financial advice, but I'm magin. I wish that
i'd put my money with my mouth. Is when I saw,
you know, when Trump was being all sort of mercurial
and the bottom fell out of the S and P,
I thought to myself, that's probably quite a good time
to buy. I should listen to myself.
Speaker 3 (38:05):
Yes, yes, the number of times time I've done that,
and I thought the same there. In fact, I'm sounded
like a conspiracy theorist and I'm not. But you know,
I wondered whether Trump engineered that his mates. Now plenty
of people are saying that.
Speaker 2 (38:24):
Well, he's done pretty well out of his own sort of.
I think he's got his own bitcoin and all sorts
of funds as quite well out of so anyway, yes, right,
we'll be back in just a moment. Though it is
nine minutes to six news talks. He'd be news talk, said,
be with Martin, whorees untim beverage, just one. Actually, I
thought just to finish with only a couple of minutes there, Martin,
(38:44):
time flies when you're having fun. You talked about when
you talk. Now, Pete, this is radio, so you don't
get to see Martin's expressions. When Martin talked about technology stocks,
how he quite likes them, you were grinning like a
cheshire cat. You're looking quite quite happy. How do you
go about choosing technology stocks? Because it'd be great ideas
(39:06):
and there'll be absolute dogs. How do you There'll be
a lot of people who are peaked by that, and
it curis to know how do they look at getting
into that side of things?
Speaker 3 (39:16):
Tim The easy answer is I don't. I have a
large finance house managing my money for me. Now. I
made a decision four or five years ago that, after
forty odd years of managing my own money, I was
going to let somebody else do it for me. So
I don't have that pescial problem to worry about whether
(39:38):
I'll buy Apple or whether I'll buy Microsoft.
Speaker 2 (39:41):
Okay, So then it gets down to what I guess
would be making a decision over the risk profile of
their investments, isn't it? So how do you make your
decision about that?
Speaker 3 (39:51):
I fill in one of their forms and they tell
me what that, what that, Whether that has means a
balanced investor, a growth investor, and so on. But I
have written the questions on the question. Is that throw
up what sort of investor you are, and so I
can I can tell pretty well straight away, and it's
(40:12):
made up of your age or what's a nice way
of saying, how long are you investing? For your financial capacity,
what sort of state are you able to stand a shock?
And your psychological profile as your other one.
Speaker 2 (40:28):
Because I mean, while you are sort of around the
retirement age sort of thing, and we've only got forty
seconds left. But of course, if people can't afford to
lose anything, they are low risk, whereas if you have
been successful in investing, you might still have a higher
risk sort of tolerance. When even though you're you want
to you know you're close, you are at that retirement age.
Speaker 3 (40:48):
You could have a higher tolerance. Not I wouldn't say high, maybe,
but high Okay.
Speaker 2 (40:54):
So Martin's on the growth profile, I'd say anyway, have
maretn't great to talk to you ready? If people want
your book, isn't it Retirement Reaaldly by Martin res yea
and think for that? Okay, cheers, bye bye, and we'll
be back same time next week. Thanks to Tyre Award,
my producer and Sunday Out Sixers next. Enjoy the rest
of your evening. We'll catch you again soon.
Speaker 5 (41:17):
Hullo need it is a little
Speaker 1 (41:22):
For more from the Weekend Collective, Listen live to news
talks it'd be weekends from three pm, or follow the
podcast on iHeartRadio.
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