Lance Gibson recouped his losses in the silver market by relentless saving.
For seven years, his economies were achieved by what he called his “Sydney Heads Pincer Strategy”. To his impressed but confused wife he explained it thus: North Head meant bold but informed bulk buying; South Head meant not spending outside the plan, except under strict necessity.
There were mishaps and problems associated with both headlands, both prongs of the pincer. Staling, fermentation and rodents destroyed much of his shrewdly acquired stock of non-perishables. A South Head decision not to spend on a roof repair in the garage led to the drenching of four years supply of toilet paper. Sometimes, North head and South Head collided…or the pincers failed to meet, or…well, metaphors only go so far.
Yet sheer will can remedy many shortcomings, and Lance had the will to save. By the year 1987, he had not only deposited large sums into his bank, but had even begun to jockey between accounts, as he expressed it. He tended to follow names rather than numbers and percentages, odd in a practitioner and teacher of accounting. Through years of increasing interest rates, he held much of his money in an account called Ultrasaver, which had initially been his bank’s “super high yield, dead easy access” account. When he realised that Ultrasaver was paying almost no interest on his increasingly substantial savings, he complained, only to be told that Ultrasaver was now little more than a common savings account. He was advised to move those savings to Cerulean. His banker described Cerulean an “exciting new product”. It came with an electric-blue book but appeared to be little more than a high interest bank account – much like Ultrasaver had been.
One night, the Gibsons sat watching Magnum PI. Lance preferred “informative television without bloody Yanks and guns”, but, being a generous and yielding partner in all matters not connected with finance, he always went along with his wife’s choices of entertainment. (When workmates referred to a previous night’s episode of Magnum or Dallas, he would never admit to having viewed it.) During the ad break, Lance leafed through some vivid green pamphlets promoting yet another “financial product”, this one called Viridian, an account with slightly different conditions and a different book, very green indeed. When the program resumed after the break, one of the characters spoke of how coastal real estate the world over was undervalued. “I’m buying Aussie dirt, Aussie bricks and mortar, provided it’s within a few miles of sand,” declared the brash character, who later turned out to be a baddie. (Magnum got him.)
Lance tossed the pamphlets aside and began to think about those lines of dialogue.
His sleepy Tuesday night class in General Economics had been enlivened by a young student, Krystal Grubb. The lady’s presence may have partly accounted for an improvement in Lance’s dress. His South Head strategy precluded spending, so he had not bought but “invested in” a navy jacket with winged shoulders as well as some coloured business shirts which had rounded white collars. Oh, and a tie with yellow and black stripes, a real dominator. The first time he dressed up for one of his Tuesday classes, Mrs. Gibson remarked that he looked like an older Mark Holden. Lance blushed a little, and explained to his wife that personal presentation and power dressing were unavoidable trends for anyone working in the finance sector in the eighties.
Krystal Grubb was very attentive to all of Lance’s lessons, and frequently asked questions. One evening she raised the subject of investment versus speculation. Lance was able to tell the class of how brief and ruinous the gold and silver boom had been for those who had not got out as quickly as they got in. “I was in silver, but only for a matter of weeks. Negotiated my own sell-off on Silver Thursday, which was a Friday here, the very day the Hunt brothers missed their margin call. As for the financial civilians who were still in that market the following weeks…One can only warn!”
After that class, Krystal approached her teacher and asked for a moment of his time. She explained how she and her fiance – this last word deflating, for some reason – were considering a step forward, a first investment. She wanted his opinion, as a finance professional and the person she most trusted, on what the nature of that investment should be.
“We thought about investing in art, especially Ken Done, because, obviously, he’s up there for the ages. But the price is already high, and there’s so much we don’t know about storing and curating…”
“Such a relief to hear it from someone in the know. We just didn’t feel easy about it…Then we considered shares, but the market is so dead and unless you’re an insider…”
“Exactly. Oh, I don’t know why I didn’t consult you sooner. Lately we’ve been thinking about real estate.”
“Lots of rental demand, but interest rates better now, capital gains are back in, talk of first home buyer subsidies…”
“So, Mr. Gibson, are we on the right page? What do you think? Nothing set in stone…just ballpark.”
Lance leaned forward and lowered his voice, though there was nobody else in the room:
“Aussie dirt, Aussie bricks and mortar, anywhere near sand!”
Then he winked.
The fluidity, the unease of recent months had at last crystallised to decision. Lance Gibson would invest in real estate. As he explained to Mrs. Gibson, if total dunderheads could make money in real estate through luck, Lance could make a lot of money by drawing on his experience, his technical and academic background – especially now that rental demand, interest rates, and capital gains laws were trending so favourably. There was even talk of first home buyer subsidies.
Another point he made to his wife, who was intrigued, even excited, by this turn in her careful husband’s thinking:
“My love, we’re going to let the rest of them clamber over one another to get what’s hot. All these auctions, this rush to make a quid…not for us! The trick is to buy the Ken Done painting…”
“We’re buying a Ken Done?”
“Let me finish, woman! The trick is to buy a Ken Done when nobody has heard of Ken Done. If you’d bought a Ken Done in, say, I dunno…whenever nobody had heard of him…Do you get what I’m saying? Are you on the same page as me yet?”
The noise from the construction site next door was brutal, so Lance had to raise his voice:
“We’re in what’s called the Golden Circle here. The real estate golden circle. It’s a global thing, a formula. Over there, is Maroubra and the Pacific ocean. No, don’t lean over the railing, its a bit…rickety. You can’t see it from here, but if you go on the roof you can see water. A few miles north and you’re in the city.”
They looked down from the skinny verandah of the unit. There was a row of shops, all of which were closed and barred, except for a small mixed business. Three youths, almost still children, sat smoking in the gutter. One of them spat as he stared back up at the Gibsons. Mrs. Gibson became all the more uneasy.
“Are those boys…are they often there? That dark one who spat at us…”
“Just boys. So, I’d say we got a bargain, eh?”
Lance turned about and gestured through the kinked venetians at the interior of the small flat, with its erupting parquetry and low vermiculite ceiling. There was still that odour of tobacco smoke and cooking fat wafting outward, even with the other windows wide open.
“But…will you be able to find a tenant, with all that construction going on?”
“Don’t worry about tenants. I’ll be renting to a demographic. In civilian language: yuppies. Young professional types. Types that go to wine tastings and Mostly Mozart. Fosters drinkers. They’re everywhere these days. They aren’t home during construction hours. What they want is a place to crash, somewhere between the surf and the office. They be queuing for a unit like this.”
“But, such a small flat, with no lift, no pool, no garage…And all around you’ve got ugly commission homes. How many people actually own homes here? And all that writing in the hallway. The big red penis when you walk in…”
“That all helps to scare off the small-picture investors. Have you ever heard the word ‘gentrification’. The word ‘manhattanisation’? Basic real estate concepts. Any major first world city. It’s a formula. I’m talking big-picture here, not lifts and pools and neighbours.”
“Oh, Lance, I’m sure you know what you’re doing. You were right about the silver thing…Lance, why is that boy near our car? Is that some kind of spray paint thing in his hand?”
When Garry Spina, the local agent who had handled the sale, suggested a normal rental to a local couple, Lance realised it was time to take charge of his own management. It was not just to save on fees. After spending on new vertical blinds, new kitchen fixtures and shelving – then the shockingly expensive parquetry repairs! – Lance decided to “manhattanise” from the very start. He would charge, and those yuppies would gladly pay.
He began with a tiny classified advertisement in the Financial Review. Two young office people came to look at the flat that Saturday, but retreated almost immediately. A new BMW pulled up outside the block of units, but, after a sharp exchange between the driver and some youths who had been lingering outside the abandoned shops, the car pulled away again.
After six weeks, though the Sydney rental market was strong, Lance had found nobody of the right demographic to occupy his Golden Circle investment property.
Soon the body corporate of the block held a meeting and decided to hold another meeting to decide on plans to clean the stairwells of graffiti and replace the old carpeting on the steps. Lance was able to convince the other owners at this second meeting that the expense would be pointless, since new graffiti and damage would soon ensue. He explained to Mrs. Gibson:
“It’s an old trick, my love. The owners who actually live there, but who don’t have a good northerly aspect and views, will always want to spend money on common areas. My money, specifically. No, no. They bought second-tier, they can keep second-tier.”
“But, if our place has a view, it’s just a view of the street…and those awful young boys. And the writing in the hall, Lance…that big red penis…”
“In New York, these days, they pay famous artists to do that stuff. It was in Time Magazine. It even has a name. Wait, I’ve made a note of what they call it.” Lance searched through the folder he dedicated to incidental matters and ideas on real estate investment. “Ah, here it is. They call it Ambient Grunge. There’s even a magazine called Ambient Grunge. Who knows? Maybe I’ll take a subscription, if its tax deductible…”
Lance was running the cheapest possible ad in the Wednesday and Saturday Sydney Morning Herald. An odd young couple who had a Kombi van and said they worked in the music industry offered to take the flat for a smaller rent. Lance could hardly contain his amusement as he refused.
Shortly after, he was phoned by an articulate young man who said he had read Lance’s ad. His crisp and confident manner was just like that of the people who ring for the Guide Dogs. Promising! The caller said he had a certain friend who was awaiting a divorce settlement, who would be more than happy to take his flat at the price asked. “She’s such a special human being, we all want to see her start a new life in the right place. We’re all very much behind her.”
Lance met the young woman at the premises. She was quite pretty, but very emaciated. She explained that her parents, Melbourne professional people currently travelling in Europe, would happily pay for her move and her expenses till her very substantial divorce settlement came through. Moreover, she would soon be joined by another lady, a friend who was a successful graphic artist, who had been headhunted to Sydney from Perth…
Lance had a tenant. Two tenants, by the sound of it, though he would only have one signature on the lease.
Some weeks passed without problems, the rent money was duly deposited. Then the money was not deposited. Lance rang the number the tenant had given him and found that it was the number of someone living nearby, in South Maroubra. The man who answered said he had never heard of Lance’s tenant, though his manner was evasive.
Lance was obliged to drive to the unit that evening. When he knocked, he heard voices and music within, but nobody came to the door. He descended, walked outside and looked up to the verandah. Just as he did this, the lights within the units dimmed and the vertical drapes were shut. And was that…?
Was that the snout of a large dog thrust between two slats of his expensive new drapes?
In the end, it was not Lance’s efforts that removed the tenants.
For weeks, he had been unable to contact them – or her, since he was still not sure how many were living in the premises. When he finally caught up with the woman who had signed the lease, she was emerging in the company of a large dog, a Rottweiler. Lance was amazed when she simply greeted him politely:
“Oh, hello, Mr…Mr. Gibson, isn’t it? I’m terrible with names.”
“Look here, you’re not keeping that dog in my unit, are you?”
“Hypo? Oh, no. He’s just visiting. Belongs to a friend who’s seeing her mother in hospital. I put him on the verandah. All the neighbours love him. Don’t they love you, Hypo, you big butch boy?”
“Well, no more. You can’t keep an animal in there. Now, what’s happening with the rent. It’s been a month now.”
“No probs with the rent. I’ve been putting it in the account. Isn’t that where you wanted it?”
“Well, it’s not there!”
“Oh, you must have on of those accounts where the bank holds the money, plays the stock market with it. Shouldn’t be allowed. Let me know if it keeps happening. Got to go. I’m picking up my friend…the one whose mother…”
“Look here, I teach people about money. I should know about bank accounts!”
“Got to fly. My mum’s in hospital…er, also. So many people in hospital! Everything seems to come in threes…or twos. I’ll double check with my bank about the rent.”
With that, the woman, with the dog, climbed into a rusted Alfa Romeo, and sped off. Lance stood gaping after them. It was time to get tough, but…
But what did one actually do when people acted in a manner which was unknown in Lance Gibson’s world? Did people actually do that? Did people sign leases then simply not pay rent? Did they keep enormous dogs in rented units?
Lance had imagined that, in such circumstances, all kinds of institutional forces automatically gathered to the defense of Property. Instead, nobody seemed to know or care. The police were uninterested, the rent tribunal told him he would need time and all kinds of documentation. When he rang something called the NSW Tenancy Advisory Service he was upbraided for charging a high rent to a person without employment or adequate income. They pointed out that property rentals were a business like any other, and he needed to ensure the quality of his product, and the client’s ability to pay. He was even cautioned not to contact or approach his tenant in view of her sex.
“But…she’s just living there, in my unit, rent-free. What am I supposed to do? She keeps a Rottweiler, for god’s sake…”
“Have you ensured that all amenities are functioning. Water, power, stove and so on? That often gives rise to these grievances?”
“But…she’s just living there, with that dog. She doesn’t come to the door…”
“Well, as I said, any physical approach is not advised, so you need to restrict yourself to phoning at this point.”
“But she doesn’t answer the phone! I think the number she gave is for somewhere else, in South Maroubra. They say they don’t know her.”
“Have you tried contacting her relatives, the people who gave references?”
“They don’t seem to exist.”
“Mr. Gibson, shouldn’t you have checked all that out before?”
So it went on for more weeks, till he received a call from an elderly gent who was on the body corporate.
“Lance, who was that tenant you put in?”
“What’s going on now?”
“Today two heavy looking blokes and a flash Chinese sheila come round to your unit. They were knocking and knocking, then they started yelling that they knew she was in there.”
“Was she there?”
“That rustbucket car of hers was there, but she didn’t answer the door. So they walked downstairs again and started yelling up toward the balcony that they knew she was there. Then they said something about how they were coming back the next day with someone called Bib. That’s what they called this person: a Bib…or just Bib…
“Anyway, now she’s gone, by the looks of it. The door of your unit is wide open. There’s rubbish everywhere. Looks like the dog’s done jobs through the place…”
As Lance and Mrs. Gibson were cleaning up the place the next day, three foreign seeming men in suits walked uninvited into the unit. A groomed, hard featured Chinese woman in plush leather slacks followed behind. She seemed to be in charge.
“Who…who are you?”
“You don’t want to know, my darling. Where is she?”
Looking about at the mess and faeces, she sighed and shook her head. “No, you wouldn’t know much at all, would you? You actually rented your flat to Robina Glassop. You need to get out of the landlord business, my sweet. You really do.”
She turned to one of the men with her, a giant with a dark stubbly face. “Habib, drive down to the beach. See if she’s there. It’s probably too late, but she might try to score before she skips town.
“And you, honeybunch, you really need to get out of the landlord business…”
Arriving home after the exhausting cleanup and an alarming inventory, Lance collapsed into an armchair and stared ahead of him for some minutes. Presently, for something to do while his wife prepared a quick meal, he opened an unexpected piece of mail that he had pulled from the box on the way in. On reading the contents he winced, and flung his arms back in the chair, blurting words he was not used to hearing, let alone using. Mrs. Gibson came rushing in.
“What is it, Lance?”
“A power bill for the unit. Somehow she managed to keep the power in my name.”
A long silence, then:
“Lance, maybe we could put the unit in the hands of an agent.”
Another long silence, then a softly panted response:
“Delegation. Of course. I’ll delegate. Good principle. Management 101…”
Then he let fly again, with more unaccustomed words.
“Lance…it’s just a power bill…just…”
He handed the bill to his wife, whose face froze as she examined it.
“I think our tenant was using a lot of heat and a lot of powerful lights.”
“Whatever for, Lance?”
“To grow a certain kind of plant, my love.”
Garry Spina, the local agent, quickly found some tenants for the Gibsons after the place was repaired and fumigated. The rent, Garry had explained when he recommended the new tenants, was necessarily quite low. He would understand if Lance were to turn around and look for a new agent – but with recent social problems in the area, that mass brawl between westies and surfies…well, two mature tenants with jobs represented value beyond mere rental return. Lance quite understood.
As months ran on, Lance checked real estate values, calculated his tax advantages, tried to take an interest. With such a modest, if reliable, rental return, the whole exercise was now just a drain, since Lance’s income did not warrant large deductible losses. In addition, Lance was bored with his investment. It had none of the triumphal elements of successful bulk buying balanced by relentless avoidance of the slightest living expense. North Head and South Head were more of a hobby than a discipline; the sluggish property market and predictable losses from week to week were only enlivened by a sudden minor expense or the threat of a special levy.
He began to hate property investment.
Lance’s close society consisted of a small group of older men who drank moderately and spent the minimum at Souths Juniors.
In any other era, these careful men would have stayed visibly the same while life’s petty evolutions made only tiny changes to their habits.
But the late eighties were no ordinary era!
Yeats wrote of how everyday folk were marvellously, terribly transformed by Ireland’s Easter Rebellion. There are these brief junctures in every society’s history where the familiar takes on a sudden glamour or terror. And in Sydney that happened in 1987. The bus driver, the milkman, the lady in the opportunity shop were “into the market”. Sometimes the bus driver, the milkman and the lady in the opportunity shop would form a syndicate to get “bigger into the market”.
And those sober authors of cautionary treatises about previous booms…those who learned and taught the lessons of Tulipomania, the South Sea bubble, the 1920s share boom…where were they?
They were into the market.
One Saturday evening, Lance was sitting with the usual group – usual, but transformed by the terrible beauty of stock market success. He could scarcely bear listening to their jargon, their pompously murmured tips, their elated cackles over the week’s easy triumphs.
Then Bert Riordan turned to Lance:
“Lancer! What about you? You’re the economics man. When are you going to make your move?”
“Oh, too rich for me, too rich for me. I’ve got my little nest eggs. Bit of super, some property for the tax advantages.”
“Come on, Lancer. A shrewd old hand like you? What shares are you moving on?”
“Nothing, nothing at all…”
“You’re joking, right? Mugs are making money! You know that big goose, Bunny Sheedy? Played front row for Souths reserves? Too stupid to tie his own boots. Lancer, he just made fifty thousand dollars in the last fortnight. Bunny Sheedy! And he’s got the intelligence of an aphid! What could a bloke like you do?”
As Lance was making his way on foot back home to Kingsford, he saw a drunk come swaying in the direction of the club. As the two drew close, Lance recognised the big, lumbering, bloated figure. It was Bunny Sheedy.
My God, if there was a stupider looking man, a stupider sounding man…if there was a stupider man generally than Bunny Sheedy…
Bunny Sheedy had made fifty thousand since the last time Lance saw him. Bunny was one of the transformed.
The biggest nong south of Cape York had made fifty thousand in a fortnight.
After tea, Lance was watching television serenely in company of his wife. He was serene because a great certainty had descended on him.
“Time to sell up, luv.”
“Sell what, Lance.”
“That unit. It’s been a handy tax deduction. Time to get out.”
“Good. I never understood anyone wanting to live there. That awful dark boy who sits in the gutter and spits at everyone…”
“Think of him as a tax deduction, my love. But it’s time you and I moved into the clear profit zone. I’m thinking about buying a few shares. Nothing too big or risky. Just a nicely timed move into the market. Do we still have the Herald from this morning?”
“I wrapped the rubbish in it.”
“No matter. I just need the finance supplement.”
“Oh, I think that’s the bit I wrapped the bits of fish in.”
“No matter, no matter…Japs eat raw fish, I don’t mind some on the fingers. Is it near the top of the bin?”
Lance rang Garry Spina the next day and told him of his intention to sell the unit. Now that Lance had other commitments, he would want a fast transaction. Garry could not have been more understanding in the pressing circumstances.
Soon Garry had news: good and bad news.
“Mr. Gibson, I can’t get you a price like the one you paid. Investors are going elsewhere, obviously.”
“Of course, of course.”
“And selling with the lease still current would normally be a problem.”
“However, your tenants have expressed a tentative interest in buying your unit. By sheer luck, you have buyers ready.”
“Well, that’s good news…”
“But, Mr. Gibson, their offer won’t be a high one.”
“Well, I’m prepared to hear what it is.”
“I have some idea of what they’re willing to pay. Frankly, I wouldn’t blame you if you were to slam the phone down and refuse to discuss things any further. As I said, selling in this market, with the interest rates still high and the money pouring into the stock market…absolutely pouring into it…”
“Of course, of course. No harm in hearing their offer.”
The settlement had been fast and easy. Only the price was terrible. Just as the rent return had been. On their way back from the solicitor’s office in Maroubra, Mrs. Gibson was unusually pensive.
“Lance, will we be making a big saving on our tax from all this?”
“Oh, yes. Big saving. That’s the name of the investment game. Virtual big cash loss, actual big tax saving.”
His mind was elsewhere, as if nothing of what had just transpired mattered.
“Lance, do you really make that much money in a year, to cover all these losses, or write-offs, or whatever they are?”
“Oh, it’s complicated. Profit, tax, loss…complicated…”
“Lance, did you notice the maiden name of the wife, when we signed the contracts or whatever they are?”
“Lance, her name was Spina.”
But Lance’s mind was elsewhere.
The money from the sale became available to Lance on a Friday afternoon. Thanks to his studious efforts over the previous weeks, his long planned share portfolio was submitted to the broker within hours.
On the following Monday, the broker converted all of Lance’s money to the desired shares.
Lance had some celebratory drinks at the club with the usual friends – the transformed – though he alone knew he was celebrating. He did not want to let on that his entry into the stock market had occurred only that day. After a few drinks, he loosened up and began to talk, a little too smugly, about some of his shares and why he liked them.
“Lancer, it’s always the quiet ones. So all this time…”
But Lance was coy.
“No, no. Just a few handy tax deductions. Maybe some pin money.’
It had been the most exhilarating, the most fatiguing day of his life. It had been a grey, rainy day, but not for the transformed ones – those who were “into the market”. Lance was already in bed when the New York Stock Exchange opened for the morning’s trade.
It was Monday, October 19, 1987.
Krystal Grubb and her husband sat and admired what many would assume to be a small Ken Done print on the wall of their apartment in Bondi. It portrayed the Harbour Bridge and Opera House in the usual naif style, but it was in a blue monochrome, to match the new decor, rather than the familiar clash of vivid colours.
It was not a print. Krystal and Bran had recently bought an original Ken Done.
“We’ve done so well, Bran. Pinch me!”
“You know what I like about Ken Done? You never know if something is a shark’s fin or a sailboat, or even an Opera House sail. You never know. Sometimes you get a breaking wave with a surfboard, and there’s a fin – but you’re not sure if the fin is a board fin or a shark fin.”
“Mmm. No, I can always tell…These last few months have been the real mystery. Two years ago we had nothing. You didn’t even have a job. Now all this – out of nothing!”
“When you think of the pittance we paid for this unit…”
“And if it weren’t for Mr. Gibson’s advice, we’d never have taken the plunge. I remember his words: ‘Aussie bricks and mortar, near sand’ – or something like that. Education really is the key to everything. Of course, without the advice of your uncle, we’d never have got into the stock market at the right time.”
“And then out at the right time. That was even better advice.”
“The mortgage…gone! That would have been enough. But then to watch the price of this flat go up by the week. I worked out – did I tell you? – we’ve made thirteen hundred dollars and ninety three dollars a week just owning this place…”
“Talk about catching a break. The biggest real estate boom in history, right after a stock market crash. Only in Sydney. What a city! Anyway, so the old bloke cried when you gave him the Ken Done tie?”
“I just told him I should have asked his advice first – like we did with real estate – but that we’ve always wanted our own Ken Done. And since we were at the gallery, I bought him a tie as a special thanks for all his advice.”
“So he cried?”
“Yes. Well, not straight away. I told Mr. Gibson how well we’d done, buying the unit, then getting into shares and out again with your uncle’s help, then paying off the unit with what we made on the shares.”
“And then he just blubbered?”
“Well, he looked moist-eyed at first. I asked him if he knew your uncle, since they live in the same area. He did! Then I told him how I’d bought the same tie for both of them, since they’d both helped us so much. And that seemed to really move him to tears. It was quite lovely really. Maybe because he never had a daughter of his own…what are you laughing at?”
“I just thought of old Bunny Sheedy in a Ken Done tie!”