Start 1

The startup atmosphere is not what it was six months ago.

Even the flagship successes are going to have to make tough decisions and gamble their existence.


It came out last year that Uber is losing a billion dollars on 1.7 billion of revenue. So they are spending $2.7 billion.


They raised a total of US$8.8 billion most recently at a valuation above $60 billion. These investors need over 60 billion in profits to break even on an absolute basis.


Uber is clearly the best taxi company ever. It’s a relief not to spend hours waiting for a taxi driver in a smelly car who insists on being paid in cash and refuses to drive to Bondi.


VCs and other investors dumped cash on Uber’s balance sheet that is now being used to ‘invest’ in growth. But when Uber says invest they don’t mean set up offices in new countries and buy plant and equipment, though there is some of that.


What they really mean is they’ll cut prices below profitability to keep Uber cheaper than taxis and anyone else who dares to compete.


To make a decent economic return on current revenue they would need to lift their fee by, say, 60%.


Soon enough there will be a point where it makes sense for every driver to be on a  congregation app. An app that out-platforms Uber.


Anyone looking for an idea?


“I prefer building rather than fundraising,” Kalanick added in the interview with Betakit. “But if I don’t participate in the fundraising bonanza, I’ll get squeezed out by others buying market share.”


Fintech is hot right now. No-one has more money than the banks. I mean the banking system literally has all our money. This was always going to attract attention from the startup community.


But finance is a poor candidate for start-ups. I do wonder how many of the kids setting up a ‘new kind bank’ would have the stomach to take a home off a family in default.*


 A few guys and girls in a room can build a world-changing app – there’s no doubt about it. But picture sharing is very different to lending someone amounts that might take a lifetime to pay back.


Some parts of fintech are incredibly promising (and proven): crowdfunding of all shapes and sizes, data analytics, security, wealth management.


But some revolutionary start-up thinkers manage to do full circles of logic, such as in P2P lending, where anyone can borrow and anyone can lend. We are all banks now.


The idea was that:


– the borrowers would be able to find cheaper loans
– the lenders would have access to new markets that were previously closed to individuals.


It quickly became too complicated to have individuals lending to people. Too risky and painful to see innocents lending at 8% to someone who won’t pay back. Default rates are still low, but we are at the very end of the credit cycle, precisely when you’d expect financial innovation and new people coming to the market. A bad time to be picking up pennies. So the P2Ps started  dividing the borrowers into tranches according to secret credit rating profiles with uniform default rates and returns.



The next step most P2P lenders have taken was to gather all the loans together and sell them to institutions.


So now we have exactly what we’ve always had – a provider who pools the lending of large amounts of money to different people. This is basically a bank, only without the infrastructure and experience of bankers.


The attempt to revolutionise lending ended up at securitised mortgages with all those hazards familiar to Americans who let mortgage brokers in Florida determine credit. Round of applause.


Still, the volumes are trivial compared to the trillions of dollars on the lending books of major banks and it’s certainly something new. Good luck to them.


The first time I heard about bitcoin I was fascinated for at least three months.


But somehow I – and anyone you hear talking about bitcoin – managed to overlook these incredible flaws:


1. It takes 10 minutes to process a transaction


2. If one mining pool controls 50% of the computing power, they have total control to reverse transactions and cause mischief. This has happened before.


3. There are two groups of chatroom bandits debating how to progress. So instead of having a regulator appointed by politicians, who at least have to win votes every now and then, the bitcoin community is dependent on an indefinite group of anonymous, amorphous, and unelected hackers.


4. Immense amounts of electricity is required to process the transactions. The system is literally designed to require increasing amounts of energy, the more energy you put in. So this will get worse rather than better.


The economics encourage miners en masse to operate at a loss. There will always be a student with access to a university’s computing power, or punters ready to miscalculate and/or ignore electricity costs.


The amount of power used to verify bitcoin transactions is obscene. This is all totally wasted of course – there are no benefits to the broader system of spending huge amounts of energy calculating something that only needed to be calculated because so many other people were trying at the same time.


5.The bitcoin merchants are mostly crooks and fools. It turns out that – like normal money –  you have to use providers to store and convert your bitcoin. These people promise to store your bitcoin strings and charge to do so. More than banks ever would. So how, exactly, is this a step forward?


But the problem is not just high costs, though it still surprises me to hear intelligent people talk about costless transactions in bitcoin, when the exchange margins would make American Express blush. The issue is these firms are juicy targets for all sorts of crime.


Often the owners just spend the bitcoin they were supposed to protect, but usually they just go bust and you lose everything. Trusting your spending power to these kinds of startups is a very poor decision.


You’re not just up against backroom hackers but entire states. I wouldn’t bet on a commercial security team against North Korea’s cybercrime unit.
Finally the whole thing is kind of absurd.


I mean, we already have electronic, instant money that is extremely secure and backed by all kinds of insurance, as well as implicit and explicit government guarantees, and we can transfer it for free – certainly within countries.


Anyway, I’m sure some people made a bundle out of this particular mining boom by selling shovels, however.


The good stuff: Data analytics


A better example data analytics – there will always be ways to fine-tune and improve credit ratings of individuals and companies.


But even this is dodgy territory: most of us would be very uneasy if we knew that the bank was monitoring our purchases and developing comprehensive character profiles of us. Banks could easily delve deep into your purchases and get an extremely good idea of how likely you are to pay a loan.


This might be fine if it means extending credit to people who would otherwise be cut off, but it gets a lot muddier if you’re only lending to certain types of people because they are more likely to pay it back.


Banks already could already figure out if you’re gay or straight, and have a good idea of your national background. How would you feel about this information being used to adjust your credit score and deny you a home loan? What if Chinese immigrants prove better borrowers than the Greeks? What if a bank used that information?


But despite the pitfalls this is definitely an area where the tech genii should be playing.


User interface
I have bank accounts in the UK and Australia. Using UK banks is like surfing web pages from 1995 – they are ugly, slow and the whole thing looks like it was put together by a child. (Don’t ever sign up with HSBC).


Australian banks seem decades ahead. I doubt any startup has the billions to match CBA’s or any of the other banks investment in technology.


The major Australian banks each spend about as much on tech as Uber loses in a year. Competition will be stiff, but it’s more likely to happen between these firms than from new outsiders. Could be wrong. But if I wanted to compete with these guys I’d do it be starting a bank, not building an app.


Wealth Management


There are companies like Wealthfront that will do well. They use generic portfolios of stocks and bonds to replicate the asset management of the ultra wealthy – the ones who hold on to their wealth anyway.


There are very few ways to make money in the market and this is one of them.


Asset allocation works by holding fixed percentages of different assets.


A lot of ink has been spilled on this kind of thing – all about volatility and efficient markets. I studied it once, it’s dry, even as far as these things go.


But that whole branch of academia kind of misses the point. Turns out efficient horizons are orthogonal to what we actually want our investment portfolios to do: make money and not lose it.


It’s actually the fixed percentages that do the magic.


Say you have 50% cash and 50% stocks. As the stocks fall, the percentage drops, so you use some of your cash to buy shares. As stocks rise, their percentage increases, so you sell some stock and increase your cash holdings.


The total effect is what basically defeats everyone who tries their hand at it: Buying low and selling high.


This isn’t just stock and bond portfolios. It’s highly effective in currencies. In my own portfolio I ramp this up by betting against markets, while holding a core portfolio of stocks. It’s the above dynamic on steriods. I wouldn’t recommend trying it unless you want to spend a few painful years losing money learning how to do so.


My favourite aspect of the miserable euro crisis was that all the horrible hedge funds who had massive bets against the euro largely lost out, while those with fixed currency ratios (sovereign wealth funds) made fortunes.


Similarly, at the peak of the crisis when financiers were collectively losing their minds and their shirts, pretty much every Australian was buying at the lows. Why? Because we all have compulsory investment portfolios that almost all work on fixed percentages. We were all selling bonds and buying stocks right at the bottom.


This is perfect for fintech . Managing simple portfolios at low cost is a totally realistic goal for a small number of tech-minded people.


Wealthfront, Betterment and their ilk have a rich future – but not for their investors. They will all have to compete on price though, so don’t invest in the companies themselves. But definitely take a look at their products.


Interestingly the people running these programs generally misunderstand why they work.
Hedgeable is an example. The CEO claims to have a “proprietary investing technology called the ‘Dynamic Advisor’ “. If you ever find yourself reading something like this, run for the hills! These people always choose almost exactly the same name and never work out.


In this case they just move client portfolios to cash when volatility rises. So just when the fixed-percentage portfolios tell investors to load up on stocks and buy low / sell high, Hedgeable will step in and do the reverse, selling low after buying hi.


Congratulations Hedgeable ! In a different way you have also done a full circle of logic and are going to do the exact opposite of what you should be doing.


A similar sort of mathematical inevitability means you should put all your money in property, but that’s for another blog post.


Stock trading: Everyone loves a punt


Punting shares is a national pastime in most Western countries. You’d be hard pressed to find a red blooded male who hasn’t tried his hand.


This is a rich, fat market, desperate for research, desperate for someone to tell them what to do.


Have some ideas on this, but this post is already too long, so, you’ll have to read about it next time.


ps I haven’t actually seen uber financials so don’t quote me quoting random pages on the internet.




I finally cracked 100% on the trading performance – a private goal for the past few years. Purple is me, blue line is Australian stocks, yellow and green are the US and the UK.

27 month performance Michael Frazis

It’s been a bad period for a number of hedge fund heroes. Einhorn hasn’t made money in about a decade, despite his fresh-faced appearances boldly plugging such uniquely intelligent trades as long dated call options on Greek banks (lol). Ackman’s arrogance (‘I’ll donate all the profits on this trade to charity’) was justly and rightly punished. Paulson got everything wrong for maybe the fifth year in a row.

Since he paid himself a 3.5 billion dollar bonus one year he’s got almost everything wrong. Gold, oil, pharma, stock picks… You could have made a fortune just taking the opposite side of his bets. It’s incredible bad these guys really are at picking stocks. And these are the good ones.
As in most parts of life it’s better to be known as a brilliant investor than to actually be one.

Nobody has any business investing in hedge funds, though I’m about to set one up so I should probably stop saying that.

Anyway, pride goeth etc, though I like to think I’ve been sufficiently chastened by the market to last a lifetime. I’ve lost every cent to my name twice, and nearly everything a third time.

At least now in dollar terms I am very much ahead. It took four years to make back everything I lost in 2011 when all my option trades went sour a couple of weeks before finals.

Then I had a fraction of the capital and my trades were more than ten times the size they are now. The good news is I haven’t worried about the markets since and don’t even check them most days so it was probably worth it. Back then, most of the stocks I picked went fantastically but I lost money. These days I can’t catch a trick on the stock selection but the portfolio has been printing coin. Go figure.

Time to put more cash behind these trades.


What's information really about? It seems to me there's something
direly wrong with the Information Economy. It's not about data, it's
about attention. In a few years you may be able to carry the Library
of Congress around in your hip pocket. So? You're never gonna read the
Library of Congress. You'll die long before you access one tenth of
one percent of it.  What's important - increasingly important is the
process by which you figure out what to look at. This is the beginning
of the real and true economics of information. Not who owns the books,
who prints the books, who has the holdings. The crux here is access,
not holdings. And not even access itself, but the signposts that tell
you what to access - what to pay attention to. In the Information
Economy everything is plentiful - except attention.
(Bruce Sterling, cyberpunk science fiction author and futurist)

If you’re ever bored on the internet take a look at this page from the 90s.

It’s a collection of ‘magazines’ in deliciously old-school fonts on the themes of anarchy and hacking.

I’ve only flicked through a fraction of them but highlights include authors describing how to make free calls old-school telephone systems by whistling the right pitch and a how-to guide to creating and modifying various viruses that stalked Microsoft users throughout the world in the 90s.

I always thought of computer viruses in similar terms to the biological flavour – basically a complete mystery – but these are orders of magnitude simpler. It’s worth reading just to see how ineffective those infuriating computer updates are. All they do is search your computer for snippets of text from known viruses. But now, you too, can find the code, change it slightly and launch your own little terror.

The anarchist ravings are also top notch, due to the complete irreverence of the authors, even if they sometimes tend to miss the mark.

A lot of material here.. if you find anything interesting let me know.

Billion Dollar Science

TLDR: Add 10 billion to the annual income available to scientists around the world and see how fast we cure cancer.

Elsevier is one of the more irritating institutions in the world. It has a number of businesses, but the one of interest is its collections of scientific journals, which it on-sells to libraries and universities in incredibly overpriced bundles.

Without wanting to sound communist there is a huge pot of value here. Its market cap is over $15 billion and made over $800 million last year. The entire scientific publishing industry is worth about $10 billion a year.

Of the multiple and varied flavours of immorality in which Elsevier chooses to indulge, the worst is that not a cent of those billions in earnings is paid to scientists who author the papers and review the articles in the journals. And Elsevier is not alone.

It’s as if a broke author submitted a manuscript to a publisher – who then made a fortune, kept the lot, and then strong-armed public libraries into buying it for $14,000 per year, while restricting the hold-outs from accessing any of their books.

There have been a number of responses to this ludicrous state of affairs. Some scientists (or in this case, mathematicians) have organised a boycott. Unfortunately this is unlikely to really achieve anything.

There have been some great attempts to set up journals in the spirit of open-source but I really don’t think that’s the solution.

There are two sides to this problem: Players like Elsevier charging a fortune and blocking government funded research from non-subscribers, and the fact none of the money flows to researchers. Open source is great for access but makes no use of the fact that scientists are actually doing something worth about $10 billion a year, and could easily command a slice of that pie, and use it to bring more scientists into the field.**

People tend to follow the money. If you create demand for mortgage backed securities, then you can be damned sure people are going to build houses no-one wants in the middle of the desert.

Likewise I imagine if you pay researchers a fortune, more and more people will scramble for a piece of that tasty cash pie, and less will be attracted to, say, the zero-sum brawl of finance*, all with the added benefit of progressively better cures for the painful diseases that will kill you and those you love.

How about this for a solution:***

1. We start a (say) monthly journal.

2. Set up a simple, lucrative payment for accepted articles. As a first stab, how about $10 000 paid personally to the researchers responsible. Similarly, each reviewer receives $2,000 for each article reviewed.

I imagine this would be enough to attract some serious submissions. So serious, in fact, that universities and libraries would be obliged to subscribe (at drastically reduced prices). Oh yeah, and you can only submit articles if you or your institution is a subscriber.

So every month hundreds of thousands of dollars would be distributed to scientists, and there would be a monthly prize pool for excellent research. And I bet the journal would be a cracking read (or as cracking as stiff scientific prose ever is, anyway).

But why not take it a step further.

3. Assuming, of course, you executed that first step and attracted some worthwhile research, you could simply distribute all of the profits. So if you attracted 5% of the market… say 50% penetration at half price, you would be able to distribute 250m a year (I know, I know).

I imagine a star researcher would prefer to get paid $200k rather than submit to Nature. And as the quality of the new journal improved, it could even end up becoming more prestigious.

You could actually replicate the current system, with flagship general journals (Nature, Science) and a host of more specific titles. There’s no way of losing money as you’re simply distributing what you earn. And even practitioners of the more esoteric fields would probably prefer something rather than nothing.

Most importantly it would stick one up to operations like Elsevier that screw the struggling authors of their over-priced journals.

Anyone want to help me do it? We could make a schnazzy video and hit the crowd-funding market.

* Not that there’s anything wrong with that

** and buy cars and the like

*** There are other ways to get this done. You could (for example) takeover elsevier. You would need at least $15 billion to do it, and probably a $5 billion equity cheque. You could treat the whole thing as debt, and as you were paid your money back, you could start increasing payments to the authors are reviewers of the articles you are selling.

Also I realise 10 billion is not the amount that could actually be available, but if publishing went down this route – and there are huge economic incentives for it to do so once the ball gets rolling – we are certainly talking billions.


Pokerstars has taken my ire of late. This is a site that pulls  suckers in with illusions of control and skill then fleeces them dry.


In this case the sell point is that you’re not playing a house, you are betting against other players: an individual in honest, fair combat.


While true to varying degrees when at home with friends, in the online arena, nothing could be further from the truth.


It is the rake that kills, and you need to run the numbers to believe it. rake being the % that the site takes from every single winning hand. Feel free to skip a couple of paragraphs.


Pokerstars takes 3-4% of every hand. They get away with this because when you lose, you don’t care, and when you win, it seems trivial. But after a 12 hour session, almost everyone is going to leave disappointed.


Let’s consider a hard betting pundit, by no means atypical of the scene. Were he to put in 5 x 10 hour sessions a week (for many players this is actually conservative), with six games open (why wait longer than necessary for a good hand?) our screen locked punter would clock 15,000 ‘playing hours’ in a year. Lets say every hand averages $2, and our punter plays 50 hands in an hour.

The annual turnover would be on the order of $1.5 million. So the 3% pokerstars ‘rake’ would amount to $45,000, that no-one remembers actually putting in, but is gone nonetheless.

Our keen punter, betting with $2 stakes (or whatever the lexicon is) needs to make 45k / year across his tables to break fucking even.

Sound realistic? Here’s a s**t test:

This is all by table, so it would be like 9 people putting in 5k over the course of the year and ending with nothing in their bank accounts. And there is nothing unexpected about that.

An absolute scam.

There are other fallacies that suck in the punters, like tournaments! Entry into bigger competitions! Naturally pokerstars still takes their cut from the prize pool, but it’s not something you notice when you’re focussed on the juicy top prize that tempts and alludes. Gamblers ‘just miss out’ many more times than anyone ever wins.

Top players are sponsored, and receive a salary in return for being held up as symbols saying, despite all evidence to the contrary, ‘you, too, can win!’ like a parade of lottery millionaires outside the local newsagency urging the aging Mrs Butterworth to have a go.

There are a handful of professional sports betters who apparently make their money off rebates from grateful betting conglomerates who need deep pockets to balance their books because, god forbid, their profit might actually depend on the outcome of any one particular game.

And sure, there’s the 1% of 1% who can make 45k off a year of $2 bets, but since they’ll hardly be able to do that next year, I don’t think that counts.*

If you want to tell me of someone who’s made ‘hundreds of thousands’ playing poker online, show me their ferrari** and I’ll believe it.

Some demons need to be slain.

*Dont get me started on how Mr Waterhouse has seen it fit to plaster his ugly smirk over sporting screens Australia wide

**I imagine that’s the sort of car a red-blooded punter would go for

Thriving Hive #2

I don’t think my last post was forceful enough.

It is completely absurd that for 130 million, so much computing power has been put on the task.

For comparison, BP alone has announced plans to spend $100 million on a super computer searching for oil – with a sliver of the computational ability.

This is a hectic example of how a well designed incentive system can trump the combined power of states, in a sphere where you’d expect them to be totally dominant.

Thanks to the hype around bitcoin – and the kicks and coin people get out of participating in the enterprise – the infrastructure developed almost overnight to create most powerful computer the world has ever seen, for a fraction of what it would cost the most powerful governments in the world. Indeed, for a fraction of what they spend on far inferior systems.

And it feels like it appeared out of thin air overnight.

Last year supercomputer sales were $5.6 billion. If these (admittedly not quite apple) comparisons to the bitcoin processing hive are to be believed, the every-ten-minute-bitcoin-releases completely trumps them.

And the bitcoins were conjured out of the aether at no cost by the system itself. Disorientating.

Perhaps politicians, economists, entrepreneurs – actually maybe all of us – should give some thought to how such an outcome has been so freely engineered with such a phenomenal result.

Gold Crush

Well it looks like Sell-in-May is apparently a couple of weeks early this year, though without wanting to repeat myself too much, lower commodity prices will quite likely end up being a good thing. It always pays to pay attention to commodity markets – when managers feel queasy and reconsider investment plans, they pause commodity buying months before anything shows up in official statistics. The sell-off is broad based, the most spectacular facet is gold:

Gold meltdown

(Source: Izabella Kaminski at Alphaville)

On the plus side this is bit of a relief – if the loony libertarians and anarchists who bought both large hordes of gold and chronic amounts of  Bitcoin kept making so much money I might have had to throw in the towel and join them.

What’s the story

As always, the price is set by who’s buying and selling. In this case we have:

    • 1. Central banks
    • 2. Real demand (jewellery, industry)
    • 3. Speculators

Gold Demand Trend 2012

1. Central Wankers

In the gold market central banks have proven true to form and have screwed their populace through poor market timing (though I do think Bernanke and Glenn Stevens have done some excellent work)

UK readers may know that Gordon Brown decided to sell 60% of UK’s gold reserves in 1999-2002 at around $300 per ounce. He even told the market what he was doing before he did it. Needless to say, commodity markets tend not to rally when a government announces it’s dumping the majority of its stock. This was at a 20 year low.

Not that we can be particularly smug down under. Typically our politicians follow the political trends coming from overseas, and in this instance we certainly played by the rulebook. We sold our lot at around $360.

Australian RBA sold gold


If central banks were selling at around $300 range, what were they doing the past few years when prices ranged between $1600-1900? Naturally, they bought more gold than at any time since 1964.

Central bank purchases of gold

2. Industry

While the central banks sold at the bottom and have been buying at the top, the fact that industrial and jewellery demand (mostly jewellery) moved in opposite direction to the price restores some faith in economics, despite what you may hear about an Indian/Chinese gold rush. In terms of picking price drivers, relatively steady industrial use pales in comparison to the huge swings in speculation and the movements and hoardings of central banks.

3. Speculators

This is where it gets interesting, as a quick inspection of the demand chart above shows what you would have assumed anyway – recent years investors have piled into ETFs and physical gold.

It’s amazing how otherwise intellectually rigorous individuals so easily accept silly notions and accept bizarre illogical statements of faith on the topic.

a) Gold does NOT protect you in a sell-off (necessarily)

Since 2001, this trade has worked very well. But nothing lasts forever, and in recent days this paradigm has completely changed. All the people who bought for this reason (e.g. Jim Cramer ‘you should always have some gold in your portfolio’) if they have any logical consistency, should now be selling.

b) Gold is NOT an inflation hedge 

This oft-expounded theorem-as-fact is easy to disprove – take a look at the picture:

Screen Shot 2013-04-16 at 11.07.24 AM

As you can see, while there has been some truth in the statement in the past, without overstating it there has been a considerable divergence lately. While we’ve been about as close to deflation as you can get without calling it such, the gold price has rallied strongly.

If anything that implies a negative correlation – but the reality is it has nothing to do with it. There is no mysterious hand here – the price is determined by real factors: who turns up to buy and sell each day. No rule of thumb or market is going to make up for actually understanding who these people are and why they are doing so.

c) Gold is a better and safer store of value than cash in a bank

While certainly true when the gold price is going up, in a nutshell, it simply makes no sense to hold gold when (real) interest rates are positive

When banking cash in the UK, US and Europe gets you close to zero, then perhaps it makes more sense than usual to swap it for bullion. But when rates normalise then holding gold makes no sense at all. Think about it – if rates hit 5% (and that is well within norms – you’ve been able to get that in Australia throughout the crisis), then effectively government guaranteed increase in wealth of 5% beats the hell out of (negative) storage costs.

Should inflation pick up and purchasing power erode, central banks will jack up rates. Cyprus aside, you are safer in a too-big-to-fail bank.

So in summary, all the main speculative reasons for holding gold make very little sense right now. Now imagine what would happen if the speculators chasing capital gains start to unwind their positions that have been building since ~2001…

But what about hyperinflation!

Pundits fall over themselves trying to predict the next time this will happen.

A cursory flip through the history books shows hyperinflation is actually far rarer than everyone seems to think. This is something of a cognitive bias – the results can be so horrific that it’s easy to overstate the actual occurrence.

And no matter how inclined-toward-conspiracy you are, there is no indication that the major central bankers in the world are sulkily printing cash to plea poverty while keeping full employment a la Weimar , or are as brazenly thieving and felonious as the villainous Mugabe and his cronies in Zimbabwe.

But even so, there are actually some excellent ways to deal with hyperinflation

For example you could:

  1. Borrow in local currency and buy real assets overseas. The currency will be on a oneway trip to hell and the value of the loan will erode just as fast.
  2. Borrow and buy real assets for which there will always be demand – like central housing. Again the face value of the debt will erode in real terms, but the living space will be worth something regardless of the payment terms

What you should not do is have any savings whatsoever, or even worse, be on a fixed rate pension. Apparently the much-maligned veterans of World War I (who could hardly have picked a worse time to be born) were particularly screwed by this one.

So in conclusion: sell your gold (if you have any) and keep some cash ready for the far more interesting opportunities the market is about to throw up.

Next post: Hedge Fund Villain #1: Mr Paulson.

FYI: A chemical anomaly

Gold has always fascinated, not really due to its rarity (after all, many things are more scarce) but due to its colour and lack of reactivity, that suits it perfectly for beautiful and lasting jewellery.

Apparently an (admittedly hand-wavy) explanation is that at the lower ends of the periodic table, the increasingly (positive) charge of the nucleus causes (negatively charged) electrons to approach relativistic speeds. By the time you reach Au,  the energy levels have been pushed to the point where gold is coloured differently to the other metals – one of the many periodic crossovers that chemistry examiners love to probe.