1 00:00:05,240 --> 00:00:06,720 Speaker 1: This is at the Flux. 2 00:00:06,800 --> 00:00:09,560 Speaker 2: I'm bread and aur Justin and it's Friday, the second 3 00:00:09,560 --> 00:00:10,080 Speaker 2: of August. 4 00:00:10,280 --> 00:00:12,920 Speaker 1: Not so fast their inflation you thought you could run 5 00:00:12,960 --> 00:00:15,800 Speaker 1: away from us, juzzy boy. The June quarter's inflation rate 6 00:00:15,920 --> 00:00:19,439 Speaker 1: was released yesterday and inflation dropped from four percent to 7 00:00:19,600 --> 00:00:22,920 Speaker 1: three point nine percent. And juzy boy, many investors are 8 00:00:22,920 --> 00:00:25,880 Speaker 1: thinking this could put to rest any talk of a 9 00:00:25,960 --> 00:00:27,640 Speaker 1: rate rise next Tuesday. 10 00:00:27,920 --> 00:00:30,640 Speaker 2: Interesting man, did you know that twenty percent of tax 11 00:00:30,640 --> 00:00:33,840 Speaker 2: pays in Australia own an investment property? No, it is true, 12 00:00:33,960 --> 00:00:36,800 Speaker 2: absolute fact and fluxdam. We've rolled out a brand new 13 00:00:36,840 --> 00:00:40,080 Speaker 2: academy this month all about investing in the property market. 14 00:00:40,159 --> 00:00:41,879 Speaker 2: We take you through all the steps you need to 15 00:00:42,200 --> 00:00:45,800 Speaker 2: understand your goals, what to look for when evaluating investment properties, 16 00:00:45,840 --> 00:00:48,640 Speaker 2: and also how to get access to investment property funds. 17 00:00:48,680 --> 00:00:50,000 Speaker 2: So if you want to check it out, it is 18 00:00:50,080 --> 00:00:52,120 Speaker 2: all in there. Check it out in the Flux Academy. 19 00:00:52,200 --> 00:00:55,360 Speaker 1: Three insightful stories today, juzzy boy, let's do it for 20 00:00:55,560 --> 00:00:58,520 Speaker 1: our first. An Aussie vodka maker that makes a popular 21 00:00:58,640 --> 00:01:01,880 Speaker 1: ready to drink vodka has gone into voluntary administration. 22 00:01:02,120 --> 00:01:04,520 Speaker 2: Always sad to hear stories like this. Be Man had 23 00:01:04,600 --> 00:01:06,920 Speaker 2: quite a few lately, so tell me more some background. 24 00:01:06,959 --> 00:01:10,840 Speaker 2: Bilson's Brewery was established in eighteen sixty five in northeast 25 00:01:10,920 --> 00:01:14,600 Speaker 2: Victoria and is one of the oldest continuing beverage manufacturers 26 00:01:14,680 --> 00:01:17,840 Speaker 2: in all of Australia. In twenty seventeen, the company behind 27 00:01:17,880 --> 00:01:21,120 Speaker 2: the brewery that operated under the name Bilson's Beverages was 28 00:01:21,160 --> 00:01:22,480 Speaker 2: taken over by new. 29 00:01:22,319 --> 00:01:24,640 Speaker 1: Owners and get this, juzzy Boy. In the years after 30 00:01:24,720 --> 00:01:29,520 Speaker 1: twenty seventeen, business was booming, largely thanks to a ready 31 00:01:29,560 --> 00:01:31,640 Speaker 1: to drink vodka product that it sold. They sell their 32 00:01:31,640 --> 00:01:34,880 Speaker 1: stuff in Dan Murphy's BWS, many other stores and be Man. 33 00:01:35,000 --> 00:01:37,720 Speaker 2: Their annual sales actually reached around one hundred and twenty 34 00:01:37,880 --> 00:01:40,840 Speaker 2: million bakarnis in the twenty three twenty four financial year. 35 00:01:41,040 --> 00:01:43,520 Speaker 1: Not bad. But this year things started to become real 36 00:01:43,640 --> 00:01:46,200 Speaker 1: tough for old bilson yep. The company experienced a big 37 00:01:46,240 --> 00:01:50,360 Speaker 1: fat slowdown in demand and also also juzzy boy chunky 38 00:01:50,440 --> 00:01:53,320 Speaker 1: increases in the government xcise for alcohol and. 39 00:01:53,320 --> 00:01:57,120 Speaker 2: Now Bilson's Beverages has been put into administration. 40 00:01:56,600 --> 00:02:00,280 Speaker 1: And unfortunately for Bilson's it encountered a triple whammy of 41 00:02:00,440 --> 00:02:03,320 Speaker 1: negative factors that ultimately brought on its demise. 42 00:02:03,400 --> 00:02:05,560 Speaker 2: So be man. Tell me what is the key learning here? 43 00:02:05,680 --> 00:02:07,560 Speaker 1: When a company is in the wrong place at the 44 00:02:07,600 --> 00:02:10,480 Speaker 1: wrong time, survival can be very challenging. 45 00:02:10,560 --> 00:02:13,079 Speaker 2: Yeah, we know for small and medium sized businesses, whether 46 00:02:13,200 --> 00:02:15,080 Speaker 2: in one challenge at a time can be hard. 47 00:02:15,080 --> 00:02:18,320 Speaker 1: But Bilsons they face three. Firstly, they face the cost 48 00:02:18,320 --> 00:02:21,960 Speaker 1: of living pressures that are basically facing all consumer facing companies. 49 00:02:21,600 --> 00:02:25,520 Speaker 2: Yet reditary vodcas aren't quite necessary in the current market conditions. 50 00:02:25,800 --> 00:02:28,679 Speaker 1: Secondly, the company struggled to manage it costs as it 51 00:02:28,760 --> 00:02:31,680 Speaker 1: scaled up its production over the last few years. And Thirdly, 52 00:02:31,919 --> 00:02:35,760 Speaker 1: Bilson's faced big increases in the excise paid to the government, the. 53 00:02:35,760 --> 00:02:37,480 Speaker 2: Tax paid by alcohol companies. 54 00:02:37,560 --> 00:02:40,520 Speaker 1: Now get this, jazzy boy, alcohol makers paid the third 55 00:02:40,600 --> 00:02:43,960 Speaker 1: highest rate of tax in the world in Australia. 56 00:02:43,440 --> 00:02:46,800 Speaker 2: And now, sadly, Bilson's is in the hands of administrators. 57 00:02:46,919 --> 00:02:50,440 Speaker 2: For our second story, Microsoft saw its shares drop seven 58 00:02:50,480 --> 00:02:53,600 Speaker 2: percent in its worst day since October twenty twenty two 59 00:02:53,760 --> 00:02:56,679 Speaker 2: because it's AI revenue just missed its forecasts. 60 00:02:56,760 --> 00:02:59,440 Speaker 1: When you position yourself as AI royalty, you just can't 61 00:02:59,440 --> 00:03:01,040 Speaker 1: be missing your numbers. Tell me more. 62 00:03:01,080 --> 00:03:05,079 Speaker 2: Okay, so we know Microsoft for its famous Microsoft Offer Suite. 63 00:03:04,680 --> 00:03:08,120 Speaker 1: Don't forget it's now infamous and uncoordinated Windows ninety five 64 00:03:08,280 --> 00:03:09,680 Speaker 1: launch dancing, and of. 65 00:03:09,639 --> 00:03:12,320 Speaker 2: Course, more recently for making the big switch into cloud 66 00:03:12,400 --> 00:03:13,200 Speaker 2: and AI. 67 00:03:13,000 --> 00:03:16,079 Speaker 1: And Jessie boy they have done so very successfully. In fact, 68 00:03:16,160 --> 00:03:18,720 Speaker 1: their shares have jumped over fifty percent just over the 69 00:03:18,800 --> 00:03:20,080 Speaker 1: last two years. 70 00:03:19,840 --> 00:03:22,720 Speaker 2: And Microsoft's twenty three twenty four revenue was on part 71 00:03:22,760 --> 00:03:25,480 Speaker 2: with the entire economies of Greece and New Zealand. 72 00:03:25,520 --> 00:03:28,760 Speaker 1: But josebait, Microsoft has just released its quarterly results which 73 00:03:28,960 --> 00:03:31,160 Speaker 1: really spooked investors quite a fair bit. 74 00:03:31,200 --> 00:03:33,560 Speaker 2: Revenue of fifteen percent year of year and well ahead 75 00:03:33,560 --> 00:03:36,000 Speaker 2: of forecast. I would say that's pretty good. Earnings per 76 00:03:36,080 --> 00:03:38,680 Speaker 2: share also above the forecast, I would say that is 77 00:03:38,960 --> 00:03:42,720 Speaker 2: very very good. But Microsoft reported only a twenty nine 78 00:03:42,720 --> 00:03:45,240 Speaker 2: percent growth in its a zuo cloud computing year when 79 00:03:45,240 --> 00:03:48,120 Speaker 2: it was projected to grow thirty one percent. Next minute, 80 00:03:48,160 --> 00:03:51,000 Speaker 2: Microsoft shares dropped seven percent, but be man. Apart from 81 00:03:51,080 --> 00:03:54,200 Speaker 2: missing its cloud growth target, Microsoft is also spending a 82 00:03:54,320 --> 00:03:56,640 Speaker 2: pretty penny on its AI capabilities. 83 00:03:56,840 --> 00:03:58,480 Speaker 1: That is a big claim by you, Josie Boyce. So 84 00:03:58,520 --> 00:03:59,480 Speaker 1: what is the key learning here? 85 00:03:59,520 --> 00:04:03,120 Speaker 2: When exhaust roorbitan spending doesn't turn into exorbitant revenue, it 86 00:04:03,160 --> 00:04:05,960 Speaker 2: can create doubts in a company's biggest believers. 87 00:04:06,240 --> 00:04:09,320 Speaker 1: Yep, all the major tech companies chasing AI glory are 88 00:04:09,320 --> 00:04:12,520 Speaker 1: spending a ton of cash on software infrastructure and software 89 00:04:12,560 --> 00:04:13,640 Speaker 1: development right now. 90 00:04:13,760 --> 00:04:17,280 Speaker 2: Get this, Microsoft invested nineteen billion US dollars in the 91 00:04:17,360 --> 00:04:20,680 Speaker 2: June quarter into capital expenditure related to AI and a 92 00:04:20,800 --> 00:04:23,640 Speaker 2: man For the true believers, this is all necessary to 93 00:04:23,760 --> 00:04:25,760 Speaker 2: fund the AI long game. 94 00:04:25,560 --> 00:04:28,640 Speaker 1: But for many investors, AI spending just isn't converting into 95 00:04:28,680 --> 00:04:31,880 Speaker 1: AI earnings fast enough. In fact, the man AI revenue 96 00:04:31,920 --> 00:04:34,560 Speaker 1: hasn't grown into a big enough revenue stream to even 97 00:04:34,600 --> 00:04:38,080 Speaker 1: be disclosed on Microsoft's financial results. And the pressure isn't 98 00:04:38,160 --> 00:04:42,520 Speaker 1: just on Microsoft, but think also pressure on Amazon alphabet Meta. 99 00:04:42,320 --> 00:04:45,120 Speaker 2: Who shares all slid and average of eleven percent over 100 00:04:45,120 --> 00:04:45,719 Speaker 2: the past month. 101 00:04:45,839 --> 00:04:48,400 Speaker 1: So Microsoft's drop in share price is just a little 102 00:04:48,400 --> 00:04:51,240 Speaker 1: reminder that if they don't start making serious moll as soon, 103 00:04:51,400 --> 00:04:52,920 Speaker 1: the heat will be on. 104 00:04:53,200 --> 00:04:56,520 Speaker 2: For our third and final story, Procter and Gamble suffered 105 00:04:56,520 --> 00:05:00,000 Speaker 2: its slowest sales growth in six years as consumers started 106 00:05:00,120 --> 00:05:02,280 Speaker 2: cutting back on brand name products. 107 00:05:01,920 --> 00:05:04,120 Speaker 1: Not your cheapest products on the market. So kind of 108 00:05:04,200 --> 00:05:07,039 Speaker 1: does make sense what is going on herekab. 109 00:05:06,680 --> 00:05:08,440 Speaker 2: Man, you might not have heard of Procter and Gamble, 110 00:05:08,480 --> 00:05:10,760 Speaker 2: but you've most certainly heard of the brands they own. 111 00:05:10,920 --> 00:05:13,640 Speaker 1: Well, let's just run me through them. Juzzy boy, We're. 112 00:05:13,440 --> 00:05:16,719 Speaker 2: Talking Joette, We're talking oralb, Vicks, Vapor Drops, Panteen, Head 113 00:05:16,720 --> 00:05:18,200 Speaker 2: and Shoulders, just to name a few. 114 00:05:18,360 --> 00:05:21,080 Speaker 1: Also used to own Pringles and Kelloggs as well. 115 00:05:21,160 --> 00:05:23,479 Speaker 2: But Procter and Gamble's brands have been whacked in the 116 00:05:23,520 --> 00:05:24,679 Speaker 2: fourth quarter sales. 117 00:05:25,000 --> 00:05:27,960 Speaker 1: While they saw volumes grow by one percent, it's net 118 00:05:28,040 --> 00:05:31,080 Speaker 1: sales fell behind expectations and I'm talking more than two 119 00:05:31,120 --> 00:05:33,080 Speaker 1: hundred million US dollary doo wow. 120 00:05:33,240 --> 00:05:34,719 Speaker 2: So what is the key learning here? 121 00:05:34,800 --> 00:05:38,240 Speaker 1: Well, in times of need, retailers often turn to promotions 122 00:05:38,360 --> 00:05:41,760 Speaker 1: or discounts to attract consumers and juzzy boy, this strategy 123 00:05:41,839 --> 00:05:44,720 Speaker 1: can be effective in driving short term sales spikes. 124 00:05:44,960 --> 00:05:48,200 Speaker 2: But be man. When a company uses promotions and discounts 125 00:05:48,240 --> 00:05:50,159 Speaker 2: to get the attention of consumers, it might. 126 00:05:50,040 --> 00:05:52,640 Speaker 1: Help their volumes, but it comes at a price. Just 127 00:05:52,640 --> 00:05:54,839 Speaker 1: a little example for you. P and G saw an 128 00:05:54,880 --> 00:05:57,520 Speaker 1: improvement in the number of units sold, but their revenue 129 00:05:57,520 --> 00:05:58,160 Speaker 1: was still down. 130 00:05:58,200 --> 00:06:01,839 Speaker 2: But not only that, discounting all the time can devalue. 131 00:06:01,240 --> 00:06:04,039 Speaker 1: A brand YEP, consumers might start to associate the brand 132 00:06:04,040 --> 00:06:05,800 Speaker 1: with constant sales, and for some. 133 00:06:05,680 --> 00:06:10,080 Speaker 2: Consumers, lower prices may mean lower perceived value in the products. 134 00:06:09,680 --> 00:06:12,400 Speaker 1: Which all means they may wait for the next promotion 135 00:06:12,680 --> 00:06:15,320 Speaker 1: rather than purchasing at the full price right now. Hello, 136 00:06:15,680 --> 00:06:19,040 Speaker 1: can man do a seventy five percent off the price 137 00:06:19,200 --> 00:06:20,760 Speaker 1: one hundred percent of the time? 138 00:06:21,480 --> 00:06:24,240 Speaker 2: So B ANDNG needs to balance their short term benefits 139 00:06:24,240 --> 00:06:26,719 Speaker 2: of promotions with the long term health of their brand. 140 00:06:26,760 --> 00:06:29,000 Speaker 2: Flex Sam if you are looking at investment property, we 141 00:06:29,080 --> 00:06:33,120 Speaker 2: take you through house verst apartment location factors, researching suburbs 142 00:06:33,120 --> 00:06:35,240 Speaker 2: and everything you need to know when it comes to 143 00:06:35,320 --> 00:06:37,560 Speaker 2: investing in property. It's all in the Flux Academy this 144 00:06:37,640 --> 00:06:39,320 Speaker 2: month and it is an absolute corker. 145 00:06:39,440 --> 00:06:42,360 Speaker 1: Thanks for listening and we'll see you on Monday.