AJ

Opinions as half-baked as my life choices 🥔
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[Craig Kelly:🇦🇺Foundation for Economic Education @craigkellyAFEE]

Re-elect Labor in Victoria, and this will be Melbourne in a few years time.

[AJ @Alex__j]

@elonmusk @visegrad24 Not that one. It's dust.

[AJ @Alex__j]

@swamy95000 @m4h007 They're in an interesting position.
They can't back down - population there hate leadership.
They can't go to war with the US/region.
They need to make a deal. Its how long the world vs. Iran can take the economic pain

[First Squawk @FirstSquawk]

Rubio: We will eliminate Iran's ability to manufacture new missiles

[AJ @Alex__j]

@GavMcCracken you reckon Canada is bad...

[Robin Dods @toy59496]

Small Cap Investing is Dead with a 77% spike in Tax Collection

I have run 1,000 Monte Carlo simulations of portfolios of 20 Small Cap Stocks with the New Inflation Corrected CGT model versus the existing 50% CGT discount model.

The results are devastating.

The bottom line is that small caps are highly asymmetric bets where your small number of winners are meant to compensate you for your many losers. Mining companies are a good example of this situation and are a fundamental pillar of our national wealth. However if you tax those few winners at 47% with the trivial relative inflation correction you effectively wipe out the ability to offset your losses. This is because the tax drag on your few multi baggers is so high that it changes the entire logic of the investment process.

It's become a loser's game.

1. ​The Moonshot Tax Penalty:
Because Australian small caps rely heavily on a right-skewed distribution (a few massive winners offsetting many losers), the Indexation framework introduces a devastating tax penalty. For a stock that goes from $50,000 to $400,000, a 3% inflation adjustment on the original $50,000 cost basis is completely negligible. Under Indexation, you forfeit the 50% discount and pay a flat 47% on nearly the entire gain.

2. ​The Turnover Trap:
With a 15% annual turnover, small-cap portfolios realize taxes continuously. Under the current system, every partial sale triggers a flat 23.5% effective tax rate, leaving more money inside the portfolio to compound. Under indexation, those early wins are hit at a full 47% clip, severely dampening the portfolio's forward compounding engine.

3. The Asymmetric Loss Failure: in small-cap investing, a stock can only ever lose 100% of its value, but explosive winners have unlimited compounding upside. The government’s asymmetric tax system completely devastates this dynamic: by replacing the flat 50% CGT discount with inflation-indexing for winners only, it leaves your nominal losses capped and completely unable to counteract the massive tax hike on your multi-baggers. Because a 3% inflation buffer barely dents a 400% moonshot gain, you end up paying a brutal, un-discounted 47% tax rate on the very winners that drive a small-cap portfolio's success, causing a 77% spike in total government tax take overall.

Even in investing we see the socialist government wants us all to be the same. Communists.

(Technical notes: Model executed using Gemini Pro with 1,000 portfolios of 20 stocks each with the volatility and median return typical of this class of small cap stocks over the last 10 years, using a geometric mean process to step forward each portfolio each year).

[AJ @Alex__j]

@GavMcCracken This still the thought process given current news flow? (confusion?)

[AJ @Alex__j]

@swamy95000 Do you think the play is in oil or in the leverage ofexploration/production companies?

[AJ @Alex__j]

@GordonGekko Free fall this, Gordo

[AJ @Alex__j]

One of the most interesting and educational articles I've read on X (or anywhere tbf)

Didn't understand a word of it, but it sounds complex and therefore plausible.

[Gavin @GavMcCracken]

https://t.co/HzleOna7me

[Gavin @GavMcCracken]

https://t.co/HzleOna7me

[Stokdog @stokdog]

🚨 BREAKING 🚨

Australia's detailed energy plan has been leaked by senior Labor officials.

[AJ @Alex__j]

@JoshYoung @GavMcCracken @SGhasseminejad Fake news

[AJ @Alex__j]

@GavMcCracken

[AJ @Alex__j]

Can someone please explain to me like I am a carrot - how in the world is Gold dropping with the world as it is?

[AJ @Alex__j]

Can we get it a little further away?

[Pauline Hanson 🇦🇺 @PaulineHansonOz]

When One Nation win seats in the next Victorian parliament, we will relocate the new Daniel Andrews statue to a special Museum of Underwater Art in Antartica.

[AJ @Alex__j]

The main thing that would help housing, was left unaddressed .. because he needs more votes.

[AJ @Alex__j]

@moh_moneys @GavMcCracken 😂😂 give the bloke a break

That's what he means

[Pauline Hanson 🇦🇺 @PaulineHansonOz]

If you want my take on the budget, I'll be blunt.

It's a sh*t sandwich, and now we're being forced to eat it.

[AJ @Alex__j]

@swamy400 Just come across your account. Some really great content. Thank you