1 00:00:07,200 --> 00:00:10,440 Speaker 1: Hello, and welcome to the Australians Money Puzzle podcast. I'm 2 00:00:10,520 --> 00:00:14,480 Speaker 1: James Kirby. Welcome aboard, everybody, Welcome aboard. On a what 3 00:00:14,600 --> 00:00:17,959 Speaker 1: can I say, a fairly rocky week, didn't we pick 4 00:00:18,120 --> 00:00:21,319 Speaker 1: the right time to talk to my guests today? The 5 00:00:21,640 --> 00:00:27,640 Speaker 1: ASEX has officially midweek entered a correction, territory down ten 6 00:00:27,680 --> 00:00:32,559 Speaker 1: percent from its peak and still very weak as we speak. 7 00:00:33,040 --> 00:00:36,040 Speaker 1: Tech shares of course being soughked off quite hard, and 8 00:00:36,120 --> 00:00:39,879 Speaker 1: anything to do with AI interestingly, not just AI stocks, 9 00:00:39,880 --> 00:00:42,400 Speaker 1: but AI related stocks of which there are many and 10 00:00:42,479 --> 00:00:47,000 Speaker 1: all sorts right across two property trusts. So we've lost 11 00:00:47,040 --> 00:00:49,720 Speaker 1: all the gains that we had since the day Trump 12 00:00:49,840 --> 00:00:53,320 Speaker 1: was elected and just now it's it's also, of course 13 00:00:53,560 --> 00:00:56,120 Speaker 1: the same week that we had the tariffs imposed upon us, 14 00:00:56,520 --> 00:00:58,400 Speaker 1: which what does that do bring us back? Where does 15 00:00:58,440 --> 00:01:02,080 Speaker 1: that bring us back to? Huh nineteen? So it's time 16 00:01:02,120 --> 00:01:04,399 Speaker 1: to talk to someone in the market about the market. 17 00:01:04,640 --> 00:01:08,280 Speaker 1: My guest is Roger Montgomery of Montgomery Fund's Management. Oh 18 00:01:08,280 --> 00:01:08,919 Speaker 1: are you Roger? 19 00:01:09,360 --> 00:01:11,160 Speaker 2: Great to be with you again, James. It is an 20 00:01:11,200 --> 00:01:12,959 Speaker 2: auspicious day to be chatting with you. 21 00:01:14,640 --> 00:01:18,560 Speaker 1: Today, so it would seem but anyone who's been around 22 00:01:18,959 --> 00:01:22,840 Speaker 1: knows the market can do this and it can surprise us. 23 00:01:24,000 --> 00:01:26,319 Speaker 1: There's no the other thing I would say about this 24 00:01:26,360 --> 00:01:29,320 Speaker 1: particular downturn, and I know that you can put your 25 00:01:29,360 --> 00:01:33,240 Speaker 1: case about it. You actually are skeptical about the definition 26 00:01:33,319 --> 00:01:36,920 Speaker 1: of correction. More than ten percent is many people's definition. 27 00:01:36,959 --> 00:01:39,720 Speaker 1: There's no nothing legal. There's no legal definition out there, 28 00:01:39,880 --> 00:01:46,200 Speaker 1: but certainly no lack of explanations for why this particular 29 00:01:46,640 --> 00:01:48,680 Speaker 1: route has occurred on the share market is there. 30 00:01:50,000 --> 00:01:52,920 Speaker 2: I agree there's no shortage. There's always going to be 31 00:01:52,960 --> 00:01:58,120 Speaker 2: opinions after the fact. You know, I'm pretty content with 32 00:01:58,400 --> 00:02:03,000 Speaker 2: the columns that I wrote in Wealth earlier this year 33 00:02:03,080 --> 00:02:06,960 Speaker 2: saying that I expect this year to be a positive year, 34 00:02:06,960 --> 00:02:09,440 Speaker 2: but that it would be more volatile, and I doubted 35 00:02:09,480 --> 00:02:11,880 Speaker 2: that we would get another twenty percent year like we 36 00:02:11,960 --> 00:02:14,240 Speaker 2: had last year in the year before in the s 37 00:02:14,280 --> 00:02:17,480 Speaker 2: and P. Five hundred. I think, James, to your point 38 00:02:17,520 --> 00:02:22,400 Speaker 2: about corrections. I think the word correction is a euphemism 39 00:02:22,520 --> 00:02:26,080 Speaker 2: for a crash, or it's been. It's been somewhere along 40 00:02:26,120 --> 00:02:30,600 Speaker 2: the line, journalists and commentators like you and I stopped 41 00:02:30,600 --> 00:02:34,160 Speaker 2: calling it a crash started calling it a correction, and 42 00:02:34,240 --> 00:02:37,320 Speaker 2: so now correction is not twenty percent anymore. It's ten percent. 43 00:02:37,600 --> 00:02:39,120 Speaker 1: That's right. The crash is twenty. 44 00:02:39,520 --> 00:02:42,639 Speaker 2: A crash is twenty. But I thought a correction was 45 00:02:42,680 --> 00:02:46,960 Speaker 2: a euphemism for a crash, so I didn't realize there 46 00:02:47,040 --> 00:02:48,120 Speaker 2: was it was nuanced. 47 00:02:48,400 --> 00:02:51,799 Speaker 1: Oh, it's nuanced. Yes, it is, whatever it is, Roger, 48 00:02:52,600 --> 00:02:54,960 Speaker 1: it's sure as how going the wrong way, isn't it. 49 00:02:55,200 --> 00:02:58,080 Speaker 1: We had a fabulous year in twenty twenty four, and 50 00:02:58,120 --> 00:03:00,720 Speaker 1: we knew that, and as investors, we all knew that, 51 00:03:00,760 --> 00:03:03,440 Speaker 1: and we knew that you don't get double digits every year. 52 00:03:03,480 --> 00:03:05,720 Speaker 1: We knew that. Come, well, bank, the biggest bank in 53 00:03:05,760 --> 00:03:09,560 Speaker 1: the market, cannot go up forty percent. Well, history would suggest, 54 00:03:09,600 --> 00:03:14,519 Speaker 1: reality with suggest it can't go up forty percent. Another falling, 55 00:03:15,000 --> 00:03:17,600 Speaker 1: and they're falling right across the board. First of all, 56 00:03:18,360 --> 00:03:21,560 Speaker 1: you're still comfortable with basic premise you're working on that 57 00:03:21,760 --> 00:03:25,799 Speaker 1: we will finish calendar twenty twenty five with a positive 58 00:03:25,840 --> 00:03:27,080 Speaker 1: return on share markets. 59 00:03:27,480 --> 00:03:34,400 Speaker 2: There's there's the backdrop that supports that idea is threefold. 60 00:03:34,920 --> 00:03:42,200 Speaker 2: Number One, you need disinflation, and in January and February 61 00:03:42,280 --> 00:03:46,000 Speaker 2: we saw an uptick in US month to month inflation. 62 00:03:46,920 --> 00:03:51,040 Speaker 2: So we're still arguably still in deflation, because we're nowhere 63 00:03:51,040 --> 00:03:53,320 Speaker 2: near the eight to nine percent inflation rates that we 64 00:03:53,360 --> 00:03:59,160 Speaker 2: had before. But if your starting point was November October 65 00:03:59,160 --> 00:04:04,920 Speaker 2: November last year, then we've seen inflation accelerating marginally, So 66 00:04:05,000 --> 00:04:07,720 Speaker 2: that's not going the right way. But we need disinflation. 67 00:04:08,360 --> 00:04:11,720 Speaker 2: The other thing that we need is positive economic growth. 68 00:04:12,360 --> 00:04:15,960 Speaker 2: There is now some doubt about that, particularly in the 69 00:04:16,040 --> 00:04:19,479 Speaker 2: United States. And the reason I say disinflation and positive 70 00:04:19,480 --> 00:04:23,520 Speaker 2: economic growth, James, is because there was some research conducted 71 00:04:23,640 --> 00:04:27,359 Speaker 2: by a macroeconomic research house back and presented back in 72 00:04:27,440 --> 00:04:31,599 Speaker 2: nineteen seventy eight, and it demonstrated that whenever you have 73 00:04:31,760 --> 00:04:37,760 Speaker 2: disinflation and positive economic growth coalescing, then you end up 74 00:04:37,880 --> 00:04:44,440 Speaker 2: with a ripe environment for innovative companies with pricing power. Now, 75 00:04:44,720 --> 00:04:48,440 Speaker 2: in twenty twenty three and twenty twenty four, that's precisely 76 00:04:48,440 --> 00:04:52,039 Speaker 2: what we had, positive economic growth, disinflation, and the innovative 77 00:04:52,080 --> 00:04:55,040 Speaker 2: companies with pricing power, the Magnificent seven, with the exception 78 00:04:55,080 --> 00:04:58,440 Speaker 2: of Tesla, let's call it the Magnificent six. They all 79 00:04:58,480 --> 00:05:01,000 Speaker 2: did really well. And by the way, and the reason 80 00:05:01,040 --> 00:05:05,240 Speaker 2: why a lot of the money flowed into those megacap 81 00:05:05,279 --> 00:05:10,160 Speaker 2: companies is because there's a perceived safety in those larger companies, 82 00:05:10,920 --> 00:05:13,400 Speaker 2: and there was still a lot of talk about recession 83 00:05:13,520 --> 00:05:15,960 Speaker 2: or the risk of recession and so forth. And so 84 00:05:16,480 --> 00:05:20,240 Speaker 2: the inner so Gavical Research, who published that research in 85 00:05:20,279 --> 00:05:24,320 Speaker 2: nineteen seventy eight, they've been absolutely correct every time since 86 00:05:24,440 --> 00:05:28,039 Speaker 2: nineteen seventy eight. So that's two requirements for a positive 87 00:05:28,040 --> 00:05:32,680 Speaker 2: outlook for this year. And the third is central bank liquidity. 88 00:05:33,320 --> 00:05:35,799 Speaker 2: And now in twenty twenty three and twenty twenty four, 89 00:05:36,440 --> 00:05:39,200 Speaker 2: we had something in the order of five to six 90 00:05:39,360 --> 00:05:45,800 Speaker 2: trillion US dollars being surreptitiously injected into financial markets. Despite 91 00:05:45,880 --> 00:05:49,760 Speaker 2: all the tough talk from Jerome Powell and all of 92 00:05:49,760 --> 00:05:53,040 Speaker 2: that realet Janet Yellen as well, all of that tough 93 00:05:53,120 --> 00:05:57,680 Speaker 2: talk about QT or quantitative tightening and so forth, in 94 00:05:57,720 --> 00:06:01,719 Speaker 2: the background, they were drawing on things like the Reverse 95 00:06:01,800 --> 00:06:06,440 Speaker 2: Repurchase Agreement account that the FED holds, and they injected 96 00:06:06,560 --> 00:06:09,760 Speaker 2: about two trillion dollars from that account into markets. So 97 00:06:09,800 --> 00:06:16,080 Speaker 2: that was supportive. Again, liquidity is a fundamental necessity for 98 00:06:16,200 --> 00:06:18,880 Speaker 2: markets to go up, you need to have liquidity. And 99 00:06:19,360 --> 00:06:22,479 Speaker 2: so this year we have three challenges, and that is 100 00:06:22,520 --> 00:06:25,560 Speaker 2: disinflation still in train, and at the beginning of the year, 101 00:06:25,600 --> 00:06:28,280 Speaker 2: I believed that it would be, but at the moment 102 00:06:28,279 --> 00:06:32,719 Speaker 2: there's a question positive economic growth that at the beginning 103 00:06:32,760 --> 00:06:36,120 Speaker 2: of the year I thought that would be a consistent issue, 104 00:06:36,160 --> 00:06:39,960 Speaker 2: a consistent positive influence, but there's question marks in the 105 00:06:40,000 --> 00:06:43,520 Speaker 2: market about that. We're still positive, growth is still positive, 106 00:06:43,520 --> 00:06:48,280 Speaker 2: but there's a question mark that's re emerged. And liquidity, well, 107 00:06:48,320 --> 00:06:51,640 Speaker 2: that reverse repurchase agreement account I mentioned a moment ago, 108 00:06:51,720 --> 00:06:54,080 Speaker 2: that's down to one hundred and twenty billion now from 109 00:06:54,120 --> 00:06:56,960 Speaker 2: about two point four trillion a year and a half ago, 110 00:06:57,360 --> 00:07:02,880 Speaker 2: So that's been exhausted. The Federal Reserve and global central 111 00:07:02,920 --> 00:07:05,400 Speaker 2: banks are going to have to be very creative if 112 00:07:05,400 --> 00:07:08,880 Speaker 2: they don't want markets to tank in thinking about they'll 113 00:07:08,880 --> 00:07:12,160 Speaker 2: have to be very creative about how they pump more 114 00:07:12,200 --> 00:07:15,920 Speaker 2: money into financial markets and into the financial system. 115 00:07:15,560 --> 00:07:18,680 Speaker 1: To give that The critic to keep that cree variable, 116 00:07:18,760 --> 00:07:20,360 Speaker 1: obviously here is Trump. 117 00:07:20,480 --> 00:07:24,080 Speaker 2: I've only talked about one one aspect. Yes, so Trump 118 00:07:24,120 --> 00:07:28,800 Speaker 2: and the tariffs and the sort of mercurial way that 119 00:07:28,840 --> 00:07:33,120 Speaker 2: he imposes them withdraws that creates uncertainty not only for 120 00:07:33,200 --> 00:07:37,600 Speaker 2: financial markets, but it creates uncertainty for business. James. Companies 121 00:07:37,600 --> 00:07:41,320 Speaker 2: don't know whether they should spend their capital on investing 122 00:07:41,360 --> 00:07:44,080 Speaker 2: in new manufacturing. They don't know whether or not they 123 00:07:44,120 --> 00:07:47,440 Speaker 2: should be in advertising or marketing, should they be employing 124 00:07:47,440 --> 00:07:51,360 Speaker 2: more people. That all gets pulled back in this very 125 00:07:51,480 --> 00:07:53,480 Speaker 2: uncertain political regime. 126 00:07:54,240 --> 00:07:58,080 Speaker 1: Yes, so what we're seeing so far actually, as you said, 127 00:07:58,080 --> 00:08:01,280 Speaker 1: like a capital striker, and that's being reported quite lightly, 128 00:08:01,320 --> 00:08:05,440 Speaker 1: that listed companies of all at all levels are they 129 00:08:05,480 --> 00:08:10,120 Speaker 1: don't know where to turn. There's always uncertainty in the market. 130 00:08:10,120 --> 00:08:12,680 Speaker 1: Of course listeners and there would have been a shore 131 00:08:12,760 --> 00:08:14,760 Speaker 1: ever where I would have talked to Roger and we 132 00:08:14,800 --> 00:08:17,120 Speaker 1: would have said, hey, the markets are certain, but there 133 00:08:17,160 --> 00:08:20,320 Speaker 1: are degrees one of the things talking about in uncertainty. 134 00:08:20,480 --> 00:08:24,280 Speaker 1: So the market's down quite sharply. But the VIX, which 135 00:08:24,320 --> 00:08:27,960 Speaker 1: is the uncertainty index, that's not flying high or anything 136 00:08:28,040 --> 00:08:28,200 Speaker 1: like that. 137 00:08:28,400 --> 00:08:30,640 Speaker 2: It did spark, We did have a spark a couple 138 00:08:30,680 --> 00:08:33,960 Speaker 2: of days ago, but it hasn't spiked too you know, 139 00:08:34,120 --> 00:08:38,439 Speaker 2: extraordinary levels of previous crashes. The other thing that's interesting, James, 140 00:08:38,559 --> 00:08:42,720 Speaker 2: I just finished that. So we talked about the economic backdrop. 141 00:08:42,760 --> 00:08:46,280 Speaker 2: We then talked about the fundamental ecodrop nomic backdrop. Then 142 00:08:46,320 --> 00:08:48,760 Speaker 2: we talked about or mentioned Trump and tariffs and the 143 00:08:48,880 --> 00:08:52,640 Speaker 2: uncertainty there. The third one is again something that I 144 00:08:52,679 --> 00:08:55,719 Speaker 2: wrote about in the column for you, and that was 145 00:08:56,360 --> 00:09:00,640 Speaker 2: that was the end of the AI thematic, at the 146 00:09:00,720 --> 00:09:03,720 Speaker 2: end of that boom in AI stocks fueled by the 147 00:09:03,840 --> 00:09:05,600 Speaker 2: liquidity that I mentioned a moment ago. 148 00:09:05,960 --> 00:09:08,920 Speaker 1: When you said the end, you mean the end. It's 149 00:09:08,920 --> 00:09:11,040 Speaker 1: not over right, It's the end of what the promise 150 00:09:11,200 --> 00:09:13,240 Speaker 1: of the period of where there was no limits to 151 00:09:13,280 --> 00:09:15,199 Speaker 1: the promise. Is that what you're straining it. 152 00:09:15,400 --> 00:09:22,480 Speaker 2: I think the initial unbridled optimism where a complete disengagement 153 00:09:22,640 --> 00:09:28,599 Speaker 2: between price and revenue occurs, that that's over And the 154 00:09:28,720 --> 00:09:30,760 Speaker 2: hint and what I wrote about in the column a 155 00:09:30,800 --> 00:09:36,640 Speaker 2: while back. The hint was that the SOPs Semiconductor Index 156 00:09:36,679 --> 00:09:40,640 Speaker 2: in the United States had actually been ranged trading for 157 00:09:40,760 --> 00:09:43,040 Speaker 2: nine months. In fact, it was unchanged about a month 158 00:09:43,080 --> 00:09:45,959 Speaker 2: and a half ago. It was unchanged from nine months earlier. 159 00:09:46,440 --> 00:09:49,640 Speaker 2: So that told me that the thematic was becoming tired. 160 00:09:50,200 --> 00:09:55,000 Speaker 2: And despite all the positive news about Mannas, about Grock, 161 00:09:55,480 --> 00:10:00,160 Speaker 2: about the next version of chat GPT, despite all all 162 00:10:00,200 --> 00:10:03,440 Speaker 2: of the positive announcements and developments in the AI landscape, 163 00:10:04,200 --> 00:10:09,439 Speaker 2: what we were seeing was no real positive price response 164 00:10:09,920 --> 00:10:13,040 Speaker 2: in semiconductor stocks. And that told me that you know what, 165 00:10:13,360 --> 00:10:15,199 Speaker 2: there's a lot of there's a lot of great words 166 00:10:15,280 --> 00:10:18,640 Speaker 2: being said, but not a whole lot of buying happening 167 00:10:19,080 --> 00:10:22,040 Speaker 2: as a result of those words. And so once once 168 00:10:22,080 --> 00:10:26,400 Speaker 2: investors see a thematic becoming tired and they're not getting again, 169 00:10:26,760 --> 00:10:29,319 Speaker 2: it's a little bit like when you're investing in a fund, James, 170 00:10:29,320 --> 00:10:31,520 Speaker 2: and you know you've been there for five years, and you're. 171 00:10:31,440 --> 00:10:32,600 Speaker 1: Going, well, yeah, you know. 172 00:10:33,880 --> 00:10:35,520 Speaker 2: When's it going to turn? You sort of start to 173 00:10:35,520 --> 00:10:38,240 Speaker 2: become a little bit a little bit impatient. And I 174 00:10:38,240 --> 00:10:41,520 Speaker 2: think that's what investors have done now, They've become impatient 175 00:10:41,559 --> 00:10:44,160 Speaker 2: and they're reversed. And if I can just say one 176 00:10:44,200 --> 00:10:48,040 Speaker 2: more thing about the AI thematic, and that is that 177 00:10:48,559 --> 00:10:51,680 Speaker 2: again wrote a column about this last year in the 178 00:10:51,720 --> 00:10:55,360 Speaker 2: Australian Wealth. The thing that needed to happen was that 179 00:10:55,920 --> 00:11:00,840 Speaker 2: revenue models needed to be developed to justify father capital 180 00:11:00,880 --> 00:11:06,040 Speaker 2: expenditure on AI. And you know, the most popular or 181 00:11:06,120 --> 00:11:10,080 Speaker 2: the biggest use case for large language models that was 182 00:11:10,160 --> 00:11:16,000 Speaker 2: commercial up until this point right now was companion bots. 183 00:11:17,040 --> 00:11:20,040 Speaker 2: So you know, so chatbots that if you were lonely 184 00:11:20,720 --> 00:11:25,439 Speaker 2: or feeling romantic or whatever it was, you could subscribe 185 00:11:25,640 --> 00:11:29,560 Speaker 2: to a chatbot that was powered by a large language model, 186 00:11:30,000 --> 00:11:32,840 Speaker 2: and it would talk to you about your needs and wants. 187 00:11:32,880 --> 00:11:35,920 Speaker 1: And it's not exactly as commercially look at as it 188 00:11:37,040 --> 00:11:39,080 Speaker 1: was in the payment system, or if it was in 189 00:11:39,120 --> 00:11:40,720 Speaker 1: the This is the sort of thing that we were 190 00:11:40,760 --> 00:11:42,719 Speaker 1: waiting for. I've got a very good question on this, 191 00:11:43,240 --> 00:11:45,000 Speaker 1: which we'll do in a few minutes when we get 192 00:11:45,000 --> 00:11:48,520 Speaker 1: to questions, because it captures what all listeners I imagine 193 00:11:48,559 --> 00:11:50,319 Speaker 1: they're asking this week. Just before I do, I think 194 00:11:50,320 --> 00:11:51,720 Speaker 1: we should take a break because I want to come 195 00:11:51,720 --> 00:11:53,880 Speaker 1: back to you and look at this market now and 196 00:11:53,920 --> 00:11:57,480 Speaker 1: the extent to which capital gains. If capital gains are 197 00:11:57,520 --> 00:12:00,760 Speaker 1: not going to come through this year they were last year, 198 00:12:00,800 --> 00:12:02,800 Speaker 1: and that's a logical thing to say, before we even 199 00:12:02,880 --> 00:12:06,080 Speaker 1: had this correction. Where do people turn for income? We'll 200 00:12:06,080 --> 00:12:18,000 Speaker 1: be back in a moment. Hello, Welcome back to The 201 00:12:18,040 --> 00:12:22,120 Speaker 1: Australian's Money Puzzle podcast. James Kirby talking to Montgomery of 202 00:12:22,160 --> 00:12:26,679 Speaker 1: Montgomery Investment Management. Regular contributor of course to the Australians 203 00:12:26,760 --> 00:12:30,440 Speaker 1: Wealth Section, longtime contributor Roger. I wanted to just bring 204 00:12:30,480 --> 00:12:33,800 Speaker 1: that up with you. For most investors, shares are just 205 00:12:33,840 --> 00:12:36,920 Speaker 1: a part of their portfolio and they are faced with 206 00:12:37,480 --> 00:12:42,920 Speaker 1: a real conundrum now. Saving rates are falling because official 207 00:12:43,000 --> 00:12:49,480 Speaker 1: rates are falling at the same time the share market returns. Well, 208 00:12:49,520 --> 00:12:52,079 Speaker 1: they've had a setback, quite a setback in this first 209 00:12:52,160 --> 00:12:55,160 Speaker 1: quarter of twenty twenty five. And on top of that, 210 00:12:55,280 --> 00:12:59,520 Speaker 1: we've also come to realize that the dividend payouts in 211 00:12:59,559 --> 00:13:03,079 Speaker 1: any event I'm talking about the ASX now are slowing. 212 00:13:03,240 --> 00:13:06,000 Speaker 1: The big miners aren't paying dividends anything like they used to. 213 00:13:06,280 --> 00:13:09,640 Speaker 1: The dividend yield which people would depend on, has dropped 214 00:13:09,880 --> 00:13:12,120 Speaker 1: and it's under four percent now, where it was traditionally 215 00:13:12,160 --> 00:13:14,880 Speaker 1: between four and six percent. To the listeners who were 216 00:13:14,880 --> 00:13:18,880 Speaker 1: looking at this scenario where the shares are falling, their 217 00:13:18,920 --> 00:13:22,760 Speaker 1: wrists on risk free deposits are falling, and they know 218 00:13:22,840 --> 00:13:24,520 Speaker 1: that a dividend do you listen as good as it 219 00:13:24,640 --> 00:13:27,520 Speaker 1: used to be? What are the options here? 220 00:13:28,000 --> 00:13:30,920 Speaker 2: Okay? So there's a couple of frameworks to consider, James, 221 00:13:31,400 --> 00:13:34,800 Speaker 2: that help inform this discussion. Number One, if you're an 222 00:13:34,840 --> 00:13:38,880 Speaker 2: investor who bought the Commonwealth Bank shares fifteen or twenty 223 00:13:38,960 --> 00:13:43,840 Speaker 2: years ago, the price doesn't matter. The yield on your 224 00:13:43,880 --> 00:13:48,400 Speaker 2: investment is extraordinary, and I would be very reluctant and 225 00:13:48,440 --> 00:13:52,800 Speaker 2: it would be disingenuous of me to suggest that you 226 00:13:52,840 --> 00:13:55,320 Speaker 2: should sell your shares because they're going down. 227 00:13:55,920 --> 00:13:58,160 Speaker 1: Yeah, you're sent to listeners. They yield on your Combak 228 00:13:58,200 --> 00:14:01,400 Speaker 1: shares if you bought them from fifty bucks exactly our 229 00:14:01,480 --> 00:14:04,000 Speaker 1: twenty bucks. Yeah, of course. Yeah. When I talk about 230 00:14:04,040 --> 00:14:05,960 Speaker 1: the dividend, I'm talking about the place they are. 231 00:14:06,400 --> 00:14:09,360 Speaker 2: So if you're investing today, if you had capital to 232 00:14:09,520 --> 00:14:12,400 Speaker 2: invest today and you're thinking about where to put it 233 00:14:12,440 --> 00:14:15,520 Speaker 2: because income is something that you're going to need or 234 00:14:15,559 --> 00:14:18,840 Speaker 2: you need now, well, you know what, there's a growing 235 00:14:18,960 --> 00:14:23,400 Speaker 2: cohort James of people who are growing very tired as 236 00:14:23,440 --> 00:14:26,760 Speaker 2: they age and head towards their seventies. They're growing very 237 00:14:26,800 --> 00:14:30,200 Speaker 2: tired of the volatility of the stock market, and so 238 00:14:30,240 --> 00:14:33,480 Speaker 2: they're looking at other asset classes. And perhaps the asset 239 00:14:33,520 --> 00:14:37,440 Speaker 2: class that is now growing the fastest is private credit. 240 00:14:37,920 --> 00:14:40,400 Speaker 2: And that is a space that I've written about. It's 241 00:14:40,440 --> 00:14:43,840 Speaker 2: an area that we're now distributing a couple of very 242 00:14:43,840 --> 00:14:48,520 Speaker 2: successful funds. We're distributing those funds in Australia. They're Australian 243 00:14:48,560 --> 00:14:50,880 Speaker 2: based and have a long track record seving and a 244 00:14:50,880 --> 00:14:52,480 Speaker 2: half year track record in one case. 245 00:14:53,000 --> 00:14:55,840 Speaker 1: But could I ask you if you've got confidence seeping 246 00:14:55,840 --> 00:14:57,600 Speaker 1: out of the share market and if you have a 247 00:14:57,600 --> 00:15:01,520 Speaker 1: share market correction, there's no way that private credit is 248 00:15:01,920 --> 00:15:06,320 Speaker 1: quarantines in any fashion from the broader action on the market. 249 00:15:06,440 --> 00:15:06,960 Speaker 1: I put that to you. 250 00:15:07,000 --> 00:15:10,760 Speaker 2: Oh yes, no, because private credit is private markets. It's unlisted. 251 00:15:11,320 --> 00:15:16,240 Speaker 2: And so your return is coming from lending to medium 252 00:15:16,240 --> 00:15:19,440 Speaker 2: sized corporates in Australia, which the banks pulled back from 253 00:15:19,520 --> 00:15:23,120 Speaker 2: after the GFC because of regulation. And so look, the 254 00:15:23,200 --> 00:15:25,720 Speaker 2: fact is, fifteen years ago, James, if you'd said, Roger, 255 00:15:26,240 --> 00:15:29,640 Speaker 2: I want to lend money to small and medium sized corporates, 256 00:15:29,640 --> 00:15:31,280 Speaker 2: I would have said, James, don't do it. You've got 257 00:15:31,360 --> 00:15:33,760 Speaker 2: rocks in your head because the banks had that market 258 00:15:33,760 --> 00:15:36,760 Speaker 2: stitched up. They had it, they were dominating that space, 259 00:15:37,240 --> 00:15:40,640 Speaker 2: and the only businesses you could have lent to directly 260 00:15:40,760 --> 00:15:43,840 Speaker 2: or indirectly through a fund would have been the businesses 261 00:15:43,880 --> 00:15:48,920 Speaker 2: the bank's rejected. But now since the GFC, so much 262 00:15:49,000 --> 00:15:52,200 Speaker 2: capital is required for certain types of lending by the banks. 263 00:15:52,320 --> 00:15:56,000 Speaker 2: It's no longer profitable for them, it's not efficient for them, 264 00:15:56,120 --> 00:15:59,680 Speaker 2: and so the gap there is now a three hundred 265 00:15:59,680 --> 00:16:03,560 Speaker 2: and fifty billion dollar gap in Australia between what small 266 00:16:03,560 --> 00:16:06,320 Speaker 2: and medium sized corporates would like to borrow for growth. 267 00:16:06,360 --> 00:16:07,960 Speaker 2: And I'm not talking about businesses that are on their 268 00:16:08,040 --> 00:16:12,560 Speaker 2: knees and need turnaround capital. We're talking about high quality borrowers, 269 00:16:12,920 --> 00:16:15,200 Speaker 2: double A, double B type borrowers. 270 00:16:16,200 --> 00:16:18,040 Speaker 1: We see some of these top funds having to take 271 00:16:18,080 --> 00:16:20,400 Speaker 1: over things they never wanted to take all in restaurants 272 00:16:20,480 --> 00:16:20,920 Speaker 1: or whatever. 273 00:16:21,400 --> 00:16:24,560 Speaker 2: Yeah, they're lending, and most of the headlines relate to 274 00:16:25,480 --> 00:16:29,320 Speaker 2: loans that have been made to property development. So I 275 00:16:29,360 --> 00:16:31,520 Speaker 2: would say, you know, there's a like stocks on the 276 00:16:31,560 --> 00:16:35,480 Speaker 2: stock market, James, there are higher risk stocks and there 277 00:16:35,520 --> 00:16:38,600 Speaker 2: are lower risk companies to invest in. And it's the 278 00:16:38,640 --> 00:16:41,640 Speaker 2: same with private credit funds. There are funds that lend 279 00:16:41,640 --> 00:16:46,440 Speaker 2: to property developers and construction companies and restaurants, and then 280 00:16:46,480 --> 00:16:48,520 Speaker 2: there are those that don't. There are those that lend 281 00:16:48,560 --> 00:16:51,560 Speaker 2: for two and three years, which I think is riskier 282 00:16:51,680 --> 00:16:55,400 Speaker 2: than lending for three months or four months. And so 283 00:16:55,520 --> 00:16:59,960 Speaker 2: there are different vehicles out there in that private credit spaces. 284 00:17:00,080 --> 00:17:03,320 Speaker 1: Side of five credits, what about in more conventional areas, 285 00:17:03,440 --> 00:17:05,840 Speaker 1: there's obviously some sort of a swing to fixed income. 286 00:17:05,880 --> 00:17:08,200 Speaker 1: We can see that in the market, those people, as 287 00:17:08,240 --> 00:17:09,840 Speaker 1: you said, tire of volatility. 288 00:17:10,160 --> 00:17:12,760 Speaker 2: The only thing I say, James on that is there's 289 00:17:12,840 --> 00:17:16,640 Speaker 2: a very high correlation between bonds such as the US 290 00:17:16,720 --> 00:17:21,600 Speaker 2: treasuries and Australian government bonds and the equity market when 291 00:17:21,640 --> 00:17:25,800 Speaker 2: inflation is rising, and particularly when inflation is above four percent. 292 00:17:26,800 --> 00:17:30,720 Speaker 2: So you know that traditional sixty to forty portfolio that 293 00:17:30,840 --> 00:17:34,160 Speaker 2: many people have heard about. The idea is that when 294 00:17:34,160 --> 00:17:37,840 Speaker 2: the stock market is going down, your bond portfolio, the 295 00:17:37,880 --> 00:17:41,760 Speaker 2: sixty percent portion of your portfolio is going well. And 296 00:17:41,920 --> 00:17:44,920 Speaker 2: historically that has been the case except for when inflation 297 00:17:45,080 --> 00:17:48,879 Speaker 2: is accelerating. And we saw that when inflation jumped after 298 00:17:48,920 --> 00:17:53,640 Speaker 2: the after COVID, the protection that the bonds were meant 299 00:17:53,680 --> 00:17:57,760 Speaker 2: to provide failed to provide that protection and bonds went 300 00:17:57,880 --> 00:18:03,639 Speaker 2: down simultaneously. Or can currently with equity markets, especially in 301 00:18:03,680 --> 00:18:04,600 Speaker 2: twenty twenty two. 302 00:18:04,960 --> 00:18:07,320 Speaker 1: What about twenty twenty five, what's the val. 303 00:18:07,280 --> 00:18:15,160 Speaker 2: Well, as long as inflation remains benign and doesn't accelerate, 304 00:18:15,800 --> 00:18:19,560 Speaker 2: then bonds can provide that protection that you're looking for. 305 00:18:20,040 --> 00:18:22,560 Speaker 2: So it's important to understand the yield that you're going 306 00:18:22,560 --> 00:18:25,920 Speaker 2: to be generating from those bonds and understand that if 307 00:18:25,920 --> 00:18:31,080 Speaker 2: you hold them to maturity, that's your maximum return. However, 308 00:18:31,280 --> 00:18:35,240 Speaker 2: if interest rates fall considerably. Long bond rates fall considerably, 309 00:18:35,560 --> 00:18:38,520 Speaker 2: then you could also make a capital gain from the bonds, 310 00:18:39,200 --> 00:18:41,919 Speaker 2: but that should be treated as cream on top. What 311 00:18:41,960 --> 00:18:44,800 Speaker 2: you should be looking at is that beginning yield and 312 00:18:45,320 --> 00:18:48,240 Speaker 2: decide whether or not you're happy with that return, because 313 00:18:48,320 --> 00:18:50,520 Speaker 2: by holding the bonds to maturity, that's what you're going 314 00:18:50,520 --> 00:18:50,920 Speaker 2: to get. 315 00:18:51,400 --> 00:18:53,920 Speaker 1: In your team, what's the inflation view. 316 00:18:54,800 --> 00:18:58,200 Speaker 2: Well, my view, and each of our managers will probably 317 00:18:58,240 --> 00:19:01,320 Speaker 2: harbor a different view to each other, but my view 318 00:19:01,400 --> 00:19:06,000 Speaker 2: is that we probably won't see inflation outside of the 319 00:19:06,040 --> 00:19:10,440 Speaker 2: tariffs that are ultimately that ultimately are imposed. We shouldn't 320 00:19:10,480 --> 00:19:15,439 Speaker 2: see dramatic inflation that is that businesses are unable to 321 00:19:15,520 --> 00:19:16,840 Speaker 2: pass on to consumers. 322 00:19:17,080 --> 00:19:20,960 Speaker 1: Right, Okay, so you see it as restricted really. 323 00:19:21,000 --> 00:19:23,560 Speaker 2: But the risk, of course, the risk, of course is 324 00:19:23,600 --> 00:19:28,520 Speaker 2: the unpredictability of what tariffs are going to be imposed 325 00:19:29,160 --> 00:19:32,359 Speaker 2: and how belligerent certain people are in the United States 326 00:19:32,359 --> 00:19:35,159 Speaker 2: about imposing them. And the reason I say that is 327 00:19:35,160 --> 00:19:39,760 Speaker 2: because the downside of tariffs is number one, prices go 328 00:19:40,000 --> 00:19:43,880 Speaker 2: up for businesses that are manufacturing in the United States 329 00:19:44,200 --> 00:19:47,040 Speaker 2: but are importing the raw materials that they need for 330 00:19:47,080 --> 00:19:50,240 Speaker 2: that manufacturing pro and if they can't pass those things on. 331 00:19:50,640 --> 00:19:53,040 Speaker 2: Then their margin is compressed and they make less money. 332 00:19:53,160 --> 00:19:56,280 Speaker 2: Then they employ fewer people, they don't grow, and the 333 00:19:56,320 --> 00:19:57,320 Speaker 2: economy slows down. 334 00:19:57,359 --> 00:20:00,680 Speaker 1: Anyway, this is the risk, isn't it the risk that's 335 00:20:00,720 --> 00:20:02,800 Speaker 1: on the table. I'm bouncing around. But I want to 336 00:20:02,800 --> 00:20:04,720 Speaker 1: try one other thing with you. I don't tell you 337 00:20:04,800 --> 00:20:08,080 Speaker 1: talking about moving to quality stocks, getting rid of the thrash. 338 00:20:08,160 --> 00:20:10,520 Speaker 1: That's sort of saying zoning in on blue chip stocks. 339 00:20:10,600 --> 00:20:11,119 Speaker 1: That's strong. 340 00:20:11,720 --> 00:20:14,159 Speaker 2: Well, you know I've only ever talked about quality stocks. 341 00:20:14,320 --> 00:20:16,280 Speaker 1: Well, you should remind everybody where you come from. 342 00:20:16,400 --> 00:20:19,520 Speaker 2: Yeah, okay, So the background is and I wrote a 343 00:20:19,520 --> 00:20:21,560 Speaker 2: book on this, as you might remember James back in 344 00:20:21,640 --> 00:20:26,120 Speaker 2: twenty ten, called Valuable, and it was all about identifying 345 00:20:26,240 --> 00:20:30,480 Speaker 2: quality and equality. Business is a business, and we'll go 346 00:20:30,560 --> 00:20:32,679 Speaker 2: right back to first principles, and I'll keep it brief. 347 00:20:34,000 --> 00:20:36,359 Speaker 2: A quality business is a business that can generate a 348 00:20:36,480 --> 00:20:39,800 Speaker 2: high rate of return on equity. And when it generates 349 00:20:39,800 --> 00:20:41,840 Speaker 2: a high rate of return on equity, it's able to 350 00:20:41,920 --> 00:20:46,159 Speaker 2: retain a very large proportion of its profits and reinvest 351 00:20:46,200 --> 00:20:50,040 Speaker 2: again at that high rate of return. And the most 352 00:20:50,200 --> 00:20:53,400 Speaker 2: so that a business that can do that su sustainably 353 00:20:54,040 --> 00:20:58,320 Speaker 2: is a business that has or harbors within it a 354 00:20:58,359 --> 00:21:02,760 Speaker 2: competitive advantage. Now, the most valuable competitive advantage of all 355 00:21:03,640 --> 00:21:07,400 Speaker 2: is the ability to raise price without a detrimental impact 356 00:21:07,400 --> 00:21:10,520 Speaker 2: on your unit sales volume. And a business that can 357 00:21:10,560 --> 00:21:12,720 Speaker 2: do that think about that, James, you and I were 358 00:21:12,720 --> 00:21:15,439 Speaker 2: on the board of a company. We sell chocolate. You know, 359 00:21:15,440 --> 00:21:18,400 Speaker 2: it doesn't matter what we're selling. If the only decision 360 00:21:18,440 --> 00:21:21,399 Speaker 2: we had to make every year was James, how much 361 00:21:21,400 --> 00:21:24,760 Speaker 2: should we raise prices by this year? And each year 362 00:21:24,800 --> 00:21:28,400 Speaker 2: we say, oh, ten percent and we see no reduction 363 00:21:28,520 --> 00:21:31,760 Speaker 2: in volume. Well, that is a wonderful business to own. 364 00:21:32,560 --> 00:21:36,800 Speaker 2: And because there's no capital expenditure involved, there's no investment involved, 365 00:21:36,840 --> 00:21:40,680 Speaker 2: nothing changes. We just put an extra ten percent into 366 00:21:40,720 --> 00:21:43,720 Speaker 2: our revenue and maybe that flows through completely to the 367 00:21:43,720 --> 00:21:44,520 Speaker 2: bottom line. 368 00:21:44,800 --> 00:21:46,920 Speaker 1: It's in just that we see Warren Buffett this year 369 00:21:47,160 --> 00:21:50,159 Speaker 1: selling when everybody was buying last year. Now cash stup 370 00:21:50,200 --> 00:21:54,040 Speaker 1: and we see this correct selling going on exactly. Yes again, 371 00:21:54,200 --> 00:21:56,200 Speaker 1: So I just want to ask you, yeah, because people 372 00:21:56,359 --> 00:22:00,359 Speaker 1: listening are going to see give me some names. Child 373 00:22:00,440 --> 00:22:02,240 Speaker 1: expect you to do that, but I can do that. 374 00:22:02,480 --> 00:22:04,119 Speaker 1: Does combank fit that criterion? 375 00:22:04,320 --> 00:22:08,000 Speaker 2: Comback does because of the inertia in banking in Australia. 376 00:22:08,119 --> 00:22:12,760 Speaker 2: Nobody thinks that the benefit of switching banks is greater 377 00:22:13,320 --> 00:22:16,560 Speaker 2: than the inconvenience of doing it. The inconvenience of changing 378 00:22:16,600 --> 00:22:21,800 Speaker 2: banks is enormous. Passwords, pin codes, logins, cards. You know, 379 00:22:21,920 --> 00:22:24,800 Speaker 2: it's a disaster and all of those payments that are 380 00:22:24,800 --> 00:22:27,359 Speaker 2: taken out automatically that you have to go and you know, 381 00:22:27,480 --> 00:22:30,919 Speaker 2: reorganize it. The benefit of switching banks isn't seen to 382 00:22:30,960 --> 00:22:34,119 Speaker 2: be greater than the inconvenience, and so people stay. And 383 00:22:34,160 --> 00:22:37,680 Speaker 2: that allows banks to try on certain things like charging 384 00:22:37,720 --> 00:22:40,200 Speaker 2: people for taking their own money out of account if 385 00:22:40,200 --> 00:22:42,280 Speaker 2: they go to a branch, which by the way, was 386 00:22:42,320 --> 00:22:45,120 Speaker 2: pulled back from but the CBA tried that, but. 387 00:22:45,080 --> 00:22:48,439 Speaker 1: They they have to try. If you're relaxed in doing so, 388 00:22:48,680 --> 00:22:51,000 Speaker 1: would you tell the list of some stocks that you 389 00:22:51,119 --> 00:22:53,119 Speaker 1: think fit that criterion. 390 00:22:53,280 --> 00:22:56,199 Speaker 2: The poster child in Australia, and I've written about it 391 00:22:56,200 --> 00:23:00,760 Speaker 2: for years with you, James, is real estate, the Aria Group, 392 00:23:01,640 --> 00:23:02,040 Speaker 2: which I. 393 00:23:02,080 --> 00:23:05,119 Speaker 1: Must see, which we've said, and disclosure is obviously a 394 00:23:05,160 --> 00:23:05,879 Speaker 1: news cooperation. 395 00:23:06,640 --> 00:23:09,639 Speaker 2: Yes, you've got a stake, big stake in the business company, 396 00:23:10,400 --> 00:23:13,920 Speaker 2: so it's listed. And think about the fact that there 397 00:23:13,960 --> 00:23:19,199 Speaker 2: are something like eighty websites eight zero eighty websites in 398 00:23:19,240 --> 00:23:22,480 Speaker 2: Australia where you can list your house for sale. The 399 00:23:22,600 --> 00:23:26,600 Speaker 2: vast majority of them you can do for free, and 400 00:23:26,720 --> 00:23:31,360 Speaker 2: yet Aria charges more than anyone else. And every year 401 00:23:31,480 --> 00:23:35,119 Speaker 2: it's been raising its price either through premiumization, which is 402 00:23:35,160 --> 00:23:37,359 Speaker 2: that idea that hey, I'm going to move your ad 403 00:23:37,400 --> 00:23:40,000 Speaker 2: for your house from a from the silver plan to 404 00:23:40,040 --> 00:23:43,080 Speaker 2: the Gold plan to the Diamond plan to the Platinum plan. 405 00:23:43,640 --> 00:23:46,920 Speaker 2: And the price goes up every year. And despite that 406 00:23:47,320 --> 00:23:50,920 Speaker 2: it has more houses listed than probably all the other 407 00:23:50,960 --> 00:23:51,960 Speaker 2: websites combined. 408 00:23:52,000 --> 00:23:55,280 Speaker 1: Yes, it's ahead, isn't it. Y has that molt again, 409 00:23:55,320 --> 00:23:59,400 Speaker 1: it's the spuffet idea. Yeah, so combined we just said 410 00:23:59,600 --> 00:24:01,679 Speaker 1: comt you, maybe you one or two more. 411 00:24:02,080 --> 00:24:06,720 Speaker 2: There was another one called Altium, which was it designed 412 00:24:06,920 --> 00:24:13,159 Speaker 2: software that helped people create the circuit boards if you like, 413 00:24:13,200 --> 00:24:17,240 Speaker 2: that are pretty much behind every single well they are 414 00:24:17,560 --> 00:24:21,119 Speaker 2: taken over that. Fortunately, that's another example of a business 415 00:24:21,119 --> 00:24:24,040 Speaker 2: that could have charged pretty much whatever it wanted. Another 416 00:24:24,080 --> 00:24:28,880 Speaker 2: business with a different kind of economic moat is Nick Scary. 417 00:24:30,400 --> 00:24:35,520 Speaker 2: Nick Anthony Scarly invented the just in time model for 418 00:24:35,640 --> 00:24:39,440 Speaker 2: furniture in Australia. So remember when you and I were young. 419 00:24:39,560 --> 00:24:42,600 Speaker 2: Our parents would go to a furniture shop, point to 420 00:24:42,640 --> 00:24:45,479 Speaker 2: a couch or a sofa as they're now called, and 421 00:24:45,480 --> 00:24:46,359 Speaker 2: so I want that one. 422 00:24:46,720 --> 00:24:49,000 Speaker 1: And they would see in stock. 423 00:24:50,000 --> 00:24:53,119 Speaker 2: Back then when we were kids, two burly men would 424 00:24:54,040 --> 00:24:56,359 Speaker 2: to the roof, put it on the put on the 425 00:24:56,440 --> 00:24:59,240 Speaker 2: roof racks and now it's you know, yep, we'll have 426 00:24:59,280 --> 00:25:03,119 Speaker 2: it delivered to you in twelve weeks after. It's manufactured furniture. 427 00:25:03,359 --> 00:25:07,919 Speaker 1: When you buy it, depressed the button to actually constructed. 428 00:25:07,680 --> 00:25:12,000 Speaker 2: Talk about it. No warehousing, no warehousing. The only stock 429 00:25:12,040 --> 00:25:13,959 Speaker 2: that they've got is the stock that's on their floor 430 00:25:13,960 --> 00:25:15,600 Speaker 2: that you decide, yeah, I want that one. 431 00:25:16,119 --> 00:25:18,239 Speaker 1: You've played for a long time, haven't you. I certainly yes, 432 00:25:18,359 --> 00:25:20,399 Speaker 1: So you've been on them for a long time. Okay. 433 00:25:20,640 --> 00:25:22,840 Speaker 2: They've just bought a business called fab Furniture in the 434 00:25:22,920 --> 00:25:27,240 Speaker 2: United Kingdom and if you google a shop front, fab 435 00:25:27,320 --> 00:25:30,960 Speaker 2: furniture storefront, google that and have a look at a 436 00:25:31,080 --> 00:25:34,400 Speaker 2: really dated concept in the UK, which by the way, 437 00:25:34,480 --> 00:25:37,680 Speaker 2: is a population three times bigger than Australia. But Nick 438 00:25:37,720 --> 00:25:41,280 Speaker 2: Scarley has bought that business and they're rebadging and they're 439 00:25:41,320 --> 00:25:44,320 Speaker 2: redesigning the stores and they're going to be pumping their 440 00:25:44,359 --> 00:25:47,480 Speaker 2: furniture through and where they've already started doing that. The 441 00:25:47,560 --> 00:25:52,080 Speaker 2: Nick Scarley furniture is the fastest growing or fastest moving 442 00:25:52,160 --> 00:25:55,960 Speaker 2: furniture in the United Kingdom stores, so we've already got 443 00:25:56,000 --> 00:25:57,919 Speaker 2: a taste of how successful that's going to be. 444 00:25:58,440 --> 00:26:00,440 Speaker 1: That's very interesting, and there are three stocks we've watched 445 00:26:00,440 --> 00:26:02,879 Speaker 1: for a long time. I know that. Okay, folks, we 446 00:26:02,960 --> 00:26:06,040 Speaker 1: have a really good batch of questions. Often at least 447 00:26:06,040 --> 00:26:08,720 Speaker 1: some of them are on what's going on this week 448 00:26:08,720 --> 00:26:11,359 Speaker 1: with the listeners genuinely worried as they would be, especially 449 00:26:11,400 --> 00:26:14,240 Speaker 1: if you haven't been around for a correction before. So 450 00:26:14,359 --> 00:26:16,200 Speaker 1: let's get back to them in a moment we take 451 00:26:16,200 --> 00:26:32,800 Speaker 1: a break. Hello, Welcome back to The Australian's Money Puzzle 452 00:26:32,880 --> 00:26:37,040 Speaker 1: podcast James Kirby with Roger Montgomery. We are talking, of course, 453 00:26:37,359 --> 00:26:41,200 Speaker 1: in about stocks and the outlook for the market, which 454 00:26:41,800 --> 00:26:44,320 Speaker 1: I know Roger a long time and I know that 455 00:26:44,400 --> 00:26:48,040 Speaker 1: his view on the market would have barely budged before 456 00:26:48,119 --> 00:26:50,600 Speaker 1: this ten percent correction because he tends to have a 457 00:26:50,920 --> 00:26:53,399 Speaker 1: he's a value investor, so they stick. They have a 458 00:26:53,400 --> 00:26:58,720 Speaker 1: principled approach which doesn't really change other than obviously as 459 00:26:58,720 --> 00:27:00,360 Speaker 1: the facts changed in front of him, and you could 460 00:27:00,400 --> 00:27:02,680 Speaker 1: hear him sort of outlining that when he talked about 461 00:27:02,720 --> 00:27:05,440 Speaker 1: at the start of the show the conditions he saw 462 00:27:05,800 --> 00:27:08,159 Speaker 1: which were necessary for a strong year this year, and 463 00:27:08,160 --> 00:27:10,760 Speaker 1: how some of them are not actually in place as 464 00:27:10,760 --> 00:27:12,200 Speaker 1: we might have thought they were at the start of 465 00:27:12,240 --> 00:27:14,760 Speaker 1: the year. I've got some ridio question this, Roger. I've 466 00:27:14,760 --> 00:27:17,320 Speaker 1: got one here from George which actually just came in 467 00:27:17,440 --> 00:27:19,800 Speaker 1: since this market set off. Here I'll read it out 468 00:27:19,840 --> 00:27:22,640 Speaker 1: in full because it's really good. He says. Tech stocks 469 00:27:22,640 --> 00:27:25,160 Speaker 1: in the US and Australia began to be sold off 470 00:27:25,200 --> 00:27:28,159 Speaker 1: even before the tariffs were announced. This was on the 471 00:27:28,160 --> 00:27:31,840 Speaker 1: basis that the Chinese app deep Seek posed a threat 472 00:27:31,880 --> 00:27:35,480 Speaker 1: to Nvidia and the larger AI group, which is very 473 00:27:35,520 --> 00:27:37,480 Speaker 1: true and in a way, if you think back about 474 00:27:37,520 --> 00:27:40,320 Speaker 1: deep Seek, was the beginning of the tumble really in 475 00:27:40,480 --> 00:27:44,240 Speaker 1: tech stocks. Now, George says, this week data center stocks 476 00:27:44,240 --> 00:27:47,080 Speaker 1: such as next d C, which I know, Roger, again 477 00:27:47,200 --> 00:27:51,960 Speaker 1: you have been an admirer of and Digiko hit twelve 478 00:27:52,080 --> 00:27:55,160 Speaker 1: month share part slow. So is the AI trade dead 479 00:27:55,920 --> 00:27:59,520 Speaker 1: or will data center stocks recover? Now? I know you've 480 00:27:59,720 --> 00:28:01,960 Speaker 1: parted actually answered that where you said that investors were 481 00:28:02,040 --> 00:28:04,640 Speaker 1: tired of the AI team, or at least they were 482 00:28:04,680 --> 00:28:07,240 Speaker 1: tired of hearing about how it would be lucrative but 483 00:28:08,040 --> 00:28:10,919 Speaker 1: little evidence of it being lucrative. The part of the 484 00:28:10,960 --> 00:28:15,640 Speaker 1: market that people were conservative investors found attractive for data 485 00:28:15,680 --> 00:28:17,879 Speaker 1: centers for the simple reason that there was I suppose 486 00:28:17,960 --> 00:28:21,440 Speaker 1: bricks and water there next to see great favorite Digico 487 00:28:21,480 --> 00:28:24,040 Speaker 1: obviously less so it went underwater from the day it 488 00:28:24,119 --> 00:28:27,720 Speaker 1: floated and has never recovered. But also off market Roger 489 00:28:27,760 --> 00:28:30,000 Speaker 1: we saw amazing stuff going on air trunk and that 490 00:28:30,080 --> 00:28:33,200 Speaker 1: sort of thing. So a lot of people perceive real 491 00:28:33,320 --> 00:28:38,160 Speaker 1: value in the data centers anyway, the AI was something 492 00:28:38,160 --> 00:28:40,840 Speaker 1: of cream on the cake. How do you view them now? 493 00:28:41,440 --> 00:28:46,120 Speaker 2: So we've been long term investors. In fact, in the 494 00:28:46,240 --> 00:28:49,480 Speaker 2: Montgomery Small Companies Fund, I think one of the day 495 00:28:49,520 --> 00:28:54,160 Speaker 2: one stocks was mcquarie what was called McQuary Telecom mcquarie 496 00:28:54,240 --> 00:28:58,960 Speaker 2: Technology correct. And the thesis there for that particular business 497 00:28:59,520 --> 00:29:04,600 Speaker 2: is that it has very high quality clients, including the Hyperscalas, 498 00:29:04,840 --> 00:29:06,840 Speaker 2: which are the Googles and the Amazons of the world. 499 00:29:07,200 --> 00:29:10,560 Speaker 2: But it also has the Australian Taxation Office, I think, 500 00:29:10,600 --> 00:29:14,440 Speaker 2: the Australian Defense Force, you know, the ASX, even you 501 00:29:14,480 --> 00:29:18,200 Speaker 2: know the very very high quality government and semi government 502 00:29:18,400 --> 00:29:24,600 Speaker 2: organizations are tenants in their centers because they are the 503 00:29:24,640 --> 00:29:28,160 Speaker 2: ones that can provide the necessary security. And that's not 504 00:29:28,200 --> 00:29:32,400 Speaker 2: going to change what we think. The thesis long term 505 00:29:32,520 --> 00:29:36,000 Speaker 2: is that eventually, when all the centers have been built 506 00:29:36,680 --> 00:29:41,959 Speaker 2: and then fully tenanted, then the exit strategy for the 507 00:29:42,000 --> 00:29:45,360 Speaker 2: founders of that business, the chewed Hope brothers, David Cheered 508 00:29:45,400 --> 00:29:49,360 Speaker 2: Hope being at the helm of the business, the exit 509 00:29:49,400 --> 00:29:53,280 Speaker 2: strategy for them is potentially to sell to a global 510 00:29:53,360 --> 00:29:57,400 Speaker 2: pension fund that is looking for a stable yield. And 511 00:29:58,160 --> 00:30:01,680 Speaker 2: on that basis, look on a current on an operating basis, 512 00:30:01,720 --> 00:30:03,480 Speaker 2: we think that the business could be worth about one 513 00:30:03,560 --> 00:30:08,440 Speaker 2: hundred and ten dollars a share, and in this takeover scenario, 514 00:30:09,000 --> 00:30:12,520 Speaker 2: which is purely hypothetical, by the way, it's a theory. 515 00:30:13,040 --> 00:30:16,080 Speaker 2: In that scenario, then you know, one hundred and fifty 516 00:30:16,160 --> 00:30:18,440 Speaker 2: or one hundred and sixty dollars or even one hundred 517 00:30:18,480 --> 00:30:20,280 Speaker 2: and eighty dollars is possible. 518 00:30:20,800 --> 00:30:23,320 Speaker 1: So, and these guys are down about thirteen percent, I think, 519 00:30:23,360 --> 00:30:25,120 Speaker 1: so far worse than the bolder market. 520 00:30:25,000 --> 00:30:29,600 Speaker 2: Indeed selling indeed, and so we think that the as 521 00:30:29,600 --> 00:30:32,240 Speaker 2: I said to you earlier, I think the AI theme 522 00:30:32,440 --> 00:30:35,800 Speaker 2: was done even before Deepseek. I think the AI theme 523 00:30:35,880 --> 00:30:40,120 Speaker 2: was growing tired before Christmas. And what we have to 524 00:30:40,160 --> 00:30:46,400 Speaker 2: remember is that excitement about new technology eventually needs to 525 00:30:46,840 --> 00:30:51,080 Speaker 2: be met with revenue models. And only Nvidia had a 526 00:30:51,120 --> 00:30:54,280 Speaker 2: revenue model, you know, for selling its chips. But the 527 00:30:54,320 --> 00:30:57,440 Speaker 2: downstream applicators, if you like, those who were going to 528 00:30:57,480 --> 00:31:00,440 Speaker 2: apply those chips, you know, they had idea for what 529 00:31:00,480 --> 00:31:02,040 Speaker 2: they were going to do. You know, we're going to 530 00:31:02,160 --> 00:31:05,840 Speaker 2: enhance We're going to enhance Microsoft Office with co pilot. 531 00:31:06,160 --> 00:31:09,360 Speaker 2: You know, we're going to enhance your experience on Facebook 532 00:31:09,720 --> 00:31:12,640 Speaker 2: and so on. People aren't paying a lot more for that, 533 00:31:12,720 --> 00:31:14,640 Speaker 2: you know that. You know, are you and I other 534 00:31:14,720 --> 00:31:18,480 Speaker 2: than maybe subscribing to pet for twenty nine dollars a month? 535 00:31:18,760 --> 00:31:21,000 Speaker 2: Are you and I saying, oh, I'm going to pay 536 00:31:21,280 --> 00:31:23,840 Speaker 2: five thousand dollars a month for you know, having an 537 00:31:23,880 --> 00:31:27,480 Speaker 2: AI version of Excel? You know, no, I'm not. It's 538 00:31:27,480 --> 00:31:31,040 Speaker 2: a margin. It's an incremental improvement to revenue. It's not 539 00:31:31,120 --> 00:31:35,880 Speaker 2: as transformative as the price change implied. It should be. 540 00:31:36,600 --> 00:31:40,160 Speaker 1: Okay, just quickly, next you see still a supporter. 541 00:31:40,400 --> 00:31:42,560 Speaker 2: It's next to you see you again. Is a business 542 00:31:42,600 --> 00:31:45,640 Speaker 2: that is going for a decade or more is going 543 00:31:45,680 --> 00:31:50,040 Speaker 2: to have a tailwind because in terms of enterprise, so 544 00:31:50,280 --> 00:31:54,880 Speaker 2: very large businesses migrating to the cloud. We're only halfway 545 00:31:54,920 --> 00:31:59,160 Speaker 2: through that journey. Where where where it's where mobile phone 546 00:31:59,160 --> 00:32:02,920 Speaker 2: smartphones work ten years ago or twelve years. 547 00:32:02,760 --> 00:32:05,520 Speaker 1: Agay, one of these time, I know again listeners are 548 00:32:05,600 --> 00:32:13,040 Speaker 1: asking Goodman highly regarded property trust. Forty percent of working 549 00:32:13,040 --> 00:32:16,600 Speaker 1: progress is linked with data centers. Four hundred million retail 550 00:32:16,680 --> 00:32:19,720 Speaker 1: raising out there right now to find more data centers. 551 00:32:19,960 --> 00:32:22,400 Speaker 1: There's retail raisings that are thirty three, the stocks are 552 00:32:22,400 --> 00:32:27,000 Speaker 1: thirty wants closing tomorrow. What's your view on Goodman's AI 553 00:32:28,720 --> 00:32:31,600 Speaker 1: link how much as you want? Yeah? Explos Yeah. 554 00:32:31,640 --> 00:32:34,000 Speaker 2: So look, Goodman is one of those businesses that I 555 00:32:34,040 --> 00:32:36,200 Speaker 2: would class as you know, one of the top fifteen 556 00:32:36,280 --> 00:32:39,840 Speaker 2: or twenty listed companies in Australia. I think it's an 557 00:32:39,880 --> 00:32:43,240 Speaker 2: extraordinary business. But there's two things to think about. There's 558 00:32:43,240 --> 00:32:46,600 Speaker 2: the business and we want a good quality business. Part 559 00:32:46,680 --> 00:32:49,719 Speaker 2: that for a minute, and then there's the price. And 560 00:32:49,880 --> 00:32:52,200 Speaker 2: if you pay too high a price, even for a 561 00:32:52,200 --> 00:32:55,080 Speaker 2: good business, you're going to end up with a low return. 562 00:32:55,480 --> 00:32:58,200 Speaker 2: Remember this rule. The higher the price you pay, the 563 00:32:58,240 --> 00:33:01,640 Speaker 2: lower your return. And so, you know, the time to 564 00:33:01,680 --> 00:33:04,280 Speaker 2: be buying these businesses that we've been talking about, and 565 00:33:04,320 --> 00:33:07,400 Speaker 2: to buy them aggressively is when everyone's running for the hills, 566 00:33:07,760 --> 00:33:10,240 Speaker 2: you know, when everyone's saying get out. You know, there's 567 00:33:10,280 --> 00:33:12,560 Speaker 2: it's going to be a blood bath, that's the time. 568 00:33:12,600 --> 00:33:16,000 Speaker 2: And I don't think the correction that we've seen to date, 569 00:33:16,520 --> 00:33:18,760 Speaker 2: you know, ten percent down on the index, you know, 570 00:33:18,920 --> 00:33:22,400 Speaker 2: for many stocks, they haven't fallen that much, you know, 571 00:33:22,480 --> 00:33:24,840 Speaker 2: and they're not far from their all time highs and so, 572 00:33:25,360 --> 00:33:29,480 Speaker 2: and they're nowhere near a big discount to their intrinsic values. 573 00:33:29,920 --> 00:33:32,320 Speaker 2: So it still isn't the time where I'd be saying 574 00:33:32,440 --> 00:33:36,760 Speaker 2: load up, and if you've got new capital, dive into 575 00:33:36,760 --> 00:33:39,600 Speaker 2: the stock market with both ears pin back. I want 576 00:33:39,680 --> 00:33:42,800 Speaker 2: some exposure when the market corrects as it's done, because 577 00:33:42,800 --> 00:33:45,200 Speaker 2: it's better to buy now than to have bought a 578 00:33:45,200 --> 00:33:47,720 Speaker 2: couple of months ago. But I'd still want to have 579 00:33:47,800 --> 00:33:51,240 Speaker 2: some powder dry to be buying if better value presents itself. 580 00:33:52,000 --> 00:33:56,160 Speaker 1: Kay. But it's interesting your disposition towards those stocks. Next 581 00:33:56,240 --> 00:34:00,280 Speaker 1: you see macro Technology, even Goodman with its AI hat 582 00:34:00,320 --> 00:34:02,000 Speaker 1: on is unchanged. 583 00:34:02,000 --> 00:34:05,400 Speaker 2: Really, the businesses haven't changed, the price has changed. And 584 00:34:05,520 --> 00:34:07,720 Speaker 2: maybe a bit of a steam has come down or 585 00:34:07,800 --> 00:34:10,960 Speaker 2: a bit of a froth has come out of the 586 00:34:11,040 --> 00:34:15,680 Speaker 2: price because people aren't as energized, and as you know, 587 00:34:15,719 --> 00:34:18,759 Speaker 2: the optimism isn't as unbridled as it was before. And 588 00:34:18,880 --> 00:34:21,799 Speaker 2: that's appropriate. That's when you start sharpening the pencil to 589 00:34:21,840 --> 00:34:22,279 Speaker 2: have a look. 590 00:34:23,200 --> 00:34:26,000 Speaker 1: Okay, we'll running out of time. I'll just jump one 591 00:34:26,040 --> 00:34:29,160 Speaker 1: or two other questions. We had a question from Paul 592 00:34:29,400 --> 00:34:32,359 Speaker 1: and also from Joshua that was more in the way 593 00:34:32,400 --> 00:34:34,400 Speaker 1: of a complaints really, which says James, if I may 594 00:34:34,440 --> 00:34:37,360 Speaker 1: say so, I think you misspoke in your discussion of 595 00:34:37,480 --> 00:34:40,080 Speaker 1: the tax of Frank dividends, where you said the less 596 00:34:40,080 --> 00:34:43,600 Speaker 1: tax you pay, the higher your dividend. Now this is 597 00:34:43,600 --> 00:34:46,080 Speaker 1: true on an after tax basis, just like any other 598 00:34:46,160 --> 00:34:48,880 Speaker 1: dollar of taxable income, the lower your tax rate, the 599 00:34:48,920 --> 00:34:52,359 Speaker 1: more of your income that you get to keep. After text, Yes, 600 00:34:52,440 --> 00:34:55,120 Speaker 1: Paul and Joshua and everyone else. Yes, in future, what 601 00:34:55,160 --> 00:34:58,600 Speaker 1: I would say is the less tax you pay, the 602 00:34:58,760 --> 00:35:04,080 Speaker 1: higher your divis end payment in your pocket, which is 603 00:35:04,120 --> 00:35:07,440 Speaker 1: really what matters to most people. And that stands. But 604 00:35:07,520 --> 00:35:10,200 Speaker 1: the dividend itself, it's not that you get a higher 605 00:35:10,239 --> 00:35:13,480 Speaker 1: dividend than someone else if you are retired, for instance, 606 00:35:13,520 --> 00:35:18,560 Speaker 1: you just get a higher payment after James ranking James. 607 00:35:18,400 --> 00:35:20,239 Speaker 2: I'll also say, you know, the lower the tax we pay, 608 00:35:20,280 --> 00:35:22,080 Speaker 2: the higher everyone's income. 609 00:35:23,600 --> 00:35:27,000 Speaker 1: Ha ha, Yeah, okay, you could say that if you want, 610 00:35:27,840 --> 00:35:30,520 Speaker 1: as long as everyone understands the first point, all right, 611 00:35:30,680 --> 00:35:33,960 Speaker 1: And finally, Susie says, markets have been falling. If you 612 00:35:34,000 --> 00:35:36,200 Speaker 1: are in agreement, we can't expect the sort of higher 613 00:35:36,200 --> 00:35:38,239 Speaker 1: returns again this year. If you were in a big 614 00:35:38,280 --> 00:35:40,920 Speaker 1: super fund, do you need to actually change your investment 615 00:35:41,000 --> 00:35:45,120 Speaker 1: choice to something more conservative? Reasonable question, It's a it's 616 00:35:45,160 --> 00:35:47,319 Speaker 1: an earnest question, so people would be out. 617 00:35:47,400 --> 00:35:51,279 Speaker 2: So we used I used precisely those words in the 618 00:35:51,320 --> 00:35:53,680 Speaker 2: most I think the most recent article I wrote for you, 619 00:35:54,080 --> 00:35:56,720 Speaker 2: or the most recent column, and that was, don't expect 620 00:35:56,719 --> 00:35:59,640 Speaker 2: the returns of whatever happens, You're not going to get 621 00:35:59,640 --> 00:36:02,800 Speaker 2: those double digit returns. In fact, only once in the 622 00:36:02,880 --> 00:36:06,640 Speaker 2: last one hundred years have we seen three high double 623 00:36:06,640 --> 00:36:08,560 Speaker 2: digit returns in a row from the S and P 624 00:36:08,719 --> 00:36:12,600 Speaker 2: five hundred, plenty of doubles, but only one triple, and 625 00:36:12,640 --> 00:36:13,880 Speaker 2: that was in the nineteen eighties. 626 00:36:14,719 --> 00:36:16,160 Speaker 1: And just remind people of where are we now. 627 00:36:16,360 --> 00:36:19,320 Speaker 2: We've had two doubles We've had two plus twenty percent 628 00:36:19,480 --> 00:36:22,319 Speaker 2: years in the S and P five hundred. So I said, 629 00:36:22,320 --> 00:36:24,400 Speaker 2: with whatever the outcome, it's going to be a lower 630 00:36:24,440 --> 00:36:30,200 Speaker 2: returning year this year anyway for me. If I wasn't 631 00:36:30,680 --> 00:36:35,400 Speaker 2: broadly diversified, and you know, I was younger, for example, 632 00:36:35,440 --> 00:36:38,040 Speaker 2: and I was happy to switch from one asset class 633 00:36:38,040 --> 00:36:40,799 Speaker 2: to another asset class, I'd be saying, well, if I 634 00:36:40,880 --> 00:36:42,719 Speaker 2: thought that the stock market was going to give me 635 00:36:43,320 --> 00:36:47,720 Speaker 2: nine percent this year, while I'd rather be in private credit, 636 00:36:47,760 --> 00:36:51,560 Speaker 2: which gives me nine percent with zero volatility, no exposure 637 00:36:51,600 --> 00:36:53,880 Speaker 2: to public markets at all, and I'm going to get 638 00:36:54,000 --> 00:36:57,040 Speaker 2: nine percent. That makes perfect sense to me, and that's 639 00:36:57,080 --> 00:37:00,280 Speaker 2: what's attracting so many retirees who were in the later 640 00:37:00,360 --> 00:37:01,400 Speaker 2: stages of their retirement. 641 00:37:01,480 --> 00:37:04,200 Speaker 1: But you put it just to as as a part 642 00:37:04,239 --> 00:37:06,520 Speaker 1: of a diverse fopeus indeed, but you. 643 00:37:06,520 --> 00:37:09,960 Speaker 2: Still need because we could be wrong, James, and the 644 00:37:10,000 --> 00:37:13,200 Speaker 2: market could have a twenty percent year, and if it did, 645 00:37:13,719 --> 00:37:17,040 Speaker 2: it would be a mistake to be exiting. And so 646 00:37:17,120 --> 00:37:20,840 Speaker 2: the answer to Susie's question relates to or it comes 647 00:37:20,880 --> 00:37:26,520 Speaker 2: back to why she selected that particular risk profile at 648 00:37:26,520 --> 00:37:29,719 Speaker 2: the very beginning of her journey. And I'm going to 649 00:37:29,760 --> 00:37:34,440 Speaker 2: presume that she assumed that there would be some bumps 650 00:37:34,440 --> 00:37:37,640 Speaker 2: along the way, that there would be some volatile years. Now, 651 00:37:37,719 --> 00:37:41,200 Speaker 2: ideally she's got some other sources of income or some 652 00:37:41,320 --> 00:37:46,600 Speaker 2: other assets outside that she can add to as prices fall, 653 00:37:47,000 --> 00:37:50,560 Speaker 2: and that's the ideal scenario. You don't sell when prices 654 00:37:50,600 --> 00:37:53,920 Speaker 2: are down, you buy more. You're invested in quality. I 655 00:37:53,960 --> 00:37:57,800 Speaker 2: will say that's an important exception because you've heard that phrase. 656 00:37:58,160 --> 00:38:01,880 Speaker 2: It's not timing the mark. It's time in the market 657 00:38:02,080 --> 00:38:05,040 Speaker 2: that matters. But in the market, time is only your 658 00:38:05,080 --> 00:38:08,200 Speaker 2: friend if you're invested in good quality businesses. If you're 659 00:38:08,200 --> 00:38:11,000 Speaker 2: invested in Telstra for the last twenty years, time has 660 00:38:11,040 --> 00:38:13,720 Speaker 2: not been your friend. You know, the longer you're invested 661 00:38:13,760 --> 00:38:16,360 Speaker 2: in a poor quality business or a lower quality business, 662 00:38:16,480 --> 00:38:19,560 Speaker 2: the worse the outcome for you, because you're missing opportunities 663 00:38:19,920 --> 00:38:23,120 Speaker 2: to be invested in better quality businesses and be invested elsewhere. 664 00:38:24,160 --> 00:38:26,759 Speaker 1: By the way, this is never advice, it's always information only. 665 00:38:26,800 --> 00:38:28,799 Speaker 1: But Susie and all the Susi's out there, I think 666 00:38:28,840 --> 00:38:33,239 Speaker 1: the point I'm just making is the investment option that 667 00:38:33,320 --> 00:38:35,879 Speaker 1: you choose in big super whether it was last year 668 00:38:35,920 --> 00:38:41,719 Speaker 1: or five years ago, shouldn't be knocked around by a 669 00:38:41,719 --> 00:38:43,840 Speaker 1: couple of bad weeks interview. 670 00:38:43,960 --> 00:38:46,920 Speaker 2: You make my article sound better, James, and also make 671 00:38:47,000 --> 00:38:48,640 Speaker 2: my sentences more succeptile. 672 00:38:48,760 --> 00:38:51,480 Speaker 1: Actually, folks. For what it's worth, the Roger Montgomery raw 673 00:38:51,560 --> 00:38:54,479 Speaker 1: copy is very good and it's the lightest of touch. 674 00:38:54,600 --> 00:38:57,719 Speaker 1: The lightest of touch, Okay, terrific. Now, one thing before 675 00:38:57,760 --> 00:39:01,719 Speaker 1: we go here at the Money Puzzle. We love receiving 676 00:39:01,760 --> 00:39:05,360 Speaker 1: your correspondence. You know that, and you know the address 677 00:39:05,400 --> 00:39:08,040 Speaker 1: the Money Puzzle at the Australian dot com dot au. 678 00:39:08,320 --> 00:39:11,120 Speaker 1: Now we have a new facility. This is worth hearing. 679 00:39:11,360 --> 00:39:14,680 Speaker 1: You can send us your questions using the voice notes 680 00:39:14,920 --> 00:39:18,440 Speaker 1: on your phone. We'd love to hear you you asking 681 00:39:18,480 --> 00:39:21,759 Speaker 1: the questions on air. We'll publish them when we get them. 682 00:39:22,000 --> 00:39:23,480 Speaker 1: All you have to do if you're on your phone, 683 00:39:23,520 --> 00:39:26,319 Speaker 1: you've got a voice memo app. You just record your 684 00:39:26,400 --> 00:39:28,600 Speaker 1: question and when you've finished it, you share it. You 685 00:39:28,719 --> 00:39:31,520 Speaker 1: send it in like an email to our address, the 686 00:39:31,560 --> 00:39:35,000 Speaker 1: Money Puzzle at the Australian dot com dot au. So 687 00:39:35,120 --> 00:39:39,800 Speaker 1: let's have some questions. That is your voice on the question. 688 00:39:39,960 --> 00:39:42,800 Speaker 1: And when we hear you and we get these voice memos, 689 00:39:43,200 --> 00:39:45,919 Speaker 1: we will bake them into the show where you will 690 00:39:45,920 --> 00:39:47,920 Speaker 1: hear yourself asking the question. I think this is a 691 00:39:47,960 --> 00:39:51,040 Speaker 1: great idea. It's the producer Liah Sama Glue has come 692 00:39:51,120 --> 00:39:54,680 Speaker 1: up with this. It's innovation here at the money Puzzle. 693 00:39:55,040 --> 00:39:57,600 Speaker 1: Thank you very much, Roger, great show as always, love 694 00:39:57,640 --> 00:39:58,959 Speaker 1: you to talk to you. We'll talk to you again 695 00:39:59,040 --> 00:40:02,640 Speaker 1: soon a pleasure, and we'll talk to you in a 696 00:40:02,680 --> 00:40:03,560 Speaker 1: few days. Thank you.