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Speaker 1: Hello, and welcome to The Australian's Money Puzzle podcast. I'm

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Speaker 1: James Kirby, the editor at The Australian. Welcome aboard everybody.

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Speaker 1: You might think in a podcast like this, I have

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Speaker 1: lots of fund managers on the show, but I don't. Actually,

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Speaker 1: I've had maybe three or four a year. The reason

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Speaker 1: for that is, to be honest with you, a lot

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Speaker 1: of them sound the same, they say the same things,

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Speaker 1: and that type of manager, the traditional fund manager, is

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Speaker 1: now indeed trouble because index funds basically are eating their lunch.

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Speaker 1: You can see those big names that were household names, Perpetual, Platinum, Magellan,

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Speaker 1: they are deeply challenged now because of index funds. And

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Speaker 1: so what fund managers have to do is they have

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Speaker 1: to do something entirely different reproducing the index as they

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Speaker 1: call it X hugging. It's just simply no good anymore.

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Speaker 1: You have to do something very different to attract the

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Speaker 1: investor and to make it worthwhile. Basically to swing with

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Speaker 1: someone and to have someone pickstocks for you. Today, I

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Speaker 1: have someone that I know for quite a while and

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Speaker 1: he's in the business largely of finding what we call

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Speaker 1: small cap stocks for mid cap stocks, I can tell

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Speaker 1: you it's not a game for the faint hearted because

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Speaker 1: one year, basically you can shoot out the lights and

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Speaker 1: the next year it can go all off the rails

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Speaker 1: big time. And that's how it goes. It's volatile. You

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Speaker 1: need an iron like constitution to stay at it. Dean

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Speaker 1: Fergie runs the Cion Investment Fund. He's going to talk

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Speaker 1: about the market, what happened this year some of the

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Speaker 1: big stories in stocks? Guzmny Gomez. Is that a big story.

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Speaker 1: It's a big story, that's for sure, but whether it's

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Speaker 1: a big stock remains to be seen. Commonwealth Bank now

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Speaker 1: there's a big stock, two hundred billion dollar stock being shorted,

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Speaker 1: mind you, because many gome as it turns out, has

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Speaker 1: been shorter too. Can you one week after it floated?

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Speaker 1: It's been a really interesting year. How are you, Dean Fergie?

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Speaker 2: Good morning, James. Thanks for having me on.

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Speaker 1: Great to have you on. We had a very interesting

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Speaker 1: show last week. Conceptually, it was a very interesting show

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Speaker 1: because I had John Stenshold, who is the editor of

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Speaker 1: The Rich two fifty and he's basically tycoon agraphy is

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Speaker 1: he think he keeps in touch with all the tycoons.

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Speaker 1: And we did a piece of what they've been investing

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Speaker 1: in and the stocks that had been winners and losers

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Speaker 1: for them. And it's interesting because they had plenty of

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Speaker 1: winners and plenty of losers over the year. But just

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Speaker 1: to give everyone an idea that the share market this

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Speaker 1: year in the end kind of a normal year, maybe

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Speaker 1: nine percent across the board for the AX and maybe

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Speaker 1: another three or four percent in dividends. Is that how

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Speaker 1: it's looking if it was to keep going, We're not

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Speaker 1: finished yet, but that is what you call it broadly

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Speaker 1: in the end, a very normal year in this scheme

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Speaker 1: of things.

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Speaker 2: I think at the top line, it is, you know,

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Speaker 2: I think you might expect a high single or low

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Speaker 2: double digit returns in any normal year in the stock market.

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Speaker 2: But I've also seen, you know, there's been a real

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Speaker 2: absence of activity in the IPO market, so there haven't

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Speaker 2: been those free kicks for a lot of investors that

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Speaker 2: play the stock market individually. And also I think it's

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Speaker 2: also been kind of a bit of a tale of

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Speaker 2: two tails. Like you've had a lot of the big

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Speaker 2: cap stocks doing really really nicely. Small caps have performed

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Speaker 2: a little bit better later on in the year, but

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Speaker 2: the microcaps are still really really kind of underappreciated and

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Speaker 2: still in a real slump at the moment. So we

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Speaker 2: tend to operate in the smaller micro cap in and

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Speaker 2: we've found that in there it's been quite a challenge

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Speaker 2: just in terms of liquidity and investor interest in that space.

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Speaker 1: For the listener, we have all sorts of listeners, but

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Speaker 1: for the every day listener, just to find those what's

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Speaker 1: a small cap, how does it? What's the tiers there?

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Speaker 2: I'd probably say small, low marker caps of anything under

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Speaker 2: one hundred million dollar in market cap to five hundred

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Speaker 2: and two billion in small cap, and anything over a

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Speaker 2: billion's probably a large captoc.

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Speaker 1: And so let's just talk about some of the things

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Speaker 1: that have been going on this last quarter in the market.

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Speaker 1: It's been really interesting because you mentioned IPOs and when

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Speaker 1: we did the show last week, Guzman Ego is the

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Speaker 1: Mexican takeaway chain, had just arrived on the market and

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Speaker 1: they'd literally floated an hour or two earlier, and that

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Speaker 1: was the biggest float for a long time, I think

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Speaker 1: three years. Instantly successful on a technical basis in that

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Speaker 1: it listed and it immediately rows by thirty percent up

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Speaker 1: to thirty dollars now in the week that's passed a

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Speaker 1: lot of questions about this float, and you just said

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Speaker 1: at the start there that we need IPOs, and we

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Speaker 1: do need IPOs. Some people think this is great, it's

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Speaker 1: wonderful for the market. Hey, we finally got a big

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Speaker 1: IPO that took off. Some people say this is as

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Speaker 1: good as it gets for those guys, believe it or not,

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Speaker 1: there's already a million share is shorted in them. They

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Speaker 1: haven't passed the level that they passed that for US

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Speaker 1: day they were thirty dollars and they're twenty nine. Now

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Speaker 1: what's your view on them, and more importantly, what is

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Speaker 1: their significance as a float?

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Speaker 2: Well, courst up with positives that. I think it's been

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Speaker 2: a fantastic result for the market. You've had a very

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Speaker 2: large float that have had both promoters and tractors involved,

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Speaker 2: so it wasn't all one way traffic. In terms of

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Speaker 2: the expectations. It's come on at a significant premium with

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Speaker 2: quite material volume training over the first few days. So

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Speaker 2: I think in terms of looking at the health of

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Speaker 2: the market, I think it's been fantastic. It's a real

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Speaker 2: sign that things are starting to get back to normal.

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Speaker 2: For me in terms of pure evaluations. Given what else

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Speaker 2: is out there, it just doesn't stack up. I'm a

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Speaker 2: fundamental investor, and maybe be your fundamental investor is not

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Speaker 2: as irrelevant as it has been in the past. In

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Speaker 2: this market, I feel the market becomes very gets very

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Speaker 2: excited about certain themes for a while, and then then

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Speaker 2: forgets about them and looks at the new kind of

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Speaker 2: shiny thing. This is a new shiny stock. But look

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Speaker 2: at the revenues, the underlying profitability, which is close to zero.

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Speaker 2: I think their MPACT for the year was about three

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Speaker 2: million dollars. It's trading at a market cap of three billion,

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Speaker 2: so that's a pretty steep multiple. If you ask may

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Speaker 2: Well Ernie's, it's a bit irrelevant when they're so small.

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Speaker 1: That's higher than Nvidian.

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Speaker 2: Yeah, but again it's off a very very low base.

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Speaker 2: I think the best comparison is something like Dominance, So

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Speaker 2: the market cap of Domino's and gos And is broadly

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Speaker 2: the same. Dominoes does four billion dollars in sales, Grismond

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Speaker 2: does seven hundred and sixty, so it does six times

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Speaker 2: the sales. It's got twenty times the number of stores.

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Speaker 2: The profitability of Dominoes is one hundred and twenty million

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Speaker 2: at the bottom line, So there's a massive gap in

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Speaker 2: evaluation between two I'd say similar socks. The difference being

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Speaker 2: that Gusman is new, it hasn't had a bad track record.

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Speaker 2: In fact, everything isn't listened to. He has been fantastic

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Speaker 2: so far, albeit over one week period. Dominos has had

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Speaker 2: early massive success and recently has struggled a little bit.

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Speaker 1: So so thoughd promise really isn't it it's worth three billion?

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Speaker 1: Someone was saying that it's working out at about seventeen

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Speaker 1: million each Gormez on your shot it's one. There are

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Speaker 1: what's seventeen million eeds according to the stoff market, So

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Speaker 1: people are betting that they will do a Domino's. Is

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Speaker 1: that it just have this ramp up period.

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Speaker 2: It has to be right that if you've got that

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Speaker 2: much expect built into the current market capitalization of the stock,

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Speaker 2: then it's all expectation. It's expectation they can take this

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Speaker 2: success store in Australia and replicated overseas, which they may

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Speaker 2: be able to do. I mean, they've got a management

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Speaker 2: team that's been proven so far. But we've seen we've

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Speaker 2: Dominoes that you go into new jurisdictions with all those

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Speaker 2: different challenges, and it's a little bit harder than building

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Speaker 2: out a franchise in a country that you're very familiar with.

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Speaker 1: Yes, and you know the rules and the regulations and

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Speaker 1: the logistics, etc. And you have your relationships I spols

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Speaker 1: with your bank, yeah yeah.

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Speaker 2: And just understanding the customers as well. People have quipped

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Speaker 2: that taking Mexican food to the US isn't overly unique,

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Speaker 2: and there might be some competition over there, but it'll

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Speaker 2: have to be very successful to justify where it's trading now.

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Speaker 2: But does that mean it won't continue to go up?

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Speaker 2: I don't know. The trend is there at the moment.

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Speaker 1: When you if you sell shorts a million shures it's

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Speaker 1: not enormous. But have when you seen people actually taking

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Speaker 1: a bet and shorting a stock for something like Guzman,

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Speaker 1: which is a new stock. What does it mean to you?

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Speaker 2: Yeah, Look, we don't short stocks as a business. You know.

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Speaker 2: My sort of philosophy is that your losses are unlimited

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Speaker 2: and your gains are kepped at one hundred percent. I

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Speaker 2: think on the basis on evaluation, it is easy to

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Speaker 2: justify that it is a logical short, but it also

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Speaker 2: would have been in a logical short at twenty five dollars

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Speaker 2: or twenty dollars, and it's trading here at thirty. So

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Speaker 2: it's not something I would personally be doing. I can

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Speaker 2: understand the logic behind it, but I have seen many

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Speaker 2: stocks in the domestic and international markets become completely hyped

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Speaker 2: and over valued and wiped out shorts very quickly. The

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Speaker 2: main example of that overseas has been what's happened in

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Speaker 2: Game Stop. You know that you've had a lot of

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Speaker 2: investors just driving the stop us up to what would

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Speaker 2: appear to be artificial has to wipe that shorts. And

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Speaker 2: once you take a bit of a pain in a

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Speaker 2: short position, if you can't take any more pain, you

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Speaker 2: have to close up position by buying stock, which makes

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Speaker 2: your short look worse. So I think it's a little

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Speaker 2: bit dangerous, but I can understand why some investors have

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Speaker 2: decided to do it.

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Speaker 1: The irony is that they have to buy the stock

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Speaker 1: to cover the short, which means they drive the stock up,

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Speaker 1: which is the exact opposite of what they were trying

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Speaker 1: to do. It's really interesting, it's fascinating. I mean, our

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Speaker 1: listeners would know the basics they're on shorting that people

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Speaker 1: borrow stock obviously and they try to profit. Then when

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Speaker 1: the stock they try to drive it down basically, and

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Speaker 1: in doing so they make money when they get the

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Speaker 1: stock back. It's a strange game. It goes back to

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Speaker 1: the nineteen twenties. We were sort of something of exemption

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Speaker 1: and there wasn't much shorting here for a long life,

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Speaker 1: long time quick history. Jim Chainos, the hedge fund manager,

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Speaker 1: famously short at mcquarie bank back in two oh seven

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Speaker 1: and it was a very successful short. McQuary went from

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Speaker 1: about eighty dollars to seventeen at the time. He made

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Speaker 1: huge enormous amounts of money. That meant people came into

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Speaker 1: the Australian market. Various people Glaucus came in at one stage,

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Speaker 1: especially on the old the old MFS plantation stock and

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Speaker 1: all that. There's lots of successful ones in the early days.

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Speaker 1: Now people are more sort of attuned to it. I'm

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Speaker 1: using this as a preamble dean to something I suppose

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Speaker 1: more important for people, which is Common Bank. So it's

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Speaker 1: got eight hundred thousand shareholders. I imagine just about everyone

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Speaker 1: listening to this show has direct or indirect holding a

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Speaker 1: comwell bank. You couldn't avoid it, right because it's just

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Speaker 1: about the biggest stock now it's been short and substantially

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Speaker 1: yeah at the moment, and Phil King, there's some names

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Speaker 1: in the market publicly saying they're shortening it. Of course

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Speaker 1: they tell us they're shortening it because that's part of

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Speaker 1: the game, isn't it that to let it be known

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Speaker 1: you're shorting. But tell me when I say to you

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Speaker 1: that there is now short activity and more shorts than usual.

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Speaker 1: I think about three billion dollars under line betting against

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Speaker 1: come Web Bank. Come We Bank's about two it's a

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Speaker 1: two hundred and thirteen billion dollar stock, as I say,

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Speaker 1: and it's worth maybe one hundred and thirty dollars. I

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Speaker 1: think at the moment, what do you say when? How

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Speaker 1: should people react when to hear that.

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Speaker 2: I wouldn't think that'd be too concern. I mean unless

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Speaker 2: they're short, as know something specific within the Commonwealth Bank

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Speaker 2: that is likely do materially impact its business. And I

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Speaker 2: think something like a data breach or you know, like

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Speaker 2: a trader that has blown up some money in a

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Speaker 2: foreign exchange deal or something like that. Betting against the

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Speaker 2: largest most successful bank in Australia because you think it's

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Speaker 2: a little bit overvalued. I just don't really so much

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Speaker 2: of a potential gain in the short to medium term

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Speaker 2: from doing that, that would be my perspective. We've seen

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Speaker 2: that the stocks are twenty five percent this year, you know,

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Speaker 2: on no real upgrade in earning, just because people walk

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Speaker 2: the yields. They trust it, say to the biggest bank,

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Speaker 2: it's almost the biggest stock on the Australian market. So yeah, certainly,

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Speaker 2: but a small amount of CBO bony shorter. I don't

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Speaker 2: think his cause for concern would be comfortable holding it

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Speaker 2: because I think it's a very solid business, well run.

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Speaker 1: And in your end then, and we're kind of leading

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Speaker 1: into your particular sort of zone. I imagine there isn't

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Speaker 1: much shorting at the small cap medium caps end of

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Speaker 1: the market, and if there is, it seriously makes a

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Speaker 1: difference on like a three billion worth of shorts against Combank,

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Speaker 1: you know, petty cash, throw it out the window. But

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Speaker 1: if someone goes in with a big short on a

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Speaker 1: tiny stock, I presume it just cuts it to shreds,

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Speaker 1: or could cut it to shreds.

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Speaker 2: Yeah, I mean, look, there are structural issues with respect

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Speaker 2: to shortening in Australia. The practical reason is you have

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Speaker 2: to borrow stock from another shareholder. So if I own

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Speaker 2: one hundred shares and sets are, I can lend them

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Speaker 2: to you and you can sell them and at some

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Speaker 2: stage in the future have to buy them back and

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Speaker 2: then give them back to me. That's the way it works.

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Speaker 2: If I was a big holder in a small stock

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Speaker 2: and someone said I want to borrow your shares to

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Speaker 2: short them, I would probably say no as such because

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Speaker 2: it'd be downward pressure on the price. But you're right

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Speaker 2: that those sort of mid cap stocks where there it

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Speaker 2: is a free float around and companies can borrow and short,

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Speaker 2: it can make a significant difference. And often those businesses

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Speaker 2: if they are in a single business stream and there

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Speaker 2: is something going on. We've seen a number of retailers

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Speaker 2: struggling recently because of just reduction in your earnings. Then

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Speaker 2: you can see some really significant falls in these businesses

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Speaker 2: and good guars means to be made, and I'll look

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Speaker 2: at other businesses like Blue Skylar was one of the

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Speaker 2: ones a few years ago that got seriously shortened and

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Speaker 2: ended up surviving, so that was a great trade. But

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Speaker 2: then again we've seen big short reports on things like

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Speaker 2: wise tech that have appear to have merits at the time,

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Speaker 2: and wise Tech against been a fantastic performer in the market.

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Speaker 1: So it's a great test at its best, like this

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Speaker 1: is actually a great test of a stock if they

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Speaker 1: come out the other side of a short attack. Yeah.

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Speaker 2: Look absolutely, And in a way I think a number

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Speaker 2: of companies will sort of complain on we shouldn't let

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Speaker 2: shorters release their reports. You know, you're in a public market,

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Speaker 2: you're a public company. People have opinions on what they

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Speaker 2: think your business is worth and how well it's managed

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Speaker 2: in it and its prospects and opportunities and its valuations.

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Speaker 2: So they should be allowed to pass comments and the

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Speaker 2: market will make up its mind. It won't always be right,

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Speaker 2: but that's what a marketplace is.

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Speaker 1: What we'll do with take short break and we'd come

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Speaker 1: back and we would talk about your layer of the

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Speaker 1: market and what you do. We'll be back in a moment, folks. Hello,

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Speaker 1: welcome back to The Australian's Money Puzzle podcast. I'm James

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Speaker 1: Kirby Well, the editor at The Australian, and this week

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Speaker 1: we're talking to Dean fergie Off Cian Investment Management. He's

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Speaker 1: a fund manager specializes in a special layer of the market,

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Speaker 1: which is small caps and microcaps. That is a completely

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Speaker 1: different area than many of us are familiar with. I

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Speaker 1: mentioned at the start how I don't have many fund

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Speaker 1: managers on the show because many of them are doing

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Speaker 1: the same thing. Someone I deemed there's something entirely different

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Speaker 1: specializes in small businesses that are listed on the market.

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Speaker 1: That means he's not sitting at a screen doing his

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Speaker 1: quant sort of mathematics. He's actually getting to know them.

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Speaker 1: He's literally going out and sitting in front of these

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Speaker 1: guys and asking them questions about their business. A lot

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Speaker 1: of these businesses don't have stuff broken research notes that

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Speaker 1: you or I could get, so it's like original research

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Speaker 1: and just conceptually, Dean, it is a game where things

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Speaker 1: go really right or really wrong right. So I think

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Speaker 1: it was the year before last you had a thirty

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Speaker 1: percent return in one year, and then another year you

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Speaker 1: had a minus twenty five percent retime. How do you

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Speaker 1: steer through that? Is that how it goes? Is that

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Speaker 1: what you have to come to expect your line of work.

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Speaker 2: I would say the last four or five years have

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Speaker 2: been very unusual in terms of how the market's reacted.

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Speaker 2: Certainly the smaller, and there's been an in incredible amount

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Speaker 2: of nervousness and then high and momentum driving stocks, and

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Speaker 2: so the volatility has been extreme, and it's been I think,

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Speaker 2: in aspects, a really difficult time to invest, because I

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Speaker 2: just don't always seem to know what's going to perapture

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Speaker 2: of the market's attention on what's going to drive stocks.

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Speaker 2: We looked at just how hyped up stocks went through

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Speaker 2: COVID when everyone was home and everyone was investing and

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Speaker 2: the stock market was going bananas. It's why is this

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Speaker 2: happening on a fundamental basis? Because there was governments throwing

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Speaker 2: money at people I was seeing at home trading the

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Speaker 2: stock market, trading bitcoin and bond stuff online, and then

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Speaker 2: that kind of all blew up, and now it's sort

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Speaker 2: of startings its way back. So it is hard like

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Speaker 2: I would have normally said to our clients, you know,

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Speaker 2: a bad year, you might expect negative fifteen percent, of

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Speaker 2: a good year, might expect plus fifteen. Now at the moment,

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Speaker 2: it's sort of can be negative thirty to plus fifty,

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Speaker 2: which is just we don't say to our clients whether

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Speaker 2: sort of investment manage that you put twenty or thirty

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Speaker 2: percent of your money with you might look at allocating

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Speaker 2: five percent of your SIP towards a microcap investor, and

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Speaker 2: if you have a couple good years, you can turn

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Speaker 2: it five percent into ten or fifteen.

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Speaker 1: And I suppose what you're doing is you're in a

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Speaker 1: way you're combining rather than you the investor, putting that

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Speaker 1: particular investment, which has a I don't know if you're

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Speaker 1: comfortable with the world speculative, but it's riskier than buying

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Speaker 1: a blue chip. Rather than narrowing your better one stock,

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Speaker 1: you actually get a basket of stocks. How many stocks

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Speaker 1: would you hold in the fund, the sea and fund

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Speaker 1: at any given time.

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Speaker 2: Typically we'd hold kind of around twenty five stocks, right,

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Speaker 2: so it is very diverse. But what we have found,

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Speaker 2: certainly in a couple of years prior, was that when

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Speaker 2: investors decide that they don't want to be in smaller

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Speaker 2: micro cap stocks, everything gets sold and liquidity make the

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Speaker 2: volatility much increased. Shares go down, and then you'll have

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Speaker 2: a period, particularly two years ago, where you had a

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Speaker 2: number of falls posts OVID and there was a hell

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Speaker 2: of a lot of tax law selling as well, which

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Speaker 2: comes around in June. So it was just a bit

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Speaker 2: of a vicious circle. It's going to feel that things

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Speaker 2: are starting to improve at the moment.

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Speaker 1: But tell me upselling you picked up when you get

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Speaker 1: it right, when you get a beauty. I think you

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Speaker 1: have a gaming software company that did very well for you.

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Speaker 2: What's that called again, Playside Studios.

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Speaker 1: Today Side Studios. How did you pick them?

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Speaker 2: I'm always interested in people that like invest in businesses

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Speaker 2: that are based in Taiwan, or Belgium or the US.

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Speaker 2: The play Side's actually I'm based just up the road

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Speaker 2: from where I lived in Port Melbourne, and over the

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Speaker 2: last couple of years I've grown from about eighty staff

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Speaker 2: to around three hundred and twenty, so I've kind of

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Speaker 2: seen the growth in my backyard that we're doing contracts

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Speaker 2: for some very big international customers. So they do programming

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Speaker 2: for metsa part of Facebook and and Netflix and a

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Speaker 2: gaming company called at Blizzard, so that blue chip clients.

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Speaker 2: They were doing some really decent revenues that was profitable,

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Speaker 2: only mildly profitable, but they've just ended up driving some

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Speaker 2: really really good business decisions. They've bought a kind of

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Speaker 2: a viral name or brand called Dumboes to Die, which

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Speaker 2: has sort of become very successful TikTok and Instagram and

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Speaker 2: with the minor games and so their revenues have almost

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Speaker 2: tripled in the last couple of years, and the business

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Speaker 2: is just going from strength to strength.

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Speaker 1: And do you know them, like, do they know you?

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Speaker 1: Can you get them on the phone? Is it that

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Speaker 1: sort of relationship?

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Speaker 2: Yeah? Yeah, Like I know Jerry Sakas really well actually,

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Speaker 2: and Mark Alopolos is one of the board members there.

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Speaker 2: So you know, we were probably a little bit fortunate

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Speaker 2: or lucky to know those people personally before the stock

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Speaker 2: actually listed, and we put a lot of money just

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Speaker 2: pre API. So it's been a really good success story.

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Speaker 2: But you know there's obviously that's out wide often against

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Speaker 2: a lot of the ones that aren't great success stories.

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Speaker 1: So as someone where it's it's literally you're knowing the

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Speaker 1: company and that's important, and other people don't know the company.

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Speaker 1: So you're on your own making these decisions. Right, It's

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Speaker 1: not like you're with a herd. It's not like there's

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Speaker 1: a whole pack. It's not like you're deciding today to

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Speaker 1: buy Nvidia or you're deciding today to buy Guzmni Goolmez. Right,

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Speaker 1: it's like you're on your own, dude, how important is

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Speaker 1: the people to you and key person risk? How important

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Speaker 1: is that at your level of investing.

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Speaker 2: It's generally pretty important. Like if you're investing in a company.

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Speaker 2: I mean people say about Guzmini Gans that Steve marxis.

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Speaker 1: He's the wiz behind the whole thing.

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Speaker 2: Yeah, just an absolute so energetic and what he's built.

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Speaker 2: Full credit to him. He's built a great business up

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Speaker 2: from scratch over ten years. So you have to invest

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Speaker 2: in the people. But sometimes the risk is that you

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Speaker 2: have a loyalty or an association with them that gets

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Speaker 2: a little bit too close, and when you start seeing

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Speaker 2: things maybe unravel or stock becoming too overvalued, you become

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Speaker 2: just too wedded to the stock to make purely objective decisions.

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Speaker 2: I think that's just something you can't avoid, but you've

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Speaker 2: got to be aware of as much as you can.

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Speaker 2: But I much prefer to be investing in someone I knew,

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Speaker 2: that I trust, that I respected, rather than I mean,

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Speaker 2: how many people know Gensen why at any video or

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Speaker 2: have to spend much time with Mark Zuckerberg or any

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Speaker 2: of those guys. They just don't, So I would rather

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Speaker 2: make rejective financial decision with someone I can meet and

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Speaker 2: look in the eye and speak to and get answers

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Speaker 2: out of us.

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Speaker 1: Yes, And what about something I've always wanted to find

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Speaker 1: with fund managers is that a lot of them can

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Speaker 1: be naive. I think about figures. By that, I mean

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Speaker 1: they're very, very dependent on the numbers and less interested

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Speaker 1: in the management. And you're talking about how in the

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Speaker 1: microcraft small capital level the people really really matter. With

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Speaker 1: all due respect to say, come back, Matt Common. He

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Speaker 1: could go tomorrow and they'll find someone ass who's really

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Speaker 1: good and it's not a crisis. But in a little

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Speaker 1: company that you might be invested in, there's some wiz

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Speaker 1: feed male or female, and the company is built around

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Speaker 1: them and they're instrumental in this and they've got skin

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Speaker 1: in the game. But you have to believe what they

432
00:24:35,680 --> 00:24:39,359
Speaker 1: tell you. How do you decode between the numbers and

433
00:24:39,400 --> 00:24:42,720
Speaker 1: their interpretation of the numbers, because they can say to you, hey,

434
00:24:43,320 --> 00:24:45,720
Speaker 1: we're just about to turn the corner, We're just about

435
00:24:45,720 --> 00:24:48,400
Speaker 1: to sign three contracts. They're not lying, right, they don't

436
00:24:48,480 --> 00:24:51,600
Speaker 1: believe that, But how do you your bullshit detector?

437
00:24:54,359 --> 00:24:56,679
Speaker 2: Yeah, I mean that's the case with all those I

438
00:24:56,680 --> 00:24:59,600
Speaker 2: mean all these people that are running smaller businesses, are

439
00:24:59,680 --> 00:25:03,959
Speaker 2: very old entrepreneur they're very aggressive, they're often very optimistic,

440
00:25:04,200 --> 00:25:07,360
Speaker 2: and so sometimes you can get caught up in that

441
00:25:07,760 --> 00:25:10,719
Speaker 2: and that's fine if they're right. But for me, the

442
00:25:10,760 --> 00:25:14,760
Speaker 2: results have got to meet the narrative and you can

443
00:25:14,800 --> 00:25:20,600
Speaker 2: only have that proven up over time. So it's about saying, Okay,

444
00:25:20,920 --> 00:25:24,119
Speaker 2: James told me this back in twenty fourteen, I'll write

445
00:25:24,119 --> 00:25:27,240
Speaker 2: that down, I'll keep notes, and you know, six months later,

446
00:25:27,480 --> 00:25:29,720
Speaker 2: has that happened? Is the ahead of expectations? Is he

447
00:25:29,840 --> 00:25:33,600
Speaker 2: behind that kind of thing? So that's what I find

448
00:25:33,720 --> 00:25:37,560
Speaker 2: is just matching up the results with the previously estimated

449
00:25:37,600 --> 00:25:40,399
Speaker 2: time owner. And that's what time in the market gives you,

450
00:25:40,400 --> 00:25:42,560
Speaker 2: you know, coming back again to you know, like a

451
00:25:42,560 --> 00:25:49,119
Speaker 2: Guzman versus a Domino's guzmins, it's all promise but no

452
00:25:49,359 --> 00:25:53,080
Speaker 2: results as yet. Domino's promised a lot early on, delivered

453
00:25:53,080 --> 00:25:56,879
Speaker 2: a lot, promised more, didn't deliver, and that's what's happened

454
00:25:56,880 --> 00:25:59,520
Speaker 2: to the share pro So yeah, that's sort of probably

455
00:25:59,640 --> 00:26:03,359
Speaker 2: my sort of that that just got to be. Don't

456
00:26:03,359 --> 00:26:05,919
Speaker 2: get too excited as much as you can help, but.

457
00:26:06,280 --> 00:26:08,800
Speaker 1: Don't get as excited as that as the CEO all

458
00:26:08,920 --> 00:26:11,040
Speaker 1: right on the opposite end then things when things got

459
00:26:11,080 --> 00:26:12,960
Speaker 1: really wrong. And I don't know whether you were in

460
00:26:13,080 --> 00:26:15,040
Speaker 1: satire or not. I'm sure we have some people who

461
00:26:15,040 --> 00:26:16,240
Speaker 1: are in it, but it would seem to be this

462
00:26:16,359 --> 00:26:21,840
Speaker 1: year's example of a company that has absolutely whatever the

463
00:26:21,840 --> 00:26:24,520
Speaker 1: opfset of shot the lights is, they've crashed basically, haven't

464
00:26:24,560 --> 00:26:27,639
Speaker 1: they by fifty percent or more? In recite? And they

465
00:26:27,680 --> 00:26:32,359
Speaker 1: were seen as this wonderful online jewelry company, the sticker

466
00:26:32,400 --> 00:26:35,760
Speaker 1: company everyone missed. Well, what happened? Could you tell people

467
00:26:35,760 --> 00:26:38,160
Speaker 1: what happened there and why? That's how a stock goes

468
00:26:38,200 --> 00:26:39,240
Speaker 1: wrong sometimes like that.

469
00:26:39,480 --> 00:26:42,800
Speaker 2: Look, I don't really know what's happened with said. What

470
00:26:42,840 --> 00:26:45,960
Speaker 2: I can tell you is I've just never been a believer,

471
00:26:46,880 --> 00:26:53,800
Speaker 2: and I've always thought there were a lot of red flags. Yes, right,

472
00:26:54,119 --> 00:26:58,439
Speaker 2: it became wildly successful very quickly.

473
00:26:59,080 --> 00:27:01,000
Speaker 1: Did you take a look at a Danny stage?

474
00:27:01,080 --> 00:27:04,040
Speaker 2: I did, but I just never got it fundamentally. I

475
00:27:04,080 --> 00:27:12,040
Speaker 2: never understood why premium you know, ultra premium brands, you know,

476
00:27:12,080 --> 00:27:15,000
Speaker 2: these are companies selling up polo shits for two thousand

477
00:27:15,080 --> 00:27:19,320
Speaker 2: dollars would want to be having them discounted through a

478
00:27:19,359 --> 00:27:23,440
Speaker 2: third party operator of Australia I just I never got

479
00:27:23,480 --> 00:27:28,560
Speaker 2: why Hermes and Priora and all those other brands would

480
00:27:28,840 --> 00:27:31,760
Speaker 2: when I have a middleman doing that. I think at

481
00:27:31,760 --> 00:27:35,360
Speaker 2: one stage early on, I asked them sort of how

482
00:27:35,359 --> 00:27:37,520
Speaker 2: many employeers they had, and they said they had thirty,

483
00:27:38,640 --> 00:27:41,640
Speaker 2: And I just thought, to myself, how is a business

484
00:27:41,680 --> 00:27:46,920
Speaker 2: with thirty employees doing hundreds of millions of dollars in

485
00:27:47,000 --> 00:27:50,720
Speaker 2: revenue and you know, tens of million dollars an even

486
00:27:50,800 --> 00:27:54,199
Speaker 2: dar with thirty employees. I just didn't understand how they

487
00:27:54,200 --> 00:27:57,920
Speaker 2: were doing it. And then the business was so secreted

488
00:27:58,080 --> 00:28:00,240
Speaker 2: they wouldn't really tell you very much. They were used

489
00:28:00,240 --> 00:28:05,800
Speaker 2: to answer questions all the same time, while founders were selling.

490
00:28:05,520 --> 00:28:07,240
Speaker 1: Licks of shares into the market.

491
00:28:07,359 --> 00:28:10,480
Speaker 2: Yeah, teens to hundreds of millions of dollars of shares.

492
00:28:10,680 --> 00:28:13,439
Speaker 2: I mean, it's just red flag on red flag on

493
00:28:13,480 --> 00:28:15,879
Speaker 2: red flag. But at the same time, the business was

494
00:28:15,920 --> 00:28:19,479
Speaker 2: doing really well and big firms were in there driving

495
00:28:19,480 --> 00:28:21,359
Speaker 2: the share price. So I think at one stage it

496
00:28:21,400 --> 00:28:25,199
Speaker 2: was worth a couple of million dollars. So in the

497
00:28:25,240 --> 00:28:29,439
Speaker 2: market there's always always dozens of companies you regret not buying,

498
00:28:29,600 --> 00:28:32,400
Speaker 2: and you've just not got to not let it get

499
00:28:32,440 --> 00:28:34,880
Speaker 2: to you. And that was when I just thought, I

500
00:28:34,920 --> 00:28:37,240
Speaker 2: think at some stage there will be a judgment day

501
00:28:37,280 --> 00:28:41,760
Speaker 2: on this, and it appears it's coming now. Whether I'm

502
00:28:42,320 --> 00:28:46,040
Speaker 2: ultimately right or wrong, I don't know. I don't really care.

503
00:28:46,040 --> 00:28:49,479
Speaker 1: It looks like it's colmed in. It's down to fifty percent.

504
00:28:50,040 --> 00:28:53,120
Speaker 1: Yeah in weeks, oh look it.

505
00:28:53,280 --> 00:28:56,520
Speaker 2: Yeah. And I think sometimes when you have these big

506
00:28:56,600 --> 00:29:00,680
Speaker 2: hits that it's really really hard to recover from. Sign

507
00:29:00,760 --> 00:29:05,440
Speaker 2: I'll do no profitability this quarter after doing ten plus

508
00:29:05,440 --> 00:29:08,640
Speaker 2: million per quarter of adversary quarter. So if you extrap

509
00:29:08,680 --> 00:29:11,160
Speaker 2: light that the business will never be profitable again.

510
00:29:12,520 --> 00:29:17,040
Speaker 1: Yeah, on that particular layer, it's a very It really

511
00:29:17,120 --> 00:29:20,200
Speaker 1: is the most tricky end of the market, small caps.

512
00:29:20,200 --> 00:29:22,280
Speaker 1: And if you've done any investing at all, you would

513
00:29:22,320 --> 00:29:25,560
Speaker 1: probably know that. In the mid caps, in the blue

514
00:29:25,680 --> 00:29:28,560
Speaker 1: chip space, you know, you may do well or you

515
00:29:28,600 --> 00:29:32,160
Speaker 1: may do badly, but it's all within a zone. But

516
00:29:32,240 --> 00:29:34,720
Speaker 1: in small caps, I mean, you can literally lose ninety

517
00:29:34,760 --> 00:29:37,080
Speaker 1: percent of your money, or you can have a triple

518
00:29:37,560 --> 00:29:40,440
Speaker 1: four bag or five bagger. That's the business that Dean

519
00:29:40,560 --> 00:29:43,480
Speaker 1: is in. It's a fascinating end of the market and

520
00:29:43,560 --> 00:29:46,160
Speaker 1: sometimes I imagine it's very helpful to have someone to

521
00:29:46,200 --> 00:29:48,280
Speaker 1: hold your hand. All right, Well, take short break. We'll

522
00:29:48,280 --> 00:30:01,160
Speaker 1: be back with some really good questions in a moment. Hello,

523
00:30:01,240 --> 00:30:04,800
Speaker 1: Welcome back to the Australian's Money Puzzle podcast. James Kirby

524
00:30:04,840 --> 00:30:07,760
Speaker 1: with Dean Fergie of c An Investment Management, who was

525
00:30:07,800 --> 00:30:10,080
Speaker 1: a fund manager at the spoon and microcap end of

526
00:30:10,120 --> 00:30:12,440
Speaker 1: the market, which we haven't actually had a look at

527
00:30:12,440 --> 00:30:15,160
Speaker 1: for quite some time. I've got two questions here. I've

528
00:30:15,200 --> 00:30:18,360
Speaker 1: just narrowed it down to two, Dean, because they are

529
00:30:18,520 --> 00:30:20,160
Speaker 1: probably the ones that I think we'll get the best

530
00:30:20,200 --> 00:30:23,360
Speaker 1: answers from you. One one is from Luke and we've

531
00:30:23,360 --> 00:30:28,320
Speaker 1: been talking about stock splits of late in the Australian market.

532
00:30:28,400 --> 00:30:32,640
Speaker 1: That the famous stock splitter is CSL. Listeners are into

533
00:30:32,680 --> 00:30:36,160
Speaker 1: overseas stocks and invariably they are into the same ten

534
00:30:36,200 --> 00:30:38,600
Speaker 1: overseas stocks that everybody else is into, one of which

535
00:30:38,640 --> 00:30:41,560
Speaker 1: is in video and they've done a split. So Luke says,

536
00:30:42,320 --> 00:30:45,080
Speaker 1: what does the data say on stock splitz? Do they

537
00:30:45,120 --> 00:30:48,720
Speaker 1: perform or onto performers to the market after a stock split.

538
00:30:49,280 --> 00:30:53,640
Speaker 1: I'm wondering is there any behavioral psychology involved in investing

539
00:30:54,200 --> 00:30:58,120
Speaker 1: post split seemingly but not actually lower price. It's a

540
00:30:58,120 --> 00:31:02,120
Speaker 1: great question. Could you explain to the general listener what

541
00:31:02,120 --> 00:31:04,720
Speaker 1: a stock split is if you would quickly, and then

542
00:31:05,320 --> 00:31:08,480
Speaker 1: whether it makes the difference to you when this has happened. Yeah.

543
00:31:08,720 --> 00:31:13,040
Speaker 2: Basically they're saying, if you have one hundred shares at

544
00:31:13,080 --> 00:31:16,640
Speaker 2: one dollar, will turn that into two hundred shares at

545
00:31:16,680 --> 00:31:21,120
Speaker 2: fifty cents. So the value is still one hundred dollars,

546
00:31:21,160 --> 00:31:24,800
Speaker 2: but the shares in isolation look like they are half

547
00:31:24,880 --> 00:31:31,840
Speaker 2: the price. The empirical evidence unequivocally is that that adds

548
00:31:32,360 --> 00:31:37,560
Speaker 2: some value to the value of looseness. I think the

549
00:31:37,600 --> 00:31:39,320
Speaker 2: rest it was like three to four percent.

550
00:31:40,280 --> 00:31:43,360
Speaker 1: So people think it's cheaper, but it's not cheaper, right.

551
00:31:44,280 --> 00:31:48,480
Speaker 2: No, it's not cheaper. There are enough people on the

552
00:31:48,600 --> 00:31:53,200
Speaker 2: edge that are prepared to buy more shares a lower price.

553
00:31:53,240 --> 00:31:55,880
Speaker 2: Even tho there's twice as many on issue as beforehand,

554
00:31:56,160 --> 00:31:58,400
Speaker 2: and we saw that happen. Tesla did a stock split

555
00:31:58,440 --> 00:32:01,080
Speaker 2: I think a couple of years ago. Main material impact.

556
00:32:01,240 --> 00:32:05,040
Speaker 2: So the answer is, yes, has put my fundamental finance

557
00:32:05,120 --> 00:32:07,880
Speaker 2: theory had on that shouldn't make any difference. But you

558
00:32:07,960 --> 00:32:10,480
Speaker 2: can't argue with the data, and that's the data.

559
00:32:10,560 --> 00:32:12,160
Speaker 1: I suppose there is a point at which it gets

560
00:32:12,200 --> 00:32:15,240
Speaker 1: absurd for a stock is just bensive paras stock.

561
00:32:15,600 --> 00:32:18,600
Speaker 2: Yeah. At the micro end're also having the issue when

562
00:32:18,640 --> 00:32:21,160
Speaker 2: stocks get so bummed out and land up being point

563
00:32:21,200 --> 00:32:23,880
Speaker 2: two of a percent point two of percent. I'll do

564
00:32:23,920 --> 00:32:26,600
Speaker 2: a consolidation as well, because people think it two cent

565
00:32:26,640 --> 00:32:29,400
Speaker 2: share is far too cheap. Let's make it twenty five cents.

566
00:32:29,640 --> 00:32:33,640
Speaker 1: Yes, yes, that's very interesting. Yeah, the opposite. Forgotten about

567
00:32:33,680 --> 00:32:36,680
Speaker 1: the stock consolidation. So look that's the opposite.

568
00:32:36,720 --> 00:32:36,880
Speaker 2: Right.

569
00:32:36,960 --> 00:32:40,560
Speaker 1: Let's say you have zing zing widgets and as Din says,

570
00:32:40,560 --> 00:32:44,040
Speaker 1: they're treading at zer point two five cents each, and

571
00:32:44,080 --> 00:32:46,400
Speaker 1: they say, this looks so bad, everybody. What they do

572
00:32:46,480 --> 00:32:48,720
Speaker 1: is they said they said to the shareholders, for every

573
00:32:49,880 --> 00:32:52,240
Speaker 1: ten you've got, you now have one, which is the

574
00:32:52,240 --> 00:32:55,080
Speaker 1: opposite of the Nvidio thing where they say for everyone

575
00:32:55,480 --> 00:32:57,720
Speaker 1: you have, you now have ten. So it's a stock

576
00:32:57,760 --> 00:32:58,320
Speaker 1: can't sell.

577
00:32:58,200 --> 00:33:02,840
Speaker 2: Ad Yeah, look, I don't know. I'd suggest it probably

578
00:33:02,840 --> 00:33:05,440
Speaker 2: goes the other why because the reason they consolidating is

579
00:33:06,120 --> 00:33:08,640
Speaker 2: the businesses are so bummed out.

580
00:33:08,760 --> 00:33:12,320
Speaker 1: Yeah, times are not good as opposed to for one thing,

581
00:33:12,800 --> 00:33:15,080
Speaker 1: that's for sure. With the stock splits, things have been

582
00:33:15,120 --> 00:33:17,520
Speaker 1: pretty good when you get them CSL as we say,

583
00:33:17,640 --> 00:33:20,480
Speaker 1: Tesla we mentioned in video that might not not always.

584
00:33:20,520 --> 00:33:23,440
Speaker 1: I remember some dot coms did them. That's going back

585
00:33:23,440 --> 00:33:25,360
Speaker 1: a fair bit, but there.

586
00:33:25,280 --> 00:33:28,600
Speaker 2: Was mightbe sabids. Consider doing your stocks plit givns and.

587
00:33:28,600 --> 00:33:30,480
Speaker 1: I knows that's right.

588
00:33:30,720 --> 00:33:31,800
Speaker 2: That'll worry the shortest.

589
00:33:31,880 --> 00:33:34,560
Speaker 1: I know. You don't need many cbahas to have a

590
00:33:34,640 --> 00:33:37,760
Speaker 1: nice holding of them these days. Question from Rowan The

591
00:33:37,840 --> 00:33:41,920
Speaker 1: as X seems like it's been pigeonholes, a backwater for

592
00:33:42,080 --> 00:33:46,720
Speaker 1: legacy Australian businesses who predominantly dig up rocks lend money

593
00:33:46,760 --> 00:33:51,000
Speaker 1: to buy houses or services. What needs to change to

594
00:33:51,080 --> 00:33:53,800
Speaker 1: make the ASX a place worth listing on for future

595
00:33:53,840 --> 00:33:56,400
Speaker 1: focused companies. You must be really interested in this. Are

596
00:33:56,440 --> 00:33:59,560
Speaker 1: you that that the AX is shrinking, that there is

597
00:33:59,680 --> 00:34:03,680
Speaker 1: less stocks listed than there was a year ago because

598
00:34:03,960 --> 00:34:06,440
Speaker 1: you're under the market. You need lots of IPOs, don't you.

599
00:34:06,480 --> 00:34:08,239
Speaker 1: I mean you need that feed if you like.

600
00:34:08,320 --> 00:34:10,480
Speaker 2: No, it's actually it's a very good question. You look

601
00:34:10,520 --> 00:34:14,440
Speaker 2: at the ASX composition and it is You've got your

602
00:34:14,440 --> 00:34:17,600
Speaker 2: big four banks and a bunch of resources companies that

603
00:34:17,640 --> 00:34:20,480
Speaker 2: dig dirt out of the ground, class a few other telcos,

604
00:34:20,480 --> 00:34:21,880
Speaker 2: so it's a very a.

605
00:34:21,880 --> 00:34:24,920
Speaker 1: Couple of supermarkets and they take off. What percentage of

606
00:34:24,960 --> 00:34:27,479
Speaker 1: the market do they take up like half more?

607
00:34:27,840 --> 00:34:30,200
Speaker 2: Yeah, I think it's more than fifty percent, and then

608
00:34:30,200 --> 00:34:32,520
Speaker 2: you throw Aldi and ij in there, it's close to eighty.

609
00:34:32,800 --> 00:34:37,080
Speaker 2: So everything's very, very consolidated in Australia. There's not a

610
00:34:37,080 --> 00:34:40,680
Speaker 2: lot of competition, you know. I look at you know,

611
00:34:40,719 --> 00:34:42,360
Speaker 2: and I think it's maybe a bit of a cultural

612
00:34:42,400 --> 00:34:45,320
Speaker 2: issue in Australia, you know, the tall poppy syndrome. And

613
00:34:45,440 --> 00:34:49,560
Speaker 2: I say, if you've tried to start up three businesses

614
00:34:49,600 --> 00:34:51,920
Speaker 2: and failed at them in Australia, regard it as a

615
00:34:52,000 --> 00:34:54,680
Speaker 2: bit of a failure, whereas if you do that in

616
00:34:54,719 --> 00:34:59,080
Speaker 2: the United States, you regard it as a thriving entrepreneur. So,

617
00:34:59,320 --> 00:35:01,880
Speaker 2: you know, I'd like to see Australia and there's been

618
00:35:01,920 --> 00:35:04,279
Speaker 2: a lot of press this week about it is just

619
00:35:04,920 --> 00:35:11,320
Speaker 2: you know, funding more startups give young entrepreneurial people to

620
00:35:11,440 --> 00:35:14,120
Speaker 2: go and have access to capital so they can make

621
00:35:14,160 --> 00:35:18,319
Speaker 2: it big and have that confidence that they can, you know,

622
00:35:19,360 --> 00:35:21,959
Speaker 2: do something special on a global scale. You know, there's

623
00:35:22,000 --> 00:35:26,000
Speaker 2: been a handful of them, obviously, the marquee ones, the

624
00:35:26,120 --> 00:35:28,560
Speaker 2: things like can for an after pay that have made

625
00:35:28,560 --> 00:35:31,279
Speaker 2: it globally. But I think we need more of that

626
00:35:31,800 --> 00:35:36,120
Speaker 2: positive investment can do culture that you start funding some

627
00:35:36,200 --> 00:35:39,400
Speaker 2: of these startups that they can progress through to being

628
00:35:39,640 --> 00:35:43,440
Speaker 2: commercial businesses that list from exchange and thrive. That would

629
00:35:43,440 --> 00:35:47,040
Speaker 2: be my underlying view rather than if you're not a

630
00:35:47,120 --> 00:35:51,680
Speaker 2: legacy bank or a big miner, we don't really want

631
00:35:51,719 --> 00:35:52,399
Speaker 2: to know about it.

632
00:35:53,040 --> 00:35:55,200
Speaker 1: And the companies you do with that that end of

633
00:35:55,239 --> 00:35:58,520
Speaker 1: the market, the smaller caps do they have to depend

634
00:35:58,560 --> 00:36:01,480
Speaker 1: on the pulse to be vss aren't interested in the

635
00:36:01,520 --> 00:36:06,399
Speaker 1: markers are listed, they're not covered by brokers. Most fund

636
00:36:06,480 --> 00:36:09,719
Speaker 1: managers don't invest in them. So what do they do?

637
00:36:09,800 --> 00:36:13,239
Speaker 1: Are they internally funded? Is that must be it?

638
00:36:13,320 --> 00:36:15,440
Speaker 2: There are still they still do have access to capital

639
00:36:15,520 --> 00:36:18,000
Speaker 2: in the markets, but it's harder than it used to be.

640
00:36:18,760 --> 00:36:21,920
Speaker 2: I think what I've seen in the last couple of

641
00:36:22,040 --> 00:36:25,479
Speaker 2: years is well two things happen. That the companies bunker down,

642
00:36:26,480 --> 00:36:29,840
Speaker 2: can serve their cash, run the businesses efficiently and start

643
00:36:30,400 --> 00:36:35,680
Speaker 2: getting growth at the bottom line, which attracts investors. Or

644
00:36:35,800 --> 00:36:38,359
Speaker 2: in fact they get taken over. And that's what we're

645
00:36:38,400 --> 00:36:40,120
Speaker 2: seeing a bit at the moment. A number of these

646
00:36:40,160 --> 00:36:45,719
Speaker 2: small businesses are getting takeover offers from international companies. Have

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00:36:45,800 --> 00:36:47,759
Speaker 2: just seen the value in the market because everything's so

648
00:36:47,800 --> 00:36:50,520
Speaker 2: bummed out. But I mean, that's not a great outcome

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00:36:50,560 --> 00:36:53,080
Speaker 2: of actual for investors. But I'd just like to see

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00:36:53,120 --> 00:36:55,640
Speaker 2: more business as listeds of are thriving in Australia rather

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00:36:55,680 --> 00:36:58,640
Speaker 2: than just trying to have a safety need of let's

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00:36:58,680 --> 00:36:59,359
Speaker 2: get taken over.

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00:37:00,200 --> 00:37:03,279
Speaker 1: Yes, okay, very good, and thanks for that. Roan is

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00:37:03,400 --> 00:37:06,440
Speaker 1: actually a real theme in the market, and more so

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00:37:06,719 --> 00:37:10,400
Speaker 1: now because of two things. One, our own market is

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00:37:10,640 --> 00:37:13,560
Speaker 1: shrinking in terms of number of listings. Very hard to do.

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00:37:13,640 --> 00:37:16,120
Speaker 1: An ipo. We've had an IPO just goes Many Gomez,

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00:37:16,160 --> 00:37:18,640
Speaker 1: which is all fine, but we all hope it goes okay,

659
00:37:18,680 --> 00:37:22,880
Speaker 1: because if it doesn't and it disappoints people in the shortter,

660
00:37:22,960 --> 00:37:25,520
Speaker 1: medium term, there won't be any more IPOs for a

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00:37:25,560 --> 00:37:28,640
Speaker 1: long time of any significance. Everyone gets scared again. The

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00:37:28,680 --> 00:37:30,399
Speaker 1: other thing is people used to run off and join

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00:37:30,480 --> 00:37:32,600
Speaker 1: Nastack or whatever I was reading this morning. They like

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00:37:32,640 --> 00:37:34,840
Speaker 1: about three hundred million in revenue before they let you

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00:37:34,880 --> 00:37:37,920
Speaker 1: on to the big US exchanges. Okay, hey, look, thank

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Speaker 1: you very much, Dean, Thank you very much coming out

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Speaker 1: the show. It's really good, really interesting to talk to you.

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Speaker 1: That's Dean Fergie of CN Investment Management small cap fund manager.

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Speaker 1: Keep those questions rolling. Folks love to hear your questions, opinions, comments, complaints,

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00:37:53,840 --> 00:37:57,000
Speaker 1: the money puzzle at the Australian dot com dot au

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Speaker 1: Talk to you soon. The flat sad, the plant s