1 00:00:10,119 --> 00:00:13,360 Speaker 1: Hello and welcome to the Australians Money Puzzled podcast. I'm 2 00:00:13,440 --> 00:00:16,640 Speaker 1: James Kirby. Welcome aboard everybody. I hope you're holding up 3 00:00:16,800 --> 00:00:19,919 Speaker 1: well in these last working days of the year, and 4 00:00:19,960 --> 00:00:22,279 Speaker 1: I hope you had a very good year so far 5 00:00:22,440 --> 00:00:26,480 Speaker 1: as an investor. I expect you would actually be unlucky 6 00:00:27,120 --> 00:00:29,320 Speaker 1: not to have had a good year as an investor. 7 00:00:29,360 --> 00:00:33,080 Speaker 1: We've had some really good returns again and one of 8 00:00:33,080 --> 00:00:36,800 Speaker 1: the big questions is can it all keep going at 9 00:00:36,840 --> 00:00:41,800 Speaker 1: this pace. My guest today is a regular guest, one 10 00:00:41,840 --> 00:00:44,400 Speaker 1: of our favorite guests on the show, Jemma Dale, head 11 00:00:44,440 --> 00:00:47,960 Speaker 1: of Investor behavior at nab Nap Trade. How are you, Gemma? 12 00:00:48,560 --> 00:00:49,760 Speaker 2: I'm well, Thanks, How are you? 13 00:00:50,560 --> 00:00:53,160 Speaker 1: I'm good? Thank you. There's so much to talk about, 14 00:00:53,320 --> 00:00:55,720 Speaker 1: and don't let me end the show without mentioning gold 15 00:00:56,200 --> 00:00:58,560 Speaker 1: could be the fascinating talk about gold. The last time 16 00:00:58,760 --> 00:01:02,480 Speaker 1: it turned out to be I say precient. Okay, now, 17 00:01:03,560 --> 00:01:07,000 Speaker 1: first things first. In a way, yes, it's another good 18 00:01:07,080 --> 00:01:10,280 Speaker 1: year and I think people will be should be happy 19 00:01:10,600 --> 00:01:12,679 Speaker 1: with the returns they are getting. I suppose in a 20 00:01:12,680 --> 00:01:16,400 Speaker 1: way some of the attention is all about super these days, 21 00:01:16,400 --> 00:01:20,200 Speaker 1: and if you look at super returns, super ratings. For instance, 22 00:01:20,240 --> 00:01:22,920 Speaker 1: they've just come up with what looks like the year 23 00:01:23,560 --> 00:01:28,080 Speaker 1: to November. That's this morning, I might add, And we're 24 00:01:28,120 --> 00:01:33,360 Speaker 1: looking at for the average balance fund eight percent for 25 00:01:33,440 --> 00:01:35,880 Speaker 1: the year. That's if we closed off the books, you know, 26 00:01:36,680 --> 00:01:39,440 Speaker 1: a few days ago, which is of course much better 27 00:01:39,560 --> 00:01:43,800 Speaker 1: than usual, and that's driven yet again by shares. I know, 28 00:01:43,800 --> 00:01:46,240 Speaker 1: it's a really big question. Can it keep going? But 29 00:01:47,560 --> 00:01:51,640 Speaker 1: in that trade, is there a sense that this market 30 00:01:51,760 --> 00:01:56,800 Speaker 1: is in some way justifiable on earnings and fundamentals or 31 00:01:56,880 --> 00:01:59,880 Speaker 1: is there a sense that this is this market is 32 00:02:00,400 --> 00:02:01,280 Speaker 1: about to boil over? 33 00:02:02,680 --> 00:02:06,040 Speaker 2: Yeah, such a good question. I think it's quite clear. 34 00:02:06,200 --> 00:02:09,280 Speaker 3: From so, we have a cash book, which is very 35 00:02:09,280 --> 00:02:13,119 Speaker 3: interesting and tends to be the best illustration. So there's 36 00:02:13,160 --> 00:02:14,400 Speaker 3: kind of a couple of things you can watch to 37 00:02:14,440 --> 00:02:16,880 Speaker 3: see what people are really thinking and feeling. One is 38 00:02:16,880 --> 00:02:19,320 Speaker 3: how much cash are people holding? And is it growing 39 00:02:19,360 --> 00:02:22,680 Speaker 3: over time? Our cash book has just been growing and growing, 40 00:02:22,960 --> 00:02:26,520 Speaker 3: and that at an increasing rate, far more so. And look, 41 00:02:26,600 --> 00:02:28,919 Speaker 3: it does get run down at times when people feel 42 00:02:28,960 --> 00:02:32,040 Speaker 3: the market has been oversold, and that is so it's 43 00:02:32,080 --> 00:02:34,280 Speaker 3: a reasonable reflection of how people are feeling. So we 44 00:02:34,360 --> 00:02:38,080 Speaker 3: had huge buying during liber liberation day, and the big 45 00:02:38,120 --> 00:02:41,200 Speaker 3: one was COVID right when the buying was you know, 46 00:02:41,280 --> 00:02:43,560 Speaker 3: four out of every five trades was a buy, and 47 00:02:43,600 --> 00:02:46,120 Speaker 3: that fifth one was usually people selling something to buy 48 00:02:46,160 --> 00:02:49,440 Speaker 3: something else, and the cash book was running down, but 49 00:02:49,520 --> 00:02:52,239 Speaker 3: more cash was coming in. It's getting piled in to 50 00:02:52,360 --> 00:02:55,320 Speaker 3: keep buying during that period. So people will absolutely put 51 00:02:55,360 --> 00:02:57,280 Speaker 3: that cash to work. It's not just it is a 52 00:02:57,360 --> 00:03:00,280 Speaker 3: high interest account. It pays you the RBA cash, but 53 00:03:00,840 --> 00:03:04,760 Speaker 3: it is absolutely used if investors feel there's an opportunity 54 00:03:04,800 --> 00:03:05,320 Speaker 3: to chase. 55 00:03:05,600 --> 00:03:08,399 Speaker 2: So that is very high growing all year. 56 00:03:09,000 --> 00:03:12,560 Speaker 1: Explain to listeners what that means that the cash is growing. 57 00:03:12,600 --> 00:03:17,720 Speaker 1: Does it mean they are wary of buying at these levels? 58 00:03:19,120 --> 00:03:19,840 Speaker 2: What it tells us. 59 00:03:20,040 --> 00:03:23,960 Speaker 3: So the other things that we're seeing are there's less 60 00:03:24,080 --> 00:03:25,760 Speaker 3: buying and a bit more selling. 61 00:03:25,919 --> 00:03:27,400 Speaker 2: Right, it's not a huge split. 62 00:03:27,480 --> 00:03:30,040 Speaker 3: It's not like it's twenty percent buying at eighty percent 63 00:03:30,080 --> 00:03:31,040 Speaker 3: selling or anything like that. 64 00:03:31,120 --> 00:03:33,000 Speaker 2: You would never see that because a lot of people. 65 00:03:32,840 --> 00:03:35,680 Speaker 3: Are accumulating over time and that's never going to be 66 00:03:35,720 --> 00:03:39,640 Speaker 3: their strategy. But we've seen a slight uptick in selling 67 00:03:39,680 --> 00:03:42,839 Speaker 3: and a slight down tick in buying through this year, 68 00:03:43,040 --> 00:03:45,680 Speaker 3: dependent on different times of the year. Obviously, and what's 69 00:03:45,720 --> 00:03:48,120 Speaker 3: going on in the market. Liberation Day it was all buying, 70 00:03:48,160 --> 00:03:51,760 Speaker 3: so let's put that to one side. So cash book 71 00:03:51,840 --> 00:03:54,520 Speaker 3: is rising, That tends to tell you people would rather 72 00:03:54,600 --> 00:03:57,200 Speaker 3: have some cash on the sidelines and wait for a pullback. 73 00:03:57,920 --> 00:04:01,119 Speaker 3: There's an uptick in selling and people are taking their 74 00:04:01,120 --> 00:04:04,000 Speaker 3: dividends and holding them in cash rather than deploying them 75 00:04:04,040 --> 00:04:07,800 Speaker 3: straight back into the market. So they're the major themes 76 00:04:07,840 --> 00:04:10,520 Speaker 3: that we see. It's not huge, it's not like people 77 00:04:10,560 --> 00:04:14,000 Speaker 3: are selling wholesale, but they're trimming things that they feel 78 00:04:14,040 --> 00:04:16,240 Speaker 3: have run really hard. They've been trimming the banks for 79 00:04:16,279 --> 00:04:19,520 Speaker 3: a year and a half now, and particularly early this year. 80 00:04:20,120 --> 00:04:22,240 Speaker 3: Anything else they feel has done very well, they're just 81 00:04:22,279 --> 00:04:24,000 Speaker 3: starting to take a bit off the table. 82 00:04:24,120 --> 00:04:26,760 Speaker 1: Okay, trimming the banks wasn't a bad call at all, 83 00:04:26,839 --> 00:04:29,320 Speaker 1: but we did make that point regularly on the show 84 00:04:29,360 --> 00:04:32,240 Speaker 1: that they were at elevated levels. Can we put numbers 85 00:04:32,240 --> 00:04:34,960 Speaker 1: around that in any way? I know fund managers is 86 00:04:35,000 --> 00:04:37,320 Speaker 1: a similar thing. When you see the big fund managers 87 00:04:37,400 --> 00:04:42,520 Speaker 1: lifting their cash levels, that suggest they're getting warier of 88 00:04:42,560 --> 00:04:44,520 Speaker 1: the market they're in. Are you able to give us 89 00:04:44,560 --> 00:04:47,680 Speaker 1: anything at all? The way of the level is it? Is? 90 00:04:47,680 --> 00:04:49,679 Speaker 1: It more from five percent to ten percenter or whatever. 91 00:04:51,279 --> 00:04:55,920 Speaker 3: We don't know what people's whole portfolio looks like, you know, 92 00:04:56,040 --> 00:04:59,000 Speaker 3: we only know what we see in the platform. So 93 00:04:59,120 --> 00:05:02,159 Speaker 3: you might have all your Australian equities with NAB Trade, 94 00:05:02,360 --> 00:05:04,760 Speaker 3: but you might have some managed fund somewhere else, and 95 00:05:04,800 --> 00:05:07,159 Speaker 3: you're super fund with a professional managed fund, and you 96 00:05:07,240 --> 00:05:09,360 Speaker 3: might have some term deposits as well as that cash. 97 00:05:09,640 --> 00:05:11,440 Speaker 2: So I can't really. 98 00:05:11,200 --> 00:05:14,280 Speaker 3: Sort of go this is exactly people's finite universe of wealth. 99 00:05:14,760 --> 00:05:18,440 Speaker 3: We just know in terms of the behavior we see 100 00:05:18,440 --> 00:05:22,520 Speaker 3: within that platform. This is very typical of when investors 101 00:05:22,520 --> 00:05:25,560 Speaker 3: feel the market has run a bit too hard. And 102 00:05:25,600 --> 00:05:29,680 Speaker 3: we saw the same thing in twenty nineteen when you 103 00:05:29,720 --> 00:05:32,160 Speaker 3: remember the market put on nineteen percent. It was completely 104 00:05:32,240 --> 00:05:35,120 Speaker 3: unexpected because there were two unexpected rate cards. We just 105 00:05:35,200 --> 00:05:37,920 Speaker 3: saw this cash book just fumped straight up, and then 106 00:05:37,960 --> 00:05:40,040 Speaker 3: as soon as COVID happened, they threw the money straight 107 00:05:40,080 --> 00:05:40,840 Speaker 3: back in the market. 108 00:05:41,000 --> 00:05:43,400 Speaker 1: It's interesting, Yeah, I mean that would all make sense. 109 00:05:43,480 --> 00:05:46,600 Speaker 1: I mean, am I hon SMSF. I don't actively mean 110 00:05:46,920 --> 00:05:50,279 Speaker 1: for the cash amount to lift, but it's been lifting 111 00:05:50,960 --> 00:05:54,080 Speaker 1: due to activity as such, but not buying. 112 00:05:56,080 --> 00:05:58,520 Speaker 3: Yeah, that's absolutely you know, I can't see anything I 113 00:05:58,640 --> 00:06:00,680 Speaker 3: really like because I'm just gonna wait a minute, and 114 00:06:00,720 --> 00:06:02,440 Speaker 3: then suddenly I've got ten percent. 115 00:06:02,760 --> 00:06:06,080 Speaker 1: Okay, very interesting. Now, the thing is, folks, I was 116 00:06:06,120 --> 00:06:08,440 Speaker 1: mentioning that it's a good year, okay, and it is 117 00:06:08,480 --> 00:06:12,520 Speaker 1: a good year. I'm talking about calendar year in the 118 00:06:12,560 --> 00:06:17,360 Speaker 1: Australian market. However, I think we better be careful here 119 00:06:17,640 --> 00:06:19,719 Speaker 1: the when we say it's a really good market, what 120 00:06:19,760 --> 00:06:24,880 Speaker 1: we really mean is that the market, anchored and holy 121 00:06:25,120 --> 00:06:29,680 Speaker 1: and utterly underpinned by Wall Street, being about sixty six 122 00:06:29,720 --> 00:06:34,280 Speaker 1: percent of the whole world market is so good, is 123 00:06:34,320 --> 00:06:38,200 Speaker 1: so strong. As we speak, it's about seventeen percent of 124 00:06:38,240 --> 00:06:41,279 Speaker 1: the S and P five hundred is of seventeen percent 125 00:06:41,720 --> 00:06:45,560 Speaker 1: in twelve months. That is a knockout number. Our number 126 00:06:46,000 --> 00:06:49,360 Speaker 1: is barely six percent. It's a little. It's about five 127 00:06:49,400 --> 00:06:52,440 Speaker 1: and a half as I speak today, being the eleventh 128 00:06:52,520 --> 00:06:56,000 Speaker 1: of December. Okay, so it's five percent, and hooray, okay, 129 00:06:56,000 --> 00:06:58,360 Speaker 1: we have good yields. So let's add the yields in. 130 00:06:58,440 --> 00:07:00,680 Speaker 1: Let's say the dividends are four we're going to get 131 00:07:00,760 --> 00:07:03,760 Speaker 1: nine percent. Nine percent is good. It's not shooting the 132 00:07:03,839 --> 00:07:07,919 Speaker 1: lights out, though, which begs the question Gemma, have we 133 00:07:07,960 --> 00:07:12,200 Speaker 1: all been in the wrong market? Oh, let's hear your answer, 134 00:07:12,280 --> 00:07:15,880 Speaker 1: because I mean it isn't it. We've raised this before. 135 00:07:16,080 --> 00:07:17,280 Speaker 1: Are we all in the wrong market? 136 00:07:17,840 --> 00:07:19,240 Speaker 2: Yeah, it's such a tough one. 137 00:07:19,360 --> 00:07:26,239 Speaker 3: We So Australia has a shocking home bias. From an 138 00:07:26,280 --> 00:07:31,400 Speaker 3: investment perspective, we know that our investors are hugely exposed 139 00:07:31,400 --> 00:07:34,040 Speaker 3: to the ASEX relative to other global markets, and the 140 00:07:34,040 --> 00:07:37,000 Speaker 3: ASEX is a very tiny proportion of the global market. 141 00:07:37,280 --> 00:07:40,120 Speaker 3: You just talked about how big the US market, though, 142 00:07:40,280 --> 00:07:43,080 Speaker 3: is in the global in the World index. If we 143 00:07:43,080 --> 00:07:46,760 Speaker 3: look at MISKY World, for example, the US is probably 144 00:07:46,840 --> 00:07:50,480 Speaker 3: overrepresented and everything else is underrepresented. But we go the 145 00:07:50,520 --> 00:07:52,880 Speaker 3: other way when we look at people's portfolios, Australia is 146 00:07:52,920 --> 00:07:57,480 Speaker 3: massively overrepresented and everything else is underrepresented. Has been changing 147 00:07:57,520 --> 00:07:59,840 Speaker 3: over time, right, so there's always a bit of a 148 00:08:00,400 --> 00:08:04,680 Speaker 3: legacy effect where so many of our investors bought CVA 149 00:08:04,800 --> 00:08:07,160 Speaker 3: and the float and have held it ever since, and 150 00:08:07,200 --> 00:08:09,520 Speaker 3: so they've just got these huge allocations to things they 151 00:08:09,560 --> 00:08:13,560 Speaker 3: bought a long time ago. And we know older Australians 152 00:08:13,600 --> 00:08:17,200 Speaker 3: are wealthier on average by and by quite substantial margin. 153 00:08:17,400 --> 00:08:20,840 Speaker 3: Even if you strip out property, they have much larger shareholdings, 154 00:08:20,880 --> 00:08:23,040 Speaker 3: they had opportunities to get into those big IPAs, so 155 00:08:23,080 --> 00:08:25,160 Speaker 3: they tend to have these portfolios that skew the data 156 00:08:25,200 --> 00:08:27,280 Speaker 3: quite a lot. When we look at our younger and 157 00:08:27,360 --> 00:08:31,120 Speaker 3: newer investors, they are much more diversified both with their 158 00:08:31,120 --> 00:08:33,960 Speaker 3: domestic and their international holdings, and they got on top 159 00:08:34,000 --> 00:08:37,360 Speaker 3: of international quite early. It made sense for them. You know, 160 00:08:37,760 --> 00:08:40,600 Speaker 3: you hold Apple in your pocket and you watch Netflix, 161 00:08:40,640 --> 00:08:43,800 Speaker 3: and you have exposure to the big the megacaps in 162 00:08:43,840 --> 00:08:47,320 Speaker 3: the US all day, every day in your life, and 163 00:08:47,360 --> 00:08:49,880 Speaker 3: so our younger investors got on that quite early. 164 00:08:49,960 --> 00:08:51,120 Speaker 2: That made perfect sense for them. 165 00:08:51,200 --> 00:08:53,040 Speaker 3: I'm like, I use this thing all the time, got 166 00:08:53,040 --> 00:08:55,240 Speaker 3: reasonable understanding what the company is and what it does. 167 00:08:55,760 --> 00:08:57,480 Speaker 3: Do I think it's good value? I don't know, but 168 00:08:57,520 --> 00:09:00,360 Speaker 3: I definitely think it's going to grow. So we do 169 00:09:00,400 --> 00:09:03,880 Speaker 3: see our younger investors with a fair bit of UIXIT exposure. 170 00:09:04,120 --> 00:09:06,480 Speaker 2: You really do, and. 171 00:09:06,440 --> 00:09:08,760 Speaker 1: What it be? I'm just looking back, folks, this is 172 00:09:08,760 --> 00:09:12,720 Speaker 1: really worth hearing. Okay, so this is one year. But 173 00:09:12,880 --> 00:09:16,199 Speaker 1: the thing is, if you look historically over the last 174 00:09:16,240 --> 00:09:18,880 Speaker 1: fifteen years, are you ready for this? The last fifteen years, 175 00:09:19,679 --> 00:09:24,360 Speaker 1: this is the ASX has done seven point six percent perannum, 176 00:09:25,679 --> 00:09:28,720 Speaker 1: and the S and P five hundred has done fourteen 177 00:09:29,000 --> 00:09:33,319 Speaker 1: point three. Paradum Us stocks have done twice as well 178 00:09:34,400 --> 00:09:38,360 Speaker 1: as Australian stocks, not this year, not last year, four 179 00:09:38,600 --> 00:09:43,600 Speaker 1: fifteen years in a row, literally half the lifetime of 180 00:09:43,640 --> 00:09:47,080 Speaker 1: a generation. So every year people say, oh, well, Australia 181 00:09:47,160 --> 00:09:49,079 Speaker 1: is bound to catch up now, because you know it's 182 00:09:49,480 --> 00:09:52,400 Speaker 1: the return to the mean, return to normal. We're all 183 00:09:52,400 --> 00:09:58,160 Speaker 1: clearly undervalued, they're clearly overvalued. Is that a sensible strategy? 184 00:09:58,360 --> 00:09:59,040 Speaker 1: Knowing what we. 185 00:09:59,080 --> 00:10:03,000 Speaker 3: Know past before, This is not a guide to future performance. 186 00:10:03,120 --> 00:10:06,440 Speaker 2: Let's just say this fifteen years. Well, so here's the thing. 187 00:10:06,559 --> 00:10:10,640 Speaker 3: I started in market in like two thousand and that 188 00:10:10,720 --> 00:10:14,120 Speaker 3: was an incredible time because you didn't have great daily 189 00:10:14,240 --> 00:10:16,800 Speaker 3: done like it wasn't fantastic. You weren't necessarily following the 190 00:10:16,800 --> 00:10:19,680 Speaker 3: market daily the way you can now Internet existed. You 191 00:10:19,760 --> 00:10:21,520 Speaker 3: definitely did not have a phone in your pocket where 192 00:10:21,520 --> 00:10:24,320 Speaker 3: you could check real time pricing. Right, so we would 193 00:10:24,360 --> 00:10:27,119 Speaker 3: all have a look at the Vanguard chart showing international 194 00:10:27,120 --> 00:10:30,160 Speaker 3: shares doing this and Aussie shares doing this, And the 195 00:10:30,360 --> 00:10:33,800 Speaker 3: argument was always Australia is an old world economy and 196 00:10:34,160 --> 00:10:37,680 Speaker 3: has limited value in a new world. It's all about 197 00:10:37,760 --> 00:10:40,959 Speaker 3: the New World's Internet stocks, all this kind of stuff, 198 00:10:41,440 --> 00:10:43,560 Speaker 3: and then that was a complete disaster for the next 199 00:10:43,600 --> 00:10:44,480 Speaker 3: seven or eight years. 200 00:10:44,679 --> 00:10:46,000 Speaker 2: Two is one of you little. 201 00:10:45,720 --> 00:10:49,959 Speaker 3: Bit careful going look at the last decade, wasn't this 202 00:10:50,000 --> 00:10:52,360 Speaker 3: thing amazing? And then yeah, you could do the same 203 00:10:52,400 --> 00:10:54,960 Speaker 3: thing with Japan in the early nineties. Right, So there 204 00:10:55,000 --> 00:10:57,760 Speaker 3: will be anomalist periods where one thing just outperforms for 205 00:10:57,840 --> 00:11:00,240 Speaker 3: quite a long time, way longer than you expect to 206 00:11:00,360 --> 00:11:03,360 Speaker 3: if it is anomalous, and then you know there is 207 00:11:03,400 --> 00:11:05,600 Speaker 3: a reversion to the mean, and you get really disappointed 208 00:11:05,640 --> 00:11:06,280 Speaker 3: with yourself. 209 00:11:06,040 --> 00:11:07,480 Speaker 2: Because you put it right at the top. 210 00:11:08,000 --> 00:11:12,520 Speaker 3: But it is worth noting we have hugely different economies, 211 00:11:13,760 --> 00:11:17,120 Speaker 3: certainly the Australia in the US, and everyone compares to 212 00:11:17,200 --> 00:11:17,720 Speaker 3: the US. 213 00:11:17,760 --> 00:11:18,880 Speaker 2: It is the behemoth it is. 214 00:11:19,160 --> 00:11:23,199 Speaker 1: But crucially also are people missing. They're just literally missing. 215 00:11:23,240 --> 00:11:27,120 Speaker 1: There is no AI stocks here. Really, Next you sees 216 00:11:27,160 --> 00:11:30,480 Speaker 1: a data center, Goodman is a property just there is 217 00:11:30,520 --> 00:11:34,960 Speaker 1: no AI monsters here. There is no pharmaceutical phizorus etc. 218 00:11:35,240 --> 00:11:36,080 Speaker 1: That're just not here. 219 00:11:36,200 --> 00:11:41,400 Speaker 3: So we have a different economy and we don't have those. 220 00:11:42,120 --> 00:11:44,520 Speaker 3: The other thing is these are global companies, so we 221 00:11:44,640 --> 00:11:46,079 Speaker 3: talk about them as being US. 222 00:11:46,120 --> 00:11:48,040 Speaker 2: They are US listed, but every. 223 00:11:47,880 --> 00:11:50,720 Speaker 3: Single one of us is using Apple somewhere, every single 224 00:11:50,760 --> 00:11:53,520 Speaker 3: one of us is using Microsoft somewhere in our lives. 225 00:11:54,000 --> 00:11:55,720 Speaker 2: So this idea that they. 226 00:11:55,640 --> 00:11:58,959 Speaker 3: Are US companies is no longer strictly true. They are 227 00:11:58,960 --> 00:12:02,600 Speaker 3: a global company and they have global exposure. Can they 228 00:12:02,640 --> 00:12:05,560 Speaker 3: continue to grow at the rates that are priced in currently? 229 00:12:05,640 --> 00:12:05,880 Speaker 2: Though? 230 00:12:05,960 --> 00:12:09,480 Speaker 3: That's really the big question, Like as overshot, even if 231 00:12:09,520 --> 00:12:13,480 Speaker 3: they're still extraordinary companies doing extraordinary things, have they overshot? 232 00:12:13,840 --> 00:12:16,280 Speaker 3: And we have plenty of investors who think they've overshot, 233 00:12:16,520 --> 00:12:18,560 Speaker 3: and plenty who think they're going to keep running, And 234 00:12:18,679 --> 00:12:20,160 Speaker 3: it's really difficult to know. 235 00:12:20,960 --> 00:12:23,479 Speaker 2: You know, they're very expensive by historical stands. 236 00:12:23,240 --> 00:12:25,360 Speaker 1: They're very expensive via historical standards, but then they have 237 00:12:25,400 --> 00:12:30,559 Speaker 1: tremendous earnings. Tell me structurally though, let's just step aside 238 00:12:30,600 --> 00:12:33,160 Speaker 1: from the anomalies and everything else. The point you made 239 00:12:33,240 --> 00:12:36,640 Speaker 1: is that younger investors, and it's interesting how you would 240 00:12:36,640 --> 00:12:40,240 Speaker 1: define that, but younger investors have a much higher proportion 241 00:12:40,440 --> 00:12:45,120 Speaker 1: to the global and Wall Street listed companies than older Australians. 242 00:12:46,120 --> 00:12:48,679 Speaker 1: Who should make a move? Who should in terms of 243 00:12:49,600 --> 00:12:53,160 Speaker 1: strategy allocation, long term portfolio allocation, I'm not talking about 244 00:12:53,200 --> 00:12:55,720 Speaker 1: today or tomorrow. Who should make a move. Should the 245 00:12:55,760 --> 00:13:00,920 Speaker 1: younger investors shift more towards THEX, so, should the order 246 00:13:00,960 --> 00:13:06,880 Speaker 1: ASX invest just chasing the franctividends shift more towards global companies? 247 00:13:07,160 --> 00:13:09,560 Speaker 3: Good question, So I think what we see so younger 248 00:13:09,640 --> 00:13:12,040 Speaker 3: investors usually do tend to start with the AX and 249 00:13:12,080 --> 00:13:15,000 Speaker 3: they will start buying ETFs, and the proportion of young 250 00:13:15,080 --> 00:13:18,160 Speaker 3: investors and I'm talking sub forty years of age, right, 251 00:13:18,240 --> 00:13:20,880 Speaker 3: not super young. I'm not talking so that you can't 252 00:13:20,880 --> 00:13:25,000 Speaker 3: get an account till you're eighteen, but we have anywhere 253 00:13:25,040 --> 00:13:28,920 Speaker 3: between eighteen and forty year olds, something like forty percent 254 00:13:28,960 --> 00:13:32,960 Speaker 3: of them only own ETFs, which is astonishing. Right, four 255 00:13:33,040 --> 00:13:35,199 Speaker 3: years ago, we would not have been having this conversation, 256 00:13:35,559 --> 00:13:38,280 Speaker 3: but the growth has been incredible and they love that 257 00:13:38,320 --> 00:13:40,439 Speaker 3: strategy and it makes perfect sense and it takes a 258 00:13:40,520 --> 00:13:42,760 Speaker 3: lot of the stress out of investing. They start with 259 00:13:42,800 --> 00:13:45,720 Speaker 3: the ASX two hundred, but they very quickly add the 260 00:13:45,840 --> 00:13:49,560 Speaker 3: S and P five hundred, and it's like it's ASEX daylight, 261 00:13:49,920 --> 00:13:53,480 Speaker 3: S and P five hundred daylight and then everything else. 262 00:13:53,520 --> 00:13:58,280 Speaker 3: So they're very clearly just those two markets for older investors, 263 00:13:58,400 --> 00:14:02,400 Speaker 3: particularly retires, and have these big, chunky portfolios that have 264 00:14:02,520 --> 00:14:03,800 Speaker 3: evolved over time. 265 00:14:05,160 --> 00:14:06,760 Speaker 2: They're managing them for income. 266 00:14:06,840 --> 00:14:08,880 Speaker 3: They tend not to want to run down their capital 267 00:14:08,960 --> 00:14:11,160 Speaker 3: and retirement, which is a different topic entirely. 268 00:14:11,200 --> 00:14:13,240 Speaker 2: They want to live off the yield. 269 00:14:13,920 --> 00:14:16,000 Speaker 3: If you're trying to live off the yield, it does 270 00:14:16,080 --> 00:14:18,480 Speaker 3: make sense to have less exposure to a market like 271 00:14:18,520 --> 00:14:22,000 Speaker 3: the US which has a very low yield, even though 272 00:14:22,040 --> 00:14:25,320 Speaker 3: there's a lot of attraction in that growth opportunity there 273 00:14:25,400 --> 00:14:27,600 Speaker 3: if you're trying to grow some of your capital base. 274 00:14:28,080 --> 00:14:32,520 Speaker 3: So the behavior is actually reasonably rational based on what 275 00:14:32,600 --> 00:14:36,040 Speaker 3: people are trying to achieve, but also where they've come from. Right, 276 00:14:36,120 --> 00:14:38,520 Speaker 3: Young people have come from an app in your pocket, 277 00:14:38,680 --> 00:14:40,840 Speaker 3: buy an ETF it's super cheap, don't have to think 278 00:14:40,880 --> 00:14:42,200 Speaker 3: about it, just do it consistently. 279 00:14:42,240 --> 00:14:42,880 Speaker 2: You're good to go. 280 00:14:43,240 --> 00:14:45,400 Speaker 3: And older people came from the way to make money 281 00:14:45,440 --> 00:14:48,120 Speaker 3: is to buy the big floats in the nineties or 282 00:14:48,200 --> 00:14:51,440 Speaker 3: to buy BHP and the big Australian and those. 283 00:14:51,240 --> 00:14:53,720 Speaker 2: Sorts of things. So their portfolios have evolved based on 284 00:14:53,760 --> 00:14:54,480 Speaker 2: when they started. 285 00:14:54,560 --> 00:14:58,520 Speaker 1: Okay, and folks, it's worth knowing that we have regular 286 00:14:58,720 --> 00:15:00,480 Speaker 1: guests on the show who have said, if you do 287 00:15:00,600 --> 00:15:04,960 Speaker 1: want to increase your exposure beyond the ESX ETFs are 288 00:15:05,000 --> 00:15:07,000 Speaker 1: a very good way to start. I mean they are 289 00:15:07,000 --> 00:15:10,760 Speaker 1: a very good way to start. That's indisputable. Exchange treated funds. 290 00:15:10,800 --> 00:15:14,960 Speaker 3: Sorry, I will say our older investors do that, right. 291 00:15:15,000 --> 00:15:17,560 Speaker 3: So if they have no international experience, they may have 292 00:15:17,680 --> 00:15:22,200 Speaker 3: had some of the listed international LICs and sort of 293 00:15:22,360 --> 00:15:25,120 Speaker 3: actively managed funds. And to be honest, the big ones 294 00:15:25,120 --> 00:15:27,040 Speaker 3: that they bought are very out of fashion now. So 295 00:15:27,080 --> 00:15:28,800 Speaker 3: they had Platinum back in the day, and then they 296 00:15:28,800 --> 00:15:32,880 Speaker 3: have Magellan and those brands are no longer sort of 297 00:15:32,920 --> 00:15:35,360 Speaker 3: where we would ever see anyone putting their money, but 298 00:15:36,200 --> 00:15:39,040 Speaker 3: they may have that exposure now. It's like I'm just 299 00:15:39,080 --> 00:15:40,520 Speaker 3: going to get the S and P five hundred. I'm 300 00:15:40,520 --> 00:15:41,600 Speaker 3: just going to do that easy. 301 00:15:41,680 --> 00:15:43,840 Speaker 2: Unfinitely older investors have bought that too. 302 00:15:44,200 --> 00:15:46,600 Speaker 1: Okay, very a good point. And we're not pushing one 303 00:15:46,680 --> 00:15:48,280 Speaker 1: or the other. Folks. They are all more or less 304 00:15:48,280 --> 00:15:50,320 Speaker 1: the same. They'll all call me now and say that's 305 00:15:50,320 --> 00:15:54,000 Speaker 1: not true. But talk about how many engines on the 306 00:15:54,040 --> 00:15:56,200 Speaker 1: head of a pin? All right, I want to talk. 307 00:15:56,280 --> 00:15:57,320 Speaker 1: I want to come back to you on a couple 308 00:15:57,360 --> 00:16:06,760 Speaker 1: of points, but take short break back in a moment. Hello, 309 00:16:06,840 --> 00:16:10,760 Speaker 1: welcome back, to the Australian's Money Puzzle podcast, James Kirby 310 00:16:10,760 --> 00:16:13,120 Speaker 1: talking to jem at Dale, regular on the show, head 311 00:16:13,160 --> 00:16:18,320 Speaker 1: of Investor Behavior at NAP Trade. It's funny, you know. 312 00:16:18,400 --> 00:16:20,360 Speaker 1: Often I go on things and people joke, Oh well, 313 00:16:20,480 --> 00:16:22,720 Speaker 1: that sounds like a great job, you know, Associate editor 314 00:16:22,800 --> 00:16:24,720 Speaker 1: Wealth on The Australian, you must be very wealthy and 315 00:16:24,720 --> 00:16:28,160 Speaker 1: blah blah blah. And I love your job. You're head 316 00:16:28,160 --> 00:16:30,760 Speaker 1: of Investor Behavior. I just think I just love that 317 00:16:31,160 --> 00:16:32,640 Speaker 1: job title. As you do. 318 00:16:32,920 --> 00:16:34,840 Speaker 2: I don't tell people what to do. I just watch 319 00:16:34,920 --> 00:16:35,880 Speaker 2: what they do. It's fast. 320 00:16:35,960 --> 00:16:39,360 Speaker 1: Yeah, yeah, I could say that too. Actually, all right, okay, 321 00:16:39,560 --> 00:16:42,160 Speaker 1: now a couple of things I want to put to 322 00:16:42,200 --> 00:16:44,640 Speaker 1: you about the market and the nature of it. Just 323 00:16:44,800 --> 00:16:49,640 Speaker 1: now we are looking at well, it's passable market. It's good. Look, 324 00:16:49,640 --> 00:16:51,600 Speaker 1: it's fine. You know at the moment to be ruled 325 00:16:51,600 --> 00:16:54,120 Speaker 1: off the books on the asx's, I say, it's maybe 326 00:16:54,160 --> 00:16:56,520 Speaker 1: a little bit better than average, and if we rule 327 00:16:56,560 --> 00:16:59,800 Speaker 1: off on the US, it's way better than average. Yet again, 328 00:17:01,080 --> 00:17:04,880 Speaker 1: but overall, your share portfolio should be strong and perhaps 329 00:17:05,000 --> 00:17:08,000 Speaker 1: if you are fortunate enough and you have had that 330 00:17:08,040 --> 00:17:11,480 Speaker 1: strategy that Jemma has talked about, that you have both 331 00:17:11,560 --> 00:17:15,240 Speaker 1: directly into the US, certainly in the way of ETFs, 332 00:17:16,000 --> 00:17:20,439 Speaker 1: then they should actually gun your portfolio, your shares portfolio 333 00:17:20,440 --> 00:17:24,600 Speaker 1: well beyond nine percent for the calendar year. All good. Now, 334 00:17:24,680 --> 00:17:26,960 Speaker 1: a couple of things I think that are sort of emerging. 335 00:17:27,359 --> 00:17:31,280 Speaker 1: It's a very lively market. There's also some things starting 336 00:17:31,280 --> 00:17:33,240 Speaker 1: to happen, Like we were just talking before the show 337 00:17:33,280 --> 00:17:38,920 Speaker 1: about this amazing deal of Netflix buying Warner Brothers Discovery, 338 00:17:39,400 --> 00:17:42,840 Speaker 1: and there's a joke in markets about Warner Brothers that 339 00:17:42,920 --> 00:17:45,879 Speaker 1: every time they're in the news, it's the top of 340 00:17:45,920 --> 00:17:49,040 Speaker 1: the market if you remember, and you will remember because 341 00:17:49,080 --> 00:17:51,679 Speaker 1: you mentioned dot com that was the famous merger with 342 00:17:51,760 --> 00:17:56,639 Speaker 1: Aol America Online and that, folks, was the bell. We 343 00:17:56,720 --> 00:17:58,679 Speaker 1: didn't know it, of course, that was the bell that 344 00:17:58,760 --> 00:18:02,720 Speaker 1: said it's over the dot com boom. There's something really 345 00:18:02,760 --> 00:18:07,159 Speaker 1: toppy things starting to happen. And look, another thing in 346 00:18:07,160 --> 00:18:09,920 Speaker 1: this market which I really don't like, which I think stinks, 347 00:18:10,119 --> 00:18:12,919 Speaker 1: is about IPO's new share market floats. There was a 348 00:18:13,000 --> 00:18:17,080 Speaker 1: time where you would participate in a share market float, 349 00:18:17,080 --> 00:18:19,639 Speaker 1: and the whole thing was obviously that you would it 350 00:18:19,680 --> 00:18:22,560 Speaker 1: would rise on the day it floated, especially in a 351 00:18:22,600 --> 00:18:25,080 Speaker 1: strong market which we have at the moment, and we're 352 00:18:25,080 --> 00:18:27,520 Speaker 1: having these outrageous affairs at the moment where there are 353 00:18:27,600 --> 00:18:32,399 Speaker 1: new share market floats and they are instantly falling. This 354 00:18:32,480 --> 00:18:36,960 Speaker 1: is a This is in a strong market. So I wonder, Jema, 355 00:18:37,000 --> 00:18:42,639 Speaker 1: are these signs really of are there signs that we 356 00:18:42,640 --> 00:18:45,239 Speaker 1: were talking about whether the market's too high? Is it 357 00:18:45,280 --> 00:18:47,720 Speaker 1: too hot? But let's put it another way, are there 358 00:18:47,920 --> 00:18:51,959 Speaker 1: signs that the market is seeing a top? I mean 359 00:18:52,000 --> 00:18:54,960 Speaker 1: we talked about you know, we've just seen the Netflix 360 00:18:55,000 --> 00:18:57,480 Speaker 1: deal which was which is kind of a joke really, 361 00:18:57,520 --> 00:18:59,840 Speaker 1: but maybe it's not a joke that when Hollywood do 362 00:18:59,880 --> 00:19:02,639 Speaker 1: these maga, these things go very wrong. We have a 363 00:19:02,640 --> 00:19:05,359 Speaker 1: lot of floats and people are are perhaps there are 364 00:19:05,520 --> 00:19:08,560 Speaker 1: cases where people are exploiting these faces. These floats are 365 00:19:08,640 --> 00:19:11,640 Speaker 1: certainly not in christ properly, that's for sure, and other 366 00:19:11,760 --> 00:19:14,040 Speaker 1: sort of signs. Do you think that's a sign of 367 00:19:14,160 --> 00:19:15,480 Speaker 1: a toppy market? 368 00:19:16,040 --> 00:19:17,920 Speaker 2: It's such a good question, this one. I think. 369 00:19:18,119 --> 00:19:19,920 Speaker 3: I actually had a look back through the float to 370 00:19:19,960 --> 00:19:22,159 Speaker 3: the last six to twelve months, both in Australia and 371 00:19:22,200 --> 00:19:24,600 Speaker 3: in the US, and some of them have been extremely successful. 372 00:19:24,640 --> 00:19:28,800 Speaker 3: So it's not universal that they're all collapsing. It's just pockets. 373 00:19:29,880 --> 00:19:34,440 Speaker 3: We did see at the peak of the Nasdaq three 374 00:19:34,520 --> 00:19:37,640 Speaker 3: years ago, the SPACs coming through, like there's a very 375 00:19:37,640 --> 00:19:40,359 Speaker 3: typical behavior as the market starts to peat. These backs 376 00:19:40,359 --> 00:19:43,480 Speaker 3: and the special purpose acquisition vehicles, cash box companies, and 377 00:19:43,640 --> 00:19:47,480 Speaker 3: you would get cash box, I'm an amazing investor. Give 378 00:19:47,520 --> 00:19:49,399 Speaker 3: me your money, and I shall do something with it, 379 00:19:49,480 --> 00:19:51,400 Speaker 3: and you're not allowed to know what it is until. 380 00:19:51,400 --> 00:19:52,600 Speaker 1: Yeah, just give it to me. I don't know what 381 00:19:52,640 --> 00:19:54,440 Speaker 1: I'm going to do with it, but hand it over. Yeah. 382 00:19:54,480 --> 00:19:55,919 Speaker 2: Yeah, I don't know what I'm gonna do yet, but 383 00:19:55,960 --> 00:19:56,600 Speaker 2: I'm great at this. 384 00:19:56,920 --> 00:20:00,199 Speaker 3: And they almost categorically a disaster one after the and 385 00:20:00,240 --> 00:20:02,320 Speaker 3: everyone said at the time when they came about, oh, 386 00:20:02,320 --> 00:20:04,359 Speaker 3: these things are always a disaster, And then they were 387 00:20:04,359 --> 00:20:04,840 Speaker 3: a disaster. 388 00:20:04,960 --> 00:20:05,560 Speaker 2: What a surprise. 389 00:20:06,080 --> 00:20:07,920 Speaker 3: I So a couple of things I would not One 390 00:20:08,000 --> 00:20:11,320 Speaker 3: is if you are a founder or a business owner 391 00:20:12,080 --> 00:20:14,879 Speaker 3: or a shonky individual on the make who thinks that 392 00:20:14,920 --> 00:20:18,080 Speaker 3: they can get away with raising as much capital as 393 00:20:18,119 --> 00:20:21,680 Speaker 3: humanly possible when the market is high and rising is 394 00:20:21,720 --> 00:20:24,040 Speaker 3: a really good time to do it. So you want 395 00:20:24,080 --> 00:20:26,359 Speaker 3: to if you are listing your company, extract as much 396 00:20:26,440 --> 00:20:27,760 Speaker 3: value as possible from. 397 00:20:27,560 --> 00:20:30,160 Speaker 2: That, and there will be. 398 00:20:31,480 --> 00:20:35,479 Speaker 3: Well intended business owners doing that, there will be private 399 00:20:35,480 --> 00:20:38,040 Speaker 3: equity firms doing that, and there will be others who 400 00:20:38,080 --> 00:20:38,800 Speaker 3: are less. 401 00:20:38,560 --> 00:20:39,600 Speaker 2: Reputable doing that. 402 00:20:40,160 --> 00:20:43,399 Speaker 3: And the days of being sure you're going to make 403 00:20:43,440 --> 00:20:45,280 Speaker 3: a ton of money out of an IPO well and 404 00:20:45,320 --> 00:20:47,159 Speaker 3: truly in the past, like you have to do your 405 00:20:47,240 --> 00:20:51,280 Speaker 3: due diligence and all throughout history you've had to do 406 00:20:51,320 --> 00:20:54,880 Speaker 3: your due diligence at these times with these sorts of things, 407 00:20:55,320 --> 00:20:57,560 Speaker 3: there's there are no guarantees said. Some of them actually 408 00:20:57,600 --> 00:20:59,359 Speaker 3: been pretty good, some of them been very good, some 409 00:20:59,440 --> 00:21:01,959 Speaker 3: are up sick three months and this sort of business. 410 00:21:01,960 --> 00:21:04,800 Speaker 3: So in Australia it tends to be the mining companies, 411 00:21:05,000 --> 00:21:07,840 Speaker 3: like the smaller end. You need to know your stuff 412 00:21:07,880 --> 00:21:08,840 Speaker 3: if you're going to play in that kit. 413 00:21:08,920 --> 00:21:14,240 Speaker 1: You really do hyperspeculative, Yeah, okay, hyperspective. All right, Okay, No, 414 00:21:14,320 --> 00:21:16,720 Speaker 1: there's a very good answer and a fair answer too actually. 415 00:21:16,800 --> 00:21:19,720 Speaker 1: All right. So then inside the market we're also saying 416 00:21:19,960 --> 00:21:23,560 Speaker 1: in terms of your clients are hoping to buy individual stocks. 417 00:21:23,840 --> 00:21:26,080 Speaker 1: There's a stock at the moment which is all the 418 00:21:26,119 --> 00:21:30,320 Speaker 1: news called Corporate Travel and it was a Brisbane based 419 00:21:30,400 --> 00:21:33,479 Speaker 1: a corporate travel company that had great success for a while. 420 00:21:33,960 --> 00:21:36,560 Speaker 1: It then came under what they call a short attack 421 00:21:37,160 --> 00:21:39,880 Speaker 1: by hedge funds and shorts and survived that came out 422 00:21:39,920 --> 00:21:42,879 Speaker 1: the other side, and many people actually thought, well, okay, 423 00:21:43,040 --> 00:21:44,880 Speaker 1: you know, these guys are actually must be quite good 424 00:21:44,880 --> 00:21:47,879 Speaker 1: because they've survived a short attack. Not every stock does. 425 00:21:48,359 --> 00:21:51,760 Speaker 1: They then did an extraordinary sort of diversion into the 426 00:21:51,840 --> 00:21:59,639 Speaker 1: fairly grizzly business of managing refuge hotels and barges for 427 00:21:59,720 --> 00:22:01,800 Speaker 1: want this is what they call them in the UK, 428 00:22:02,960 --> 00:22:05,920 Speaker 1: which was a strange diversion for a company that's called 429 00:22:06,000 --> 00:22:10,840 Speaker 1: corporate travel, used by many companies Disclosure The News Corporation 430 00:22:10,960 --> 00:22:15,600 Speaker 1: uses them. But anyway, the point I'm bleeding to is 431 00:22:15,640 --> 00:22:20,320 Speaker 1: that they were suspended some time ago, a long time ago, 432 00:22:20,400 --> 00:22:24,080 Speaker 1: weeks and weeks ago, and it since transpired that the 433 00:22:24,080 --> 00:22:28,000 Speaker 1: British government has accused them of overcharging. They've accused them 434 00:22:28,040 --> 00:22:31,240 Speaker 1: of overcharging using very strong documentation produced by one of 435 00:22:31,240 --> 00:22:34,399 Speaker 1: the six accountancy companies. This is a disaster in the making. 436 00:22:34,680 --> 00:22:37,159 Speaker 1: The stock is currently trading at I wish, sorry I 437 00:22:37,160 --> 00:22:41,159 Speaker 1: could remember the numbers, maybe fourteen fifteen dollars and we 438 00:22:41,280 --> 00:22:45,600 Speaker 1: now know that when it comes back it's probably going 439 00:22:45,640 --> 00:22:47,960 Speaker 1: to trade for who knows, it may not trade at all. 440 00:22:48,000 --> 00:22:50,800 Speaker 1: I mean it may literally go and fund managers are 441 00:22:50,800 --> 00:22:53,280 Speaker 1: writing down the value of this to ten dollars five 442 00:22:53,320 --> 00:22:56,480 Speaker 1: dollars less than that dev What I want to ask 443 00:22:56,520 --> 00:22:57,800 Speaker 1: you is that you don't have to get into the 444 00:22:57,800 --> 00:23:00,080 Speaker 1: tangle about corporate travel. But what I want to ask 445 00:23:00,119 --> 00:23:02,640 Speaker 1: you is it seems to be a really bad management 446 00:23:02,640 --> 00:23:06,520 Speaker 1: here on the share market by the ASX that this 447 00:23:06,720 --> 00:23:09,119 Speaker 1: was allowed to happen, that these guys were allowed to 448 00:23:09,119 --> 00:23:11,320 Speaker 1: stay in suspension for weeks and weeks. This is a 449 00:23:11,400 --> 00:23:16,439 Speaker 1: huge billion dollar company, and I can prove that this 450 00:23:16,600 --> 00:23:21,000 Speaker 1: was bad management by the fact that we mentioned MSCI earlier, MISKI, 451 00:23:21,160 --> 00:23:25,240 Speaker 1: the Morgan Standy Capital International Index, they don't allow companies 452 00:23:25,760 --> 00:23:28,479 Speaker 1: if they've been suspended for a long time, They just 453 00:23:28,560 --> 00:23:32,679 Speaker 1: they're out. Do you think this could be an important 454 00:23:32,760 --> 00:23:34,240 Speaker 1: story and how it pans out? 455 00:23:34,760 --> 00:23:36,760 Speaker 3: That's a really tricky one, isn't it. I think there's 456 00:23:36,960 --> 00:23:43,280 Speaker 3: multiple factors. The fact that they're being accused of overcharging 457 00:23:43,359 --> 00:23:44,400 Speaker 3: let's say, not fraud, but. 458 00:23:45,000 --> 00:23:49,280 Speaker 1: The British government. By the British government, which is no 459 00:23:49,320 --> 00:23:49,919 Speaker 1: small player. 460 00:23:50,200 --> 00:23:53,520 Speaker 3: They were It's not a small player. 461 00:23:53,880 --> 00:23:55,639 Speaker 2: There were credible. 462 00:23:55,240 --> 00:24:00,600 Speaker 3: Questions about governance, let's say some years ago, as you said, 463 00:24:00,600 --> 00:24:02,280 Speaker 3: and this is not reason. There's been going on for 464 00:24:02,320 --> 00:24:05,560 Speaker 3: a long time, credible questions about governance. You know, the 465 00:24:05,640 --> 00:24:08,960 Speaker 3: press was after them for various things that there were 466 00:24:09,320 --> 00:24:11,920 Speaker 3: short sellers also, you know, and the difficulty with short sellers. 467 00:24:11,960 --> 00:24:15,800 Speaker 3: People like, justifiably the difficulty with short sellers. Everyone's like, oh, 468 00:24:15,840 --> 00:24:17,320 Speaker 3: you're just trying to make money out of it, and 469 00:24:17,359 --> 00:24:20,520 Speaker 3: you're like sure, but there are credible questions being asked 470 00:24:20,560 --> 00:24:23,600 Speaker 3: for multiple sources, and now you have probably the. 471 00:24:23,560 --> 00:24:24,639 Speaker 2: Most credible source. 472 00:24:24,720 --> 00:24:27,000 Speaker 3: Your UK Government's not one you're going to take on 473 00:24:27,080 --> 00:24:32,200 Speaker 3: for fun. So it's a really tricky scenario. I know, 474 00:24:32,320 --> 00:24:36,760 Speaker 3: I can't think of a lot of precedence in my experience, 475 00:24:37,200 --> 00:24:41,240 Speaker 3: so I can see why the market operator doesn't have 476 00:24:41,920 --> 00:24:44,919 Speaker 3: necessarily a great set of rules for a scenario like 477 00:24:45,040 --> 00:24:49,680 Speaker 3: this where there'd be multiple credible questions. They've survived all 478 00:24:49,720 --> 00:24:52,639 Speaker 3: of them, and then now we've got a very serious question, 479 00:24:52,720 --> 00:24:54,639 Speaker 3: and then what do you do do you just so 480 00:24:54,680 --> 00:24:56,280 Speaker 3: then you go, well, we're just going to force you 481 00:24:56,359 --> 00:24:58,120 Speaker 3: to dlist or are we going to do something else? 482 00:24:58,160 --> 00:24:58,560 Speaker 2: And so on? 483 00:24:58,880 --> 00:25:01,120 Speaker 3: You know, whereas ask in this scenario, all those sorts 484 00:25:01,160 --> 00:25:04,600 Speaker 3: of questions, so I can see why it's in this situation. 485 00:25:04,720 --> 00:25:07,320 Speaker 2: But it's not ideal for investors, that's for sure. 486 00:25:08,320 --> 00:25:10,200 Speaker 1: No, it's not. And I think it's a lot to 487 00:25:10,240 --> 00:25:13,840 Speaker 1: play out there. Okay, we're gon, we're running out of time, 488 00:25:14,400 --> 00:25:17,720 Speaker 1: which often happens with Gemma because she's so good. And 489 00:25:19,440 --> 00:25:21,639 Speaker 1: no it's two folks. I mean, she is a great 490 00:25:21,640 --> 00:25:23,920 Speaker 1: communicator on the market, she really is. That's why she's 491 00:25:23,920 --> 00:25:25,399 Speaker 1: on the show so often. I'm going to take a 492 00:25:25,440 --> 00:25:27,200 Speaker 1: short break and I'm going to come back and I've 493 00:25:27,200 --> 00:25:29,280 Speaker 1: got to pin her with a couple of other difficult 494 00:25:29,359 --> 00:25:38,800 Speaker 1: questions that most people would run from. Back in a moment. Hello, 495 00:25:38,880 --> 00:25:41,920 Speaker 1: Welcome back to the Australians Money Puzzle Podcast. James Kirby 496 00:25:41,960 --> 00:25:46,320 Speaker 1: with Jemma Dale. Out of investor behavior at NAP Trade. Okay, 497 00:25:46,400 --> 00:25:49,000 Speaker 1: a couple of other random questions for you, Jemma. There 498 00:25:49,040 --> 00:25:51,480 Speaker 1: are listener questions. I don't know if we'd have time 499 00:25:51,520 --> 00:25:54,399 Speaker 1: to get through. I'll definitely deal with the one from Tom. 500 00:25:54,840 --> 00:25:57,640 Speaker 1: But also just a question without notice because it only 501 00:25:57,640 --> 00:26:02,000 Speaker 1: happened yesterday. But part of your also is SMSFS. I 502 00:26:02,000 --> 00:26:03,760 Speaker 1: think that's an important part of your role, isn't it? 503 00:26:04,160 --> 00:26:06,520 Speaker 1: And we all know that there's been all sorts of 504 00:26:06,600 --> 00:26:08,840 Speaker 1: scandals this year, the first Guardian scandal. This is the 505 00:26:08,840 --> 00:26:12,720 Speaker 1: biggest scandal in the local financial products for many years. 506 00:26:14,200 --> 00:26:16,560 Speaker 1: Who's going to pay for it? Big question? The minister, 507 00:26:16,680 --> 00:26:22,840 Speaker 1: Daniel Belino, Finances Finance Minister, this week has announced that 508 00:26:22,880 --> 00:26:25,080 Speaker 1: it's going to be a levee and the levee is 509 00:26:25,119 --> 00:26:29,320 Speaker 1: going to be imposed on all sorts of players in 510 00:26:29,359 --> 00:26:33,840 Speaker 1: the market, big super funds, financial advisors are going to 511 00:26:33,880 --> 00:26:37,600 Speaker 1: have to chip into this levee. He's also put forward 512 00:26:37,600 --> 00:26:41,280 Speaker 1: the notion that smsfs are going to have to pay 513 00:26:41,280 --> 00:26:47,080 Speaker 1: this levee. I think that's ridiculous because smsfs are not 514 00:26:47,200 --> 00:26:52,120 Speaker 1: involved in selling dodgy products and smsfs the whole trade off. 515 00:26:52,160 --> 00:26:54,679 Speaker 1: But having one and taking the risk of one is 516 00:26:54,720 --> 00:26:57,640 Speaker 1: that you sidestep if you like some of those consumer protections, 517 00:26:57,680 --> 00:27:00,600 Speaker 1: you're not allowed to access them. So whether you pay 518 00:27:00,640 --> 00:27:03,000 Speaker 1: for them, have you formed if you want it yet? 519 00:27:03,040 --> 00:27:07,480 Speaker 3: Look, I won't pretend I've done enough work. Also, as 520 00:27:07,520 --> 00:27:09,560 Speaker 3: you point out, it's been changing a lot, this one, 521 00:27:09,600 --> 00:27:11,000 Speaker 3: and it's been fairly contentious. 522 00:27:11,040 --> 00:27:12,240 Speaker 2: It's been going on for a long time. 523 00:27:12,280 --> 00:27:16,159 Speaker 3: Trying to find a solution that satisfies all parties and 524 00:27:16,280 --> 00:27:20,160 Speaker 3: doesn't create moral hazard, because that's the big issue, right 525 00:27:20,200 --> 00:27:24,040 Speaker 3: Like you're going to provide a backstop that then encourages 526 00:27:25,359 --> 00:27:27,560 Speaker 3: more risk taking behavior and so on, and you just 527 00:27:27,680 --> 00:27:30,399 Speaker 3: don't need that in your life right now. So I 528 00:27:30,480 --> 00:27:35,879 Speaker 3: can see it's a real challenge for self managed super funds. 529 00:27:35,880 --> 00:27:38,119 Speaker 3: But there has been this question, as you know, like 530 00:27:38,280 --> 00:27:42,160 Speaker 3: E four, but really at least since the GFC, having 531 00:27:42,200 --> 00:27:44,280 Speaker 3: seen some of the smsfs that got caught up in 532 00:27:44,320 --> 00:27:47,960 Speaker 3: fairly difficult situations, what protections are in place in a 533 00:27:48,000 --> 00:27:53,399 Speaker 3: scenario where they will sold something that you may not 534 00:27:53,440 --> 00:27:55,720 Speaker 3: have been advice per se, and what do we do 535 00:27:55,800 --> 00:27:58,639 Speaker 3: in that scenario. So it's a really tricky one, and 536 00:27:58,680 --> 00:28:01,680 Speaker 3: it's a particularly tricky one, I think the question where 537 00:28:01,720 --> 00:28:05,080 Speaker 3: the wholesale investor test sits as well, whether that threshold 538 00:28:05,160 --> 00:28:07,040 Speaker 3: is too low and whether you need to really ramp 539 00:28:07,040 --> 00:28:10,040 Speaker 3: it up because we don't, you know, it's not really. 540 00:28:10,400 --> 00:28:12,320 Speaker 1: Do you think smfs should have to pay the levey? 541 00:28:12,760 --> 00:28:13,440 Speaker 2: Interesting question? 542 00:28:13,560 --> 00:28:15,560 Speaker 3: If they get no protection from it, then no, it 543 00:28:15,600 --> 00:28:19,159 Speaker 3: seems laughable, right, you know, for you to be And 544 00:28:20,240 --> 00:28:22,359 Speaker 3: the question I've got about it actually, which is a 545 00:28:22,359 --> 00:28:25,720 Speaker 3: bit of a different one is the owner and I'm 546 00:28:25,720 --> 00:28:30,240 Speaker 3: not mentioning any names of a major platform implied that 547 00:28:30,359 --> 00:28:34,280 Speaker 3: there should be a compensation scheme like it is your 548 00:28:34,480 --> 00:28:36,919 Speaker 3: job to provide due diligence on this stuff. That is 549 00:28:37,040 --> 00:28:40,320 Speaker 3: literally part of your process as a trustee. You should 550 00:28:40,360 --> 00:28:45,160 Speaker 3: not be getting backstopped by those who do not have 551 00:28:45,200 --> 00:28:47,560 Speaker 3: that obligation like you do have that obligation. If you 552 00:28:47,680 --> 00:28:51,840 Speaker 3: provide a trustee service, you absolutely obligation. I'm more concerned 553 00:28:51,840 --> 00:28:52,680 Speaker 3: about those comments. 554 00:28:52,760 --> 00:28:55,480 Speaker 1: Okay, I completely agree with that. And folks, just to 555 00:28:55,480 --> 00:28:57,440 Speaker 1: cut to the chase on this one, tho's three big players. 556 00:28:57,520 --> 00:29:00,600 Speaker 1: One was Macquarie. They have actually volunteer year to pay 557 00:29:00,640 --> 00:29:04,200 Speaker 1: out three hundred million already to the victims of this 558 00:29:04,280 --> 00:29:08,560 Speaker 1: first Guardian and Shield debacle. Another key player was Equity Trustees. 559 00:29:08,640 --> 00:29:11,120 Speaker 1: They have actually been hauled before the courts to deal 560 00:29:11,160 --> 00:29:13,680 Speaker 1: with this. Alan Kirklands, the asset Commissioner, was on the 561 00:29:13,680 --> 00:29:15,200 Speaker 1: show a few weeks ago. Have a listen to that 562 00:29:15,200 --> 00:29:17,080 Speaker 1: one if you want to know all about this. And 563 00:29:17,120 --> 00:29:20,360 Speaker 1: the third major player was net Wealthy investment platform, who 564 00:29:20,600 --> 00:29:22,640 Speaker 1: have got a lawyer who was smart enough to find 565 00:29:22,680 --> 00:29:25,760 Speaker 1: an obscure clothes in superannuation law, which says that they 566 00:29:25,760 --> 00:29:29,120 Speaker 1: should be helped compensate if they had to compensate. So 567 00:29:29,160 --> 00:29:31,480 Speaker 1: we'll see how that plays out. Last final quick question, 568 00:29:31,560 --> 00:29:34,120 Speaker 1: Tom says, I've never heard a word about European stocks 569 00:29:34,120 --> 00:29:38,080 Speaker 1: on your show. It's like the only offshore market the 570 00:29:38,080 --> 00:29:41,000 Speaker 1: world is Wall Street. European stocks have been terrific this year. 571 00:29:41,040 --> 00:29:43,040 Speaker 1: When now are you going to do something? Tell me 572 00:29:43,120 --> 00:29:49,120 Speaker 1: this gemma, those offshore active investors of which you have 573 00:29:49,280 --> 00:29:54,240 Speaker 1: many the eurostocks, the European stocks feature at all. 574 00:29:56,360 --> 00:29:59,440 Speaker 3: So this year they have started to and this is 575 00:29:59,480 --> 00:30:02,760 Speaker 3: what happened. So ninety plus percent you via a NAB 576 00:30:02,800 --> 00:30:07,120 Speaker 3: trade you can buy US, UK, Germany and Hong Kong. 577 00:30:07,840 --> 00:30:11,120 Speaker 3: Ninety plus percent is the US, Yeah, right, so far 578 00:30:11,200 --> 00:30:14,160 Speaker 3: out in front. And there's also and what's really fascinating 579 00:30:14,240 --> 00:30:16,680 Speaker 3: is there's a fair amount of appetite and you just 580 00:30:16,720 --> 00:30:19,200 Speaker 3: need to look at how the Australian demographic is changing. 581 00:30:19,280 --> 00:30:21,760 Speaker 3: There's a fair amount of appetite for Ali, Barba and 582 00:30:21,800 --> 00:30:24,600 Speaker 3: Tencent and so on. But they will buy the ADR, 583 00:30:24,680 --> 00:30:28,160 Speaker 3: the US listed version, which is super interesting in itself. 584 00:30:28,240 --> 00:30:30,719 Speaker 2: Right, you can buy the Hong Kong version if you prefer. 585 00:30:31,360 --> 00:30:37,080 Speaker 3: There has been some European stuff popping up this year, 586 00:30:37,480 --> 00:30:41,400 Speaker 3: and the one that is most obvious is defense. So 587 00:30:41,440 --> 00:30:44,840 Speaker 3: it's kind of all been about European defense of run. Mattal, 588 00:30:44,960 --> 00:30:48,680 Speaker 3: which I'm probably pronouncing incorrectly, has been big in our numbers, 589 00:30:48,720 --> 00:30:52,200 Speaker 3: certainly through the early part of this year. When I 590 00:30:52,240 --> 00:30:55,600 Speaker 3: speak to analysts in the space, they're pretty concerned that 591 00:30:55,640 --> 00:30:59,400 Speaker 3: those European defense stocks have run too hard. Right, Rolls 592 00:30:59,480 --> 00:31:02,480 Speaker 3: Royce would care out as a European defense stock. Funnily enough, 593 00:31:02,680 --> 00:31:04,320 Speaker 3: you're on a few others. The other one that I 594 00:31:04,360 --> 00:31:05,800 Speaker 3: hear from fun manager is Ferrari. 595 00:31:06,280 --> 00:31:09,280 Speaker 1: Okay, okay, but you know a few of. 596 00:31:09,240 --> 00:31:14,840 Speaker 3: These sort of interesting ultra premium kind of direct to 597 00:31:14,880 --> 00:31:16,200 Speaker 3: consumer brands and so on. 598 00:31:16,920 --> 00:31:18,800 Speaker 2: It's interesting, it's interesting. 599 00:31:18,480 --> 00:31:20,440 Speaker 3: But we don't get a huge amount of appetite for 600 00:31:20,520 --> 00:31:23,280 Speaker 3: it because you have to be fairly selective. And the 601 00:31:23,360 --> 00:31:28,400 Speaker 3: general consensus on the Eurozone economy is not positive, right, 602 00:31:28,400 --> 00:31:32,000 Speaker 3: it's pretty lackluster. So there have been some really strong performers, 603 00:31:32,080 --> 00:31:34,920 Speaker 3: but they are largely in the defense space from what 604 00:31:34,960 --> 00:31:35,440 Speaker 3: we see. 605 00:31:35,520 --> 00:31:38,720 Speaker 1: Okay, that's it for you, Tom. Never advice, of course, 606 00:31:38,760 --> 00:31:41,880 Speaker 1: always information. It's been asleep for a long time. European market, 607 00:31:41,920 --> 00:31:44,640 Speaker 1: there has been a lift. As Emma says, the lift 608 00:31:44,920 --> 00:31:48,880 Speaker 1: is substantially underpinned by defense companies, which again was substantially 609 00:31:48,960 --> 00:31:51,120 Speaker 1: underpinned by the fact that Trump basically pulled the rug 610 00:31:51,160 --> 00:31:52,760 Speaker 1: from under them and said you got to start paying 611 00:31:52,760 --> 00:31:57,040 Speaker 1: for your rollin NATO. But that's not really a reflection 612 00:31:57,240 --> 00:32:00,920 Speaker 1: of a big broad upswell in the European stocks, I 613 00:32:00,960 --> 00:32:04,479 Speaker 1: would argue, but you might tell me something different. Tom Okay, 614 00:32:04,680 --> 00:32:07,240 Speaker 1: Thank you very much everyone for the questions. Keep them 615 00:32:07,280 --> 00:32:10,120 Speaker 1: rolling the money puzzle at the Australian dot com dot au. 616 00:32:10,680 --> 00:32:13,440 Speaker 1: Jemma Dale, thank you very much. We will probably not 617 00:32:13,560 --> 00:32:15,239 Speaker 1: talk to you again this year, but we sure as 618 00:32:15,240 --> 00:32:17,400 Speaker 1: hell talk to you next year. Thanks a lot. Great 619 00:32:17,440 --> 00:32:18,640 Speaker 1: to have you on the show as always. 620 00:32:18,880 --> 00:32:20,320 Speaker 2: Thank you so much for having me. 621 00:32:20,520 --> 00:32:22,560 Speaker 1: Thanks Jemma, Talk to you soon, folks.