1
00:00:01,120 --> 00:00:04,720
Speaker 1: Hello, James Kirby. Here, just a quick note before we begin.

2
00:00:05,200 --> 00:00:08,200
Speaker 1: We're taking a short break over the holiday period and

3
00:00:08,320 --> 00:00:10,760
Speaker 1: we'll be back with the first new episode of The

4
00:00:10,800 --> 00:00:15,560
Speaker 1: Money Puzzle for the new year on Wednesday, January fourtheenth.

5
00:00:16,000 --> 00:00:19,840
Speaker 1: In the meantime, here's high profile stock picker June Beleeu

6
00:00:19,960 --> 00:00:22,919
Speaker 1: of the ten Cap Group, who has one of the

7
00:00:22,960 --> 00:00:26,960
Speaker 1: most interesting stories we had during the year. It's a

8
00:00:27,000 --> 00:00:31,040
Speaker 1: fascinating interview. It was recorded in October with Wealth editor

9
00:00:31,240 --> 00:00:34,440
Speaker 1: Julianne Spragg. I'm sure you'll enjoy it on behalf of

10
00:00:34,560 --> 00:00:38,640
Speaker 1: the Money Puzzle team, especially my producer Liah Sammaglu, who's

11
00:00:38,640 --> 00:00:41,239
Speaker 1: been so good this year. I'd like to wish you

12
00:00:41,280 --> 00:00:56,080
Speaker 1: all and merry Christmas and a happy new Year. Hello

13
00:00:56,200 --> 00:00:59,720
Speaker 1: and welcome to the Australians Money Puzzle podcast. I'm James Kirby.

14
00:01:00,080 --> 00:01:04,560
Speaker 1: Aboard everybody. Well. I've mentioned in recent weeks that we

15
00:01:04,600 --> 00:01:07,200
Speaker 1: are planning to do some new features here at The

16
00:01:07,319 --> 00:01:10,880
Speaker 1: Money Puzzle, and today and over the next three Mondays,

17
00:01:11,240 --> 00:01:13,760
Speaker 1: we're going to present a short series to you on

18
00:01:13,840 --> 00:01:18,200
Speaker 1: how top investors pick their winning investments. My colleague at

19
00:01:18,280 --> 00:01:21,640
Speaker 1: The Australian, Julianne Spragg, sat down for a chat with

20
00:01:21,920 --> 00:01:27,000
Speaker 1: top stock picker Jun Beilu, the co founder of ten Cap.

21
00:01:27,080 --> 00:01:29,800
Speaker 1: She's more than tripled funds under management to more than

22
00:01:29,840 --> 00:01:32,720
Speaker 1: one point five billion dollars. How does she pick a

23
00:01:32,760 --> 00:01:37,280
Speaker 1: good stock and what's your advice for everyday investors? Let's

24
00:01:37,319 --> 00:01:37,720
Speaker 1: find out.

25
00:01:39,920 --> 00:01:42,000
Speaker 2: Jin Bailou, thanks for joining me. I want to have

26
00:01:42,040 --> 00:01:45,080
Speaker 2: a chat to you about your journey. So you came

27
00:01:45,160 --> 00:01:48,040
Speaker 2: to Australia as a sixteen year old, got yourself into

28
00:01:48,080 --> 00:01:52,280
Speaker 2: the funds management business, initially as an analyst involved in

29
00:01:52,280 --> 00:01:54,040
Speaker 2: a fund that I think had around three hundred million

30
00:01:54,040 --> 00:01:56,160
Speaker 2: dollars funds under management, then grew that to over a

31
00:01:56,200 --> 00:01:58,800
Speaker 2: billion dollars and now out on you aren at ten cap.

32
00:01:58,800 --> 00:02:00,000
Speaker 2: It's pretty extraordinary store.

33
00:02:00,320 --> 00:02:00,880
Speaker 3: Oh thank you.

34
00:02:01,280 --> 00:02:02,800
Speaker 2: We want to have a chat about that, but also

35
00:02:03,680 --> 00:02:05,559
Speaker 2: really keen to learn from you about what you've learned

36
00:02:05,560 --> 00:02:08,519
Speaker 2: about investing and get some of your tips for those

37
00:02:08,560 --> 00:02:10,440
Speaker 2: of us who just want to get better at it.

38
00:02:11,520 --> 00:02:13,600
Speaker 2: Let's maybe just start at the beginning. And you came

39
00:02:13,639 --> 00:02:16,360
Speaker 2: to Australia as a sixteen year old. What was that like?

40
00:02:16,720 --> 00:02:19,560
Speaker 3: Oh, look, it's quite incredible. Actually, I still remember thinking

41
00:02:19,639 --> 00:02:22,320
Speaker 3: the first day I landed in Australia. The first thing

42
00:02:22,320 --> 00:02:24,880
Speaker 3: that struck me is the sky was so blue. And

43
00:02:24,960 --> 00:02:26,799
Speaker 3: I come from China at the time, we don't see

44
00:02:26,800 --> 00:02:29,480
Speaker 3: blue sky very often. Sky so blue, and the cloud

45
00:02:29,560 --> 00:02:32,720
Speaker 3: is so three d, almost as if you could touch it.

46
00:02:32,720 --> 00:02:35,400
Speaker 3: It's such a beautiful country. I just remember thinking that

47
00:02:35,760 --> 00:02:38,120
Speaker 3: was incredible. Of course, over the next six month, I

48
00:02:38,160 --> 00:02:40,480
Speaker 3: think I couldn't understand the word of English, so it

49
00:02:40,520 --> 00:02:43,840
Speaker 3: took a little while to vaguely translate the body language

50
00:02:43,880 --> 00:02:45,160
Speaker 3: into what people meant.

51
00:02:45,919 --> 00:02:47,040
Speaker 2: We went to read people.

52
00:02:47,160 --> 00:02:49,440
Speaker 3: Yeah, you kind of need to read, and it's incredible

53
00:02:49,480 --> 00:02:52,520
Speaker 3: how our mind adapt them. So our brain sort of

54
00:02:52,520 --> 00:02:55,120
Speaker 3: adapt to the situation. I think within three months I

55
00:02:55,160 --> 00:02:57,880
Speaker 3: can sort of vaguely understand in the class that what

56
00:02:58,080 --> 00:03:01,200
Speaker 3: teacher sort of meant. Subject matter like matt and other

57
00:03:01,240 --> 00:03:03,480
Speaker 3: things a bit easier, but when you go into biology

58
00:03:03,480 --> 00:03:05,639
Speaker 3: and others becomes a bit harder. But still you pick

59
00:03:05,720 --> 00:03:08,079
Speaker 3: up real quick. And I still remember every day when

60
00:03:08,120 --> 00:03:09,840
Speaker 3: I was on my way to school, I have to

61
00:03:09,880 --> 00:03:12,080
Speaker 3: catch the bus to go to school, and it's about

62
00:03:12,160 --> 00:03:15,320
Speaker 3: forty minute bus ride and I used to take deep breath.

63
00:03:15,360 --> 00:03:18,639
Speaker 3: I get quite stressed and take deep breath, keep forcing

64
00:03:18,680 --> 00:03:21,840
Speaker 3: myself thinking in English, because the hardest thing for a

65
00:03:21,919 --> 00:03:24,240
Speaker 3: migrant is that you think in your own language. Then

66
00:03:24,320 --> 00:03:26,880
Speaker 3: you before you speak, you translate it, and then when

67
00:03:26,919 --> 00:03:28,600
Speaker 3: you hear it, then you translate back and then you

68
00:03:28,680 --> 00:03:30,800
Speaker 3: think again in your own language. That's why it takes

69
00:03:30,800 --> 00:03:34,359
Speaker 3: so long for you to actually speak something. So if

70
00:03:34,400 --> 00:03:37,320
Speaker 3: you force yourself to think English, then it much faster,

71
00:03:37,640 --> 00:03:40,160
Speaker 3: and then you actually get practice all the time. So

72
00:03:40,320 --> 00:03:42,400
Speaker 3: I remember that forty minute bus ride. I used to

73
00:03:42,400 --> 00:03:43,560
Speaker 3: practice every day.

74
00:03:43,880 --> 00:03:46,280
Speaker 2: And ingest in your head, you're strying to speak talking

75
00:03:46,320 --> 00:03:46,880
Speaker 2: to myself.

76
00:03:46,960 --> 00:03:48,920
Speaker 3: Yeah, so I think I still today people catch me

77
00:03:48,960 --> 00:03:51,320
Speaker 3: talking to myself all the time, going crazy.

78
00:03:52,200 --> 00:03:54,960
Speaker 2: And your parents what triggered the move? Did they sort

79
00:03:55,000 --> 00:03:56,280
Speaker 2: of talk to you at the time about why they

80
00:03:56,360 --> 00:03:56,720
Speaker 2: were doing that?

81
00:03:56,800 --> 00:03:58,880
Speaker 3: Yeah? Sure, look at the time. So my mother came

82
00:03:58,920 --> 00:04:01,760
Speaker 3: to Australia as part of that whole relaxation of student

83
00:04:01,840 --> 00:04:04,920
Speaker 3: visa posta Tiama Square and massacre. And at the time,

84
00:04:05,080 --> 00:04:07,920
Speaker 3: but in China, China was very poor. Every person in

85
00:04:08,000 --> 00:04:10,160
Speaker 3: China really wanted to see what it's like to be

86
00:04:10,400 --> 00:04:12,880
Speaker 3: in a foreign country. It's almost it's like a dream

87
00:04:12,920 --> 00:04:15,560
Speaker 3: come true. And my mother was very fortunate that she

88
00:04:15,680 --> 00:04:18,480
Speaker 3: came through in the visa and then she managed to stay,

89
00:04:18,600 --> 00:04:20,880
Speaker 3: worked many jobs and managed to stay. And then I

90
00:04:21,000 --> 00:04:23,880
Speaker 3: came and joined her six years later. So we separated

91
00:04:23,920 --> 00:04:25,800
Speaker 3: for six years and joined her six years later, and

92
00:04:25,839 --> 00:04:27,919
Speaker 3: then my dad came another four years later.

93
00:04:28,200 --> 00:04:29,640
Speaker 2: My goodness, what a journey.

94
00:04:29,880 --> 00:04:30,920
Speaker 3: I know, it's incredible.

95
00:04:31,120 --> 00:04:34,120
Speaker 2: And the attitudes towards money when you were growing up,

96
00:04:34,200 --> 00:04:36,760
Speaker 2: did your sort of parents sort of instilled in particular values.

97
00:04:37,040 --> 00:04:39,480
Speaker 3: Yeah, look, I think it just we grew up pretty poor,

98
00:04:39,560 --> 00:04:42,120
Speaker 3: so making money is it's probably a big thing. But

99
00:04:42,480 --> 00:04:44,839
Speaker 3: even though we were poor, But my dad always remember

100
00:04:44,880 --> 00:04:47,560
Speaker 3: he's I think he's quite a venturous. He was, I

101
00:04:47,600 --> 00:04:50,600
Speaker 3: would say, one of the earliest investors in share market

102
00:04:50,680 --> 00:04:52,920
Speaker 3: or bomb market there in China. This is I think

103
00:04:52,960 --> 00:04:56,200
Speaker 3: he started in maybe like ninety nineteen ninety when the

104
00:04:56,240 --> 00:04:59,680
Speaker 3: capital market was really literally its infancy in China, and

105
00:04:59,720 --> 00:05:02,080
Speaker 3: it was more or less just punting, right. So I

106
00:05:02,160 --> 00:05:05,159
Speaker 3: remember at home, we don't have computers. He will print

107
00:05:05,200 --> 00:05:07,680
Speaker 3: out all these paper and draw all the lines of

108
00:05:07,720 --> 00:05:10,200
Speaker 3: where the stock is today, and then draw all these

109
00:05:10,279 --> 00:05:12,640
Speaker 3: ratio and everything, and then every day he'll make a

110
00:05:12,640 --> 00:05:15,840
Speaker 3: prediction about the stock either going up or going down.

111
00:05:16,520 --> 00:05:18,760
Speaker 3: He'll never get it wrong. And then every day he'll

112
00:05:18,800 --> 00:05:21,640
Speaker 3: stick up a paper, so we literally have all these

113
00:05:21,880 --> 00:05:24,679
Speaker 3: lines of paper because we don't have computer going across

114
00:05:24,760 --> 00:05:28,760
Speaker 3: my bedroom, his bedroom, living room, all the way down downstairs,

115
00:05:28,920 --> 00:05:31,000
Speaker 3: and they're into the kitchen, so we just have all

116
00:05:31,040 --> 00:05:33,680
Speaker 3: these charts everywhere. So I grew up with the charters.

117
00:05:34,040 --> 00:05:36,839
Speaker 2: Wow, investing you learned by Osmosis, Oh.

118
00:05:36,760 --> 00:05:39,600
Speaker 3: I reckon, it's exciting. I think what I learned is

119
00:05:39,680 --> 00:05:43,520
Speaker 3: that excitement. To me, it's always investing bit like treasure hunting.

120
00:05:43,720 --> 00:05:46,360
Speaker 3: You go and find something before everyone else, and then

121
00:05:46,480 --> 00:05:49,120
Speaker 3: you founder, you did the work, you found it, and

122
00:05:49,360 --> 00:05:51,600
Speaker 3: you know you make the return. So it's very much

123
00:05:51,680 --> 00:05:53,600
Speaker 3: like treasure hunting. So at the time, I feel a

124
00:05:53,680 --> 00:05:56,240
Speaker 3: lot of my dad's excitement and disappointment, and then my

125
00:05:56,640 --> 00:05:58,400
Speaker 3: at the time, I thought he would never be wrong

126
00:05:58,480 --> 00:06:01,800
Speaker 3: because every day he's predict either or doubt Sideway will

127
00:06:01,839 --> 00:06:02,520
Speaker 3: be the wrong day.

128
00:06:02,880 --> 00:06:06,480
Speaker 2: Was chat treasure hunting. Can you remember your very first investment,

129
00:06:07,160 --> 00:06:08,960
Speaker 2: what it might have been, and how old you were

130
00:06:09,000 --> 00:06:11,640
Speaker 2: when you made your first, like your first investment all

131
00:06:11,720 --> 00:06:12,120
Speaker 2: on your own?

132
00:06:12,320 --> 00:06:15,000
Speaker 3: Yeah, yeah, that's right. So my first investment actually when

133
00:06:15,080 --> 00:06:18,640
Speaker 3: I already started working, but very early days, I think

134
00:06:18,680 --> 00:06:22,480
Speaker 3: I put my money in a company. Actually, I put

135
00:06:22,520 --> 00:06:25,640
Speaker 3: my money in a company where at the time I thought, oh, look,

136
00:06:25,760 --> 00:06:27,440
Speaker 3: I don't really know how to invest. I just want

137
00:06:27,480 --> 00:06:29,440
Speaker 3: to invest in something that I know what it is,

138
00:06:29,600 --> 00:06:32,719
Speaker 3: which is worth it, and because I go to the store.

139
00:06:32,920 --> 00:06:35,480
Speaker 3: In fact, I worked in Woolworth briefly as a checkout

140
00:06:35,560 --> 00:06:36,920
Speaker 3: chick in high school, so you knew it.

141
00:06:37,000 --> 00:06:37,160
Speaker 2: Well.

142
00:06:37,360 --> 00:06:40,080
Speaker 3: Yeah, so it's like that touch and feel. It's really exciting.

143
00:06:40,200 --> 00:06:43,240
Speaker 2: And I still have my name bad from Coles just quietly, Oh.

144
00:06:43,640 --> 00:06:46,080
Speaker 3: I think I do too. Yeah, I think I do too.

145
00:06:48,520 --> 00:06:50,760
Speaker 3: And that was my first experience. I didn't know anything

146
00:06:50,800 --> 00:06:52,880
Speaker 3: about it, and that was at the time where I

147
00:06:53,000 --> 00:06:55,400
Speaker 3: just started looking at some of the financial statements I

148
00:06:55,480 --> 00:06:57,800
Speaker 3: learned in UNI, and then my first job as a

149
00:06:58,000 --> 00:07:00,480
Speaker 3: signlest also working for morning staff as well.

150
00:07:00,800 --> 00:07:03,400
Speaker 2: So you studied finance to you knew you wanted to

151
00:07:03,440 --> 00:07:05,920
Speaker 2: go into the finance industry become an analyst. So you've

152
00:07:05,960 --> 00:07:07,640
Speaker 2: got a bit of knowledge behind you then, but then

153
00:07:07,720 --> 00:07:09,800
Speaker 2: you sort of think you still stick to what you know, so.

154
00:07:09,880 --> 00:07:12,320
Speaker 3: You'll buy I tell you what I think that it's

155
00:07:12,440 --> 00:07:16,640
Speaker 3: actually less inspirational than often what I portrayed to be.

156
00:07:16,760 --> 00:07:19,520
Speaker 3: It's actually, look I always feel finance. I did finance

157
00:07:19,600 --> 00:07:22,160
Speaker 3: because as a Chinese kid will go finance or accounting

158
00:07:22,360 --> 00:07:24,480
Speaker 3: definitely will find a job. That's what my mother tells me.

159
00:07:24,840 --> 00:07:27,360
Speaker 3: And as I go through finance, and then I kind

160
00:07:27,400 --> 00:07:30,160
Speaker 3: of learned the things that I like. I never liked

161
00:07:30,200 --> 00:07:33,040
Speaker 3: the accounting part of it. I find a very try so.

162
00:07:34,400 --> 00:07:36,280
Speaker 2: And people who know me, they'll be having a giggle

163
00:07:36,360 --> 00:07:38,720
Speaker 2: now because one of my stories is my dad wanted

164
00:07:39,000 --> 00:07:41,400
Speaker 2: me to study accounting. You'll get a job. But then

165
00:07:41,480 --> 00:07:45,440
Speaker 2: I was just delinquent, going, no, I don't want accounting.

166
00:07:45,720 --> 00:07:49,280
Speaker 3: No, yeah, I think the accounting is the thing. Yeah, well,

167
00:07:49,520 --> 00:07:51,920
Speaker 3: well I think I'm kind of pivoted as well. So

168
00:07:51,960 --> 00:07:54,120
Speaker 3: because with accounting I did a one year of accounting

169
00:07:54,160 --> 00:07:54,920
Speaker 3: or was that not that's.

170
00:07:54,800 --> 00:07:56,320
Speaker 2: Not met the accounting.

171
00:07:56,360 --> 00:07:58,240
Speaker 3: Yeah, that's right, and they're too scared to drop the

172
00:07:58,400 --> 00:08:01,600
Speaker 3: entire commerce. Then my mother be hugely disappointed. So I

173
00:08:01,680 --> 00:08:04,600
Speaker 3: shifted to finance. And then in finance that you learn

174
00:08:04,640 --> 00:08:07,720
Speaker 3: about behavioral finance and economics and a few other things.

175
00:08:08,000 --> 00:08:11,920
Speaker 3: And behavioral finance was so fascinating because that's the soft skill,

176
00:08:12,320 --> 00:08:14,720
Speaker 3: that's where you do the treasure hunting. You're trying to

177
00:08:15,360 --> 00:08:18,760
Speaker 3: think about how everyone else is thinking what are their biases?

178
00:08:19,080 --> 00:08:22,600
Speaker 3: It's almost like a psychology class. I find that very fascinating.

179
00:08:22,800 --> 00:08:25,120
Speaker 2: Is that then how you can work out whether to

180
00:08:25,200 --> 00:08:26,760
Speaker 2: go with the herd or not? You know how there's

181
00:08:26,760 --> 00:08:28,160
Speaker 2: that herd mentality in markets.

182
00:08:28,480 --> 00:08:31,680
Speaker 3: That's absolutely right. I actually think unlike what many other

183
00:08:31,720 --> 00:08:34,000
Speaker 3: people think. Many people think investing about numbers and get

184
00:08:34,000 --> 00:08:36,480
Speaker 3: the numbers right and everything. I actually think get the

185
00:08:36,520 --> 00:08:38,760
Speaker 3: numbers right is almost a basic and that's a small

186
00:08:38,800 --> 00:08:41,400
Speaker 3: component of ultimate what the share price will do. It's

187
00:08:41,400 --> 00:08:43,640
Speaker 3: actually get your numbers right, and what the share price

188
00:08:43,720 --> 00:08:46,520
Speaker 3: will do, especially in the immediate future, in the next

189
00:08:46,640 --> 00:08:49,720
Speaker 3: three to six months. Short term is all about sentiment.

190
00:08:50,120 --> 00:08:53,439
Speaker 3: Sentiment is behavioral bias, you know, is all about what

191
00:08:53,679 --> 00:08:56,599
Speaker 3: would other people pay for those numbers that you just

192
00:08:56,679 --> 00:08:59,120
Speaker 3: put together. And that's what share market. That's why these

193
00:08:59,200 --> 00:09:02,559
Speaker 3: days you see while swings. It's just that sentiment. So

194
00:09:02,800 --> 00:09:05,920
Speaker 3: it's actually incredibly important because if you can understand that

195
00:09:06,240 --> 00:09:08,760
Speaker 3: and then you can sometimes go against the hurds, then

196
00:09:08,880 --> 00:09:11,079
Speaker 3: you make a lot more return. There's your treasure. You

197
00:09:11,240 --> 00:09:13,600
Speaker 3: found that before other people realized it was a treasure.

198
00:09:13,720 --> 00:09:16,280
Speaker 2: So is there something that you look towards to try

199
00:09:16,360 --> 00:09:19,240
Speaker 2: and work out that behavioral piece, like is there. I

200
00:09:19,240 --> 00:09:21,800
Speaker 2: don't know if you're reading different aspects of how do

201
00:09:21,880 --> 00:09:24,199
Speaker 2: you try and determine what people are going to do?

202
00:09:24,440 --> 00:09:24,640
Speaker 1: Yeah?

203
00:09:24,720 --> 00:09:26,400
Speaker 3: I think firstly you need to and when you start

204
00:09:26,440 --> 00:09:29,280
Speaker 3: investing in something, don't start with a preconceived idea of

205
00:09:29,360 --> 00:09:31,920
Speaker 3: what it should be, because I find many investors make

206
00:09:32,000 --> 00:09:34,280
Speaker 3: this mistake is that they always feel, oh, I think

207
00:09:34,360 --> 00:09:37,319
Speaker 3: this is that, and then they when you believe something

208
00:09:37,400 --> 00:09:41,280
Speaker 3: firmly without open mind, then you start finding evidence just

209
00:09:41,360 --> 00:09:44,079
Speaker 3: to support your own view, our own view sometimes right,

210
00:09:44,160 --> 00:09:46,880
Speaker 3: sometimes right. It's very important to when you start looking

211
00:09:46,920 --> 00:09:49,680
Speaker 3: at something just keep a complete open mind looking at

212
00:09:49,760 --> 00:09:52,840
Speaker 3: as afresh or some of the previous mistakes. Many mistakes

213
00:09:53,000 --> 00:09:55,160
Speaker 3: made mistake all the time, and one of some of

214
00:09:55,240 --> 00:09:57,800
Speaker 3: the biggest mistake is that when we have preseconceived idea,

215
00:09:57,880 --> 00:10:00,240
Speaker 3: then we start making pivot to the wrong side. Then

216
00:10:00,280 --> 00:10:03,719
Speaker 3: you stop listening to everyone and then you kind of

217
00:10:03,880 --> 00:10:07,280
Speaker 3: just make the wrong bet about a company's future simply

218
00:10:07,360 --> 00:10:09,920
Speaker 3: because you just couldn't see what is coming. So yeah,

219
00:10:10,000 --> 00:10:12,960
Speaker 3: so I think open mind and curiosity is very important.

220
00:10:14,320 --> 00:10:18,120
Speaker 2: Do you have any rules or structures around how you

221
00:10:18,200 --> 00:10:20,079
Speaker 2: go to invest that you're talking about it sounds like

222
00:10:20,120 --> 00:10:22,079
Speaker 2: you do an awful lot of research and you sort

223
00:10:22,120 --> 00:10:24,960
Speaker 2: of sounds like you pause and really get to understand

224
00:10:25,080 --> 00:10:28,560
Speaker 2: the company before you invest. But how long does that take?

225
00:10:28,679 --> 00:10:30,839
Speaker 2: And is that sort of a metric or so some

226
00:10:31,760 --> 00:10:33,760
Speaker 2: sort of plan that you work to before you actually

227
00:10:34,160 --> 00:10:35,720
Speaker 2: invest your money or your client's money.

228
00:10:35,880 --> 00:10:38,559
Speaker 3: Oh absolutely, so look for a brand new company, it

229
00:10:38,720 --> 00:10:42,040
Speaker 3: does take much longer because ultimately we always talk about

230
00:10:42,080 --> 00:10:44,480
Speaker 3: do your homework, is that you do need to understand

231
00:10:44,520 --> 00:10:47,840
Speaker 3: the business. So the core understanding of the business is firstly,

232
00:10:48,240 --> 00:10:51,800
Speaker 3: what's its customer proposition? What's the proposition? Why does it exist?

233
00:10:51,960 --> 00:10:54,800
Speaker 3: So ask this question why does it exist? How does

234
00:10:54,840 --> 00:10:57,559
Speaker 3: it exist? How is it better than others? And how

235
00:10:57,600 --> 00:11:01,160
Speaker 3: does it make money? And is that how or specialty

236
00:11:01,360 --> 00:11:04,720
Speaker 3: going to continue? Are they keep reinvesting what's special about

237
00:11:04,760 --> 00:11:07,079
Speaker 3: that business that they can keep going? And then you

238
00:11:07,160 --> 00:11:09,960
Speaker 3: can decide, Okay, well it can make this much money

239
00:11:10,040 --> 00:11:12,520
Speaker 3: and next share you'll make more. Because I know all

240
00:11:12,600 --> 00:11:15,040
Speaker 3: these things they're doing, it's going to drive this and

241
00:11:15,240 --> 00:11:18,559
Speaker 3: I know the management execution is very important. They've done

242
00:11:18,559 --> 00:11:21,040
Speaker 3: it before and you met the management need. They're driven

243
00:11:21,080 --> 00:11:25,240
Speaker 3: because ultimately, especially small business, they run by people who's creating,

244
00:11:25,679 --> 00:11:28,880
Speaker 3: innovating an idea, So they've got to be driven, so

245
00:11:29,320 --> 00:11:32,040
Speaker 3: it's them. You kind of follow them when it's early on.

246
00:11:32,360 --> 00:11:35,000
Speaker 3: So a lot of these Once you're done your homeworld,

247
00:11:35,040 --> 00:11:37,840
Speaker 3: you understand, you really understand the driver of the business,

248
00:11:38,080 --> 00:11:41,480
Speaker 3: where it's going, You understand the management, you understand in

249
00:11:41,559 --> 00:11:44,280
Speaker 3: and out of that business and that industry. And then

250
00:11:44,720 --> 00:11:46,640
Speaker 3: this is the first part of it. And then the

251
00:11:46,720 --> 00:11:48,760
Speaker 3: next part of it is to actually work out what

252
00:11:48,880 --> 00:11:50,920
Speaker 3: you want to pay for it, and that is the

253
00:11:51,080 --> 00:11:51,680
Speaker 3: tricky part.

254
00:11:52,200 --> 00:11:54,440
Speaker 2: That is the tricky part. When we come back, let's

255
00:11:54,480 --> 00:11:56,880
Speaker 2: talk about how to know when a stock is too expensive?

256
00:11:57,600 --> 00:12:01,520
Speaker 2: And I also want to know your investing mistakes or

257
00:12:01,559 --> 00:12:04,400
Speaker 2: do they teach you? And what's your investing advice for

258
00:12:04,559 --> 00:12:08,120
Speaker 2: everyday investors. We'll return to our chat following this small

259
00:12:08,200 --> 00:12:24,439
Speaker 2: break Jim Bay. Before we went to the break, we

260
00:12:24,559 --> 00:12:27,559
Speaker 2: were talking about investing in shares, so doing all of

261
00:12:27,640 --> 00:12:31,880
Speaker 2: the research deciding which company you'd like to back. The

262
00:12:31,960 --> 00:12:34,160
Speaker 2: tricky part though, is working out whether there's value in

263
00:12:34,240 --> 00:12:37,240
Speaker 2: that company. How do you go about working out whether

264
00:12:37,400 --> 00:12:39,240
Speaker 2: a company is too expensive to buy?

265
00:12:39,640 --> 00:12:43,280
Speaker 3: I think in today's world, the expensiveness really come back

266
00:12:43,360 --> 00:12:46,960
Speaker 3: down to relative valuation, so you compare it with something else.

267
00:12:47,280 --> 00:12:51,160
Speaker 3: So we in the Australian market, if something is expensive,

268
00:12:51,360 --> 00:12:54,160
Speaker 3: is not a reason for not buying something or for

269
00:12:54,360 --> 00:12:58,720
Speaker 3: selling something, because yeah, I tell you why. Because Australian

270
00:12:58,800 --> 00:13:01,880
Speaker 3: market growth is very hard to come by, and then

271
00:13:01,920 --> 00:13:04,240
Speaker 3: there's only limited there's only a couple of companies you

272
00:13:04,320 --> 00:13:07,079
Speaker 3: can buy that can grow. So there's an incredible amount

273
00:13:07,120 --> 00:13:09,959
Speaker 3: of money keeps piling into growth within our share market

274
00:13:10,160 --> 00:13:12,280
Speaker 3: and they will keep going to the same company. So

275
00:13:12,559 --> 00:13:15,040
Speaker 3: the evaluation today is much much higher than they were

276
00:13:15,320 --> 00:13:16,160
Speaker 3: ten years ago.

277
00:13:16,400 --> 00:13:18,880
Speaker 2: Simply because it's just not as many companies, not many comports,

278
00:13:19,160 --> 00:13:21,520
Speaker 2: that's right, And there's an awful lot of money that

279
00:13:21,600 --> 00:13:22,600
Speaker 2: needs to be funneled.

280
00:13:22,240 --> 00:13:25,199
Speaker 3: Towards amount of money that's right. Yeah, that's right. And

281
00:13:25,480 --> 00:13:29,280
Speaker 3: everyone wants to growth company to future proof their portfolio. Right,

282
00:13:29,360 --> 00:13:31,840
Speaker 3: So your portfolio will have always have bit of everything.

283
00:13:31,880 --> 00:13:33,679
Speaker 3: You have, bit of gold, bit of a company that

284
00:13:33,760 --> 00:13:36,520
Speaker 3: paid dividend like banks and things give you good income,

285
00:13:36,800 --> 00:13:38,960
Speaker 3: and then bit of maybe bit of material, but bit

286
00:13:39,040 --> 00:13:41,959
Speaker 3: of a growth company because in five years time, you

287
00:13:42,000 --> 00:13:44,560
Speaker 3: want your portfolio to keep growing rather than just paying

288
00:13:44,600 --> 00:13:46,440
Speaker 3: out dividend. Right, you don't want it to stand still

289
00:13:46,760 --> 00:13:49,520
Speaker 3: every year. They say share market should double every seven years.

290
00:13:49,840 --> 00:13:52,840
Speaker 3: So you want that growth company to be the core

291
00:13:52,960 --> 00:13:55,599
Speaker 3: holding of a portfolio. And they're on top of that,

292
00:13:55,720 --> 00:13:58,679
Speaker 3: you've got some dividend, you got some cyclical they call

293
00:13:58,720 --> 00:14:02,440
Speaker 3: a ciclical. Cyclicals companies do well when the economy picks

294
00:14:02,480 --> 00:14:05,199
Speaker 3: up and then do badly when economy So you buy

295
00:14:05,280 --> 00:14:08,000
Speaker 3: and sell you much more shorter term with those ones.

296
00:14:08,400 --> 00:14:09,439
Speaker 3: So that's the portfolio.

297
00:14:09,600 --> 00:14:11,040
Speaker 2: So you think I need to have a bank in

298
00:14:11,080 --> 00:14:13,559
Speaker 2: my portfolio. We always refer to the Big four and

299
00:14:13,640 --> 00:14:17,160
Speaker 2: then Commonwealth Bank has absolutely gone out on its own,

300
00:14:17,240 --> 00:14:19,920
Speaker 2: like it is just on a different level. So then

301
00:14:20,080 --> 00:14:21,480
Speaker 2: how do you work out then, if I want to

302
00:14:21,520 --> 00:14:23,920
Speaker 2: have a bank, does Commonwealth now look so expensive that

303
00:14:23,960 --> 00:14:27,280
Speaker 2: I'm better off going with these other three pick one

304
00:14:27,320 --> 00:14:29,360
Speaker 2: of them? Or do you say, like what we were

305
00:14:29,400 --> 00:14:32,240
Speaker 2: talking about before is like the herd's obviously going with CBA.

306
00:14:33,200 --> 00:14:34,880
Speaker 2: How do you make that decision? How do you sit

307
00:14:34,960 --> 00:14:35,960
Speaker 2: down and assess it?

308
00:14:36,240 --> 00:14:38,000
Speaker 3: Yeah, look a two things I agree with you. I

309
00:14:38,040 --> 00:14:40,960
Speaker 3: think banks looks really expensive. Yeah yeah. And then the

310
00:14:41,040 --> 00:14:42,960
Speaker 3: thing is like you don't really want to as an

311
00:14:43,000 --> 00:14:46,360
Speaker 3: investor who's not constantly watching the market. I always have

312
00:14:46,440 --> 00:14:50,080
Speaker 3: advice to stick with quality, stick with the best quality company,

313
00:14:50,080 --> 00:14:51,440
Speaker 3: and because you don't want to worry about a day

314
00:14:51,480 --> 00:14:53,560
Speaker 3: to day you've got to day trade and all of that, right,

315
00:14:53,640 --> 00:14:56,760
Speaker 3: So unfortunately, I think CBA is best position. It's the

316
00:14:56,800 --> 00:14:59,360
Speaker 3: best bank, but most expensive in the world. I can

317
00:14:59,440 --> 00:15:01,720
Speaker 3: say that. So when you pick one, I think NAB

318
00:15:01,760 --> 00:15:05,160
Speaker 3: looks okay. Relative Again, we're talking about relative valuation. Things

319
00:15:05,360 --> 00:15:08,200
Speaker 3: look relatively cheaper. NAP still looks expensive for a bank

320
00:15:08,360 --> 00:15:11,280
Speaker 3: on historical terms, but it's a whole lot cheaper than

321
00:15:11,360 --> 00:15:14,920
Speaker 3: what CBA is offering. So I think relatively I would

322
00:15:14,960 --> 00:15:18,720
Speaker 3: hold NAB instead of CBA. But nothing will stop CBA

323
00:15:18,800 --> 00:15:20,520
Speaker 3: from keep rallying away because.

324
00:15:20,360 --> 00:15:23,080
Speaker 2: If anyone listening, if they just put CBA, it's you keep.

325
00:15:23,040 --> 00:15:25,000
Speaker 3: Up, because I tell you what, last three months at

326
00:15:25,000 --> 00:15:28,200
Speaker 3: the share price going where it actually six six months ago,

327
00:15:28,400 --> 00:15:31,320
Speaker 3: a share price was moving higher because of it's earning,

328
00:15:31,480 --> 00:15:33,480
Speaker 3: was doing a bit better and buy back and all

329
00:15:33,520 --> 00:15:36,880
Speaker 3: these great things. But last three months all because international

330
00:15:36,960 --> 00:15:39,920
Speaker 3: investor want to put money in Australia. And then what

331
00:15:40,040 --> 00:15:41,680
Speaker 3: do they do. They kind of just buy the top

332
00:15:41,800 --> 00:15:44,480
Speaker 3: companies and they don't want to buy resources, so they

333
00:15:44,560 --> 00:15:46,400
Speaker 3: bought banks and then watch banks you buy, you buy

334
00:15:46,440 --> 00:15:48,680
Speaker 3: the CBA. They don't want the problem with it, and

335
00:15:48,760 --> 00:15:51,520
Speaker 3: they've had a lot of issues and even Westpac is

336
00:15:51,600 --> 00:15:53,880
Speaker 3: not doing gray, so they kind of just put money

337
00:15:53,920 --> 00:15:54,640
Speaker 3: in the big one.

338
00:15:54,960 --> 00:15:58,520
Speaker 2: We get told a lot that, particularly when markets are volatile,

339
00:15:59,160 --> 00:16:04,840
Speaker 2: don't sell, sit tight hanging there. I think for investors too,

340
00:16:05,040 --> 00:16:07,360
Speaker 2: there is an art in knowing when to sell. How

341
00:16:07,400 --> 00:16:10,080
Speaker 2: do you work out when is a great time to sell?

342
00:16:10,400 --> 00:16:14,400
Speaker 3: Yeah, so to sell is always the hardest question for it. Yeah,

343
00:16:14,600 --> 00:16:17,360
Speaker 3: so hardest question. I always believe you find a proper

344
00:16:17,600 --> 00:16:20,440
Speaker 3: growth winner, you do not sell right, so you can

345
00:16:20,560 --> 00:16:22,280
Speaker 3: trim a little bit because you need money to buy

346
00:16:22,360 --> 00:16:24,680
Speaker 3: something else. That's how we look at it. So if

347
00:16:24,760 --> 00:16:27,480
Speaker 3: I some of our winner like like three sixty Promedicus

348
00:16:27,560 --> 00:16:30,520
Speaker 3: and these were incredibly well. But the thing is, if

349
00:16:30,560 --> 00:16:33,040
Speaker 3: I find something else I think also can do very

350
00:16:33,080 --> 00:16:34,560
Speaker 3: well in the next to a month, I might sell

351
00:16:34,560 --> 00:16:36,200
Speaker 3: a little bit and put into it, but I don't

352
00:16:36,240 --> 00:16:40,760
Speaker 3: completely sell out because winners history have proven that if

353
00:16:40,800 --> 00:16:42,760
Speaker 3: you sell it, you'll never buy back in because they

354
00:16:42,880 --> 00:16:45,680
Speaker 3: keep going. So a company like that is they're just

355
00:16:45,760 --> 00:16:49,480
Speaker 3: such a strong driver behind them in terms of earnings

356
00:16:49,560 --> 00:16:52,360
Speaker 3: growth We just don't have many of them around.

357
00:16:52,240 --> 00:16:54,240
Speaker 2: So how do you go about balancing your portfolio?

358
00:16:54,600 --> 00:16:56,680
Speaker 3: Yeah, So the good thing is that when you find

359
00:16:56,760 --> 00:16:59,360
Speaker 3: when we have the next opportunity coming out maybe so

360
00:16:59,520 --> 00:17:02,040
Speaker 3: I think even with like three sixty it was a

361
00:17:02,120 --> 00:17:04,640
Speaker 3: few years ago, was very cheap. Everyone worried about what's

362
00:17:04,640 --> 00:17:06,840
Speaker 3: happening with the US and all that, and then you know,

363
00:17:06,920 --> 00:17:08,879
Speaker 3: you sell some of the growth names and funding too

364
00:17:08,960 --> 00:17:11,360
Speaker 3: those and even early in the year when you talk

365
00:17:11,359 --> 00:17:14,480
Speaker 3: about the market volatility, these times are great to picking

366
00:17:14,560 --> 00:17:18,080
Speaker 3: up high quality companies because people sell everything. Especially people

367
00:17:18,200 --> 00:17:20,200
Speaker 3: like to sell winners because they go, oh, I don't

368
00:17:20,240 --> 00:17:22,280
Speaker 3: know what tariff is going to do. I'm going to

369
00:17:22,359 --> 00:17:24,520
Speaker 3: sell my profit, my winners because I've done so well

370
00:17:24,560 --> 00:17:27,359
Speaker 3: out of them. So people sold out all the growth names.

371
00:17:27,520 --> 00:17:31,200
Speaker 3: They're all thirty percent cheaper, literally in three weeks thirty

372
00:17:31,200 --> 00:17:34,400
Speaker 3: percent cheaper, and then they all jumped more than thirty percent.

373
00:17:34,520 --> 00:17:36,520
Speaker 3: Some of them have gone up thirty percent since the.

374
00:17:36,800 --> 00:17:39,080
Speaker 2: Behindslight's wonderful, isn't it. So Yeah, that's why do you

375
00:17:39,240 --> 00:17:42,200
Speaker 2: stay calm in those times. It can be turbulent. That's

376
00:17:42,320 --> 00:17:44,920
Speaker 2: got a job where you'll wake up in the morning

377
00:17:44,960 --> 00:17:47,399
Speaker 2: or maybe I don't know if you would have to go,

378
00:17:47,640 --> 00:17:49,760
Speaker 2: what's my morning going to be? Like, It's just it's

379
00:17:49,960 --> 00:17:52,720
Speaker 2: what differences happening on global markets really does impact what's

380
00:17:52,720 --> 00:17:53,800
Speaker 2: happening on the local market.

381
00:17:54,040 --> 00:17:56,240
Speaker 3: Absolutely, so I think, look, I've been doing this for

382
00:17:56,359 --> 00:17:58,480
Speaker 3: twenty five years, so you kind of get used to

383
00:17:58,560 --> 00:18:01,760
Speaker 3: the volatility. Volatility will but you know it will always pass.

384
00:18:02,040 --> 00:18:04,720
Speaker 3: It will always pass, but you need to work out

385
00:18:04,720 --> 00:18:07,080
Speaker 3: what's the new information. So what we didn't know at

386
00:18:07,119 --> 00:18:10,399
Speaker 3: the time was really in this particular time was tariff.

387
00:18:10,640 --> 00:18:12,280
Speaker 3: We don't know what Trump is going to do one

388
00:18:12,359 --> 00:18:14,399
Speaker 3: hundred and forty seven percent on China or all that.

389
00:18:14,720 --> 00:18:18,159
Speaker 3: So for companies that potentially get impacted by that tariff,

390
00:18:18,320 --> 00:18:20,640
Speaker 3: we just thought that's too hard because I don't know tomorrow.

391
00:18:20,640 --> 00:18:22,960
Speaker 3: It could be one hundred percent tomorrow or zero percent.

392
00:18:23,040 --> 00:18:25,359
Speaker 3: I don't know. That's we don't do. But for the

393
00:18:25,440 --> 00:18:28,480
Speaker 3: company actually doesn't get impacted by tariff, they are thirty

394
00:18:28,520 --> 00:18:31,840
Speaker 3: percent lower on no change to earnings. This way we

395
00:18:32,040 --> 00:18:35,280
Speaker 3: know it will come back. So you buy these businesses.

396
00:18:35,560 --> 00:18:38,280
Speaker 3: Same as during a pandemic. I remember when market went

397
00:18:38,359 --> 00:18:41,679
Speaker 3: free four, same thing. Everything fell, especially the winners. They

398
00:18:41,720 --> 00:18:44,159
Speaker 3: fell first and then we just sort of work out

399
00:18:44,200 --> 00:18:46,320
Speaker 3: what we do know what we don't know. So the

400
00:18:46,400 --> 00:18:47,960
Speaker 3: first thing is that what we do know is that

401
00:18:48,320 --> 00:18:51,200
Speaker 3: hard asset will come back Sydney Airport. Someone will buy

402
00:18:51,280 --> 00:18:53,560
Speaker 3: this thing it was forty percent cheap, or someone will

403
00:18:53,600 --> 00:18:55,480
Speaker 3: buy it. So you buy the hard air set and

404
00:18:55,600 --> 00:18:58,520
Speaker 3: then we have the government promised to stepping give stimulus

405
00:18:58,600 --> 00:19:00,280
Speaker 3: and all of that. Then we'll go okay and then

406
00:19:00,320 --> 00:19:03,760
Speaker 3: buy retailers by JB High Vibe. So really need to

407
00:19:03,840 --> 00:19:07,200
Speaker 3: really understand what information is there and then based on

408
00:19:07,359 --> 00:19:10,520
Speaker 3: and see if there's any change to your investment assumptions

409
00:19:10,760 --> 00:19:11,359
Speaker 3: of a company.

410
00:19:11,720 --> 00:19:14,400
Speaker 2: Let's dive into some of the mistakes along the way.

411
00:19:14,480 --> 00:19:18,600
Speaker 2: We've all made some safe places. It's a safe space,

412
00:19:19,080 --> 00:19:21,280
Speaker 2: that's right. But I think to learn and to grow

413
00:19:21,320 --> 00:19:23,040
Speaker 2: and to become a better investor, you've had to have

414
00:19:23,400 --> 00:19:25,399
Speaker 2: made some clangers along the way. So I don't know

415
00:19:25,440 --> 00:19:28,480
Speaker 2: if there's one in particular that you recall what it

416
00:19:28,720 --> 00:19:29,119
Speaker 2: was and.

417
00:19:29,160 --> 00:19:31,439
Speaker 3: What it taught you. Yeah, look, we make a mistake

418
00:19:31,480 --> 00:19:33,639
Speaker 3: all the time, that's what they say. So investing in

419
00:19:33,680 --> 00:19:36,159
Speaker 3: the share market, right, you work out your probability, so

420
00:19:36,600 --> 00:19:38,359
Speaker 3: what they say, but we do better than that. So

421
00:19:38,720 --> 00:19:42,160
Speaker 3: we are probably is about seventy to twenty percent will outperform,

422
00:19:42,359 --> 00:19:44,840
Speaker 3: and but that twenty percent time that we're underperforming will

423
00:19:44,840 --> 00:19:47,479
Speaker 3: pick the company that didn't work out. So you always

424
00:19:47,560 --> 00:19:50,359
Speaker 3: make mispaedakes. That's the key advice. You have to make

425
00:19:50,440 --> 00:19:53,680
Speaker 3: mistake to learn, otherwise you'll never learn. So what there's

426
00:19:53,720 --> 00:19:56,440
Speaker 3: one name always click with me because that's early days

427
00:19:56,440 --> 00:20:00,720
Speaker 3: in my career. Obviously feeling fantastic. Buying Woolworth is oh easy.

428
00:20:00,720 --> 00:20:03,359
Speaker 2: And so that investment went well, we meant the beginning,

429
00:20:03,440 --> 00:20:05,120
Speaker 2: So that that was your first investment. Can you recall

430
00:20:05,160 --> 00:20:06,280
Speaker 2: how much you's can't remember?

431
00:20:06,840 --> 00:20:08,399
Speaker 3: God, Yeah, I made money and then I sold it.

432
00:20:08,720 --> 00:20:10,320
Speaker 3: Yeah that's right, I made money. I think I made

433
00:20:10,359 --> 00:20:12,119
Speaker 3: a thousand dollars. I was so excited and I sold it.

434
00:20:12,320 --> 00:20:13,880
Speaker 3: I was like, yes, lock it in, okay.

435
00:20:14,000 --> 00:20:15,520
Speaker 2: So then you feel like, yeah, I know what I'm doing.

436
00:20:15,760 --> 00:20:17,880
Speaker 3: Yeah, that's right. It's way too easy. And then that's

437
00:20:17,920 --> 00:20:20,760
Speaker 3: when and then the I also just started my celside

438
00:20:20,840 --> 00:20:23,320
Speaker 3: Joe where I was the first time young person be

439
00:20:23,480 --> 00:20:26,720
Speaker 3: my full lead analysts and initiate on this company. And

440
00:20:26,840 --> 00:20:29,439
Speaker 3: I remember at the time JB High Fi just listed

441
00:20:29,720 --> 00:20:32,320
Speaker 3: and it was expensive I think sixteen times earnings was

442
00:20:32,520 --> 00:20:35,359
Speaker 3: very expensive then now will be like two hundred times.

443
00:20:35,480 --> 00:20:37,760
Speaker 3: But anyway, I was sixteen times earning, and then I thought,

444
00:20:38,000 --> 00:20:42,359
Speaker 3: oh Jbhi Fi sixteen times earning. Strathfield car Radio. I

445
00:20:42,359 --> 00:20:45,760
Speaker 3: don't know if you know that one. Oh that's going back, yeah, yeah, okay,

446
00:20:45,920 --> 00:20:48,879
Speaker 3: that's it. So Strathfield Car Radio I was trading on

447
00:20:49,000 --> 00:20:50,639
Speaker 3: twelve times and and.

448
00:20:50,720 --> 00:20:52,840
Speaker 2: So just wen't they They was a company and you

449
00:20:53,000 --> 00:20:55,320
Speaker 2: could take out your car radio and your existing car

450
00:20:55,359 --> 00:20:58,960
Speaker 2: and put in like the rats and city players and stuff.

451
00:20:59,040 --> 00:21:01,400
Speaker 3: That's right. And then those days car radio is big thing.

452
00:21:01,480 --> 00:21:04,000
Speaker 3: So every people when they buy the car, they go

453
00:21:04,119 --> 00:21:07,240
Speaker 3: and change their radio, they upgrade their radio. So JB

454
00:21:07,359 --> 00:21:09,720
Speaker 3: High Fi used to have those as well. With the

455
00:21:09,800 --> 00:21:12,159
Speaker 3: car radio. It was a big credit, big component of

456
00:21:12,240 --> 00:21:14,960
Speaker 3: that time, right, that's right. Yeah, So you walk into

457
00:21:15,040 --> 00:21:17,240
Speaker 3: Strathfield car Radio, they say they got car radio. They

458
00:21:17,320 --> 00:21:20,080
Speaker 3: got back then they just started selling mobile phone in

459
00:21:20,200 --> 00:21:22,040
Speaker 3: those things, and they got a little bit of consumer

460
00:21:22,080 --> 00:21:24,359
Speaker 3: electronics on the side as well. So it's like a

461
00:21:24,560 --> 00:21:27,040
Speaker 3: mini JB High five, but poor men version JB High.

462
00:21:26,920 --> 00:21:28,320
Speaker 2: Five Okay, And he thought, well it's cheaper.

463
00:21:28,440 --> 00:21:30,600
Speaker 3: I was as much cheaper. Why not They're rolling our

464
00:21:30,640 --> 00:21:33,080
Speaker 3: stores as well, and JB High five's rolling our stores.

465
00:21:33,440 --> 00:21:35,680
Speaker 3: Why would not buy this one? It's all great? But

466
00:21:36,040 --> 00:21:38,920
Speaker 3: and then I put on a great strong buy and everything,

467
00:21:39,119 --> 00:21:41,359
Speaker 3: and actually shape price did well for about three months.

468
00:21:41,640 --> 00:21:44,439
Speaker 3: And then Richard Utriz was running JB High five at

469
00:21:44,440 --> 00:21:47,399
Speaker 3: the time. He came over and saw me. He's like, Jabab,

470
00:21:48,480 --> 00:21:52,080
Speaker 3: have you been to the Strathfield store. That's almost question

471
00:21:52,119 --> 00:21:54,080
Speaker 3: to me. He's like, have you actually been to the store?

472
00:21:54,359 --> 00:21:57,040
Speaker 3: I was like, no, I've seen pictures. It looks fine.

473
00:21:58,040 --> 00:21:59,640
Speaker 3: He's like, you should go and have a look.

474
00:22:00,160 --> 00:22:02,160
Speaker 2: And was he there to chat to you about trying

475
00:22:02,200 --> 00:22:06,480
Speaker 2: to invest in it? You never sell one, Jock.

476
00:22:06,520 --> 00:22:08,840
Speaker 3: I didn't have sell but they just just essentially he's

477
00:22:08,960 --> 00:22:12,520
Speaker 3: educating in the market, just listed yeah, doing a kind

478
00:22:12,560 --> 00:22:13,879
Speaker 3: of road show and he's like, have you been to

479
00:22:13,920 --> 00:22:17,719
Speaker 3: the store to obviously the pictures and everything. And then

480
00:22:17,760 --> 00:22:19,400
Speaker 3: I thought, oh, damn, I probably should go and see

481
00:22:19,440 --> 00:22:21,600
Speaker 3: the store. And I did go see the store, was saying,

482
00:22:21,640 --> 00:22:24,040
Speaker 3: oh god, this is not like JB High Fi. Majority

483
00:22:24,040 --> 00:22:26,879
Speaker 3: of the store was designated to the car radio and

484
00:22:26,920 --> 00:22:28,800
Speaker 3: then there's a couple of I think they have a

485
00:22:28,840 --> 00:22:31,560
Speaker 3: big contract where the Optus or Telstra, they're like Telstra

486
00:22:31,680 --> 00:22:34,360
Speaker 3: Optus love us, gave us all these big trailing revenue.

487
00:22:34,480 --> 00:22:36,400
Speaker 3: We sell one mobile phone, we'll get paid so much

488
00:22:36,440 --> 00:22:38,760
Speaker 3: and all that, and then tiny bit income stream electronics

489
00:22:39,000 --> 00:22:42,040
Speaker 3: completely different, very old school, very dated. They're not in

490
00:22:42,119 --> 00:22:45,560
Speaker 3: the shopping center, they're outside on those Paramatta roads and

491
00:22:45,920 --> 00:22:48,720
Speaker 3: just very different vibe between the stores. And then it's

492
00:22:48,760 --> 00:22:51,920
Speaker 3: not efficient every category and JB HIGHI back then only

493
00:22:52,000 --> 00:22:54,600
Speaker 3: just started selling a few category. They haven't started selling

494
00:22:54,640 --> 00:22:56,760
Speaker 3: game yet, they haven't started selling PC. There were so

495
00:22:56,880 --> 00:23:00,159
Speaker 3: many new categories to come, completely different, and I came

496
00:23:00,240 --> 00:23:03,040
Speaker 3: back thinking this is not good. But anyway, I wasn't

497
00:23:03,119 --> 00:23:04,760
Speaker 3: experienced that. I thought, look, I could write it.

498
00:23:04,840 --> 00:23:06,639
Speaker 2: Because you made your decision right, and so going to

499
00:23:06,680 --> 00:23:08,280
Speaker 2: back yourself in every written it's great.

500
00:23:08,359 --> 00:23:11,560
Speaker 3: Yeah, and invested and I said it's great buy and

501
00:23:11,600 --> 00:23:14,240
Speaker 3: then trying to convince everyone to buy. And six months

502
00:23:14,320 --> 00:23:17,640
Speaker 3: later retail condition got a bit tougher, so consumer become

503
00:23:17,840 --> 00:23:22,440
Speaker 3: tightened their pockets and everything else. Immediately, Strathfield they're like

504
00:23:22,520 --> 00:23:23,800
Speaker 3: for like started going negative.

505
00:23:23,920 --> 00:23:25,280
Speaker 2: Can you what year are we talking?

506
00:23:25,440 --> 00:23:27,720
Speaker 3: Maybe it was two thousand and five. There was one

507
00:23:27,840 --> 00:23:31,359
Speaker 3: year many retailer had downgrades. I think maybe it was

508
00:23:31,560 --> 00:23:33,440
Speaker 3: May two thousand and five or two thousand and four.

509
00:23:33,720 --> 00:23:36,280
Speaker 3: Winter was too hot as well. Everyone down graded because

510
00:23:36,280 --> 00:23:39,000
Speaker 3: it was too hot. Jackets won't selling. A Just group

511
00:23:39,119 --> 00:23:41,600
Speaker 3: was listed at the time as well, remember, but yeah,

512
00:23:41,640 --> 00:23:43,960
Speaker 3: so just retailer when things got a little bit tougher.

513
00:23:44,240 --> 00:23:46,879
Speaker 3: Retailer don't have strong business model. They just don't do

514
00:23:46,920 --> 00:23:49,040
Speaker 3: it as well. People don't need to go to Strathfield,

515
00:23:49,240 --> 00:23:51,560
Speaker 3: whereas jbhigfire because they have a strong business models, but

516
00:23:51,560 --> 00:23:53,480
Speaker 3: they pull people in. People want to go and see

517
00:23:53,520 --> 00:23:56,200
Speaker 3: what's going on or the excited excitement. So things started

518
00:23:56,240 --> 00:23:58,920
Speaker 3: going backwards and the minute star for retailers when things

519
00:23:59,040 --> 00:24:03,200
Speaker 3: going backwards, going negative, it's heavily leveraged because they don't

520
00:24:03,200 --> 00:24:05,640
Speaker 3: have much debt but the lease. They have to pay

521
00:24:05,680 --> 00:24:07,760
Speaker 3: a lot on the lease, so there's not much room

522
00:24:07,800 --> 00:24:09,040
Speaker 3: to move for regiler.

523
00:24:08,720 --> 00:24:11,359
Speaker 2: Start to see it turn negative. But you realize, as

524
00:24:11,400 --> 00:24:13,399
Speaker 2: we spoke about earlier, it's like you've made a decision

525
00:24:13,440 --> 00:24:16,480
Speaker 2: and you don't You don't sell out when things get volatile.

526
00:24:16,640 --> 00:24:19,119
Speaker 2: So did you stay? Oh no, no, So I got

527
00:24:19,160 --> 00:24:19,640
Speaker 2: this one wrong.

528
00:24:19,800 --> 00:24:22,640
Speaker 3: Yeah, because I realized how quickly things can get bad,

529
00:24:22,800 --> 00:24:25,080
Speaker 3: and so the minute it turns negative. I think I

530
00:24:25,119 --> 00:24:27,880
Speaker 3: sat there for six months, longer than I should six months.

531
00:24:28,000 --> 00:24:30,520
Speaker 3: So when it started turning, I didn't move straight away

532
00:24:30,520 --> 00:24:32,680
Speaker 3: because I thought it will get better. Maybe just patch

533
00:24:32,760 --> 00:24:35,560
Speaker 3: your consumer. Maybe they just unlucky. Management always find the

534
00:24:35,600 --> 00:24:39,320
Speaker 3: best excuses. Oh, this thing happened, too much rain or something.

535
00:24:39,640 --> 00:24:41,840
Speaker 3: Always this. So at the end, so and they're six

536
00:24:41,920 --> 00:24:44,760
Speaker 3: month later, I realized that the operating D leverage is

537
00:24:44,840 --> 00:24:47,880
Speaker 3: very significant for a retailer. And for a retailer, by then,

538
00:24:48,000 --> 00:24:51,040
Speaker 3: I have realized that there is something that whatever I

539
00:24:51,080 --> 00:24:53,080
Speaker 3: thought it was special about the company, it was not there.

540
00:24:53,359 --> 00:24:56,600
Speaker 3: I should have really visited the store, really see what

541
00:24:57,119 --> 00:24:59,879
Speaker 3: was the value driver why people walk into that store.

542
00:25:00,080 --> 00:25:01,840
Speaker 3: There was no reason. That's why when things are tough,

543
00:25:01,920 --> 00:25:02,639
Speaker 3: people don't walk in.

544
00:25:03,280 --> 00:25:04,960
Speaker 2: Do you remember how much money you might have lost

545
00:25:05,080 --> 00:25:05,800
Speaker 2: with that investment?

546
00:25:06,480 --> 00:25:08,520
Speaker 3: Oh I think I lost like twenty thirty percent of

547
00:25:08,640 --> 00:25:09,240
Speaker 3: the investment.

548
00:25:09,359 --> 00:25:11,080
Speaker 2: Yeah, okay, all right, but it stuck with you all

549
00:25:11,119 --> 00:25:13,240
Speaker 2: this time, and that mistake forever.

550
00:25:13,520 --> 00:25:16,359
Speaker 3: It's just to do the homework right. It's about really

551
00:25:16,440 --> 00:25:19,159
Speaker 3: truly understand the business instead of what management tell you.

552
00:25:19,840 --> 00:25:21,920
Speaker 2: Seeing as we're going down back to two thousand and five,

553
00:25:22,000 --> 00:25:24,120
Speaker 2: maybe if you could go back sort of twenty years

554
00:25:24,240 --> 00:25:27,600
Speaker 2: or so, if there was a financial habit that you

555
00:25:27,720 --> 00:25:29,520
Speaker 2: could have picked up back then, do you know what

556
00:25:29,600 --> 00:25:32,360
Speaker 2: that would have been, just layering a good.

557
00:25:32,200 --> 00:25:35,800
Speaker 3: Habit, financial habit. I think it's probably back then I

558
00:25:36,000 --> 00:25:38,400
Speaker 3: was at the early stage of I do think reading

559
00:25:38,480 --> 00:25:40,280
Speaker 3: financial publication is very important.

560
00:25:40,440 --> 00:25:42,680
Speaker 2: Excellent, you can all read this and the Australia is

561
00:25:42,720 --> 00:25:43,000
Speaker 2: the best.

562
00:25:43,040 --> 00:25:47,320
Speaker 3: Well, that's right, that's right. I actually think it's really important.

563
00:25:47,560 --> 00:25:50,600
Speaker 3: And these days that's where we read about the mergers

564
00:25:50,640 --> 00:25:53,800
Speaker 3: and acquisitions, the rumored deal that's coming through. We'll get

565
00:25:53,840 --> 00:25:56,520
Speaker 3: it from the paper. And in those days, still early days,

566
00:25:56,600 --> 00:25:58,159
Speaker 3: I scheme through every now and then, but then you

567
00:25:58,240 --> 00:25:59,600
Speaker 3: miss things also.

568
00:25:59,400 --> 00:26:01,400
Speaker 2: You want as dead. It catered to reading and making sure.

569
00:26:01,400 --> 00:26:03,200
Speaker 2: So if you could go back in time, you would

570
00:26:03,200 --> 00:26:05,320
Speaker 2: actually just read more consistently.

571
00:26:05,000 --> 00:26:08,600
Speaker 3: Absolutely every single day like as information, and process the

572
00:26:08,680 --> 00:26:11,119
Speaker 3: information much earlier in the day. So how I process

573
00:26:11,200 --> 00:26:14,560
Speaker 3: information these days? All the reading everything is done before

574
00:26:14,560 --> 00:26:18,440
Speaker 3: a thirty, So everything is done before a thirty, So

575
00:26:18,600 --> 00:26:20,840
Speaker 3: all the and the a thirty we have our team meeting,

576
00:26:20,880 --> 00:26:23,600
Speaker 3: we talk about what we have absorbed. This includes everything

577
00:26:23,680 --> 00:26:26,359
Speaker 3: what happened overnight, what happened to what happened in the

578
00:26:26,480 --> 00:26:29,200
Speaker 3: US market, what sort of things that's change, Which company

579
00:26:29,240 --> 00:26:31,920
Speaker 3: said well, which company had done great? And what's this?

580
00:26:32,119 --> 00:26:35,840
Speaker 3: And they're also absorbing newsflow in Australian market before it opens,

581
00:26:36,119 --> 00:26:38,960
Speaker 3: all the morning news, knowing what's going to change, and

582
00:26:39,240 --> 00:26:42,360
Speaker 3: by a thirty we almost know how our market will open,

583
00:26:42,440 --> 00:26:44,639
Speaker 3: which sector would do well, which company will go up

584
00:26:44,680 --> 00:26:48,520
Speaker 3: and down, which announcement meant to earnings down, and all that.

585
00:26:48,760 --> 00:26:50,879
Speaker 3: So by a thirty everything's processed.

586
00:26:51,560 --> 00:27:00,440
Speaker 2: We'll return to our chat following this small breakthrough. Is

587
00:27:00,480 --> 00:27:03,040
Speaker 2: there a piece of advice for someone like me or

588
00:27:03,240 --> 00:27:07,119
Speaker 2: someone listening about how they can is the one thing

589
00:27:07,160 --> 00:27:10,560
Speaker 2: that they should be doing that can make them a

590
00:27:10,680 --> 00:27:13,920
Speaker 2: better investor or at least start to build that wealth.

591
00:27:13,960 --> 00:27:16,479
Speaker 3: I feel like we're just all very busy, That's right.

592
00:27:16,600 --> 00:27:18,719
Speaker 2: What can people do? You sort of juggling? People are

593
00:27:18,760 --> 00:27:19,320
Speaker 2: juggling a lot.

594
00:27:19,560 --> 00:27:22,120
Speaker 3: Oh absolutely, and it's a never ending I've got kids

595
00:27:22,119 --> 00:27:24,639
Speaker 3: to myself, it's just constantly juggling. So look, I think

596
00:27:24,680 --> 00:27:27,280
Speaker 3: the advice is that for someone wants to really learn

597
00:27:27,320 --> 00:27:30,680
Speaker 3: about investing, because I do all of these beforehand, because

598
00:27:30,680 --> 00:27:33,320
Speaker 3: I'm a professional farm manager, I meant to know everything

599
00:27:33,359 --> 00:27:35,680
Speaker 3: about what's happening in the market. Then I can change

600
00:27:35,760 --> 00:27:37,719
Speaker 3: my bed so I can be more active, I can

601
00:27:37,880 --> 00:27:40,800
Speaker 3: respond to different things. But you know, if you're an individual,

602
00:27:40,880 --> 00:27:43,440
Speaker 3: you're buying peel to your own portfolio, you don't A

603
00:27:43,520 --> 00:27:45,720
Speaker 3: lot of these things are noise. As individual, you just

604
00:27:45,760 --> 00:27:47,800
Speaker 3: want to want to grow your own wealth. You may

605
00:27:47,880 --> 00:27:50,040
Speaker 3: one year you do a bit worse than the share market,

606
00:27:50,119 --> 00:27:52,960
Speaker 3: but it doesn't matter. You pick the company that's still

607
00:27:52,960 --> 00:27:55,440
Speaker 3: gone up. So it's a very different dynamic. But for

608
00:27:55,600 --> 00:27:59,320
Speaker 3: individual it's really about I feel, it's about the find

609
00:27:59,359 --> 00:28:02,800
Speaker 3: the company you really understand and its quality, so they

610
00:28:02,880 --> 00:28:05,720
Speaker 3: get much less headache when you find a spivvy stock.

611
00:28:06,040 --> 00:28:08,800
Speaker 3: When you get a hot tip from somebody, usually hot

612
00:28:08,840 --> 00:28:11,280
Speaker 3: tap are bad because somebody told you the hot tip

613
00:28:11,320 --> 00:28:13,320
Speaker 3: would probably means that many other people already got that

614
00:28:13,400 --> 00:28:15,359
Speaker 3: hot tip a long time ago, and then you might

615
00:28:15,400 --> 00:28:17,600
Speaker 3: be the last person before it become not so hot.

616
00:28:17,840 --> 00:28:19,840
Speaker 3: And a lot of hot tip is fine, but it

617
00:28:20,040 --> 00:28:22,280
Speaker 3: just means they've probably it's gone up a lot, gone

618
00:28:22,359 --> 00:28:25,160
Speaker 3: very expensive. One of the example is recently there's all

619
00:28:25,200 --> 00:28:28,359
Speaker 3: these defense companies, Yeah, gone through the roof, that's right,

620
00:28:28,480 --> 00:28:30,560
Speaker 3: trying to sign up and everything, and I would say

621
00:28:30,640 --> 00:28:32,160
Speaker 3: a lot of them has a lot of hot air

622
00:28:32,200 --> 00:28:34,640
Speaker 3: in it, so they're not really training on how much

623
00:28:34,720 --> 00:28:37,080
Speaker 3: earning is multiple and the traditional things you're looking at

624
00:28:37,200 --> 00:28:39,040
Speaker 3: they're training are it's hot. We just got to get

625
00:28:39,080 --> 00:28:41,040
Speaker 3: in because there's only a few of them. So these

626
00:28:41,120 --> 00:28:43,560
Speaker 3: companies when they it's just risky, right, you got to

627
00:28:43,600 --> 00:28:46,720
Speaker 3: watch them because if suddenly one day people go, oh,

628
00:28:47,360 --> 00:28:50,320
Speaker 3: you're maybe it's not spending as much or maybe actually

629
00:28:50,320 --> 00:28:52,760
Speaker 3: a company didn't win quite that many contract because the

630
00:28:52,880 --> 00:28:55,720
Speaker 3: ship the amount of shapper's gone out, people waiting for

631
00:28:55,880 --> 00:28:57,840
Speaker 3: a lot of contract to come through. So that's rich.

632
00:28:57,960 --> 00:29:00,440
Speaker 3: So I just think stayed with the company, especially you

633
00:29:00,480 --> 00:29:03,080
Speaker 3: can touch and feel, you understand the product and in

634
00:29:03,360 --> 00:29:06,840
Speaker 3: the quality larger blue tip. It's just much much easier,

635
00:29:07,240 --> 00:29:09,320
Speaker 3: less headache, you don't have to be on call suddenly

636
00:29:09,400 --> 00:29:12,200
Speaker 3: something happens, share price down twenty Just invest is that

637
00:29:12,320 --> 00:29:14,840
Speaker 3: the message just in state you have to get started.

638
00:29:15,040 --> 00:29:17,800
Speaker 3: Don't invest in ETF for ETF is his least lazy

639
00:29:17,840 --> 00:29:18,520
Speaker 3: way of doing.

640
00:29:18,480 --> 00:29:20,080
Speaker 2: So ETFs are booming.

641
00:29:21,320 --> 00:29:24,760
Speaker 3: Yeah, there's now active ETF coming. Actually we launching it

642
00:29:24,880 --> 00:29:27,840
Speaker 3: active ETF as well, So that's with active manager ETF

643
00:29:28,000 --> 00:29:30,680
Speaker 3: is fine, but you're not really learning. So if you

644
00:29:30,760 --> 00:29:33,320
Speaker 3: really want to learn about investing, when we talk about

645
00:29:33,400 --> 00:29:35,920
Speaker 3: understanding company, you're doing all that homework. That's big part

646
00:29:36,000 --> 00:29:38,280
Speaker 3: of the treasure hunting, right, that's the fun part. So

647
00:29:38,840 --> 00:29:42,000
Speaker 3: that's when you if you pick a company, it forces

648
00:29:42,080 --> 00:29:45,440
Speaker 3: you to learn about it. So that's actually investing part.

649
00:29:45,640 --> 00:29:48,000
Speaker 3: But if you're put in the ETF, that's more grow

650
00:29:48,240 --> 00:29:50,560
Speaker 3: wealth part. So because if you want to just an

651
00:29:50,600 --> 00:29:52,640
Speaker 3: easy way just okay, I just want to go with

652
00:29:52,720 --> 00:29:55,000
Speaker 3: the share market, put in the ETF. That's an easy

653
00:29:55,040 --> 00:29:55,760
Speaker 3: way to do it as well.

654
00:29:55,880 --> 00:29:58,400
Speaker 2: So we're talking defense stocks, so I might not be

655
00:29:58,440 --> 00:29:59,760
Speaker 2: able to pick the winner of who's going to get

656
00:29:59,760 --> 00:30:02,440
Speaker 2: the content, but I would think my logic would say

657
00:30:02,680 --> 00:30:04,800
Speaker 2: by the defense ETF, so you can spread the risk.

658
00:30:05,160 --> 00:30:07,000
Speaker 3: So the challenge with that is that you've got to

659
00:30:07,040 --> 00:30:09,200
Speaker 3: be early, right because when the hot air comes out,

660
00:30:09,240 --> 00:30:12,080
Speaker 3: the whole thing goes. Yeah yeah, So it doesn't matter

661
00:30:12,160 --> 00:30:14,560
Speaker 3: which one you're in, so it's just the whole thing goes.

662
00:30:14,840 --> 00:30:17,440
Speaker 3: So I always feel the thematic there is a lot

663
00:30:17,480 --> 00:30:20,400
Speaker 3: of thematic ETF, but when you look at your own portfolio,

664
00:30:20,640 --> 00:30:22,560
Speaker 3: you don't want to have a big part of it

665
00:30:22,680 --> 00:30:24,520
Speaker 3: in it. You have a small part. It's almost like

666
00:30:24,880 --> 00:30:27,040
Speaker 3: part little bit on this. But my core portfolio are

667
00:30:27,280 --> 00:30:30,040
Speaker 3: these things. We know the core things because the other

668
00:30:30,120 --> 00:30:31,280
Speaker 3: one can be very volatile.

669
00:30:31,680 --> 00:30:34,120
Speaker 2: Juinbe we are fast running out of time. So I

670
00:30:34,240 --> 00:30:36,600
Speaker 2: do want to put our fast five to you, five

671
00:30:36,680 --> 00:30:39,400
Speaker 2: sort of rapid fire questions just to see how we go.

672
00:30:40,080 --> 00:30:42,920
Speaker 2: First up, morning or night. When do you make your

673
00:30:43,000 --> 00:30:44,200
Speaker 2: best financial decisions?

674
00:30:44,600 --> 00:30:45,600
Speaker 3: Morning morning?

675
00:30:45,800 --> 00:30:48,200
Speaker 2: Okay, before a thirty, before thirty, when you've done all

676
00:30:48,280 --> 00:30:50,800
Speaker 2: the digesting. Yeah, that's offee is fresh. I'm assuming this

677
00:30:50,880 --> 00:30:51,440
Speaker 2: coffee in the morning.

678
00:30:51,600 --> 00:30:52,160
Speaker 3: H lets of coffee?

679
00:30:52,240 --> 00:30:56,680
Speaker 2: Okay, power you through if you could invest in one

680
00:30:56,760 --> 00:30:58,640
Speaker 2: thing for the next ten years, so you're only gonna

681
00:30:59,200 --> 00:31:01,720
Speaker 2: forget about the actually forget about the I'm only allowing

682
00:31:01,760 --> 00:31:03,840
Speaker 2: you to invest in one thing for the next ten years.

683
00:31:03,880 --> 00:31:04,360
Speaker 2: What would it be?

684
00:31:04,920 --> 00:31:06,920
Speaker 3: Yeah, you miss stock stock.

685
00:31:07,320 --> 00:31:09,240
Speaker 2: Yeah, maybe that's trying to be a little bit specific.

686
00:31:09,520 --> 00:31:09,920
Speaker 2: You get up.

687
00:31:09,960 --> 00:31:12,040
Speaker 3: I only I got plen of that, But I think

688
00:31:12,080 --> 00:31:14,440
Speaker 3: I'm just going to give a very high quality one,

689
00:31:14,480 --> 00:31:18,280
Speaker 3: which is Cochlear. We know Cochlear, great company in Australia,

690
00:31:18,440 --> 00:31:21,080
Speaker 3: a huge, huge amount of years of that strong execution

691
00:31:21,240 --> 00:31:24,760
Speaker 3: globally not expensive relative to others. Yeah, I think it's

692
00:31:24,920 --> 00:31:26,080
Speaker 3: it's going to continue to grow.

693
00:31:26,320 --> 00:31:28,800
Speaker 2: Okay, is there any investment app you can't live without?

694
00:31:29,640 --> 00:31:31,080
Speaker 3: Investment app? Bloomberg?

695
00:31:31,680 --> 00:31:36,320
Speaker 2: Okay, the terminal Bloomberg is a thing you can't live without.

696
00:31:36,360 --> 00:31:38,000
Speaker 2: Like if I took it away, you would actually have

697
00:31:38,120 --> 00:31:38,800
Speaker 2: a difficult day.

698
00:31:39,240 --> 00:31:42,400
Speaker 3: Yeah, I think yeah, because Bloomberg is a professional one

699
00:31:42,400 --> 00:31:44,120
Speaker 3: where we get all the life pricing and the like.

700
00:31:44,200 --> 00:31:46,640
Speaker 2: Here. What's the one thing you want your kids to

701
00:31:46,760 --> 00:31:48,920
Speaker 2: learn about money or to know about money? Something you

702
00:31:48,960 --> 00:31:50,120
Speaker 2: want them to really take away?

703
00:31:50,880 --> 00:31:53,200
Speaker 3: Oh okay, that's a really hard one. So I want

704
00:31:53,240 --> 00:31:55,160
Speaker 3: my kid I think the key thing I want my

705
00:31:55,280 --> 00:31:58,320
Speaker 3: kids to start really understanding the value of money. I

706
00:31:58,360 --> 00:32:01,080
Speaker 3: think every probably doing that. I want them to. Actually,

707
00:32:01,120 --> 00:32:02,920
Speaker 3: the key thing is I want them to understand how

708
00:32:02,960 --> 00:32:05,960
Speaker 3: to grow money. Actually already created lots of those savings

709
00:32:06,000 --> 00:32:08,000
Speaker 3: to help them to understand you grow your money, the

710
00:32:08,040 --> 00:32:09,920
Speaker 3: compounding effect of money.

711
00:32:10,200 --> 00:32:12,000
Speaker 2: And are they so? How old are you kids? Again? Eleven?

712
00:32:12,000 --> 00:32:12,480
Speaker 3: Then fourteen?

713
00:32:12,520 --> 00:32:14,719
Speaker 2: Eleven and fourteen? And do they have their own investments?

714
00:32:14,760 --> 00:32:16,240
Speaker 2: Are you letting them invest themselves or that?

715
00:32:16,440 --> 00:32:18,440
Speaker 3: Yeah, I've been telling them about so they do so,

716
00:32:18,760 --> 00:32:21,360
Speaker 3: but obviously they always pick the easiest, the Tesla, the

717
00:32:21,480 --> 00:32:24,120
Speaker 3: Apple and these ones. So I'm trying to get them

718
00:32:24,160 --> 00:32:26,480
Speaker 3: to whenever they see go to Woolworth and the like

719
00:32:26,560 --> 00:32:29,200
Speaker 3: and then tell them the shares that's listed and everything else.

720
00:32:29,400 --> 00:32:31,400
Speaker 3: So that's how I get them, essentially, the things that

721
00:32:31,440 --> 00:32:33,560
Speaker 3: they touch and feel every day. The more the consumer

722
00:32:33,600 --> 00:32:34,479
Speaker 3: goods product.

723
00:32:34,960 --> 00:32:36,560
Speaker 2: Hey, what's the one thing money can't buy?

724
00:32:37,600 --> 00:32:42,080
Speaker 3: Happiness? And look, I think the one thing money come by.

725
00:32:42,240 --> 00:32:45,200
Speaker 3: I think lots of things money come by. Even in investing,

726
00:32:45,440 --> 00:32:48,360
Speaker 3: always feel it's actually I do it for I just

727
00:32:48,400 --> 00:32:51,040
Speaker 3: think it's so much fun in doing so, because of

728
00:32:51,120 --> 00:32:55,120
Speaker 3: that treasure hunting, that journey, the resilience, you get things wrong, resilience,

729
00:32:55,240 --> 00:32:57,640
Speaker 3: come back and learn, then do it again. So more

730
00:32:57,720 --> 00:33:01,080
Speaker 3: than just money, it's actually for me, it's character building.

731
00:33:01,440 --> 00:33:03,600
Speaker 3: It's incredible experience.

732
00:33:03,800 --> 00:33:06,760
Speaker 2: A lot of people find investing quite intimidating. So is

733
00:33:06,760 --> 00:33:08,800
Speaker 2: there a piece of advice you have for people who

734
00:33:08,960 --> 00:33:10,800
Speaker 2: look at the success that you've got and think, oh gosh,

735
00:33:11,080 --> 00:33:11,920
Speaker 2: how do I replicate that?

736
00:33:12,240 --> 00:33:14,360
Speaker 3: Yeah? Look, I think I just get started. It's not

737
00:33:14,480 --> 00:33:17,040
Speaker 3: intimidating at all, And it's not And remember you don't

738
00:33:17,040 --> 00:33:18,520
Speaker 3: have to be accountant to do really well, but if

739
00:33:18,560 --> 00:33:21,040
Speaker 3: you're countent, you'll still do it. It's not just numbers.

740
00:33:21,240 --> 00:33:23,560
Speaker 3: It's actually so much more than that. We talk about

741
00:33:23,600 --> 00:33:26,560
Speaker 3: some of those thematic and things. Every company is so interesting,

742
00:33:26,840 --> 00:33:30,080
Speaker 3: and just have the curiosity and just get started.

743
00:33:30,600 --> 00:33:32,640
Speaker 2: I think people think they need a finance degree or

744
00:33:32,680 --> 00:33:34,760
Speaker 2: some sort of education in this. Is that sort of

745
00:33:34,960 --> 00:33:36,080
Speaker 2: a big miss? Do you think?

746
00:33:36,400 --> 00:33:38,280
Speaker 3: I think you don't need it. But remember when you

747
00:33:38,320 --> 00:33:41,080
Speaker 3: build a portfolio for the first time, you first you

748
00:33:41,160 --> 00:33:43,920
Speaker 3: pick the blue chip, the larger company and diversify. You

749
00:33:44,040 --> 00:33:46,520
Speaker 3: need to have at least ten to fifteen stocks and

750
00:33:46,640 --> 00:33:49,080
Speaker 3: don't just pick them out of one sector. So if

751
00:33:49,160 --> 00:33:50,640
Speaker 3: you pick a bank, and then you could pick a

752
00:33:50,960 --> 00:33:53,400
Speaker 3: growth company, you pick a gold company, pick just a

753
00:33:53,400 --> 00:33:56,280
Speaker 3: bit of everything, just so your portfolio is diversify. It

754
00:33:56,320 --> 00:33:58,080
Speaker 3: takes away a lot of risks when you do that.

755
00:33:58,440 --> 00:34:00,200
Speaker 2: JIMBEI thank you so much, Thank you, thank you so

756
00:34:00,280 --> 00:34:03,680
Speaker 2: much for having me, Thanks for joining me. I'm Julianne Sprague,

757
00:34:03,760 --> 00:34:07,360
Speaker 2: Wealth editor at The Australian. We'll have another bonus episode

758
00:34:07,400 --> 00:34:09,759
Speaker 2: of the Money Puzzle next week. We'll sit down with

759
00:34:09,880 --> 00:34:13,279
Speaker 2: Roger Montgomery, a leading fund manager, a firm favorite at

760
00:34:13,360 --> 00:34:17,960
Speaker 2: the Australian, a regular columnist. He wasn't always a great investor,

761
00:34:18,160 --> 00:34:21,120
Speaker 2: and so we'll go back and learn how he launched

762
00:34:21,160 --> 00:34:24,160
Speaker 2: the trade, some of the mistakes he made, and his

763
00:34:24,320 --> 00:34:25,279
Speaker 2: advice for us