1 00:00:06,000 --> 00:00:08,399 Speaker 1: Welcome to Fear and Greed, a Q and A where 2 00:00:08,400 --> 00:00:12,160 Speaker 1: we ask and answer questions about business, investing, economics, politics, 3 00:00:12,200 --> 00:00:16,760 Speaker 1: and more. I'm Suan Alma. The last seven days has 4 00:00:16,800 --> 00:00:20,680 Speaker 1: been quite incredible in asset markets. We have Wall Street 5 00:00:20,800 --> 00:00:24,720 Speaker 1: trading near a record level. The ASEX two hundreds also 6 00:00:24,880 --> 00:00:28,120 Speaker 1: newer record level, not doing quite as well as Wall Street, admittedly, 7 00:00:28,160 --> 00:00:30,560 Speaker 1: but still has only seventy or eighty points behind its 8 00:00:30,560 --> 00:00:33,519 Speaker 1: all time high. Golden in all time high. Bitcoin it 9 00:00:33,479 --> 00:00:36,519 Speaker 1: an all time high. In fact, Pokemon cards hit an 10 00:00:36,520 --> 00:00:39,680 Speaker 1: all time high. All sorts of assets classes doing very well. 11 00:00:39,960 --> 00:00:41,720 Speaker 1: But is it a bubble or not? 12 00:00:42,640 --> 00:00:42,880 Speaker 2: Now? 13 00:00:43,240 --> 00:00:46,080 Speaker 1: Remember, anytime you are thinking about investing, you should always 14 00:00:46,080 --> 00:00:49,279 Speaker 1: get financial device. This is not an investment podcast. To 15 00:00:49,320 --> 00:00:52,040 Speaker 1: help me think through the consequences of what's going on 16 00:00:52,159 --> 00:00:54,440 Speaker 1: in the world of assets at the moment. A welcome, 17 00:00:54,480 --> 00:00:56,760 Speaker 1: Adam Lang Adam, Welcome to Sunday. 18 00:00:56,480 --> 00:00:58,240 Speaker 2: Q and a Hello Sean. 19 00:00:59,240 --> 00:01:02,880 Speaker 1: So off the top, what do you eving about these 20 00:01:02,880 --> 00:01:08,560 Speaker 1: asset prices with equities and gold and bitcoin and other 21 00:01:08,600 --> 00:01:13,119 Speaker 1: cryptocurrencies at record levels and Pokemon cards but maybe we'll 22 00:01:13,120 --> 00:01:14,320 Speaker 1: just sleeve them aside for the moment. 23 00:01:16,360 --> 00:01:21,040 Speaker 2: Well, can I confess something very personal here, Sean. Yes, 24 00:01:22,160 --> 00:01:26,960 Speaker 2: I'm you know, I have a pretty cautious outlook in 25 00:01:27,040 --> 00:01:30,800 Speaker 2: terms certainly in terms of my investor appetite, but I'm 26 00:01:30,920 --> 00:01:36,120 Speaker 2: feeling like it's very highly valued and so I'm normally 27 00:01:36,200 --> 00:01:40,720 Speaker 2: a nervous investor, but at the moment I think that 28 00:01:40,880 --> 00:01:43,800 Speaker 2: anxiety is a little higher than it has been through 29 00:01:44,520 --> 00:01:47,640 Speaker 2: my life. And I'm just looking at so many things 30 00:01:47,760 --> 00:01:53,760 Speaker 2: and not a relentless crawl upwards, but seemingly continual increases 31 00:01:53,960 --> 00:01:59,600 Speaker 2: in valuations. And so we've got global geopolitical issues, We've 32 00:01:59,640 --> 00:02:03,040 Speaker 2: got probably a cautious approach on inflation. Have we really 33 00:02:03,040 --> 00:02:06,440 Speaker 2: got it under control around the world and including in Australia. 34 00:02:07,040 --> 00:02:09,520 Speaker 2: And then you've got given asset classes and this growing 35 00:02:09,600 --> 00:02:12,440 Speaker 2: pot of superannuation money in our country. What are we 36 00:02:12,520 --> 00:02:15,960 Speaker 2: the fourth biggest fund in the world now? And so 37 00:02:16,880 --> 00:02:20,080 Speaker 2: we've just got so many I guess variables that are 38 00:02:20,120 --> 00:02:23,880 Speaker 2: supporting high valuations and that makes me a little bit nervous. 39 00:02:23,919 --> 00:02:25,000 Speaker 2: So how are you seeing it? 40 00:02:25,639 --> 00:02:28,480 Speaker 1: Look, I think it's a well, let's talk equities first, 41 00:02:28,520 --> 00:02:31,799 Speaker 1: right and to help and I have nots as Lachland 42 00:02:31,800 --> 00:02:35,240 Speaker 1: Halloway from morning Star faked Us during the week is 43 00:02:35,280 --> 00:02:36,919 Speaker 1: talking about the fact that if you take the big 44 00:02:36,960 --> 00:02:40,200 Speaker 1: four banks and We's Farmers out of the market, our 45 00:02:40,240 --> 00:02:44,440 Speaker 1: market isn't that hot. It's just that Commonwealth Bank, Westpac, National, 46 00:02:44,440 --> 00:02:46,119 Speaker 1: Australia Bank and A and Z have done so well, 47 00:02:46,240 --> 00:02:48,920 Speaker 1: as has We's Farmers. There are a bunch of other stocks, 48 00:02:49,080 --> 00:02:53,359 Speaker 1: the HP Rio, Tinto, Forteskew Metals Group, Woolworths is another 49 00:02:53,360 --> 00:02:57,440 Speaker 1: big one, CSL throw them in that just even the 50 00:02:57,520 --> 00:03:02,000 Speaker 1: energy companies that just haven't done so well. So in 51 00:03:02,040 --> 00:03:04,280 Speaker 1: a sense, it's a very I was going to do. 52 00:03:04,360 --> 00:03:08,239 Speaker 1: What's that word, bifurcated. I never had to use that. Yeah, 53 00:03:08,240 --> 00:03:12,000 Speaker 1: bifurcated market where you have the haves and have nots. 54 00:03:12,040 --> 00:03:15,560 Speaker 1: And I think that explains equities away. I agree. I mean, 55 00:03:15,560 --> 00:03:18,359 Speaker 1: I think it's overpriced to the moment equities. But what 56 00:03:18,400 --> 00:03:21,040 Speaker 1: you will find is that some stocks, and you're already 57 00:03:21,040 --> 00:03:24,520 Speaker 1: seeing it a little bit with the banks, they will 58 00:03:24,520 --> 00:03:28,040 Speaker 1: come back to the pack and other stocks will do well. 59 00:03:28,440 --> 00:03:31,800 Speaker 1: So when what Lachlan said the three stocks and he 60 00:03:31,880 --> 00:03:35,080 Speaker 1: nominated that he thought he was interested in Woolworth's, CSL 61 00:03:35,120 --> 00:03:39,040 Speaker 1: and Santos, Now that's contra and investing almost because there 62 00:03:39,080 --> 00:03:41,880 Speaker 1: are plenty of people who say, I mean all those 63 00:03:41,880 --> 00:03:44,600 Speaker 1: three stocks are down Trodam. The other interesting thing I 64 00:03:44,640 --> 00:03:48,360 Speaker 1: think inequities is the comeback of the small cap market. 65 00:03:48,760 --> 00:03:51,600 Speaker 1: And for years we expected them to outperform the large caps, 66 00:03:51,640 --> 00:03:54,400 Speaker 1: didn't do it. This year they are, so I think 67 00:03:54,440 --> 00:03:58,480 Speaker 1: that's where that is in inequities. Let's turn to bitcoin. 68 00:03:58,720 --> 00:04:03,200 Speaker 1: Can you believe at it that bitcoin in some ways 69 00:04:03,560 --> 00:04:05,000 Speaker 1: is considered a safe haven asset. 70 00:04:07,440 --> 00:04:09,600 Speaker 2: I know you talked about this, I know I've talked 71 00:04:09,600 --> 00:04:13,240 Speaker 2: about it. I'm still in disbelief, you know. In essence, 72 00:04:13,520 --> 00:04:15,640 Speaker 2: bitcoin is one of those things that's just worth what 73 00:04:15,840 --> 00:04:18,520 Speaker 2: people think it's worth. It doesn't give you a return 74 00:04:18,520 --> 00:04:21,760 Speaker 2: on your investment, it doesn't pay dividend. It's just what 75 00:04:22,160 --> 00:04:25,480 Speaker 2: a reflection of demand for what is obviously in fixed 76 00:04:25,520 --> 00:04:29,600 Speaker 2: supply or relatively tight supply. And short answer Sean, No, 77 00:04:29,800 --> 00:04:33,359 Speaker 2: I can't. I can't. Yes, US one hundred and twenty 78 00:04:33,440 --> 00:04:36,279 Speaker 2: five thousand dollars. I mean this is an extraordinary large 79 00:04:36,279 --> 00:04:36,960 Speaker 2: amount of money. 80 00:04:37,320 --> 00:04:39,360 Speaker 1: Yeah. I mean what I find interesting is that its 81 00:04:39,400 --> 00:04:43,040 Speaker 1: credibility is such, thanks in part to the US and 82 00:04:43,160 --> 00:04:48,599 Speaker 1: slash the Trump White House, that people are replacing holding 83 00:04:49,320 --> 00:04:53,680 Speaker 1: the currencies holding the US dollar, the Japanese yen the 84 00:04:53,760 --> 00:04:58,320 Speaker 1: euro with holding crypto and particularly bitcoin. Now the bunch 85 00:04:58,320 --> 00:04:59,760 Speaker 1: of reasons why you don't like the US dollar at 86 00:04:59,760 --> 00:05:02,720 Speaker 1: the MA I mean people still it's devalued thirty percent 87 00:05:02,760 --> 00:05:07,240 Speaker 1: against the against bitcoin this year alone. That's very much 88 00:05:07,240 --> 00:05:09,040 Speaker 1: on the back of fears of what's going on there. 89 00:05:09,360 --> 00:05:12,359 Speaker 1: Japan's got a new prime minister that'sen its currency lower. 90 00:05:12,880 --> 00:05:16,360 Speaker 1: The Euro. Well, the French had a new prime minister 91 00:05:16,480 --> 00:05:18,719 Speaker 1: and now needs another one. I think he lasted twenty 92 00:05:18,720 --> 00:05:21,160 Speaker 1: four hours or they're about to announce a new cabinet. 93 00:05:21,920 --> 00:05:28,080 Speaker 2: But yeah, Theresa May her record's. 94 00:05:26,360 --> 00:05:30,000 Speaker 1: He's just fleaten the trees and may record. The euro 95 00:05:30,279 --> 00:05:34,520 Speaker 1: is definitely on well on the nose this week, and 96 00:05:34,560 --> 00:05:35,880 Speaker 1: so you know where you're going to put your money, 97 00:05:35,920 --> 00:05:38,280 Speaker 1: I mean the Aussie dollar for let's face it, it's 98 00:05:38,279 --> 00:05:42,040 Speaker 1: not a major currency. So suddenly you're getting bitcoin as 99 00:05:42,080 --> 00:05:45,320 Speaker 1: a place to park funds, which truly extraordinary, I mean 100 00:05:45,640 --> 00:05:46,760 Speaker 1: truly extraordinary. 101 00:05:47,800 --> 00:05:50,240 Speaker 2: Yeah. Can I ask a question on bitcoin though, because 102 00:05:50,279 --> 00:05:57,320 Speaker 2: amongst the cryptocurrencies, it's almost feeling like a cryptocurrency and 103 00:05:57,400 --> 00:06:02,280 Speaker 2: bitcoin are synonymous, meaning that we cryptocurrencies is obviously the category, 104 00:06:02,360 --> 00:06:05,400 Speaker 2: right and then but we talk about Bitcoin, almost as 105 00:06:05,400 --> 00:06:07,760 Speaker 2: if they're one and the same thing, because Bitcoin is 106 00:06:07,800 --> 00:06:11,719 Speaker 2: so dominant in cryptocurrency, but there are so many others. 107 00:06:11,839 --> 00:06:13,320 Speaker 2: There's like hundreds of them. 108 00:06:14,160 --> 00:06:16,800 Speaker 1: In fact, that's another market, which is what's the word 109 00:06:16,800 --> 00:06:22,240 Speaker 1: I was using, bifurcated. There are certain ether solano some 110 00:06:22,279 --> 00:06:25,440 Speaker 1: of those currencies are actually tradingly at higher levels. Some 111 00:06:25,600 --> 00:06:29,320 Speaker 1: of them may record levels well, well, maybe not what 112 00:06:29,440 --> 00:06:31,720 Speaker 1: I think you're finding in the cryptocurrency market, though it 113 00:06:31,800 --> 00:06:35,000 Speaker 1: is being found out a bit. So there are hundreds 114 00:06:35,000 --> 00:06:40,600 Speaker 1: of mean coins might have zero value nowadays, and cryptos 115 00:06:41,200 --> 00:06:44,680 Speaker 1: sometimes those with good technology behind them. There's kind of 116 00:06:44,880 --> 00:06:47,479 Speaker 1: a handful of top ones and I'm talking four or 117 00:06:47,520 --> 00:06:50,040 Speaker 1: five they seem to be doing very well, whereas the 118 00:06:50,080 --> 00:06:52,280 Speaker 1: rest of the market less. So, so I think there 119 00:06:52,320 --> 00:06:54,960 Speaker 1: is a little bit more rationality coming into that market, 120 00:06:54,960 --> 00:06:55,559 Speaker 1: which is good. 121 00:06:55,920 --> 00:07:00,560 Speaker 2: Yeah, what about do you think the longer this goes on? Right, 122 00:07:01,360 --> 00:07:03,240 Speaker 2: in a way, if the world's banks got together and 123 00:07:03,279 --> 00:07:07,560 Speaker 2: said we're going to create an international digital currency, that 124 00:07:07,640 --> 00:07:12,040 Speaker 2: it could disrupt this market entirely. But the longer this 125 00:07:12,160 --> 00:07:15,440 Speaker 2: market goes on, it feels like the less likely that 126 00:07:15,640 --> 00:07:17,520 Speaker 2: threat is real. 127 00:07:20,560 --> 00:07:22,840 Speaker 1: Yes, I don't know the answer to that, Adam, because 128 00:07:22,920 --> 00:07:25,840 Speaker 1: I mean central b If you get a central bank 129 00:07:25,920 --> 00:07:29,840 Speaker 1: digital currency, how does that play out? Because the banks 130 00:07:29,840 --> 00:07:33,720 Speaker 1: are working on that. I'm still not a huge fan 131 00:07:33,760 --> 00:07:38,400 Speaker 1: of bitcoin. I get that we now have you know, 132 00:07:38,440 --> 00:07:41,720 Speaker 1: ETF funds, exchange traded funds for bitcoin. We have a 133 00:07:41,960 --> 00:07:45,200 Speaker 1: US government which is pro bitcoin, so you're probably right, 134 00:07:45,360 --> 00:07:50,120 Speaker 1: You're probably right. I still just it doesn't have anything 135 00:07:50,160 --> 00:07:52,840 Speaker 1: backing it. It still worries me. Look, we're running out 136 00:07:52,840 --> 00:07:54,680 Speaker 1: of time, so we've got to quickly talk about gold, 137 00:07:54,720 --> 00:07:56,960 Speaker 1: and I think gold, You mind if I go first 138 00:07:57,000 --> 00:07:59,880 Speaker 1: on this one. I think you know, gold that OVERFO 139 00:08:00,040 --> 00:08:02,320 Speaker 1: thousand and US dollars and hours as it hit this week, 140 00:08:02,920 --> 00:08:06,000 Speaker 1: I think that demonstrates just how fearful markets are, and 141 00:08:06,040 --> 00:08:07,880 Speaker 1: that's why you should worry about equities. That's why you 142 00:08:07,880 --> 00:08:13,680 Speaker 1: should worry about bitcoin, because gold safe haven status been 143 00:08:13,880 --> 00:08:17,480 Speaker 1: around ever since Bretton Woods in the forties. Well probably 144 00:08:17,520 --> 00:08:20,680 Speaker 1: well before that in fact, but given the price of 145 00:08:20,680 --> 00:08:24,880 Speaker 1: it at the moment, it just shows how really sensible investors, 146 00:08:24,920 --> 00:08:27,120 Speaker 1: and I suppose mostly I'm talking about central banks here, 147 00:08:27,320 --> 00:08:31,640 Speaker 1: but also institutional investors are rushing to gold, and I 148 00:08:31,680 --> 00:08:36,680 Speaker 1: think that in itself tells the story about other asset 149 00:08:37,000 --> 00:08:43,640 Speaker 1: prices like equities and bitcoin potentially being overvalued. I don't know. 150 00:08:43,679 --> 00:08:45,480 Speaker 1: I noticed something was gold and Sacks during the week 151 00:08:45,520 --> 00:08:47,360 Speaker 1: came out and said gold will go to forty nine 152 00:08:47,480 --> 00:08:51,560 Speaker 1: hundred US dollars and ounce crazy prices for that asset. 153 00:08:52,000 --> 00:08:56,160 Speaker 1: Crazy prices. But when people are talking like that, it just. 154 00:08:56,520 --> 00:08:59,040 Speaker 2: Suggests, yeah, another twenty percent. 155 00:09:00,360 --> 00:09:02,040 Speaker 1: Is a little bit crazy. Maybe at the moment. 156 00:09:02,400 --> 00:09:03,680 Speaker 2: Oh, I think it's a great point. 157 00:09:03,720 --> 00:09:08,120 Speaker 1: Well, mate, what a good place to leave it, Adam, 158 00:09:08,400 --> 00:09:10,480 Speaker 1: thank you very much for having a chat this morning. 159 00:09:10,600 --> 00:09:11,800 Speaker 2: Thank you to being my pleasure. 160 00:09:12,080 --> 00:09:14,319 Speaker 1: That was a weekend edition of Fear and Greed Q 161 00:09:14,440 --> 00:09:16,800 Speaker 1: and A. Remember this is general information only and you 162 00:09:16,800 --> 00:09:20,160 Speaker 1: should always see professional advice before making investment decisions. I'm 163 00:09:20,160 --> 00:09:23,160 Speaker 1: Sean Aelma Enjoy your day.