Gareth Morgan Just Called Mrs Hubbard a Dropkick and a Wanker. No Really, He Did.

Mark Hubbard's picture
Submitted by Mark Hubbard on Thu, 2012-01-26 22:51

More Mark Hubbard posts can be found at his blog: Life Behind the IRon Drape.


Dr Morgan’s last email to Mrs Hubbard was as follows:

I don’t tolerate wankers. You began in a most obnoxious fashion (quote ‘mouthing a lot of rubbish’), and have the audacity to be offended because I’ve treated you as a dropkick ever since. What did you expect?


Blimey. How did such an extraordinary state of affairs come about: the principal of GMI, who has just sold his investment firm to the Peoplesbank valued at least partially, I imagine, on his reputational goodwill, emailing a GMI client a collection of nasty expletives, in a manner that can’t do his reputation much good at all? To find out, read on … Note that chronologically this piece was written in three separate stages as Mrs Hubbard and Dr Morgan were insulting each other, so this reads a little disjointed.

Long title for this post: The naive, dangerous mind of a utilitarian who believes morality is served by sacrificing the freedoms of the minority to the needs of the majority, despite the lessons of history. And believes that civilised society is about central planning, pulling levers to change macroeconomic aggregates, and taxing, rather than the limited government and limited state necessary for working out of the complex needs and desires of individuals pursuing their happiness through volunteerism, voluntarism, and a free market. (That is, freedom.)

Short title for this post: The mind of a social planning authoritarian bully.

Then, always good to begin with a quotation:

I had made my fortune by being able to spot a certain kind of man. The kind who never asked you for faith, hope and charity, but offered you facts, proof and profit.

Atlas Shrugged.

Exchange 1:

Mrs Hubbard, Pauline to her friends, of which Mr, sorry, Dr - Morgan is not one, sent an email to Gareth Morgan Investments telling of her displeasure that it had been sold (out) to the State, and that as she did not agree with the State ownership of such an asset, or the State operating in and distorting free markets, she would be transferring her funds.

You might have thought GMI would professionally reply simply by reference to their product and how superior it was, thus indicating how Mrs Hubbard would be better off leaving her funds with GMI and Kiwibank, despite her ‘philosophic’ misgivings. That would have been my response. That would have been the considered and rational response of the businessman. That would have been the end of it. Though, I guess there is a ‘wee’ problem here, as it’s impossible to compare the performance of GMI against its competitors since September 2010 when that company has refused to allow Morningstar to publish the performance of their funds compared with all other funds.

For the sake of fairness, GMI’s reasons were as follows:


In September 2010, [Gareth Morgan] withdrew his KiwiSaver fund from researcher Morningstar's analysis and laid a complaint against the firm with the Advertising Standands Authority.

He was deeply critical of what he saw as Morningstar's failures in its reporting methodology. Morningstar rejected the claim.

Instead, Dr Morgan claims his funds now adhere to GIPS, the global investment portfolio standard. You can read for yourselves on this standard on GMI’s site:

But here’s an interesting thing; the decision to allow no objective comparison with other funds only came after Morningstar issued its fund comparisons in July 2010, which included the following results (see closing footnote 1 for a better précis of GMI Performance and benchmarking, and the odd few more insults):

Quoting that article:

The biggest contrast is in the growth sector where the Gareth Morgan Growth fund has attracted the most money at $121 million but is the worst performer over two years and bottom of the pack over the last three months.

The Gareth Morgan Balanced fund was also the largest balanced fund at $165 million but was second from bottom over two years and 18th out of 27 over the last three months.

Morningstar analyst Chris Douglas said the figures showed performance was not playing a big part in the decisions people were making.

Oh dear.

At the time, GMI’s Investment Director, Andrew Gawith, had this to say:

Gareth Morgan Investments director Andrew Gawith said it was fair to say its investment style had performed poorly next to its peers over the last two years but he believed it had done better over a longer timeframe since it began investing in October 2007.

Gawith said people were kidding themselves if they believed investing in the Gareth Morgan name would result in being the top performer.

"I don't think we have ever suggested you come with us for the best performance.

Oh dear, again. Apart from this being an extraordinary admission, Mr Gawith, Mrs Hubbard did come to you for best performance and you might be surprised how many of your clients are with you for that very thing, amongst other factors and incidentals. You place, instead, the importance on GIPS. Frankly, I find GMI’s page on GIPS big on promise, and it reads lovely, but short on detail, or, of course, any meaningful comparisons. In concrete terms, it’s hard to tell what it means. Thus, I reckon it’s far more important what Mr Gawith went on to say about how GMI now measures its performance:

Like any fund manager Gawith said Gareth Morgan Investments wanted to beat the benchmarks it set itself. "And generally we have done that."

Um, sorry, what’s that? You set your own subjective benchmarks, then beat them: right, ooookay. I’m sure Mrs Hubbard hadn’t realised that when initially investing with you. And I note as recent as just this week, Dr Morgan is still defending the low performance of his funds.

I wonder if that’s why GMI’s marketing since mid-2010 has been more about Gareth Morgan using his ‘celebrity’ to traduce his opposition, rather than to point out the performance of his own funds. Negative politicking, in other words. Bullying to use some other words. And I wonder if that’s why instead of GMI replying to Mrs Hubbard that she should keep her funds with GMI and Peoplesbank because of their ‘proven’ performance, she received, instead, the following stunning missive from Mr Dr Morgan himself. It appears GMI has now continued its negative marketing campaign from bad mouthing its competitors, to bad mouthing its own clients. He wrote:

Hello Pauline [Good to here.]

It may be of interest to you that KB was the only bank or insurance company prepared to sign up to the values I have built this business on. I repeat those below. Isn’t it fascinating that the foreign institutions won’t do that because it would make them accountable to clients. Are you not aware of what ING and ANZ did to their investors with the Diversified Yield Fund? Are you not aware that GMI is the only financial firm in this country that meets the standards of GiPs, the global standard for investment management standards? I suggest you read a bit more rather than mutter a mindless mantra about the State and the private sector. There is only one thing worse than a government monopoly (at least in a democracy) and that’s a private one. Sounds to me you have hit an ideological hurdle you’re incapable of mounting. I can recommend Economics 101 as a start on matters of financial literacy.

Dr Gareth Morgan

Well done Gareth, with that snide attitude you’ll fit right in with the similar culture of bureaucrats you’ve sold your clients (out) to.

Needless to say you’ll be getting Mrs Hubbard’s personal response, she’s penning it as I write this, and it runs something along the lines of perhaps you should take Philosophy 101 and History 101 to learn the difference between a free, classical liberal society, and the patronizing nanny slave society you advocate, along with where the Big State has always led to, which is one form of human misery or other. (Plus, for the record, she has done Economics 101 and Economics 201). For myself, I would say that Marketing 101 couldn’t be too highly recommended in your instance. Also, possibly, Women 101, because my wife is lovely, mate, but really, you don’t want to piss her off like this. Every man who has, has regretted it, plus she’s just finished chewing up a poor real estate agent. And might I say ‘mounting’ was an unfortunate choice of word to use with a lady in that context?

In ending, a couple of queries on my own account:

Firstly, can you please explain to me the nature of the ‘private sector monopoly’ you believe exists in relation to the funds management industry? I believe it’s a very competitive sector – just look at the pages of funds covered by Morningstar tables. Oh, sorry, that’s a touchy point – GMI is no longer amongst them. Um, I’m sure because you’ve done Economics 101 you could perhaps also explain to me the concept of a ‘private sector monopoly’ per se? Especially how same is possible?

Secondly, as Mr Gawith has strangely said, your clients don’t come to GMI for ‘best performance’, but ‘other stuff’. Amongst that other stuff I see the word ‘transparency’ mentioned a lot, so let’s have some. GMI was sold to KB for an ‘undisclosed sum’. Given I know how cheaply public sector bureaucrats hold money, especially philosophically, and how also they are devotees of the school that decries ‘best performance’ rather than strive for it, I’m a little worried as a taxpayer they have paid a sum that may well be, to use the word that defines this decade so far - as with every economic article you’ve written over the last twelve months - ‘unfair’, on me. If GMI was sold by a tender process, then in the sake of transparency, I would like to know the price paid, and the next two closest private sector tendered offers? If not, then let’s examine the valuation methodology used, the result, and how much reputational goodwill on your name is involved?

Finally, what’s all this xenophobia that drips from your every word? I’ve first noticed this in the writing of Chris Trotter, his social democratic credo of cannibalistic societies built on need only applying to Kiwis, apparently. And more and more lately I see this in your writing: New Zealand this, New Zealand that. Why is Left politics – yes, I said Left politics in relation to yourself - becoming infected with this dangerous nationalistic nonsense? I’m neither Right nor Left wing, I just want a society in which I can be a free man, and these days that means from the State, as much as anything, but I always thought nationalism was either a mercantilist, or else bigoted, affliction of the far Right? That sort of childishness is quite appropriate on the sports field, but even we who revel in it there, know it’s unhealthy for freedom loving, civilised adults. Also, slightly off topic, why are the advocates of taxing the rich nearly always tainted by this also: how do you justify policies that you believe solve income inequality in New Zealand, yet leave the truly starving in the third world no opportunities? I say this because this type of politics always walks the line with the gun of protectionism.

Wait a minute; I said ‘freedom loving’ – sorry, silly of me. Your writings of late indicate you would have no terms of reference on that.

A little philanthropic advice in parting. You sent Mrs Hubbard your reply at 9.00pm Friday night. At that stage, we had friends over for a pizza party around my new BBQ, and were happily imbibed. Perhaps if you took the odd Friday off, drank and reveled a bit, you’d be happier, hey, nicer to people, and not so frustrated and manky as to think we need Nanny State to run every damned thing. Because you’re really pissing a lot of us off with your Statism which is showing up all over the place, from climate change to the South Sea fishery.

Exchange 2:

Since penning the above, Mrs Hubbard had sent off another missive of her own, to which, to add incredible to incredulity Dr Morgan has again responded:

The point is you have an ideological rigidity.
Your education didn't help you overcome it so I
won't try. Happy to respond to rational concerns
but you must present them first, it is idiotic
your portrayal of the State in NZ, why do you stay?

‘If you don’t like it why don’t you leave?’ That’s about the standard I’d expect of high school students posting to The Standard.

Needless to say, Mrs Hubbard is red hot angry in her chair behind me again. Looking over her shoulder, literally, her further response includes the following.

Over 2004 Mr Dr Morgan – to cite just one example - posted an op-ed that was rightly scathing of the State education system:

Quoting this wise article:

The real issue for parents is that until we get to the destination this path leads to – bare-bones, lowest quality education – then parents relying on the State system are taking part in a lottery. The prize you might win in this lottery is adequate schooling for your child, but more likely you’ll find a state school provides the child with less education than going into child labour would.

From this, Mrs Hubbard will be asking Dr Morgan why, if in 2004 he wisely wouldn’t trust the State with the minds of our children, in 2012 he would trust them with her savings? And given Dr Morgan had figured out the cause of financial illiteracy in 2004, the state school system, how has he now forgotten it?

I am asking, what the hell happened to you, Dr Morgan? You damned philosophy bereft utilitarian economist monsters, with your greatest good for the greatest number tyranny of the majority twaddle, are the end of the free West. There is either laissez faire freedom, or the planned society: there is no middle ground. You’re destroying the classical liberalism that was the moral superiority and beauty of a once mighty Western civilization, now destroyed by Keynesian socialism, Statism, collectivism, and, ironically, democracy. That is, by turncoats like you. Men and women who should be free to pursue their happiness, caught in the iron fist of State at your behest.

Also noted is the clever shortening of your name here to ‘G’. Very subtle: G can obviously stand for Gareth, or God – right, got it.


The first paragraph of this Cactus Kate post is interesting. I think she will find it would be hard to evidence the charitable giving - and nothing wrong with charitable giving, indeed, I applaud it - as the Morgan Foundation is in large part about 'educating the public', that is, groan, social engineering toward the slave society.

Exchange 2: Addendum – Here is goes; Mrs Hubbard’s reply, finished and sent:

You don't get any nicer, do you, Gareth.

I would have thought you would have had more pleasurable things to do than insult me on a Saturday evening. I guess the niceties are just for the media, pretending you are such a great guy. Looking for the "Sir" prefix are we now? Or is it politics?

You know absolutely nothing about me, but unfortunately, I now know a lot more about you. Back in July 2004 you considered the State were incapable of educating our children, but now you think the State is capable of looking after our savings, when they are not even capable of organising timely EQC pay-outs, or doing anything else of value, apart from spending what is not theirs.

Somewhere along the line you did a major flip-flop, and it seems more about attention seeking now. … We all know your pathetic motive in paying the paltry funeral costs for the Blanket man: media exposure – he came from a well-off family, you silly man. You should have read Rosemary McLeod's article published the week before you took your good works to the press conference.

… And the reason I stay in NZ is because I am a NZer. Your childish remarks are pathetic and tiresome.

You are now blacklisted, so please don't bother with any more insults.

Hold the Press – Exchange 3:

And so to Dr Morgan’s final exchange to Mrs Hubbard. Remember, she’s a (former) client of GMI!


I don’t tolerate wankers. You began in a most obnoxious fashion (quote ‘mouthing a lot of rubbish’), and have the audacity to be offended because I’ve treated you as a dropkick ever since. What did you expect?


What’s that Sinatra tune, … I’ve got Mrs Hubbard
Under my skin …

It’s actually a ballsy response from someone in his position, just, unfortunately, completely inappropriate given what the professional - which in this case coincides with the sensible - response would have been. And anger is good, but Dr Morgan’s anger, latterly, is always about enslaving Mrs Hubbard and me to an ever bigger State, whereas we only want to be free of it, and authoritarian bullies like him. So, remembering that many a dropkick has won a game for the victor on the rugby field, I’ll trade with you, Gareth, the worst name a free man can use against another. Statist. Worse, Nanny Statist. That’s what you’ve become. Your reply should only have been on the facts: why Mrs Hubbard would have been best to stay with a ‘supposed’ superior performance of your funds against other funds. I’m afraid I have to award you, and the GMI marketing arm that let your replies through, a massive fail.

It reads to me like you need to take a little time out; trying to micro-manage everything right down to my wife, is not healthy, and is certainly pissing off the Hubbard household. Your replies look to me like burn-out. … And really, I mean it: Marketing 101, apply under urgency, I reckon you’ve just taken about $2 million off the goodwill the bureaucrats at Kiwibank have paid for your name given the valuation obviously involves reputational goodwill, on the scant few details that have become known of this mystery deal of your’s. Although if it helps, you are now in line behind Bob Parker, Mayor of Christchurch, at having been driven a little bit nuts and losing their rag at the glorious Mrs Hubbard – and that was before the first earthquake Smiling

Footnote 1 – GMI’s Performance and Benchmarking.

While I think Dr Morgan’s behaviour here is somewhere between strange, brave, and reprehensible, I don’t want to besmirch GMI if that is not warranted, but their policy from September 2010 to not allow Morningstar to compare their performance against their competitor funds, was an own goal, no matter what their differences with Morningstar are.

Looking at Pauline’s report for the last month of December 2011, I note that the three Kiwisaver funds have performed as follows from inception:

Conservative Fund 11.18%
Balanced Fund 0.12%
Aggressive Fund -13.13%

Performances are also given for last twelve months and for the single month of December. With the acknowledgement that past performance is no guarantee of future performance (although all past performances were once future performances), I simply don’t know how good or bad these performances are. I do remember around the end of 2008 sending GMI an email congratulating them on cashing up some of the Aggressive Fund equity holdings just before the big falls in markets over August 2008, so they got that right, as – by the by - they have their unique administration system, but the disastrous Morningstar results report was for the two year period from that point. And since then there’s simply no meaningful terms of reference or context for me to view comparative performance anymore. For example, at the start of this month’s report it says:

Monthly Return:

Your return for the month of December was 0.4% against a benchmark of 0.1%.

Overall Return:

Your net contributions since 1 October 2007 have totalled $xxx. As at 31 December 2011 the total value of your KiwiSaver account is $xxx.

This is a simple return of -7.4% (after tax and fees), and a time-weighted return of -15.0% (after tax and fees) against a benchmark of -28.3%

And that’s where I have the problem. The supposed benchmark given emits little in the way of useful information. GMI give full disclosure of what the various benchmarks are here.

However, a quick reading of these would indicate the benchmarks used are nothing more than various weighted indices of applicable markets representing the performance of those markets ‘overall’, such as the MSCI series, for each fund. So, they do show any result of GMI’s active management over just sticking your money in passive index tracking funds, BUT, they do not tell me how well GMI’s active management was compared to the active management of their Australian parented/NZ competing funds in beating a passive, index tracking investment style. That is, the funds that Mrs Hubbard could otherwise invest in. I can only tell this by being able to compare GMI’s funds, thus funds management, against the management of competing funds run in each of the applicable areas invested. Without the Morningstar analysis, this is impossible, thus any meaningful context to place GMI’s performance for investors is not possible. And that’s not good enough in this industry. Well, not if you want to be competitive, unless you’re simply planning on using some type of brow-beating-celebrity-bluster marketing to trick financial illiterates, wankers, and dropkicks into leaving their money with you.

Does anybody whose read more on GMI want to put me right on this or confirm my thoughts?

I would’ve said if Kiwibank do anything constructive, it will be to remedy this, however, I see from Dr Morgan’s sale statement Kiwibank will have no input into management (despite they had to sign up to his values and standards), so I guess nothing will change here. Whatever problem GMI have with Morningstar’s methodology must surely be fixable, it would defy belief that it was not so – letting it go like this was a ‘dropkick’ thing to do at the time and smacks more of an uncooperative, bruised ego, indeed the one that shows through in Dr Morgan’s correspondence, than a firm making wise business decisions, and that looks set to continue. Anyway, regardless, Pauline and I won’t be with GMI/KB: we are laissez faire freedom lovers, and for philosophical reasons, won’t have a bar of the Peoplesbank. Moreover, as the nasty Dr Morgan says, ‘we don’t tolerate wankers’, either, or patronising gits, for that matter. So dropkick that between the posts … of your own goal.

With that, I started with a quotation, and will end with one – American Thomas Babington Macaulay could well have been talking of Dr Morgan:

“He conceives that the business of the magistrate is not merely to see that the persons and property of the people are secure from attack, but that he ought to be a jack-of-all-trades, architect, engineer, [climate change scientist], schoolmaster, merchant, theologian, [fisheries sorter-outer], a Lady Bountiful in every parish, a Paul Pry in every house, spying, eavesdropping, relieving, admonishing, spending our money for us. His principle is, if we understand it rightly, that no man can do anything so well for himself as his rulers, be they who they may, can do it for him, and that a government approaches nearer and nearer to perfection in proportion as it interferes more and more with the habits and notions of individuals [and destroys their freedoms].”

... the annoyed writer of this post can be contacted at

( categories: )

You're not the only one, Mark

Richard G McGrath's picture

I bought into Kiwisaver in 2011 for the same reason - to retrieve a thousand dollars of stolen money.

The paperwork is being

Mark Hubbard's picture

The paperwork is being signed, Mrs Hubbard is moving fund manager Smiling

And Dr Jesus Morgan has paid $20,000, from what I read, for a month in Antarctica: wait for the carbon taxes on steroids when he returns.

Cheers Commander. But no, a

Mark Hubbard's picture

Cheers Commander. But no, a sell out, still, because I knew that beforehand and still did it.

What did you actually sell

Richard Wiig's picture

What did you actually sell out, Mark? You haven't stolen from anyone. You didn't violate anyones rights. I signed up because I couldn't pass up liberating the thousand dollars and I could get out when I chose. As Linz says, you may as well get something back if you can.

... your wife?Well I

Mark Hubbard's picture

... your wife?

Well I wake up with her in bed each morning Marcus, so I'm in trouble otherwise Smiling

Although forum members may have been thinking because all they see here is me, that I'm the stroppy one in the family ...

Linz, yes, I get the point, but still regret it. It was one area that was easy not to sell out in.

[Footnote, I've also not tied up the xenophobe - rich prick tax advocates - protectionist connection very well in this post, but it does exist, and I shall post on it down the track somewhere.]

Bro Hubbard (and Mrs Bro)

Lindsay Perigo's picture

Don't beat yourselves up. The West didn't/won't fall 'cos folk clawed back some of what Nanny had taken from them. It's the taking, not the retrieving, wherein lies destruction. You're not obliged to proceed as though we live in a NIOF libertarian society already. See Rand on the subject of government scholarships etc.

There's a polar diffwinth between weluctant acquiethenth and the wilfull advocathy of inthitutionalithed thtealing pwactithed by Gaweth the Markthitht Morgan.

Mrs Hubbard...

Marcus's picture your wife?

Did you spot the flaw?

Mark Hubbard's picture

Surprised someone hasn't pulled me up on it. I was angry when I wrote this post, so didn't bother with it, but, of course, the admission is necessary.

If Mrs Hubbard doesn't believe the State should be involved in this area, then why did she join Kiwisaver? For that matter, if I don't believe the State should be involved in this area, why am I in Kiwisaver?

To my shame, there is no honourable answer, obviously. Our joining was unprincipled. At the time I was angry, as usual, on paying out another provisional tax bill, so thought Kiwisaver was a way to get some of our money back.

Dumb, stupid, dishonourable reason to have joined. I regretted it months after joining up, I'd sold myself out, but then, as a salutary message on how the State just continues to grow, once you join there is no legal way out of Kiwisaver again. I am stuck in Kiwisaver until I'm 65, and I volunteered for it. I volunteered to be put into a position from which voluntarism was no longer then possible, and now I am forced by the State to keep contributing.

My fault. I'm a moron. (Mrs Hubbard isn't, she was busy at the time and just following my advice). But there's a whole message in how the West fell in that sad little tale.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.