Dynamique nuntium
Charlie Munger’s death at age of 99 caught everyone’s attention. Warren Buffett’s business partner and key driver of Berkshire Hathaway was known for his incisive views, acerbic wit and ability to spot a damp squid. As mentioned in many obituaries examples of wise counsel include such comments as:
“I think the best road to human happiness is to expect less. I think it’s going to get tougher”
“What you have to learn is to fold early when the odds are against you, or if you have a big edge, back it heavily because you don’t get a big edge often. Opportunity comes, but it doesn’t come often, so seize it when it does come”.
In New Zealand much chatter has focused on review of NZQA Level 5 for financial advisers and whether it should stay the same or be updated. No doubt any changes will be at the margins. The key question is “Will it result in better outcomes for clients?” For many financial advisers these are tough times. They need to be better and winning the hearts and minds of their clients throughout the complete product, service and advice cycle.
The Official Cash Rate remains at 5.5% as from 29th November 2023. Next RBNZ update 28th February 2024 - will the Governor be a dove or a hawk at the next setting date?
Other areas catching investors attention related to sustainable investing disclosures, move away from traditional asset classes to include private equity, credit and selective hedge fund strategies. Are investors paying too much for foreign exchange transactions and do investment managers know the true cost of running a fund and the lost opportunity in terms of returns this costs their clients? Product disclosure should provide detailed breakdowns of foreign exchange implicit costs, best execution analysis across all asset classes.
Finally, one cannot ignore a change of NZ government, the cost of unravelling policies and implementing new ones. Whilst remaining apolitical the swing from left to right, increasing budget deficits, weakening current account and international perception of the latest NZ MMP troika experiment will be observed with interest.