1
00:00:08,360 --> 00:00:11,480
Speaker 1: Hello and welcome to The Australian's Money Puzzle podcast. I'm

2
00:00:11,560 --> 00:00:15,280
Speaker 1: James Kirby. Welcome aboard everybody now if you've just tuned in.

3
00:00:15,400 --> 00:00:18,880
Speaker 1: We started the year earlier this week with the edition

4
00:00:19,320 --> 00:00:21,680
Speaker 1: Your Shares in twenty twenty six, and we had Mark

5
00:00:21,760 --> 00:00:26,160
Speaker 1: Jocum take us on a panoramic view really of global

6
00:00:26,200 --> 00:00:29,479
Speaker 1: investment markets and what we might reasonably expect in the

7
00:00:29,560 --> 00:00:34,400
Speaker 1: year ahead. Today we're going to look at individual shares. Specifically,

8
00:00:34,479 --> 00:00:36,560
Speaker 1: we're going to look at Australian shares on the A six,

9
00:00:36,600 --> 00:00:40,239
Speaker 1: which means we're talking about stock picking. And joining me

10
00:00:40,320 --> 00:00:45,280
Speaker 1: on the show is jun Belu of Tedcap. If you

11
00:00:45,400 --> 00:00:48,479
Speaker 1: recall she did this exercise with me last year. She

12
00:00:48,520 --> 00:00:51,280
Speaker 1: had just started her fund actually this time last year,

13
00:00:51,800 --> 00:00:56,880
Speaker 1: certainly as in its current formation, and in that twelve

14
00:00:56,880 --> 00:00:59,360
Speaker 1: month period, I think we can say that she's become

15
00:00:59,360 --> 00:01:03,320
Speaker 1: one of the best known, high profile certainly stock pickers

16
00:01:03,800 --> 00:01:07,800
Speaker 1: in the market. Very good to have you on again.

17
00:01:07,840 --> 00:01:08,720
Speaker 1: How are you, JB.

18
00:01:10,000 --> 00:01:12,320
Speaker 2: I am great, Hi James, thank you so much for

19
00:01:12,440 --> 00:01:15,039
Speaker 2: having you. Always love to have chat about the stock market.

20
00:01:15,440 --> 00:01:18,560
Speaker 1: Well, we are ready to roll. As I say, we

21
00:01:18,640 --> 00:01:21,280
Speaker 1: did an exercise earlier in the week where we just

22
00:01:21,319 --> 00:01:24,119
Speaker 1: looked at the broader market and they sort of conditions

23
00:01:24,160 --> 00:01:27,000
Speaker 1: out there, just to refresh for everybody. You know, our

24
00:01:27,080 --> 00:01:31,080
Speaker 1: own market, the US did about seventeen eighteen percent, and

25
00:01:31,120 --> 00:01:34,400
Speaker 1: we in the end almost got to ten percent, thankfully

26
00:01:34,920 --> 00:01:38,600
Speaker 1: due to as always the dividend kicker of three and

27
00:01:38,640 --> 00:01:40,880
Speaker 1: a half percent or so, which has come down it

28
00:01:40,959 --> 00:01:42,959
Speaker 1: used to be about four and a half percent. We'll

29
00:01:42,959 --> 00:01:45,319
Speaker 1: come back to that as the show goes on, but

30
00:01:45,480 --> 00:01:48,480
Speaker 1: we want to look at first of all the outlook

31
00:01:48,520 --> 00:01:52,480
Speaker 1: for the AX. Tough question, but clear question for you.

32
00:01:53,520 --> 00:01:56,600
Speaker 1: Do you think the ASEX can do it again this year?

33
00:01:56,640 --> 00:01:59,080
Speaker 1: Can it do double digits?

34
00:02:00,840 --> 00:02:03,000
Speaker 2: Yeah, a SEX definitely is going to get to the

35
00:02:03,080 --> 00:02:06,120
Speaker 2: double digit if anything, potentially a little bit of upside.

36
00:02:06,200 --> 00:02:08,760
Speaker 2: I'll tell you why. There's a couple of tailwinds. One

37
00:02:08,840 --> 00:02:11,079
Speaker 2: is that we started seeing our corporate earnings doing a

38
00:02:11,120 --> 00:02:13,160
Speaker 2: little bit better. You know, in the last few years,

39
00:02:13,200 --> 00:02:15,760
Speaker 2: we have had a lot of downgrades and now looking

40
00:02:16,000 --> 00:02:18,480
Speaker 2: you know, looking forward next twelve months, we're looking at

41
00:02:18,480 --> 00:02:21,320
Speaker 2: the corporate earnings growth between eight to twelve percent. That's

42
00:02:21,320 --> 00:02:24,000
Speaker 2: actually pretty good. And then if you look at some

43
00:02:24,080 --> 00:02:26,520
Speaker 2: of the biggest sector actually you know, one of the

44
00:02:26,520 --> 00:02:30,080
Speaker 2: biggest sector, which is mining for Australia, they are having

45
00:02:30,280 --> 00:02:32,960
Speaker 2: they are on fire. That sector is projected to do

46
00:02:33,040 --> 00:02:36,079
Speaker 2: pretty well again this year, of course, will be more selective,

47
00:02:36,120 --> 00:02:39,040
Speaker 2: will be more supported by some of the structural commodity

48
00:02:39,160 --> 00:02:42,120
Speaker 2: like copper and others, but that sector should do pretty well.

49
00:02:42,280 --> 00:02:45,799
Speaker 2: They paid pretty big dividends and that should drive quite

50
00:02:45,840 --> 00:02:47,920
Speaker 2: a lot of growth in terms of earnings as well.

51
00:02:48,120 --> 00:02:50,200
Speaker 2: So our market, I think it will get to the

52
00:02:50,240 --> 00:02:53,040
Speaker 2: ten percent potentially with a little bit more, you know.

53
00:02:53,120 --> 00:02:56,320
Speaker 2: I guess there's a bit of expectation for US market

54
00:02:56,360 --> 00:02:58,760
Speaker 2: to do so much better, as people always do. I

55
00:02:58,800 --> 00:03:01,440
Speaker 2: think the one thing that sort of held holding us

56
00:03:01,480 --> 00:03:03,639
Speaker 2: back is that, you know, the back of the mind

57
00:03:03,720 --> 00:03:06,040
Speaker 2: question of what's going to happen to our interest rate.

58
00:03:06,320 --> 00:03:07,720
Speaker 2: We're going to get a height towards the end of

59
00:03:07,760 --> 00:03:10,640
Speaker 2: the year potentially. I don't think it's coming soon, but

60
00:03:10,720 --> 00:03:13,079
Speaker 2: I do think potentially there is a chance. But that

61
00:03:13,200 --> 00:03:15,520
Speaker 2: is still going to see us see our market have

62
00:03:15,560 --> 00:03:16,440
Speaker 2: a pretty good return.

63
00:03:17,120 --> 00:03:19,600
Speaker 1: So just to give you some context there, it's not

64
00:03:19,680 --> 00:03:23,119
Speaker 1: that we have strong earnings this year so much as

65
00:03:23,440 --> 00:03:25,919
Speaker 1: we have earnings this year, right, So it's actually been

66
00:03:26,040 --> 00:03:29,119
Speaker 1: pretty dull hasn't it in terms of earnings and perhaps

67
00:03:29,520 --> 00:03:34,079
Speaker 1: behind all the noise, the inability to have strong earnings

68
00:03:34,080 --> 00:03:37,000
Speaker 1: on the axis is really what explains why we were

69
00:03:37,040 --> 00:03:39,480
Speaker 1: dragging our heads compared to the US in recent times.

70
00:03:41,080 --> 00:03:43,920
Speaker 2: That's right, so recent US because the index is very

71
00:03:43,960 --> 00:03:46,520
Speaker 2: dominated by a lot of those growth businesses and they

72
00:03:46,560 --> 00:03:49,440
Speaker 2: have done incredibly well. And the challenge is that for

73
00:03:49,600 --> 00:03:51,600
Speaker 2: next year is you know, there is a bit of

74
00:03:51,800 --> 00:03:55,160
Speaker 2: investor skepism with evaluation, you know, and now they're getting

75
00:03:55,200 --> 00:03:58,560
Speaker 2: returns and they are becoming cabinets heavy companies now. So

76
00:03:58,760 --> 00:04:01,920
Speaker 2: now in a way that our market may see, Ernie Swarth,

77
00:04:01,960 --> 00:04:03,160
Speaker 2: that's actually not too bad.

78
00:04:03,320 --> 00:04:05,760
Speaker 1: One of the things that people have been concerned. There's

79
00:04:05,760 --> 00:04:10,680
Speaker 1: two sort of outstanding, obvious, in your face headwinds for

80
00:04:10,880 --> 00:04:15,080
Speaker 1: the AX all things been equal, who knows, of course

81
00:04:15,880 --> 00:04:18,120
Speaker 1: the international markets and if we wake up in the

82
00:04:18,160 --> 00:04:21,279
Speaker 1: morning and Wall Street has a ten percent correction, where

83
00:04:21,360 --> 00:04:24,800
Speaker 1: we are going to follow that for sure absolutely probably

84
00:04:24,839 --> 00:04:28,159
Speaker 1: exceeded history would suggest. So let's put that on the table.

85
00:04:28,320 --> 00:04:31,120
Speaker 1: But as we stand, and as you say, twelve months

86
00:04:31,160 --> 00:04:33,640
Speaker 1: is a long time, so we're talking over twelve month

87
00:04:33,680 --> 00:04:35,479
Speaker 1: pero that we could do this double digit. But you

88
00:04:35,560 --> 00:04:38,040
Speaker 1: mentioned one thing first of all already, which is the

89
00:04:38,040 --> 00:04:40,920
Speaker 1: prospect of rising rates. So the consensus is that we're

90
00:04:40,920 --> 00:04:44,760
Speaker 1: going to have rising rates now that is surely going

91
00:04:44,800 --> 00:04:48,360
Speaker 1: to work against sentiment in the market. And the second

92
00:04:48,400 --> 00:04:50,719
Speaker 1: thing that I just alluded to at the start is

93
00:04:51,240 --> 00:04:55,119
Speaker 1: our great concushion has always been dividends. The dividend yields,

94
00:04:55,120 --> 00:04:57,640
Speaker 1: which was about four and a half percent, it's actually

95
00:04:57,680 --> 00:04:59,839
Speaker 1: sliding and sliding. It's now about three and a half.

96
00:05:00,400 --> 00:05:04,320
Speaker 1: So how do you bake in those two factors? JB.

97
00:05:05,960 --> 00:05:08,159
Speaker 2: That's a really good question. I think it's very true.

98
00:05:08,320 --> 00:05:10,600
Speaker 2: First of all, with the interest rate, it's very interesting

99
00:05:10,640 --> 00:05:14,040
Speaker 2: the expectations for rate rise has changed very rapidly, literally

100
00:05:14,080 --> 00:05:17,120
Speaker 2: within the last few weeks of December, that market start

101
00:05:17,200 --> 00:05:20,800
Speaker 2: expecting a rate rise in February, rate rise in May,

102
00:05:21,200 --> 00:05:24,599
Speaker 2: and you know, instead of ray cards previously. So now

103
00:05:24,720 --> 00:05:27,159
Speaker 2: my view is that because market is very fast in

104
00:05:27,440 --> 00:05:30,560
Speaker 2: sort of pricing in the expectations, which you know, economic

105
00:05:30,640 --> 00:05:33,679
Speaker 2: seems to have moved together. I do think that what's

106
00:05:33,720 --> 00:05:36,040
Speaker 2: been priced in which we saw a lot of selling

107
00:05:36,080 --> 00:05:40,320
Speaker 2: in the ur retailers, is now actually perhaps way too pessimistic.

108
00:05:40,480 --> 00:05:43,360
Speaker 2: My view that we're not getting a rate rise in February.

109
00:05:43,600 --> 00:05:46,560
Speaker 2: Even May is very skeptical because you know some of

110
00:05:46,600 --> 00:05:50,239
Speaker 2: the data stats coming through. Normally for RBA, they called

111
00:05:50,320 --> 00:05:52,920
Speaker 2: for the board. The key thing is to do nothing

112
00:05:53,080 --> 00:05:55,640
Speaker 2: usually is the first step, and then it takes a

113
00:05:55,680 --> 00:05:59,640
Speaker 2: really high hurdle to move from raate card to suddenly

114
00:05:59,760 --> 00:06:02,240
Speaker 2: rate right. So that is going to be very negative.

115
00:06:02,279 --> 00:06:04,279
Speaker 2: So for me is that I don't think it's coming

116
00:06:04,279 --> 00:06:06,600
Speaker 2: in the first half of the year. Yes, you'll be negative,

117
00:06:06,720 --> 00:06:08,640
Speaker 2: you know when it does come that part of the year,

118
00:06:08,640 --> 00:06:11,760
Speaker 2: and that's assuming inflation stays very strong. We only just

119
00:06:11,800 --> 00:06:14,680
Speaker 2: really have a one data point, you know, in September

120
00:06:14,760 --> 00:06:17,760
Speaker 2: quarter that was that was stronger than expected. So you know,

121
00:06:17,800 --> 00:06:19,800
Speaker 2: we're just still too early to call. Yes, c it

122
00:06:19,880 --> 00:06:22,400
Speaker 2: is negative for the share market, but right now market

123
00:06:22,440 --> 00:06:25,160
Speaker 2: is pricing in quite a lot of rate rise already,

124
00:06:25,240 --> 00:06:27,880
Speaker 2: so from here on you know in a way that

125
00:06:27,920 --> 00:06:30,240
Speaker 2: we won't be surprised. So I think it's been pricing

126
00:06:30,440 --> 00:06:33,160
Speaker 2: at least one rise for this year, and I think

127
00:06:33,200 --> 00:06:36,000
Speaker 2: if anything, timing could be extended out so that if anything,

128
00:06:36,040 --> 00:06:38,159
Speaker 2: that's kind of on the positive front. So for the

129
00:06:38,200 --> 00:06:39,799
Speaker 2: market valuation, before.

130
00:06:39,600 --> 00:06:42,480
Speaker 1: You talk about dividend, Yeald, that's very interesting. So your

131
00:06:42,520 --> 00:06:44,599
Speaker 1: theory to some extent is that the sell off in

132
00:06:44,640 --> 00:06:47,120
Speaker 1: the role of the Christmas was actually because of the

133
00:06:47,160 --> 00:06:49,640
Speaker 1: change of sentiment about rates and the market and the

134
00:06:49,680 --> 00:06:52,279
Speaker 1: analysts and the journalists are all running wareheaded themselves in

135
00:06:52,360 --> 00:06:55,000
Speaker 1: terms of how quickly this would and THERBA would never

136
00:06:55,080 --> 00:06:57,720
Speaker 1: be seen to flip flop quite so dramatically. Is that

137
00:06:57,920 --> 00:06:59,440
Speaker 1: basically what where you're coming from.

138
00:07:00,160 --> 00:07:03,120
Speaker 2: Absolutely, I think the pricing is essentially being in and

139
00:07:03,240 --> 00:07:06,599
Speaker 2: now we actually if you've seen some of the rediscretionary sector,

140
00:07:06,960 --> 00:07:08,800
Speaker 2: they started performing a little bit better just in the

141
00:07:08,880 --> 00:07:11,520
Speaker 2: last few weeks because the probability for raate rise is

142
00:07:11,560 --> 00:07:14,600
Speaker 2: already moving back from you know, something like eighty percent

143
00:07:14,680 --> 00:07:17,400
Speaker 2: in February now down to twenty five. So, you know,

144
00:07:17,560 --> 00:07:19,760
Speaker 2: just the market's got too way ahead of themselves.

145
00:07:19,840 --> 00:07:23,400
Speaker 1: So but consumer sentiment is it's pretty poor, Yeah, I

146
00:07:23,400 --> 00:07:23,680
Speaker 1: think so.

147
00:07:23,880 --> 00:07:27,440
Speaker 2: I think consumer the actual consumer sector for this year

148
00:07:27,480 --> 00:07:30,080
Speaker 2: will be a bit challenged because we heard the Christmas

149
00:07:30,160 --> 00:07:33,120
Speaker 2: was okay, you know, November was strong, but the challenges

150
00:07:33,200 --> 00:07:36,360
Speaker 2: there's a lot of discounting and because of the headline

151
00:07:36,640 --> 00:07:39,400
Speaker 2: was being discussed in the media. You know, Ray Rice rayhike.

152
00:07:39,680 --> 00:07:42,200
Speaker 2: Consumer just don't spend. And on top of that, we

153
00:07:42,360 --> 00:07:46,160
Speaker 2: also had the tragedy at Boondai shooting, you know, hearing

154
00:07:46,160 --> 00:07:48,680
Speaker 2: your South Wales that has really caused a lot of

155
00:07:48,840 --> 00:07:51,920
Speaker 2: traffic to disappear from shopping centers and others. You know,

156
00:07:52,040 --> 00:07:54,960
Speaker 2: this has happened previously, any of those similar sort of

157
00:07:54,960 --> 00:07:57,960
Speaker 2: events that you know, consumer just don't feel they want

158
00:07:58,000 --> 00:08:00,160
Speaker 2: to be shopping, they want to don't Yeah, they don't

159
00:08:00,160 --> 00:08:03,200
Speaker 2: to spend. So we definitely seen that full back discounting

160
00:08:03,280 --> 00:08:05,480
Speaker 2: is very heavy at the moment. We already have a

161
00:08:05,480 --> 00:08:08,800
Speaker 2: couple of retailers came out already downgraded, not on the

162
00:08:08,840 --> 00:08:12,000
Speaker 2: revenue front, but more so on the march because they

163
00:08:12,040 --> 00:08:14,280
Speaker 2: have to discount. So I do think that will become

164
00:08:14,320 --> 00:08:17,600
Speaker 2: a theme for this year because retailers are sitting at

165
00:08:17,800 --> 00:08:19,920
Speaker 2: very big margins for the last couple of years because

166
00:08:19,960 --> 00:08:21,880
Speaker 2: things been good. You know, they do have to give

167
00:08:21,960 --> 00:08:23,000
Speaker 2: some of that back.

168
00:08:22,840 --> 00:08:26,600
Speaker 1: This year, okay, and on the dividend yield. So the

169
00:08:26,600 --> 00:08:31,400
Speaker 1: point we were making is that cushion is fading for

170
00:08:31,560 --> 00:08:35,559
Speaker 1: Australian stocks. That the ability that you could always say,

171
00:08:35,559 --> 00:08:36,960
Speaker 1: well you're going to get four and a half percent

172
00:08:37,000 --> 00:08:38,800
Speaker 1: whatever happens, but you're only going to get three and

173
00:08:38,800 --> 00:08:41,320
Speaker 1: a half percent. Now, that puts more pressure on the

174
00:08:41,320 --> 00:08:42,959
Speaker 1: stocks to grow, doesn't it.

175
00:08:45,240 --> 00:08:48,560
Speaker 2: In a way. So I think part of the reason

176
00:08:48,600 --> 00:08:51,600
Speaker 2: the dividend has been steadily falling is one is that

177
00:08:51,880 --> 00:08:54,760
Speaker 2: you know, clearly our banks is already sort of peaked

178
00:08:54,800 --> 00:08:56,719
Speaker 2: in terms of their earning, so it's not growing in

179
00:08:56,800 --> 00:08:59,360
Speaker 2: terms of dividend. And two is the last few years

180
00:08:59,400 --> 00:09:03,160
Speaker 2: that resources company which normally pay big dividend, has been

181
00:09:03,200 --> 00:09:08,119
Speaker 2: really tough. But we just started seeing those commodity prices

182
00:09:08,120 --> 00:09:11,640
Speaker 2: turning around significantly. If you look at just take PHPO

183
00:09:11,760 --> 00:09:14,360
Speaker 2: or Real as an example, both of them are sitting

184
00:09:14,360 --> 00:09:17,600
Speaker 2: there with thirty percent earnings upgrade to come in this

185
00:09:17,760 --> 00:09:21,640
Speaker 2: reporting season because how much commodity price has moved. Just

186
00:09:21,720 --> 00:09:25,120
Speaker 2: this month, the commodity prices all up double digit. So

187
00:09:25,360 --> 00:09:28,240
Speaker 2: that means these companies normally pay out quite a lot

188
00:09:28,240 --> 00:09:30,960
Speaker 2: of dividends and that should see the dividend improved for

189
00:09:31,080 --> 00:09:34,720
Speaker 2: this year. But definitely they will put pressure on companies

190
00:09:34,760 --> 00:09:37,959
Speaker 2: because the Australian investors always demanded higher dividends.

191
00:09:38,400 --> 00:09:43,240
Speaker 1: So do you think the big miners the mining sector

192
00:09:43,360 --> 00:09:46,720
Speaker 1: in it it could actually revive the dividend yield across

193
00:09:46,760 --> 00:09:48,599
Speaker 1: the market, it's self a structural decline.

194
00:09:49,960 --> 00:09:52,520
Speaker 2: I think they will pay more, but one of my

195
00:09:52,600 --> 00:09:54,480
Speaker 2: concerns for the Big Mind at the moment is that

196
00:09:54,559 --> 00:09:57,400
Speaker 2: they're making so much cash flow at the moment, almost

197
00:09:57,440 --> 00:10:00,680
Speaker 2: like a windfall, and they historically have being very bad

198
00:10:00,760 --> 00:10:03,240
Speaker 2: in paying out shareholder and they'll hold on to the

199
00:10:03,280 --> 00:10:05,720
Speaker 2: cash then normally would like to go out and buy

200
00:10:05,720 --> 00:10:08,000
Speaker 2: things to grow. You know, managements sit around the table

201
00:10:08,000 --> 00:10:09,920
Speaker 2: going how do we grow in next year? And we're

202
00:10:09,960 --> 00:10:11,040
Speaker 2: already started seeing a.

203
00:10:10,960 --> 00:10:11,280
Speaker 1: Bit of that.

204
00:10:11,400 --> 00:10:13,600
Speaker 2: So the challenge is that hopefully they don't go out

205
00:10:13,600 --> 00:10:15,640
Speaker 2: and slowly spend all the money. But I think it

206
00:10:15,679 --> 00:10:17,760
Speaker 2: looks they will be a bit disciplined because you know,

207
00:10:17,800 --> 00:10:21,199
Speaker 2: shareholder room punish these sort of nowsal quite quickly.

208
00:10:21,720 --> 00:10:23,960
Speaker 1: Okay, very interesting now, folks, what we're going to do

209
00:10:24,040 --> 00:10:25,760
Speaker 1: is we're going to we're going to deep dive. Now,

210
00:10:25,800 --> 00:10:27,079
Speaker 1: we're going to go and have a look at first

211
00:10:27,120 --> 00:10:28,280
Speaker 1: of all, and I think this is going to be

212
00:10:28,400 --> 00:10:30,280
Speaker 1: very interesting. We're going to look at the miners. We're

213
00:10:30,320 --> 00:10:33,080
Speaker 1: going to look the mining shares of what risks and

214
00:10:33,080 --> 00:10:35,840
Speaker 1: opportunities you have in front of you, which as JB.

215
00:10:35,960 --> 00:10:38,120
Speaker 1: Has said it is red hot, and it is red hot.

216
00:10:38,160 --> 00:10:40,240
Speaker 1: I can't think of the time. I think you'd have

217
00:10:40,240 --> 00:10:43,240
Speaker 1: to go back nearly twenty years two four to two

218
00:10:43,240 --> 00:10:45,559
Speaker 1: o seven to see to see the sort of momentum

219
00:10:45,600 --> 00:11:05,040
Speaker 1: in the big miners. We'll be back in a moment. Hello,

220
00:11:05,200 --> 00:11:08,600
Speaker 1: Welcome back to The Australian's Money Puzzle podcast. Okay, this

221
00:11:08,720 --> 00:11:13,160
Speaker 1: is the second of our Outlook shows four twenty twenty

222
00:11:13,200 --> 00:11:16,679
Speaker 1: sixties are always very popular and if you can, I

223
00:11:16,720 --> 00:11:19,640
Speaker 1: recommend you actually listen to them in sequence because you'll

224
00:11:19,679 --> 00:11:23,319
Speaker 1: really get a broad picture for investing in the year

225
00:11:23,320 --> 00:11:25,360
Speaker 1: ahead and it is very useful.

226
00:11:25,559 --> 00:11:25,760
Speaker 2: You know.

227
00:11:26,040 --> 00:11:27,920
Speaker 1: One of the secrets of investing is not what you

228
00:11:27,960 --> 00:11:30,640
Speaker 1: think is going to happen. It's knowing what everyone else

229
00:11:30,720 --> 00:11:33,120
Speaker 1: is thinking is going to happen. And this is what

230
00:11:33,160 --> 00:11:35,200
Speaker 1: these shows are about. They do really give you a

231
00:11:35,200 --> 00:11:37,480
Speaker 1: guide if you use them in that fashion. My guest

232
00:11:37,480 --> 00:11:41,320
Speaker 1: today is Jun Belu of ten Cap. Ten Cap is

233
00:11:41,559 --> 00:11:45,000
Speaker 1: a one point five billion dollar fund. It is an

234
00:11:45,040 --> 00:11:47,920
Speaker 1: active manager. It is long short, which is very interesting.

235
00:11:48,160 --> 00:11:49,880
Speaker 1: That is they have the ability to short should they

236
00:11:49,920 --> 00:11:53,760
Speaker 1: wish to do so. It started basically it has a

237
00:11:53,800 --> 00:11:57,960
Speaker 1: net return ruffling of about eleven point two percent since

238
00:11:58,000 --> 00:12:01,960
Speaker 1: its inception. That's against the air six two hundred of

239
00:12:02,120 --> 00:12:04,679
Speaker 1: eight point nine percent over the same period of time.

240
00:12:04,920 --> 00:12:07,199
Speaker 1: And if you want to know more about my guest today,

241
00:12:07,240 --> 00:12:10,160
Speaker 1: We've had a show that was very popular that Juliane

242
00:12:10,440 --> 00:12:14,240
Speaker 1: Sprague did with JB earlier in the year, which is

243
00:12:14,280 --> 00:12:16,640
Speaker 1: called Secrets of a one point five billion Investor. Have

244
00:12:16,679 --> 00:12:18,080
Speaker 1: a look at that if you want to know more

245
00:12:18,120 --> 00:12:20,120
Speaker 1: about her today, I just want to concentrate on what

246
00:12:20,160 --> 00:12:22,280
Speaker 1: she knows about the market and what she's thinking. Okay,

247
00:12:22,440 --> 00:12:24,840
Speaker 1: now the miners, Okay, where will we start? The big

248
00:12:24,840 --> 00:12:30,199
Speaker 1: three BHP, Rio and Forteskew. As you say, they've been

249
00:12:30,400 --> 00:12:32,960
Speaker 1: somewhat dormant, but boy, they were kicking at the end

250
00:12:32,960 --> 00:12:35,079
Speaker 1: of last year. It takes a hell of a lot

251
00:12:35,120 --> 00:12:37,440
Speaker 1: to lift those stocks. They're up about twenty five percent

252
00:12:37,600 --> 00:12:39,800
Speaker 1: so far in the twelve month period. That is a

253
00:12:39,880 --> 00:12:43,920
Speaker 1: bhp in Rio. And when they deliver dividends, they deliver

254
00:12:44,200 --> 00:12:46,400
Speaker 1: gigantic dividends, don't they. They just blow it out of

255
00:12:46,440 --> 00:12:48,160
Speaker 1: that They blow the banks out of the water when

256
00:12:48,160 --> 00:12:49,960
Speaker 1: they're at the top of the cycle. So where do

257
00:12:50,000 --> 00:12:52,120
Speaker 1: you think we are with these big miners just now?

258
00:12:52,160 --> 00:12:55,120
Speaker 1: I mean is there is there more to come? Are

259
00:12:55,120 --> 00:12:57,480
Speaker 1: we are they? Where are they in their own cycle?

260
00:12:57,520 --> 00:12:59,160
Speaker 1: Because they are notoriously cyclical.

261
00:13:00,520 --> 00:13:03,240
Speaker 2: Yeah, absolutely certainly, Minus are not what you buy and

262
00:13:03,280 --> 00:13:05,680
Speaker 2: hold and your bottom drawer sort of thing. Look at

263
00:13:05,720 --> 00:13:08,520
Speaker 2: they are still looking at having a pretty good year,

264
00:13:08,880 --> 00:13:11,840
Speaker 2: But it really depends on what type of commodity is.

265
00:13:11,880 --> 00:13:14,560
Speaker 2: So for if our commodity outlook, if you look at

266
00:13:14,559 --> 00:13:17,360
Speaker 2: the support, you know, the structural names such as copper

267
00:13:17,720 --> 00:13:20,720
Speaker 2: or certainly some cases gold and maybe even al aminium

268
00:13:20,840 --> 00:13:23,560
Speaker 2: has some of the structural supports. In terms of copper,

269
00:13:23,760 --> 00:13:27,320
Speaker 2: you know, it's electrification and the demand globally, demand for

270
00:13:27,440 --> 00:13:30,760
Speaker 2: copper has really increased, and then the supply just hasn't

271
00:13:30,800 --> 00:13:32,720
Speaker 2: been there and we all know that's going to create

272
00:13:32,840 --> 00:13:35,760
Speaker 2: price this location. And we're seeing copper going to have

273
00:13:35,800 --> 00:13:38,719
Speaker 2: another strong yet because there's just a supply with it.

274
00:13:38,800 --> 00:13:41,880
Speaker 2: Iron ore is a bit harder because a big consumer

275
00:13:41,920 --> 00:13:44,640
Speaker 2: of iron oil is actually China, and China hasn't really

276
00:13:44,720 --> 00:13:47,360
Speaker 2: revived that much. It's just not doing any worse. So

277
00:13:47,640 --> 00:13:50,320
Speaker 2: China is steady, and then we're looking at globally the

278
00:13:50,360 --> 00:13:52,719
Speaker 2: demand is actually picking up a little bit. So yeah,

279
00:13:52,760 --> 00:13:55,560
Speaker 2: I think all these commodities are well supported, so our

280
00:13:55,640 --> 00:13:58,520
Speaker 2: minus probably still another good year. You know, probably not

281
00:13:58,559 --> 00:14:01,680
Speaker 2: going to see that twenty thirty percent range for the

282
00:14:01,800 --> 00:14:05,280
Speaker 2: large miners, particularly because we are now already seeing a

283
00:14:05,280 --> 00:14:08,199
Speaker 2: lot of earnings upgrade coming through. In February this year,

284
00:14:08,200 --> 00:14:11,560
Speaker 2: we're going to see something like twenty thirty percent earnings

285
00:14:11,640 --> 00:14:14,840
Speaker 2: upgrade for a company for these large miners, FORTESQ, if

286
00:14:14,880 --> 00:14:18,280
Speaker 2: you like, actually here looking at even bigger upgrades, so

287
00:14:18,440 --> 00:14:20,520
Speaker 2: you know, it's quite a lot of earnings upgrade, big

288
00:14:20,560 --> 00:14:23,320
Speaker 2: dividend to come through for them. You know, this reporting

289
00:14:23,320 --> 00:14:25,880
Speaker 2: season and I think next reporting season August we're going

290
00:14:25,880 --> 00:14:28,760
Speaker 2: to see an even larger name. But then posta we

291
00:14:28,920 --> 00:14:31,640
Speaker 2: really have to see whether globally, you know, where we

292
00:14:31,760 --> 00:14:34,440
Speaker 2: stand in terms of the global bombers, But certainly first

293
00:14:34,440 --> 00:14:36,640
Speaker 2: half they're going to continue to do pretty well.

294
00:14:37,680 --> 00:14:39,720
Speaker 1: It sounds to me like you're saying that to some

295
00:14:39,800 --> 00:14:42,520
Speaker 1: extent it's priced in the Big three, But there is

296
00:14:42,560 --> 00:14:44,920
Speaker 1: such a huge mining sector and we can look further

297
00:14:44,960 --> 00:14:47,440
Speaker 1: down the line at what is available out there. So

298
00:14:47,560 --> 00:14:50,240
Speaker 1: if copper is like this year's thing right this year

299
00:14:50,320 --> 00:14:53,760
Speaker 1: is hot metal, so to speak, where could we enter

300
00:14:54,120 --> 00:14:57,160
Speaker 1: as an investor? What sort of stocks are you looking

301
00:14:57,200 --> 00:15:00,200
Speaker 1: at beyond those big three? And Fortescue isn't even in

302
00:15:00,320 --> 00:15:02,480
Speaker 1: the game here, is it? Really? It's iron or almost

303
00:15:02,640 --> 00:15:05,800
Speaker 1: and real with very heavily iron or BHP is more diversified.

304
00:15:06,080 --> 00:15:09,040
Speaker 1: But beyond those big three, what's the next layer of stocks?

305
00:15:09,400 --> 00:15:12,440
Speaker 1: Let's start talking about individual stocks. Yeah.

306
00:15:12,480 --> 00:15:15,120
Speaker 2: Absolutely, there's a lot of interesting names. So in terms

307
00:15:15,120 --> 00:15:18,000
Speaker 2: of copper, you want to play pure play slightly larger.

308
00:15:18,040 --> 00:15:20,840
Speaker 2: One is the sam Fire. It has you know, has

309
00:15:20,880 --> 00:15:24,200
Speaker 2: a really good copper exposure, but said by is very expensive.

310
00:15:24,440 --> 00:15:26,880
Speaker 2: Then you go even smaller. The next one you can

311
00:15:26,920 --> 00:15:30,480
Speaker 2: look at is Capstole. It's due listed in Canada and

312
00:15:30,520 --> 00:15:33,320
Speaker 2: then also you know in Australia it's got a really

313
00:15:33,320 --> 00:15:35,760
Speaker 2: good production growth as well. Because one of the things

314
00:15:35,760 --> 00:15:37,640
Speaker 2: about minor is there not only commodities, you get a

315
00:15:37,720 --> 00:15:40,880
Speaker 2: right each by company actually growing production and also can

316
00:15:40,920 --> 00:15:43,800
Speaker 2: benefit from high prices right now, So I think Capstole

317
00:15:43,920 --> 00:15:46,080
Speaker 2: is a really good one to look at. What's also

318
00:15:46,160 --> 00:15:48,880
Speaker 2: interesting is so if you look at the copper price

319
00:15:48,920 --> 00:15:51,880
Speaker 2: that's gone really well, there is the next derivative. So

320
00:15:52,120 --> 00:15:55,040
Speaker 2: when usually globally where copper price go really high, there's

321
00:15:55,040 --> 00:15:58,720
Speaker 2: some sectors they started moving into some substituting effects. So

322
00:15:58,920 --> 00:16:01,360
Speaker 2: instead of copper, it might be to use al aminium.

323
00:16:01,440 --> 00:16:04,320
Speaker 2: So if you look at the prices of aluminium, normally

324
00:16:04,400 --> 00:16:07,600
Speaker 2: they trace copper, and so far at the moment aluminium

325
00:16:07,640 --> 00:16:11,080
Speaker 2: actually underperformed comper Now I'm not a mining specialist, but

326
00:16:11,360 --> 00:16:13,040
Speaker 2: you know if you look at what that means is

327
00:16:13,040 --> 00:16:16,240
Speaker 2: that potentially, you know, with strong copper, alominium will have

328
00:16:16,360 --> 00:16:17,320
Speaker 2: it stay in the sun.

329
00:16:17,680 --> 00:16:20,520
Speaker 1: So there's like a like a reliable ratio like LPG

330
00:16:20,600 --> 00:16:21,640
Speaker 1: two oil or whatever.

331
00:16:21,480 --> 00:16:23,040
Speaker 2: Very reliable ratio. That's right.

332
00:16:23,320 --> 00:16:25,200
Speaker 1: Who are the players in that space?

333
00:16:25,480 --> 00:16:28,800
Speaker 2: Yeah, so the easiest purest play is our CoA And

334
00:16:29,040 --> 00:16:32,000
Speaker 2: clearly the share price actually gone incredibly well. And that's

335
00:16:32,040 --> 00:16:35,040
Speaker 2: again Julis said, it's not just pure here and then

336
00:16:35,160 --> 00:16:37,800
Speaker 2: you know, obviously it's and it's for a cousin which

337
00:16:38,240 --> 00:16:41,680
Speaker 2: has had many production issues, which is South thirty two. Now,

338
00:16:42,040 --> 00:16:45,200
Speaker 2: being mindful mining companies, you do really need to know

339
00:16:45,240 --> 00:16:48,480
Speaker 2: what's happening in total mind production. South thirty two has

340
00:16:48,480 --> 00:16:50,760
Speaker 2: had a lot of issues. It's one of those companies

341
00:16:50,760 --> 00:16:53,840
Speaker 2: people always say you buy it before the result or

342
00:16:53,880 --> 00:16:56,320
Speaker 2: after the result, but not during the result because they're

343
00:16:56,320 --> 00:16:58,960
Speaker 2: always disappoint So just be bringing mindful when you move

344
00:16:59,000 --> 00:17:02,120
Speaker 2: away from the large chap the smaller ones they generally

345
00:17:02,240 --> 00:17:04,960
Speaker 2: have issues and you just got to do the homework.

346
00:17:05,040 --> 00:17:06,320
Speaker 2: Be very careful with those things.

347
00:17:06,359 --> 00:17:09,040
Speaker 1: Can I ask you in your own fund beyond the

348
00:17:09,040 --> 00:17:12,160
Speaker 1: big three bhp real and for the SKU, what would

349
00:17:12,200 --> 00:17:14,160
Speaker 1: the peer ibor was looking at your fund and looking

350
00:17:14,200 --> 00:17:15,880
Speaker 1: at the biggest holdings.

351
00:17:16,480 --> 00:17:19,439
Speaker 2: Sure, so aside from the larger so larger ones, we

352
00:17:19,520 --> 00:17:21,760
Speaker 2: actually have more PHV than the real because you know

353
00:17:21,840 --> 00:17:24,600
Speaker 2: we go through later on, we have that, we have

354
00:17:24,720 --> 00:17:27,439
Speaker 2: the capsule, we have the same fire, we have the

355
00:17:27,480 --> 00:17:29,879
Speaker 2: alcohol as well, a little bit of self rearly to

356
00:17:30,000 --> 00:17:32,960
Speaker 2: smaller position because a little bit, you know, it needs

357
00:17:32,920 --> 00:17:34,240
Speaker 2: to be careful with those socks.

358
00:17:34,760 --> 00:17:36,600
Speaker 1: Operational risk as they call.

359
00:17:36,480 --> 00:17:40,880
Speaker 2: It, operational risk, it's very large, that's right, it's really therefore,

360
00:17:41,119 --> 00:17:43,600
Speaker 2: you know for a period where you've seen that aluminium

361
00:17:43,680 --> 00:17:46,520
Speaker 2: price catch up. And also one thing we haven't talked

362
00:17:46,560 --> 00:17:48,680
Speaker 2: about is the gold set, that goal set.

363
00:17:48,440 --> 00:17:52,919
Speaker 1: I'm going to do. I don't think I have a

364
00:17:52,920 --> 00:17:55,159
Speaker 1: little of gold. Let's do it. Let's do it. Just

365
00:17:55,200 --> 00:17:58,560
Speaker 1: before we do it, folks. Something that JB has pointed

366
00:17:58,560 --> 00:18:03,320
Speaker 1: out and it's so true and it's just extraordinary. Don't

367
00:18:03,320 --> 00:18:08,239
Speaker 1: for one moment think that because a company owns a

368
00:18:08,320 --> 00:18:12,760
Speaker 1: gold mine and gold is rising at its fastest pace

369
00:18:13,359 --> 00:18:16,360
Speaker 1: since the nineteen eighties, don't for one moment think they

370
00:18:16,400 --> 00:18:19,199
Speaker 1: can't blow it. They can blow it every time, it

371
00:18:19,240 --> 00:18:21,760
Speaker 1: doesn't matter. They can be sitting on a gold mine,

372
00:18:21,760 --> 00:18:26,159
Speaker 1: so to speak, with the most marvelous external macro conditions,

373
00:18:26,200 --> 00:18:28,600
Speaker 1: and unbelievably they can blow it. And one of the

374
00:18:28,600 --> 00:18:32,960
Speaker 1: things in this market, and people regret that Newcrest, which

375
00:18:33,040 --> 00:18:35,439
Speaker 1: was our biggest goal miner, was sold back in twenty

376
00:18:35,480 --> 00:18:38,520
Speaker 1: twenty three to Numont and it was a giveaway and

377
00:18:38,560 --> 00:18:41,720
Speaker 1: it was an exquisitely time purchased by Numont and a

378
00:18:41,840 --> 00:18:44,639
Speaker 1: terrible loss for Australia. But what people forget is that

379
00:18:44,720 --> 00:18:48,600
Speaker 1: Newcrest was the greatest disappointer on operational risk. Talk about

380
00:18:48,600 --> 00:18:52,880
Speaker 1: things going wrong every time. So with that preamble, jombat

381
00:18:53,880 --> 00:18:56,240
Speaker 1: a couple of things. Let's let's set the ground here.

382
00:18:57,440 --> 00:19:01,960
Speaker 1: Gold is running extraor in extraordinary run, and it's entirely

383
00:19:02,040 --> 00:19:06,200
Speaker 1: understandable and rational because of the mounting risks in world economy,

384
00:19:06,480 --> 00:19:08,560
Speaker 1: primarily in the US, primarily off the back of the

385
00:19:08,600 --> 00:19:14,119
Speaker 1: Trump administration's behavior. Now, on that basis, I think we

386
00:19:14,160 --> 00:19:16,600
Speaker 1: can be confident that it will keep going. Gold is

387
00:19:16,680 --> 00:19:19,320
Speaker 1: up about very roughly, up about sixty percent in the

388
00:19:19,400 --> 00:19:24,760
Speaker 1: last felve months. Gold miners who tend to lag gold

389
00:19:24,800 --> 00:19:28,120
Speaker 1: itself for commodity, they are up. That is our own

390
00:19:28,160 --> 00:19:31,480
Speaker 1: ASX gold sector is up about one hundred and forty

391
00:19:31,560 --> 00:19:34,080
Speaker 1: percent twice as fast as goes. So we can put

392
00:19:34,080 --> 00:19:36,040
Speaker 1: it on the table. There's a enormous opportunity and I'm

393
00:19:36,080 --> 00:19:41,680
Speaker 1: still excellent opportunity left foreign investors in gold stocks. Where

394
00:19:41,680 --> 00:19:42,240
Speaker 1: do we start?

395
00:19:43,920 --> 00:19:46,359
Speaker 2: You're absolutely right, I think where do we start? So

396
00:19:46,640 --> 00:19:50,119
Speaker 2: with the goal companies, And you know one reason for

397
00:19:50,280 --> 00:19:53,840
Speaker 2: why goal companies always lack the goal prices. First of all,

398
00:19:54,000 --> 00:19:56,520
Speaker 2: goal prices can be affected by so many things, and

399
00:19:56,680 --> 00:19:59,720
Speaker 2: often it trends in directions that we don't expect. Now,

400
00:20:00,000 --> 00:20:03,560
Speaker 2: So with the so when people forecast gold equity prices,

401
00:20:03,720 --> 00:20:06,639
Speaker 2: people don't expect the current spot. So most of the

402
00:20:06,680 --> 00:20:09,840
Speaker 2: gold companies, you know, when others do their evaluation, it

403
00:20:09,960 --> 00:20:12,800
Speaker 2: assumes it's going to fall. It's been like other commodities

404
00:20:12,840 --> 00:20:15,119
Speaker 2: as well. And at the same time, most of the

405
00:20:15,240 --> 00:20:19,160
Speaker 2: larger gold companies, they actually are contracted all their volumes

406
00:20:19,160 --> 00:20:22,399
Speaker 2: has been contracted with their customers, so they don't actually

407
00:20:22,440 --> 00:20:24,320
Speaker 2: get the highest price until they.

408
00:20:24,680 --> 00:20:28,159
Speaker 1: Yeah, they're working on long term contracts, which which don't

409
00:20:28,200 --> 00:20:31,760
Speaker 1: necessarily reflect the red heart lift in gold.

410
00:20:32,000 --> 00:20:36,159
Speaker 2: Okay, that's right, that's right, and so that's the second reason.

411
00:20:36,440 --> 00:20:39,560
Speaker 2: Now the last reason of why it's always lack is

412
00:20:39,600 --> 00:20:42,720
Speaker 2: because gold companies, if you do, a risk customer. So

413
00:20:42,760 --> 00:20:44,560
Speaker 2: we have a model we look at all the companies

414
00:20:44,640 --> 00:20:48,080
Speaker 2: risk their volatile. They are relative to share market, gold

415
00:20:48,240 --> 00:20:51,560
Speaker 2: is four times of volatility goal shares, goal gold equities.

416
00:20:51,640 --> 00:20:54,480
Speaker 2: They're very volatile. The reason being is that most of

417
00:20:54,480 --> 00:20:57,400
Speaker 2: the gold company always need to raise money to dig

418
00:20:57,440 --> 00:20:59,440
Speaker 2: out all the goal because gold is hard to dig out.

419
00:20:59,560 --> 00:21:02,120
Speaker 2: You have a lot of operational risks, so they always

420
00:21:02,160 --> 00:21:06,240
Speaker 2: come equity raising, particularly smaller names. So when the market

421
00:21:06,440 --> 00:21:08,960
Speaker 2: so often when the market goes through free four, when

422
00:21:08,960 --> 00:21:11,600
Speaker 2: people worry about the world, the goal price will go up,

423
00:21:11,760 --> 00:21:15,000
Speaker 2: but goal shares, goal equity will fall a lot because

424
00:21:15,000 --> 00:21:17,400
Speaker 2: people think, oh, they can't raise money anymore. They can't

425
00:21:17,440 --> 00:21:20,600
Speaker 2: dig those goals out. So it is very interesting dynamics.

426
00:21:20,600 --> 00:21:23,760
Speaker 2: So it's not exactly like your goal bus. It's actually

427
00:21:23,800 --> 00:21:27,560
Speaker 2: works as a very extreme volatility measure of the market.

428
00:21:27,720 --> 00:21:30,000
Speaker 2: But normally market in the normal condition, they will go

429
00:21:30,160 --> 00:21:32,440
Speaker 2: up rasually over the goal prices. So these are the

430
00:21:32,520 --> 00:21:35,960
Speaker 2: key reason why they don't they always be cheaper. But

431
00:21:36,040 --> 00:21:38,320
Speaker 2: I do think the goal sector is really interesting because

432
00:21:38,320 --> 00:21:40,320
Speaker 2: in the last four month, we actually have gone to

433
00:21:40,640 --> 00:21:43,320
Speaker 2: a lot of smaller gold companies. So when we talk

434
00:21:43,359 --> 00:21:45,960
Speaker 2: about the big goal company, you know, they have contracts

435
00:21:46,000 --> 00:21:48,160
Speaker 2: and everything takes a long time to benefit from the thing.

436
00:21:48,400 --> 00:21:50,240
Speaker 2: And some of the bigger ones and we both know,

437
00:21:50,480 --> 00:21:52,720
Speaker 2: you know, particularly Northern Start has had a lot of

438
00:21:52,760 --> 00:21:54,160
Speaker 2: production issues exactly.

439
00:21:54,240 --> 00:21:56,680
Speaker 1: Yeah, yeah, just like Luclest added their day.

440
00:21:56,760 --> 00:21:59,480
Speaker 2: Yeah, yeah, that's right, the weather and everything else, and

441
00:21:59,520 --> 00:22:02,080
Speaker 2: most of them they're pretty good in telling us about it.

442
00:22:02,080 --> 00:22:05,720
Speaker 2: It's just that market don't remember. So by the time

443
00:22:05,800 --> 00:22:08,879
Speaker 2: the market don't adjust their number until suddenly they report

444
00:22:08,920 --> 00:22:10,440
Speaker 2: and they said, we told you, and then the market

445
00:22:10,440 --> 00:22:12,280
Speaker 2: have been put into their numbers because they got too

446
00:22:12,280 --> 00:22:15,080
Speaker 2: carried away with high prices. So we moved into some

447
00:22:15,160 --> 00:22:18,600
Speaker 2: of the mid tier mid caps, so smaller names, and

448
00:22:18,680 --> 00:22:20,920
Speaker 2: they are the one that actually has been doing really well.

449
00:22:21,000 --> 00:22:23,840
Speaker 2: Not only they growing production, they actually don't have long

450
00:22:23,880 --> 00:22:27,560
Speaker 2: term contracts, so they just they started benefiting much higher

451
00:22:27,560 --> 00:22:30,080
Speaker 2: prices and get all these cash flow. That's why you're

452
00:22:30,080 --> 00:22:33,600
Speaker 2: seeing them doing so much better than the larger names.

453
00:22:33,640 --> 00:22:35,959
Speaker 2: So you know, so the names we sit in are

454
00:22:36,000 --> 00:22:40,320
Speaker 2: the likes of Catalysts and the names of Genesis, Capricorn.

455
00:22:40,560 --> 00:22:43,240
Speaker 2: They're all doing really well now. They all actually gradually,

456
00:22:43,400 --> 00:22:46,520
Speaker 2: you know, going from small cap small ordinary index into

457
00:22:46,600 --> 00:22:50,040
Speaker 2: larger index just because they actually are benefiting so much

458
00:22:50,040 --> 00:22:52,560
Speaker 2: more than the larger like the Northern Star and.

459
00:22:52,600 --> 00:22:55,960
Speaker 1: US fourteen of the top twenty performers last year were

460
00:22:55,960 --> 00:22:59,919
Speaker 1: gold miners. That's right, a goal that is the extraord

461
00:23:00,480 --> 00:23:02,840
Speaker 1: Do you think we have a similar reflection in this

462
00:23:03,160 --> 00:23:03,960
Speaker 1: twenty twenty six?

463
00:23:05,560 --> 00:23:07,920
Speaker 2: I think it will be harder, but of course, look

464
00:23:07,920 --> 00:23:10,520
Speaker 2: if the goal continued with the way Trump operates it,

465
00:23:11,320 --> 00:23:14,400
Speaker 2: the world is still very uncertain. There is a possibility,

466
00:23:14,440 --> 00:23:17,400
Speaker 2: but I think hargely for that gold reray is they

467
00:23:17,400 --> 00:23:20,040
Speaker 2: distruggle for many years. The part of the reray is

468
00:23:20,040 --> 00:23:24,240
Speaker 2: the market recognized your cryptocurrency is not the true diversification

469
00:23:24,600 --> 00:23:27,679
Speaker 2: from the money from the you know, over stimulus. You know,

470
00:23:27,720 --> 00:23:30,119
Speaker 2: all these world and wash with money. So you know,

471
00:23:30,160 --> 00:23:32,600
Speaker 2: because that has become quite a problem towards the end

472
00:23:32,640 --> 00:23:35,280
Speaker 2: of the year. So now the gold you see just

473
00:23:35,280 --> 00:23:38,160
Speaker 2: see investors moving back into gold at the same time

474
00:23:38,280 --> 00:23:41,000
Speaker 2: you see all the central banks buying gold China in

475
00:23:41,040 --> 00:23:44,040
Speaker 2: your emergency market. They're not buying what they might be

476
00:23:44,040 --> 00:23:46,520
Speaker 2: buying some cryptal currency. But it's just it's the gold

477
00:23:46,760 --> 00:23:50,320
Speaker 2: has now restored its title as the story value.

478
00:23:50,680 --> 00:23:54,520
Speaker 1: That's very interesting and I certainly I actually did something

479
00:23:54,560 --> 00:23:57,040
Speaker 1: a few prior to Christmas on this. It is certainly

480
00:23:57,080 --> 00:23:59,280
Speaker 1: from my point of view, digitally goal. It's over really

481
00:23:59,320 --> 00:24:01,720
Speaker 1: the story about whether crypto is digital gold. It's not

482
00:24:01,840 --> 00:24:04,000
Speaker 1: goldles gold. But I'm going to ask you two questions.

483
00:24:04,000 --> 00:24:07,080
Speaker 1: They're not easy questions. They're relating to gold. One is

484
00:24:07,680 --> 00:24:09,639
Speaker 1: on the gold rally. I don't know if you're a

485
00:24:09,760 --> 00:24:13,360
Speaker 1: buler bear on gold, but I wonder one thing. If

486
00:24:13,400 --> 00:24:14,960
Speaker 1: the whole thing about gold is that it was a

487
00:24:15,000 --> 00:24:18,600
Speaker 1: non correlated asset and in theory it went down when

488
00:24:18,640 --> 00:24:21,800
Speaker 1: markets went up, then what's going on because markets are

489
00:24:21,800 --> 00:24:25,119
Speaker 1: going up and gold is going up, and so what

490
00:24:25,119 --> 00:24:28,040
Speaker 1: does that mean? I mean, if what does it mean

491
00:24:28,080 --> 00:24:31,359
Speaker 1: it's becoming I don't know if it's becoming correlated sufficiently

492
00:24:31,400 --> 00:24:36,119
Speaker 1: that mathematically that the analysts are convinced but does that concern.

493
00:24:35,800 --> 00:24:39,720
Speaker 2: You in a way because it's like you said, it's

494
00:24:39,720 --> 00:24:43,320
Speaker 2: becoming very correlated, right, So it's possibly correlated. So it's

495
00:24:43,320 --> 00:24:45,639
Speaker 2: been like the bond and equity when they move together,

496
00:24:45,880 --> 00:24:49,240
Speaker 2: which do these days, it's almost that reduces its effect

497
00:24:49,240 --> 00:24:52,760
Speaker 2: as diversification. I think what with gold is a bit

498
00:24:52,800 --> 00:24:55,480
Speaker 2: different at the moment. It's look, that's why it kind

499
00:24:55,480 --> 00:24:58,359
Speaker 2: of feels okay, is it going higher? You know, it's

500
00:24:58,359 --> 00:25:01,040
Speaker 2: harder to see it down from here now. But so

501
00:25:01,080 --> 00:25:02,920
Speaker 2: the goal is a little bit different. I do think

502
00:25:02,960 --> 00:25:06,399
Speaker 2: that investors or you know, insitutions or countries around the world,

503
00:25:06,520 --> 00:25:09,000
Speaker 2: there is so much demand they realize how much under

504
00:25:09,200 --> 00:25:12,600
Speaker 2: owned of the goal it is, so there is this

505
00:25:12,840 --> 00:25:16,479
Speaker 2: rush to buy them. So it's actually demand for you know,

506
00:25:16,520 --> 00:25:19,160
Speaker 2: from real demand. It's not actually more you know, sort

507
00:25:19,160 --> 00:25:22,080
Speaker 2: of financial you know, sort of structuring demand. It's actually

508
00:25:22,280 --> 00:25:25,960
Speaker 2: different countries positioning, for whatever reason, a real demand for

509
00:25:26,040 --> 00:25:29,119
Speaker 2: this asset class. So I think it's well supported that

510
00:25:29,200 --> 00:25:32,879
Speaker 2: it still is enough support to support that. And given

511
00:25:33,160 --> 00:25:35,400
Speaker 2: you know, crypto is a little bit unsure of where

512
00:25:35,400 --> 00:25:37,880
Speaker 2: it stands at the moment, I think that's at least

513
00:25:37,880 --> 00:25:39,800
Speaker 2: for the next twelve month. You think this price is

514
00:25:39,840 --> 00:25:42,520
Speaker 2: well supported, you know, very hard to see it collapsing,

515
00:25:42,760 --> 00:25:46,560
Speaker 2: particularly given the Trump administration. What's happening.

516
00:25:46,880 --> 00:25:49,600
Speaker 1: Yeah, I suppose the factors that have driven it to

517
00:25:49,640 --> 00:25:52,400
Speaker 1: this point remain very much in place, if not, if

518
00:25:52,440 --> 00:25:55,639
Speaker 1: not enhanced. Really Okay, it's interesting you mentioned about being

519
00:25:55,680 --> 00:25:58,640
Speaker 1: under owned. There is there is speculation, hard to prove

520
00:25:58,680 --> 00:26:01,920
Speaker 1: this at the big superfunds. Australian super funds are way

521
00:26:01,960 --> 00:26:05,600
Speaker 1: behind on glow delocation and if they are, then that's

522
00:26:05,600 --> 00:26:08,639
Speaker 1: another sort of demand that would come through from that

523
00:26:08,800 --> 00:26:11,919
Speaker 1: under ownership. Okay, shortbreak, folks. Back in the moment, we're

524
00:26:11,920 --> 00:26:26,359
Speaker 1: going to talk about what you might avoid. Hello, Welcome

525
00:26:26,400 --> 00:26:30,480
Speaker 1: back to The Australian's Money Puzzle podcast. James Kirby here

526
00:26:30,520 --> 00:26:34,679
Speaker 1: talking to June Beileu of ten Cap, regular on the show,

527
00:26:35,560 --> 00:26:38,320
Speaker 1: perhaps a much better known as a staff picker now

528
00:26:38,680 --> 00:26:41,000
Speaker 1: then we started talking to her earlier and I'm sure

529
00:26:41,040 --> 00:26:44,400
Speaker 1: that will continue in this year. She's great to talk

530
00:26:44,480 --> 00:26:50,280
Speaker 1: to and I think particularly for fund managers, she's talks

531
00:26:50,280 --> 00:26:54,879
Speaker 1: in detail and takes a stand and there's nothing more frustrating,

532
00:26:54,920 --> 00:26:56,600
Speaker 1: I can tell you on a podcast show than someone

533
00:26:56,600 --> 00:26:59,480
Speaker 1: who's humming and haweiing and beating around the bush. Not

534
00:26:59,560 --> 00:27:01,680
Speaker 1: everything works for you, you always have I mean, as

535
00:27:01,680 --> 00:27:04,160
Speaker 1: a staff picker, it's hard, right every year something goes right,

536
00:27:04,200 --> 00:27:06,520
Speaker 1: something goes wrong. I mean most things go right. I

537
00:27:06,560 --> 00:27:08,280
Speaker 1: mean I think the last time we talked, the one

538
00:27:08,280 --> 00:27:10,720
Speaker 1: that the one that I thought had let you down

539
00:27:10,920 --> 00:27:13,920
Speaker 1: was Ramsey. Maybe they're turning a bit now this time

540
00:27:13,960 --> 00:27:16,760
Speaker 1: around Premier Investments. How do you that didn't work out

541
00:27:16,800 --> 00:27:18,800
Speaker 1: for your heart? I mean do you just say that

542
00:27:18,960 --> 00:27:21,200
Speaker 1: it's like doing karate? You do karate every now and again,

543
00:27:21,520 --> 00:27:23,520
Speaker 1: A punch lands and you just keep going. Is that

544
00:27:23,560 --> 00:27:25,160
Speaker 1: your approach or what is your approach?

545
00:27:25,280 --> 00:27:26,720
Speaker 2: You know, when we look at the company and we

546
00:27:26,760 --> 00:27:29,080
Speaker 2: have a thesis, you know, what is expected to return,

547
00:27:29,160 --> 00:27:31,159
Speaker 2: what are some of the catalysts, and then when the

548
00:27:31,160 --> 00:27:33,760
Speaker 2: catalysts come along, we look at it and say, look

549
00:27:34,160 --> 00:27:36,360
Speaker 2: that's just way too tough. And so in a case

550
00:27:36,400 --> 00:27:39,080
Speaker 2: of Ramsey, I remember many years ago, you know, it

551
00:27:39,200 --> 00:27:42,239
Speaker 2: was a case where we're waiting for the reopening trade, right,

552
00:27:42,240 --> 00:27:44,639
Speaker 2: I remember when the you know, post COVID had a

553
00:27:44,640 --> 00:27:47,720
Speaker 2: lot of issues. We're waiting for people to finally start

554
00:27:47,840 --> 00:27:50,520
Speaker 2: using you know, egos of doctors, and they're like, now

555
00:27:50,800 --> 00:27:54,320
Speaker 2: we are seeing it now, but it's two more years

556
00:27:54,320 --> 00:27:58,600
Speaker 2: then expected, and they had all these extra inflation in

557
00:27:58,720 --> 00:28:02,000
Speaker 2: terms of nursing stuff and others. That's been very tricky, so,

558
00:28:02,280 --> 00:28:04,640
Speaker 2: you know, but Ramsey, to be honest, it's actually now

559
00:28:04,720 --> 00:28:08,199
Speaker 2: finally looking a little bit better. We know, health scopes

560
00:28:08,240 --> 00:28:11,280
Speaker 2: go through these challenges, but the market seems to be turning.

561
00:28:11,359 --> 00:28:14,359
Speaker 2: We'll do double digit return. So this is what we see.

562
00:28:14,480 --> 00:28:16,959
Speaker 2: We want to see our thesis. We're constantly testing our

563
00:28:17,000 --> 00:28:19,320
Speaker 2: thesis to say if it's a still it is a

564
00:28:19,400 --> 00:28:23,240
Speaker 2: still intact. If it's perhaps the money should be allocated elsewhere.

565
00:28:23,520 --> 00:28:25,720
Speaker 2: So it's kind of all, well, we always look at

566
00:28:25,880 --> 00:28:28,639
Speaker 2: in the case of the retailers. Yet last year was

567
00:28:28,680 --> 00:28:30,960
Speaker 2: looking as a good year to start with that, with

568
00:28:31,080 --> 00:28:33,560
Speaker 2: the rake cards, you know, with the you know many

569
00:28:33,600 --> 00:28:35,760
Speaker 2: ray car on the car that's coming through, with the

570
00:28:35,800 --> 00:28:38,400
Speaker 2: consumer not doing too badly, you know, things were looking

571
00:28:38,440 --> 00:28:41,520
Speaker 2: pretty good. However, the challenge is now that we just

572
00:28:41,640 --> 00:28:43,760
Speaker 2: you know that we all see now are we getting

573
00:28:43,760 --> 00:28:47,000
Speaker 2: a rad cards? Probably not, Probably is more likely to

574
00:28:47,080 --> 00:28:49,920
Speaker 2: stay on hold for some time. And then in the

575
00:28:50,040 --> 00:28:53,200
Speaker 2: environment also where consumers a bit more picky, not collapsing,

576
00:28:53,320 --> 00:28:54,960
Speaker 2: just a little bit more picky, there might be a

577
00:28:54,960 --> 00:28:57,719
Speaker 2: little bit of challenges for some of those companies in

578
00:28:57,760 --> 00:28:58,280
Speaker 2: that sector.

579
00:28:59,240 --> 00:29:02,640
Speaker 1: Okay, so looking at docs that may let you down.

580
00:29:03,240 --> 00:29:05,880
Speaker 1: They were so good for so long, and Combank obviously

581
00:29:06,080 --> 00:29:08,560
Speaker 1: was I've been talking to people all week about this

582
00:29:08,640 --> 00:29:11,520
Speaker 1: about Combank, and there's almost like a mystery as to

583
00:29:11,760 --> 00:29:15,160
Speaker 1: just how it got to the sort of extraordinary levels

584
00:29:15,160 --> 00:29:16,880
Speaker 1: that it get to, and when it had a valuation,

585
00:29:16,960 --> 00:29:19,600
Speaker 1: and when it had an intrinsic value of allegedly one

586
00:29:19,640 --> 00:29:21,479
Speaker 1: hundred bucks or so and it was trading at one

587
00:29:21,520 --> 00:29:24,320
Speaker 1: hundred and eighty or whatever, of course it couldn't hold up.

588
00:29:24,960 --> 00:29:27,800
Speaker 1: So the question this year with banks, we have the

589
00:29:27,840 --> 00:29:32,640
Speaker 1: four banks now sitting with you know, possible rate rises,

590
00:29:32,800 --> 00:29:37,080
Speaker 1: possible soft consumer sentiment, struggling with the fact that they

591
00:29:37,120 --> 00:29:42,520
Speaker 1: were clearly overvalued in twenty twenty five, and they are

592
00:29:42,560 --> 00:29:44,960
Speaker 1: the big sector that often we would be talking half

593
00:29:44,960 --> 00:29:46,800
Speaker 1: the show on. But we'll take it. I don't know

594
00:29:46,800 --> 00:29:49,040
Speaker 1: if you agree, but I would take it that the

595
00:29:49,080 --> 00:29:51,200
Speaker 1: best we can expect from the banks would be a

596
00:29:51,280 --> 00:29:52,840
Speaker 1: sort of market average return.

597
00:29:53,320 --> 00:29:56,640
Speaker 2: What's your view, I think, Magie is that it probably

598
00:29:56,640 --> 00:29:58,920
Speaker 2: will be market average, a little bit less in terms

599
00:29:58,960 --> 00:30:02,280
Speaker 2: of written and the return delivered from the banks will

600
00:30:02,320 --> 00:30:05,000
Speaker 2: be quite you know different, So within the banks, you know,

601
00:30:05,080 --> 00:30:07,720
Speaker 2: also into outperform and then the disparity will be still

602
00:30:07,800 --> 00:30:09,920
Speaker 2: quite large compared to last year, so that would be

603
00:30:10,040 --> 00:30:12,880
Speaker 2: quite large. And I do think the banks will be,

604
00:30:13,080 --> 00:30:14,880
Speaker 2: you know, in terms of performance, will be a whole

605
00:30:14,880 --> 00:30:17,640
Speaker 2: lot worse than you know, the lives of resources and

606
00:30:17,680 --> 00:30:20,280
Speaker 2: a few other sectors, just because they don't have earnings

607
00:30:20,320 --> 00:30:24,680
Speaker 2: growth and they're previously their earnings upgrade was because people

608
00:30:24,680 --> 00:30:28,320
Speaker 2: were expecting very bad, bad their cycle. And now all

609
00:30:28,360 --> 00:30:31,680
Speaker 2: the expectation has been re rated, so people don't expect

610
00:30:31,720 --> 00:30:34,600
Speaker 2: that cycle. So there's no earnings upgrade to come through,

611
00:30:34,840 --> 00:30:37,200
Speaker 2: and there's not much earnings growth. And then now it's

612
00:30:37,240 --> 00:30:40,000
Speaker 2: all about cost out, so revenue environment benign, you know,

613
00:30:40,400 --> 00:30:42,560
Speaker 2: it's really just about cost out. Then who can do

614
00:30:42,600 --> 00:30:44,840
Speaker 2: the cost out? So we saw A and Z already

615
00:30:44,840 --> 00:30:46,960
Speaker 2: talk about cost out. I think it's got a little

616
00:30:46,960 --> 00:30:49,400
Speaker 2: more rude to go, you know, West Pide potentially a

617
00:30:49,400 --> 00:30:52,720
Speaker 2: bit more. And CBA is the one that doesn't you know,

618
00:30:52,920 --> 00:30:55,680
Speaker 2: never really does cost out. They invest, so you know,

619
00:30:56,080 --> 00:30:58,760
Speaker 2: that's the one I think will be probably struggled more,

620
00:30:58,840 --> 00:31:00,800
Speaker 2: you know, for the next twelve month because they're not

621
00:31:00,880 --> 00:31:03,720
Speaker 2: going down the path where they will control costs and

622
00:31:03,760 --> 00:31:06,480
Speaker 2: they will probably want to invest ahead of the pus.

623
00:31:07,000 --> 00:31:10,560
Speaker 1: Okay, so banks as a sector, the big four, you say,

624
00:31:10,800 --> 00:31:12,960
Speaker 1: maybe average or less than average. And when we know

625
00:31:13,080 --> 00:31:15,400
Speaker 1: we have one, we're talking about a very good year

626
00:31:15,440 --> 00:31:17,520
Speaker 1: that put that on the table, folks. And I suppose

627
00:31:17,720 --> 00:31:20,479
Speaker 1: part of the message here is always be diversified. So

628
00:31:20,800 --> 00:31:25,120
Speaker 1: Bank's not looking great, ordinary at best, with some diversity

629
00:31:25,200 --> 00:31:28,720
Speaker 1: within the four. After that, I think we're going to

630
00:31:28,720 --> 00:31:31,080
Speaker 1: start basically we're going to get random here, folks. Okay,

631
00:31:31,080 --> 00:31:33,280
Speaker 1: I'm going to just I'm just going to spray JB.

632
00:31:33,320 --> 00:31:35,120
Speaker 1: But also as the questions that you probably have in

633
00:31:35,160 --> 00:31:41,200
Speaker 1: your mind. So let's go CSL extraordinary disappointment. This great stock,

634
00:31:41,280 --> 00:31:43,320
Speaker 1: once the biggest stock in Australia. Can you believe this?

635
00:31:43,360 --> 00:31:46,640
Speaker 1: Bigger than CBA, bigger than BHP. Now what has happened?

636
00:31:46,680 --> 00:31:49,200
Speaker 1: It's down thirty five percent, but it's got an ROI

637
00:31:49,600 --> 00:31:52,720
Speaker 1: of about sixteen percent, which is magnificent. What do you

638
00:31:52,720 --> 00:31:53,960
Speaker 1: think is going to happen to it this year?

639
00:31:55,680 --> 00:31:57,720
Speaker 2: I think by the end of the year seer Priss

640
00:31:57,720 --> 00:32:00,920
Speaker 2: should be higher, but it will betail two hearts again,

641
00:32:01,080 --> 00:32:03,760
Speaker 2: you know, because the reason they sounds so much is

642
00:32:03,800 --> 00:32:08,080
Speaker 2: because it's perpetual disappointment. It's disappointed market again and again.

643
00:32:08,200 --> 00:32:10,680
Speaker 2: Last year. I think with something like two three downgrades.

644
00:32:10,760 --> 00:32:14,720
Speaker 2: Now the risk is there's one more. There's one more downrade. Look,

645
00:32:14,800 --> 00:32:17,360
Speaker 2: the operating environment is still very tough. Sounds like the

646
00:32:17,400 --> 00:32:20,840
Speaker 2: core business has lost really lost, you know, lost its

647
00:32:20,880 --> 00:32:24,160
Speaker 2: structural growth driver. Now you know, the ig business, it

648
00:32:24,200 --> 00:32:26,880
Speaker 2: seems to be in oversupply. That's why the competition is

649
00:32:26,920 --> 00:32:29,080
Speaker 2: being severe. They're losing share and they say they don't

650
00:32:29,080 --> 00:32:31,360
Speaker 2: want to compete on price, but clearly the market is

651
00:32:31,480 --> 00:32:34,080
Speaker 2: very competitive. So that's tough. We're not seeing that turning

652
00:32:34,120 --> 00:32:37,600
Speaker 2: around yet. And then the other product category, you know,

653
00:32:37,640 --> 00:32:40,680
Speaker 2: we're seeing the album is doing really poorly in China.

654
00:32:41,080 --> 00:32:44,080
Speaker 2: That's another headway to come through. Flu is not great,

655
00:32:44,280 --> 00:32:46,520
Speaker 2: but I think that's in people's numbers now, So I

656
00:32:46,520 --> 00:32:48,640
Speaker 2: think the next six months there's still numbers to be

657
00:32:48,760 --> 00:32:52,080
Speaker 2: notched out. But look, it is cheaper compared to what

658
00:32:52,160 --> 00:32:54,480
Speaker 2: it was. It will never go back to the heydays

659
00:32:54,520 --> 00:32:57,640
Speaker 2: because it's not a growth structural grower now because it

660
00:32:57,680 --> 00:33:00,520
Speaker 2: doesn't have a big pipeline to grow it but cyclically

661
00:33:00,680 --> 00:33:03,680
Speaker 2: should do better less than twenty times. It is cheaper

662
00:33:03,920 --> 00:33:05,920
Speaker 2: for what it was. So I think second half the year,

663
00:33:06,240 --> 00:33:08,760
Speaker 2: once the earning is really cleared through a weekend, you

664
00:33:08,760 --> 00:33:11,840
Speaker 2: know confidently say it will grow from here. It will

665
00:33:11,840 --> 00:33:13,400
Speaker 2: definitely you should outperform.

666
00:33:13,400 --> 00:33:16,560
Speaker 1: You're not exactly calling it all the way back right, Okay,

667
00:33:16,800 --> 00:33:18,600
Speaker 1: very interesting. I had no idea what you're going to

668
00:33:18,600 --> 00:33:21,400
Speaker 1: tell me on that one. Okay, that's CSL. Let's take

669
00:33:21,440 --> 00:33:24,680
Speaker 1: a look at and talking about potential areas that may

670
00:33:24,720 --> 00:33:27,360
Speaker 1: not thrill, shall we say in the year ahead, the

671
00:33:27,400 --> 00:33:28,920
Speaker 1: things that might let you down, things of where there

672
00:33:28,960 --> 00:33:31,360
Speaker 1: are distinct risks. Tell me if I'm I mean, tell

673
00:33:31,400 --> 00:33:34,640
Speaker 1: me what you think. If there's any area I'm guessing here,

674
00:33:34,760 --> 00:33:37,800
Speaker 1: where are we standing on for instance, Reads and the

675
00:33:37,840 --> 00:33:41,000
Speaker 1: big If we have rising interest rate environment, then the

676
00:33:41,040 --> 00:33:43,840
Speaker 1: textbook would say keep away from Reads. That is a

677
00:33:43,880 --> 00:33:45,320
Speaker 1: property trust. Where are you on that.

678
00:33:46,920 --> 00:33:49,920
Speaker 2: Property trust? That you're right? They underperform leading up to

679
00:33:49,960 --> 00:33:52,400
Speaker 2: the rate rise, and then you're probably looking at again

680
00:33:52,440 --> 00:33:54,959
Speaker 2: the second half names. I think with the Reads they

681
00:33:55,000 --> 00:33:57,040
Speaker 2: will do okay. For the first part of the year,

682
00:33:57,240 --> 00:33:59,600
Speaker 2: earning is still pretty strong. Now this is as a sector,

683
00:34:00,760 --> 00:34:03,960
Speaker 2: but this as a sector because the earnings just started turning.

684
00:34:04,000 --> 00:34:07,600
Speaker 2: All of them has been come upgrades. Retail property is

685
00:34:07,640 --> 00:34:10,840
Speaker 2: doing really well and they all probably have earnings upgrades.

686
00:34:10,960 --> 00:34:14,000
Speaker 2: So your center group, your vicinity, that's doing pretty well.

687
00:34:14,200 --> 00:34:16,920
Speaker 2: Even some of the office space, which you know Childhol's

688
00:34:16,960 --> 00:34:20,280
Speaker 2: doing is not too bad. Dexus is a different story.

689
00:34:20,320 --> 00:34:22,879
Speaker 2: That's just going to be tough. And then the residential

690
00:34:22,920 --> 00:34:25,480
Speaker 2: space is actually doing pretty good. You know, we like

691
00:34:25,560 --> 00:34:29,000
Speaker 2: the retirement some of the retirement living space where you know,

692
00:34:29,120 --> 00:34:32,200
Speaker 2: the recent listing of gem Life is doing very well.

693
00:34:32,239 --> 00:34:34,840
Speaker 2: So we kind of prefer company that more have the

694
00:34:34,960 --> 00:34:37,840
Speaker 2: self help right, so they are building all these properties

695
00:34:37,880 --> 00:34:40,319
Speaker 2: in the area highly desirable. You know, they're going to

696
00:34:40,400 --> 00:34:43,040
Speaker 2: do very good earning growth regardless you know, whether they

697
00:34:43,120 --> 00:34:45,200
Speaker 2: might be build a micro pressure. So I think the

698
00:34:45,239 --> 00:34:47,960
Speaker 2: reason will do okay, but it's more on neutral stands

699
00:34:48,040 --> 00:34:49,879
Speaker 2: for the rest of the year because once the great

700
00:34:50,080 --> 00:34:52,799
Speaker 2: they usually start underperforming as a sector. You know, when

701
00:34:52,800 --> 00:34:54,960
Speaker 2: they don't have a proper growth for the company itself,

702
00:34:55,120 --> 00:34:57,759
Speaker 2: they tend to underperform five month leading up to the

703
00:34:57,840 --> 00:35:00,520
Speaker 2: first rate hike. So if we say the the year's

704
00:35:00,600 --> 00:35:03,279
Speaker 2: ray high, so second half the year, that's pretty much

705
00:35:03,440 --> 00:35:06,239
Speaker 2: it or the rebrates is pretty much done. So that's

706
00:35:06,280 --> 00:35:08,840
Speaker 2: how it is more neutral. I think the housing is

707
00:35:08,880 --> 00:35:11,120
Speaker 2: still looking okay, but it's you know, it's the other

708
00:35:11,360 --> 00:35:13,600
Speaker 2: the some Yeah, it's the other face.

709
00:35:13,680 --> 00:35:17,000
Speaker 1: I wanted to ask you something there. Goodman being in

710
00:35:17,080 --> 00:35:20,680
Speaker 1: theory a property trust but in practice priced as an

711
00:35:20,680 --> 00:35:26,560
Speaker 1: AI play with an extraordinarly ambitious agenda, one would naturally

712
00:35:26,600 --> 00:35:29,479
Speaker 1: be skeptical except for the fact that Greg Goodman has

713
00:35:30,560 --> 00:35:35,520
Speaker 1: an impeccable record through decades of getting it right in

714
00:35:35,600 --> 00:35:38,440
Speaker 1: the end again and again. Are you comfortable with the

715
00:35:38,480 --> 00:35:39,520
Speaker 1: price that's at now?

716
00:35:42,320 --> 00:35:46,360
Speaker 2: I am. I hold Goodman. I think it's an incredible company,

717
00:35:46,400 --> 00:35:49,440
Speaker 2: and I think what they're doing there is a disclaimer coming.

718
00:35:49,719 --> 00:35:52,680
Speaker 2: I think what they're doing is great because they're repurposing

719
00:35:52,719 --> 00:35:55,400
Speaker 2: a lot of their industrial property, right and they just

720
00:35:55,480 --> 00:35:57,640
Speaker 2: keep them another leg of growth and you're delivering double

721
00:35:57,680 --> 00:35:59,520
Speaker 2: did you return? It is great? You know into the

722
00:35:59,640 --> 00:36:04,399
Speaker 2: data like it's great now, I do have, But rather saying,

723
00:36:04,440 --> 00:36:06,560
Speaker 2: you know, Russia for all your eggs and buying lots

724
00:36:06,600 --> 00:36:09,600
Speaker 2: of goodment, I'm a little bit skeptical, and you know,

725
00:36:09,880 --> 00:36:13,879
Speaker 2: unsure about this whole data center space, whether there will

726
00:36:13,880 --> 00:36:16,960
Speaker 2: be enough return to be generated in five years time, right,

727
00:36:17,040 --> 00:36:20,800
Speaker 2: So you know, because there's hyperscalers putting so much money

728
00:36:20,920 --> 00:36:23,799
Speaker 2: into the data center and evaluation going through the roof,

729
00:36:23,920 --> 00:36:26,680
Speaker 2: we just don't know who's going to be the ultimate buyer,

730
00:36:26,920 --> 00:36:29,080
Speaker 2: like saying ten years, who's going to buy them, and

731
00:36:29,120 --> 00:36:31,760
Speaker 2: then whether there will be enough technology if the data

732
00:36:31,760 --> 00:36:34,040
Speaker 2: center is still going to be in the current form,

733
00:36:34,320 --> 00:36:37,360
Speaker 2: So maybe there's no terminal value for those and Goodmen

734
00:36:37,680 --> 00:36:40,440
Speaker 2: instead of just buy and sell it, they want to

735
00:36:40,480 --> 00:36:43,040
Speaker 2: hold it because normally with their other industrial property that's

736
00:36:43,040 --> 00:36:45,600
Speaker 2: what they do. So they will manage. They will put

737
00:36:45,600 --> 00:36:47,680
Speaker 2: them into a fund and the fund will manage it

738
00:36:47,719 --> 00:36:50,279
Speaker 2: so they will be the owner of this property. So

739
00:36:51,080 --> 00:36:53,640
Speaker 2: it's a little bit challenging for me to see ultimate

740
00:36:53,719 --> 00:36:56,839
Speaker 2: value of data center. But for Goodmen, I do think

741
00:36:56,880 --> 00:37:00,520
Speaker 2: they underperform the sector enormously last year. You know, I

742
00:37:00,560 --> 00:37:03,280
Speaker 2: think it does look pretty good from the industrial perspective

743
00:37:03,280 --> 00:37:05,279
Speaker 2: and the money they can make right now from those

744
00:37:05,320 --> 00:37:05,920
Speaker 2: data center.

745
00:37:06,280 --> 00:37:08,919
Speaker 1: Do you say Goodman underperformed the sector last year?

746
00:37:09,600 --> 00:37:12,440
Speaker 2: Yeah, they did, so the sectors down If you compare

747
00:37:12,480 --> 00:37:15,480
Speaker 2: Goodman and Charta Hall, I think something like thirty percent

748
00:37:15,719 --> 00:37:19,200
Speaker 2: or more difference now Obviously the year before Goodman did

749
00:37:19,200 --> 00:37:21,480
Speaker 2: really well because the data center. But it's just it

750
00:37:21,520 --> 00:37:23,359
Speaker 2: does look like there's a bit of catch up to do,

751
00:37:23,480 --> 00:37:26,080
Speaker 2: and industrial property is still doing pretty well, demand strong,

752
00:37:26,200 --> 00:37:28,520
Speaker 2: and then meanwhile they're making good profit out of those

753
00:37:28,640 --> 00:37:31,480
Speaker 2: making building those data center So you know, so I

754
00:37:31,480 --> 00:37:34,160
Speaker 2: think it's it's something that I do like. I think

755
00:37:34,200 --> 00:37:36,560
Speaker 2: for the time being, it's good. But I'm still working

756
00:37:36,600 --> 00:37:40,839
Speaker 2: out this whole data center centeris because our portfolio can

757
00:37:40,920 --> 00:37:43,440
Speaker 2: hold it and we can show other companies, so you know,

758
00:37:43,480 --> 00:37:45,640
Speaker 2: we can take how that data center uncertainty.

759
00:37:46,880 --> 00:37:51,000
Speaker 1: I certainly tune into your notion, your concept that the

760
00:37:51,080 --> 00:37:54,239
Speaker 1: technology itself could change, and then you know, maybe data

761
00:37:54,280 --> 00:37:56,239
Speaker 1: centers as we know them will not look anything like

762
00:37:56,320 --> 00:37:58,799
Speaker 1: data centers that have been planned to be built right

763
00:37:58,840 --> 00:38:03,000
Speaker 1: now that are getting such valuations. One last thing, and

764
00:38:03,120 --> 00:38:05,280
Speaker 1: it's a kind of a reflection really of our market

765
00:38:05,320 --> 00:38:08,279
Speaker 1: and its absence of tech and AI that we leave

766
00:38:08,320 --> 00:38:11,920
Speaker 1: it to last, because there isn't really a part. I mean,

767
00:38:12,280 --> 00:38:15,760
Speaker 1: Goodman has become a proxy AI play in the blue

768
00:38:15,840 --> 00:38:17,439
Speaker 1: chip space, or at least the top of the market,

769
00:38:17,520 --> 00:38:20,160
Speaker 1: and within the market, there is very little else. NEXTDC

770
00:38:20,680 --> 00:38:24,640
Speaker 1: has been seems to be a very disappointing company in

771
00:38:24,680 --> 00:38:27,520
Speaker 1: many ways. Is what do you think of a NEXTDC

772
00:38:27,719 --> 00:38:30,920
Speaker 1: and do you of in recent times has been disappointing.

773
00:38:30,960 --> 00:38:34,759
Speaker 1: Do you see any AI play within the ASX.

774
00:38:37,880 --> 00:38:40,239
Speaker 2: I think, first of all NEXTDC again, it comes down

775
00:38:40,239 --> 00:38:41,799
Speaker 2: I think it's done very well. If you want to

776
00:38:41,800 --> 00:38:44,360
Speaker 2: have exposure to data center, it's just one all the

777
00:38:44,360 --> 00:38:47,320
Speaker 2: contracts and everything's great. My thing is that again, I'm

778
00:38:47,360 --> 00:38:50,320
Speaker 2: just not sure about ultimate value of those data center.

779
00:38:50,600 --> 00:38:53,319
Speaker 2: I don't know if by building it today in five

780
00:38:53,400 --> 00:38:55,520
Speaker 2: years you know who's going to be the next person

781
00:38:55,600 --> 00:38:58,200
Speaker 2: to buy those assets. You know it's going to be

782
00:38:58,280 --> 00:39:01,120
Speaker 2: harder to see. And then when I talk about technology

783
00:39:01,160 --> 00:39:03,480
Speaker 2: goal change, you know what if there's a breakthrough that

784
00:39:03,640 --> 00:39:06,000
Speaker 2: you can have data center in the middle of the forest,

785
00:39:06,080 --> 00:39:06,719
Speaker 2: like in the middle of the.

786
00:39:07,280 --> 00:39:09,560
Speaker 1: A data center in your basement.

787
00:39:09,560 --> 00:39:12,120
Speaker 2: That's right, Yeah, why what if you just put something

788
00:39:12,160 --> 00:39:14,280
Speaker 2: out of the building. So I think it's just really

789
00:39:14,520 --> 00:39:16,920
Speaker 2: I don't know, because the technology changing so fast. So

790
00:39:17,200 --> 00:39:19,239
Speaker 2: that's the thing. So I like it as a data

791
00:39:19,239 --> 00:39:21,239
Speaker 2: center exposure, but I'm just not sure if I want that.

792
00:39:21,280 --> 00:39:23,600
Speaker 2: I seen the exposure at the moment. Goodman gives me

793
00:39:23,640 --> 00:39:26,279
Speaker 2: a quasi it's still got other assets in that sort

794
00:39:26,280 --> 00:39:29,480
Speaker 2: of exposure in terms of the AI player and everything.

795
00:39:29,760 --> 00:39:32,600
Speaker 2: I really think this is the year when you actually,

796
00:39:32,840 --> 00:39:36,520
Speaker 2: rather than just AI exposure, it's the company that benefit

797
00:39:36,840 --> 00:39:39,560
Speaker 2: from the AI. You know, it's the costs out. It's

798
00:39:39,560 --> 00:39:42,080
Speaker 2: the secer for example. You know what is the sector

799
00:39:42,120 --> 00:39:44,960
Speaker 2: that has the highest labor cost? You know, where there's healthcare,

800
00:39:45,080 --> 00:39:48,439
Speaker 2: where there's banks, there's a lot of cost efficiency coming through.

801
00:39:48,640 --> 00:39:52,480
Speaker 2: You know, we're hearing chatters overseas now, you know people

802
00:39:52,520 --> 00:39:54,960
Speaker 2: talking about overseas banks. You know, one of the JP

803
00:39:55,120 --> 00:39:58,000
Speaker 2: Morgan Stanley cheap Ecommas said that they think the banks

804
00:39:58,080 --> 00:40:00,680
Speaker 2: is the growth stock of the future because there's so

805
00:40:00,760 --> 00:40:03,560
Speaker 2: much cost that can come through with the AI efficiency.

806
00:40:03,680 --> 00:40:05,759
Speaker 2: So I think this is a year people will distinguish

807
00:40:05,960 --> 00:40:08,120
Speaker 2: on also win there a loser. People still trying to

808
00:40:08,160 --> 00:40:10,759
Speaker 2: work it out of the AI, the development of the

809
00:40:10,840 --> 00:40:13,920
Speaker 2: AI rather than just go to the physical AI exposure.

810
00:40:14,160 --> 00:40:16,640
Speaker 2: You know, I would actually say some of the company

811
00:40:16,680 --> 00:40:19,880
Speaker 2: tech companies be sold off recently. It potentially is the

812
00:40:19,880 --> 00:40:23,279
Speaker 2: benefit beneficiary of those AI because they you know, they

813
00:40:23,280 --> 00:40:27,600
Speaker 2: have big database RAA for example, big database, the proprietary database.

814
00:40:27,760 --> 00:40:30,160
Speaker 2: You know, they actually working with some of the AI model,

815
00:40:30,320 --> 00:40:32,680
Speaker 2: you know, so that is the beneficiary. And but the

816
00:40:32,680 --> 00:40:34,919
Speaker 2: market at the moment is selling your tech not sure

817
00:40:35,000 --> 00:40:37,480
Speaker 2: what it is, and then just all buy just direct

818
00:40:37,600 --> 00:40:40,840
Speaker 2: chip exposure. So for me, it's the companies that will benefit.

819
00:40:40,880 --> 00:40:42,799
Speaker 2: And then there's a lot I think companies will start

820
00:40:42,800 --> 00:40:44,200
Speaker 2: talking about it in the next six months.

821
00:40:44,880 --> 00:40:47,960
Speaker 1: So hard one just wrap. We're going to say at

822
00:40:47,960 --> 00:40:50,400
Speaker 1: the start stock you really like stock you think you

823
00:40:50,400 --> 00:40:52,920
Speaker 1: could avoid top of your head.

824
00:40:52,960 --> 00:40:55,799
Speaker 2: Yeah, so the things that the stoker would avoid, it's

825
00:40:55,840 --> 00:40:58,560
Speaker 2: probably temple on website this stage. I'm a little bit worried.

826
00:40:58,600 --> 00:41:00,960
Speaker 2: One is it's expensive and that we're heading into a

827
00:41:01,000 --> 00:41:04,160
Speaker 2: somewhat slow down sort of environment. Lots of expectations. I know,

828
00:41:04,239 --> 00:41:07,040
Speaker 2: shampires fallen, just a little bit caret cautious on that front.

829
00:41:07,160 --> 00:41:09,799
Speaker 2: The thing that's soccer like is actually you know what

830
00:41:09,960 --> 00:41:14,000
Speaker 2: flight center. Yeah, because of the companies downwhere look at

831
00:41:14,080 --> 00:41:17,239
Speaker 2: Godfrey's challenges and everything. Then we had the war last year,

832
00:41:17,480 --> 00:41:19,840
Speaker 2: so now it's heading into an environment where you know,

833
00:41:19,960 --> 00:41:22,960
Speaker 2: the travel is normalizing. Austria faced Australia as we love

834
00:41:23,040 --> 00:41:26,160
Speaker 2: to travel overseas, so you know, demand environments put not

835
00:41:26,200 --> 00:41:29,600
Speaker 2: too bad. And and then you're cycling some really weak coms.

836
00:41:29,640 --> 00:41:32,080
Speaker 2: That means you're earning growth will come through at the

837
00:41:32,120 --> 00:41:36,319
Speaker 2: same time. Corporate travel. The problem with corporate travel, and

838
00:41:36,360 --> 00:41:38,600
Speaker 2: it's going through review of some of the you know,

839
00:41:38,640 --> 00:41:41,480
Speaker 2: dodgy accounting and the like has now created, you know,

840
00:41:41,640 --> 00:41:45,640
Speaker 2: opportunity for other corporate travel service provider like flight center.

841
00:41:45,920 --> 00:41:47,520
Speaker 2: You know, in a way that you know, all the

842
00:41:47,640 --> 00:41:50,080
Speaker 2: large companies that we great speed to, they're all now

843
00:41:50,120 --> 00:41:53,399
Speaker 2: revising their corporate travel contracts. So you know, I think

844
00:41:53,440 --> 00:41:56,080
Speaker 2: the next six month growth for travel or flight Center

845
00:41:56,200 --> 00:41:59,800
Speaker 2: is going to be enormous.

846
00:41:58,320 --> 00:42:02,040
Speaker 1: Really interesting. Parently convinced by both those calls, might I

847
00:42:02,040 --> 00:42:06,239
Speaker 1: say especially the travel one. Yeah, absolutely, well, well you've

848
00:42:06,280 --> 00:42:08,840
Speaker 1: got two extraordinary stories there. One obviously the extraordinary story

849
00:42:08,840 --> 00:42:10,920
Speaker 1: of corporate travel being so bad that they left it.

850
00:42:10,920 --> 00:42:12,880
Speaker 1: They've just basically left a big gap in the market,

851
00:42:12,880 --> 00:42:15,600
Speaker 1: haven't they, And every corporate and every government department is

852
00:42:15,600 --> 00:42:18,239
Speaker 1: going to have to review. Terrific. All right, Thank you

853
00:42:18,400 --> 00:42:20,359
Speaker 1: very much for being on the show. Always great. We'll

854
00:42:20,400 --> 00:42:22,319
Speaker 1: talk to you again during the year, I hope, but

855
00:42:22,400 --> 00:42:23,240
Speaker 1: thank you for today.

856
00:42:23,680 --> 00:42:25,640
Speaker 2: Thank you so much for having me and Best of

857
00:42:25,719 --> 00:42:27,040
Speaker 2: Black with twenty twenty six.

858
00:42:28,000 --> 00:42:32,120
Speaker 1: Thank you. That was Jim Baylor of ten Cap Folks.

859
00:42:32,239 --> 00:42:35,280
Speaker 1: Terrific to talk to us always. So now you've got it. Okay,

860
00:42:35,280 --> 00:42:38,480
Speaker 1: You've got Mark Jocum of Global XCTFS, who talked about

861
00:42:38,480 --> 00:42:43,160
Speaker 1: the global markets. Then we talked specifically today about Australian

862
00:42:43,760 --> 00:42:47,239
Speaker 1: share opportunities stop picks. Next week, we're going to talk

863
00:42:47,280 --> 00:42:49,759
Speaker 1: about property opportunities in twenty twenty six, and we're going

864
00:42:49,840 --> 00:42:51,640
Speaker 1: to wrap it over Will Hamilton at the end of

865
00:42:51,680 --> 00:42:54,080
Speaker 1: next week. Talk to you soon.