WEBVTT - Have Aussie shares let you down this year? 0:00:10.119 --> 0:00:13.360 Hello and welcome to the Australians Money Puzzled podcast. I'm 0:00:13.440 --> 0:00:16.640 James Kirby. Welcome aboard everybody. I hope you're holding up 0:00:16.800 --> 0:00:19.919 well in these last working days of the year, and 0:00:19.960 --> 0:00:22.279 I hope you had a very good year so far 0:00:22.440 --> 0:00:26.480 as an investor. I expect you would actually be unlucky 0:00:27.120 --> 0:00:29.320 not to have had a good year as an investor. 0:00:29.360 --> 0:00:33.080 We've had some really good returns again and one of 0:00:33.080 --> 0:00:36.800 the big questions is can it all keep going at 0:00:36.840 --> 0:00:41.800 this pace. My guest today is a regular guest, one 0:00:41.840 --> 0:00:44.400 of our favorite guests on the show, Jemma Dale, head 0:00:44.440 --> 0:00:47.960 of Investor behavior at nab Nap Trade. How are you, Gemma? 0:00:48.560 --> 0:00:49.760 I'm well, Thanks, How are you? 0:00:50.560 --> 0:00:53.160 I'm good? Thank you. There's so much to talk about, 0:00:53.320 --> 0:00:55.720 and don't let me end the show without mentioning gold 0:00:56.200 --> 0:00:58.560 could be the fascinating talk about gold. The last time 0:00:58.760 --> 0:01:02.480 it turned out to be I say precient. Okay, now, 0:01:03.560 --> 0:01:07.000 first things first. In a way, yes, it's another good 0:01:07.080 --> 0:01:10.280 year and I think people will be should be happy 0:01:10.600 --> 0:01:12.679 with the returns they are getting. I suppose in a 0:01:12.680 --> 0:01:16.400 way some of the attention is all about super these days, 0:01:16.400 --> 0:01:20.200 and if you look at super returns, super ratings. For instance, 0:01:20.240 --> 0:01:22.920 they've just come up with what looks like the year 0:01:23.560 --> 0:01:28.080 to November. That's this morning, I might add, And we're 0:01:28.120 --> 0:01:33.360 looking at for the average balance fund eight percent for 0:01:33.440 --> 0:01:35.880 the year. That's if we closed off the books, you know, 0:01:36.680 --> 0:01:39.440 a few days ago, which is of course much better 0:01:39.560 --> 0:01:43.800 than usual, and that's driven yet again by shares. I know, 0:01:43.800 --> 0:01:46.240 it's a really big question. Can it keep going? But 0:01:47.560 --> 0:01:51.640 in that trade, is there a sense that this market 0:01:51.760 --> 0:01:56.800 is in some way justifiable on earnings and fundamentals or 0:01:56.880 --> 0:01:59.880 is there a sense that this is this market is 0:02:00.400 --> 0:02:01.280 about to boil over? 0:02:02.680 --> 0:02:06.040 Yeah, such a good question. I think it's quite clear. 0:02:06.200 --> 0:02:09.280 From so, we have a cash book, which is very 0:02:09.280 --> 0:02:13.119 interesting and tends to be the best illustration. So there's 0:02:13.160 --> 0:02:14.400 kind of a couple of things you can watch to 0:02:14.440 --> 0:02:16.880 see what people are really thinking and feeling. One is 0:02:16.880 --> 0:02:19.320 how much cash are people holding? And is it growing 0:02:19.360 --> 0:02:22.680 over time? Our cash book has just been growing and growing, 0:02:22.960 --> 0:02:26.520 and that at an increasing rate, far more so. And look, 0:02:26.600 --> 0:02:28.919 it does get run down at times when people feel 0:02:28.960 --> 0:02:32.040 the market has been oversold, and that is so it's 0:02:32.080 --> 0:02:34.280 a reasonable reflection of how people are feeling. So we 0:02:34.360 --> 0:02:38.080 had huge buying during liber liberation day, and the big 0:02:38.120 --> 0:02:41.200 one was COVID right when the buying was you know, 0:02:41.280 --> 0:02:43.560 four out of every five trades was a buy, and 0:02:43.600 --> 0:02:46.120 that fifth one was usually people selling something to buy 0:02:46.160 --> 0:02:49.440 something else, and the cash book was running down, but 0:02:49.520 --> 0:02:52.239 more cash was coming in. It's getting piled in to 0:02:52.360 --> 0:02:55.320 keep buying during that period. So people will absolutely put 0:02:55.360 --> 0:02:57.280 that cash to work. It's not just it is a 0:02:57.360 --> 0:03:00.280 high interest account. It pays you the RBA cash, but 0:03:00.840 --> 0:03:04.760 it is absolutely used if investors feel there's an opportunity 0:03:04.800 --> 0:03:05.320 to chase. 0:03:05.600 --> 0:03:08.399 So that is very high growing all year. 0:03:09.000 --> 0:03:12.560 Explain to listeners what that means that the cash is growing. 0:03:12.600 --> 0:03:17.720 Does it mean they are wary of buying at these levels? 0:03:19.120 --> 0:03:19.840 What it tells us. 0:03:20.040 --> 0:03:23.960 So the other things that we're seeing are there's less 0:03:24.080 --> 0:03:25.760 buying and a bit more selling. 0:03:25.919 --> 0:03:27.400 Right, it's not a huge split. 0:03:27.480 --> 0:03:30.040 It's not like it's twenty percent buying at eighty percent 0:03:30.080 --> 0:03:31.040 selling or anything like that. 0:03:31.120 --> 0:03:33.000 You would never see that because a lot of people. 0:03:32.840 --> 0:03:35.680 Are accumulating over time and that's never going to be 0:03:35.720 --> 0:03:39.640 their strategy. But we've seen a slight uptick in selling 0:03:39.680 --> 0:03:42.839 and a slight down tick in buying through this year, 0:03:43.040 --> 0:03:45.680 dependent on different times of the year. Obviously, and what's 0:03:45.720 --> 0:03:48.120 going on in the market. Liberation Day it was all buying, 0:03:48.160 --> 0:03:51.760 so let's put that to one side. So cash book 0:03:51.840 --> 0:03:54.520 is rising, That tends to tell you people would rather 0:03:54.600 --> 0:03:57.200 have some cash on the sidelines and wait for a pullback. 0:03:57.920 --> 0:04:01.119 There's an uptick in selling and people are taking their 0:04:01.120 --> 0:04:04.000 dividends and holding them in cash rather than deploying them 0:04:04.040 --> 0:04:07.800 straight back into the market. So they're the major themes 0:04:07.840 --> 0:04:10.520 that we see. It's not huge, it's not like people 0:04:10.560 --> 0:04:14.000 are selling wholesale, but they're trimming things that they feel 0:04:14.040 --> 0:04:16.240 have run really hard. They've been trimming the banks for 0:04:16.279 --> 0:04:19.520 a year and a half now, and particularly early this year. 0:04:20.120 --> 0:04:22.240 Anything else they feel has done very well, they're just 0:04:22.279 --> 0:04:24.000 starting to take a bit off the table. 0:04:24.120 --> 0:04:26.760 Okay, trimming the banks wasn't a bad call at all, 0:04:26.839 --> 0:04:29.320 but we did make that point regularly on the show 0:04:29.360 --> 0:04:32.240 that they were at elevated levels. Can we put numbers 0:04:32.240 --> 0:04:34.960 around that in any way? I know fund managers is 0:04:35.000 --> 0:04:37.320 a similar thing. When you see the big fund managers 0:04:37.400 --> 0:04:42.520 lifting their cash levels, that suggest they're getting warier of 0:04:42.560 --> 0:04:44.520 the market they're in. Are you able to give us 0:04:44.560 --> 0:04:47.680 anything at all? The way of the level is it? Is? 0:04:47.680 --> 0:04:49.679 It more from five percent to ten percenter or whatever. 0:04:51.279 --> 0:04:55.920 We don't know what people's whole portfolio looks like, you know, 0:04:56.040 --> 0:04:59.000 we only know what we see in the platform. So 0:04:59.120 --> 0:05:02.159 you might have all your Australian equities with NAB Trade, 0:05:02.360 --> 0:05:04.760 but you might have some managed fund somewhere else, and 0:05:04.800 --> 0:05:07.159 you're super fund with a professional managed fund, and you 0:05:07.240 --> 0:05:09.360 might have some term deposits as well as that cash. 0:05:09.640 --> 0:05:11.440 So I can't really. 0:05:11.200 --> 0:05:14.280 Sort of go this is exactly people's finite universe of wealth. 0:05:14.760 --> 0:05:18.440 We just know in terms of the behavior we see 0:05:18.440 --> 0:05:22.520 within that platform. This is very typical of when investors 0:05:22.520 --> 0:05:25.560 feel the market has run a bit too hard. And 0:05:25.600 --> 0:05:29.680 we saw the same thing in twenty nineteen when you 0:05:29.720 --> 0:05:32.160 remember the market put on nineteen percent. It was completely 0:05:32.240 --> 0:05:35.120 unexpected because there were two unexpected rate cards. We just 0:05:35.200 --> 0:05:37.920 saw this cash book just fumped straight up, and then 0:05:37.960 --> 0:05:40.040 as soon as COVID happened, they threw the money straight 0:05:40.080 --> 0:05:40.840 back in the market. 0:05:41.000 --> 0:05:43.400 It's interesting, Yeah, I mean that would all make sense. 0:05:43.480 --> 0:05:46.600 I mean, am I hon SMSF. I don't actively mean 0:05:46.920 --> 0:05:50.279 for the cash amount to lift, but it's been lifting 0:05:50.960 --> 0:05:54.080 due to activity as such, but not buying. 0:05:56.080 --> 0:05:58.520 Yeah, that's absolutely you know, I can't see anything I 0:05:58.640 --> 0:06:00.680 really like because I'm just gonna wait a minute, and 0:06:00.720 --> 0:06:02.440 then suddenly I've got ten percent. 0:06:02.760 --> 0:06:06.080 Okay, very interesting. Now, the thing is, folks, I was 0:06:06.120 --> 0:06:08.440 mentioning that it's a good year, okay, and it is 0:06:08.480 --> 0:06:12.520 a good year. I'm talking about calendar year in the 0:06:12.560 --> 0:06:17.360 Australian market. However, I think we better be careful here 0:06:17.640 --> 0:06:19.719 the when we say it's a really good market, what 0:06:19.760 --> 0:06:24.880 we really mean is that the market, anchored and holy 0:06:25.120 --> 0:06:29.680 and utterly underpinned by Wall Street, being about sixty six 0:06:29.720 --> 0:06:34.280 percent of the whole world market is so good, is 0:06:34.320 --> 0:06:38.200 so strong. As we speak, it's about seventeen percent of 0:06:38.240 --> 0:06:41.279 the S and P five hundred is of seventeen percent 0:06:41.720 --> 0:06:45.560 in twelve months. That is a knockout number. Our number 0:06:46.000 --> 0:06:49.360 is barely six percent. It's a little. It's about five 0:06:49.400 --> 0:06:52.440 and a half as I speak today, being the eleventh 0:06:52.520 --> 0:06:56.000 of December. Okay, so it's five percent, and hooray, okay, 0:06:56.000 --> 0:06:58.360 we have good yields. So let's add the yields in. 0:06:58.440 --> 0:07:00.680 Let's say the dividends are four we're going to get 0:07:00.760 --> 0:07:03.760 nine percent. Nine percent is good. It's not shooting the 0:07:03.839 --> 0:07:07.919 lights out, though, which begs the question Gemma, have we 0:07:07.960 --> 0:07:12.200 all been in the wrong market? Oh, let's hear your answer, 0:07:12.280 --> 0:07:15.880 because I mean it isn't it. We've raised this before. 0:07:16.080 --> 0:07:17.280 Are we all in the wrong market? 0:07:17.840 --> 0:07:19.240 Yeah, it's such a tough one. 0:07:19.360 --> 0:07:26.239 We So Australia has a shocking home bias. From an 0:07:26.280 --> 0:07:31.400 investment perspective, we know that our investors are hugely exposed 0:07:31.400 --> 0:07:34.040 to the ASEX relative to other global markets, and the 0:07:34.040 --> 0:07:37.000 ASEX is a very tiny proportion of the global market. 0:07:37.280 --> 0:07:40.120 You just talked about how big the US market, though, 0:07:40.280 --> 0:07:43.080 is in the global in the World index. If we 0:07:43.080 --> 0:07:46.760 look at MISKY World, for example, the US is probably 0:07:46.840 --> 0:07:50.480 overrepresented and everything else is underrepresented. But we go the 0:07:50.520 --> 0:07:52.880 other way when we look at people's portfolios, Australia is 0:07:52.920 --> 0:07:57.480 massively overrepresented and everything else is underrepresented. Has been changing 0:07:57.520 --> 0:07:59.840 over time, right, so there's always a bit of a 0:08:00.400 --> 0:08:04.680 legacy effect where so many of our investors bought CVA 0:08:04.800 --> 0:08:07.160 and the float and have held it ever since, and 0:08:07.200 --> 0:08:09.520 so they've just got these huge allocations to things they 0:08:09.560 --> 0:08:13.560 bought a long time ago. And we know older Australians 0:08:13.600 --> 0:08:17.200 are wealthier on average by and by quite substantial margin. 0:08:17.400 --> 0:08:20.840 Even if you strip out property, they have much larger shareholdings, 0:08:20.880 --> 0:08:23.040 they had opportunities to get into those big IPAs, so 0:08:23.080 --> 0:08:25.160 they tend to have these portfolios that skew the data 0:08:25.200 --> 0:08:27.280 quite a lot. When we look at our younger and 0:08:27.360 --> 0:08:31.120 newer investors, they are much more diversified both with their 0:08:31.120 --> 0:08:33.960 domestic and their international holdings, and they got on top 0:08:34.000 --> 0:08:37.360 of international quite early. It made sense for them. You know, 0:08:37.760 --> 0:08:40.600 you hold Apple in your pocket and you watch Netflix, 0:08:40.640 --> 0:08:43.800 and you have exposure to the big the megacaps in 0:08:43.840 --> 0:08:47.320 the US all day, every day in your life, and 0:08:47.360 --> 0:08:49.880 so our younger investors got on that quite early. 0:08:49.960 --> 0:08:51.120 That made perfect sense for them. 0:08:51.200 --> 0:08:53.040 I'm like, I use this thing all the time, got 0:08:53.040 --> 0:08:55.240 reasonable understanding what the company is and what it does. 0:08:55.760 --> 0:08:57.480 Do I think it's good value? I don't know, but 0:08:57.520 --> 0:09:00.360 I definitely think it's going to grow. So we do 0:09:00.400 --> 0:09:03.880 see our younger investors with a fair bit of UIXIT exposure. 0:09:04.120 --> 0:09:06.480 You really do, and. 0:09:06.440 --> 0:09:08.760 What it be? I'm just looking back, folks, this is 0:09:08.760 --> 0:09:12.720 really worth hearing. Okay, so this is one year. But 0:09:12.880 --> 0:09:16.199 the thing is, if you look historically over the last 0:09:16.240 --> 0:09:18.880 fifteen years, are you ready for this? The last fifteen years, 0:09:19.679 --> 0:09:24.360 this is the ASX has done seven point six percent perannum, 0:09:25.679 --> 0:09:28.720 and the S and P five hundred has done fourteen 0:09:29.000 --> 0:09:33.319 point three. Paradum Us stocks have done twice as well 0:09:34.400 --> 0:09:38.360 as Australian stocks, not this year, not last year, four 0:09:38.600 --> 0:09:43.600 fifteen years in a row, literally half the lifetime of 0:09:43.640 --> 0:09:47.080 a generation. So every year people say, oh, well, Australia 0:09:47.160 --> 0:09:49.079 is bound to catch up now, because you know it's 0:09:49.480 --> 0:09:52.400 the return to the mean, return to normal. We're all 0:09:52.400 --> 0:09:58.160 clearly undervalued, they're clearly overvalued. Is that a sensible strategy? 0:09:58.360 --> 0:09:59.040 Knowing what we. 0:09:59.080 --> 0:10:03.000 Know past before, This is not a guide to future performance. 0:10:03.120 --> 0:10:06.440 Let's just say this fifteen years. Well, so here's the thing. 0:10:06.559 --> 0:10:10.640 I started in market in like two thousand and that 0:10:10.720 --> 0:10:14.120 was an incredible time because you didn't have great daily 0:10:14.240 --> 0:10:16.800 done like it wasn't fantastic. You weren't necessarily following the 0:10:16.800 --> 0:10:19.680 market daily the way you can now Internet existed. You 0:10:19.760 --> 0:10:21.520 definitely did not have a phone in your pocket where 0:10:21.520 --> 0:10:24.320 you could check real time pricing. Right, so we would 0:10:24.360 --> 0:10:27.119 all have a look at the Vanguard chart showing international 0:10:27.120 --> 0:10:30.160 shares doing this and Aussie shares doing this, And the 0:10:30.360 --> 0:10:33.800 argument was always Australia is an old world economy and 0:10:34.160 --> 0:10:37.680 has limited value in a new world. It's all about 0:10:37.760 --> 0:10:40.959 the New World's Internet stocks, all this kind of stuff, 0:10:41.440 --> 0:10:43.560 and then that was a complete disaster for the next 0:10:43.600 --> 0:10:44.480 seven or eight years. 0:10:44.679 --> 0:10:46.000 Two is one of you little. 0:10:45.720 --> 0:10:49.959 Bit careful going look at the last decade, wasn't this 0:10:50.000 --> 0:10:52.360 thing amazing? And then yeah, you could do the same 0:10:52.400 --> 0:10:54.960 thing with Japan in the early nineties. Right, So there 0:10:55.000 --> 0:10:57.760 will be anomalist periods where one thing just outperforms for 0:10:57.840 --> 0:11:00.240 quite a long time, way longer than you expect to 0:11:00.360 --> 0:11:03.360 if it is anomalous, and then you know there is 0:11:03.400 --> 0:11:05.600 a reversion to the mean, and you get really disappointed 0:11:05.640 --> 0:11:06.280 with yourself. 0:11:06.040 --> 0:11:07.480 Because you put it right at the top. 0:11:08.000 --> 0:11:12.520 But it is worth noting we have hugely different economies, 0:11:13.760 --> 0:11:17.120 certainly the Australia in the US, and everyone compares to 0:11:17.200 --> 0:11:17.720 the US. 0:11:17.760 --> 0:11:18.880 It is the behemoth it is. 0:11:19.160 --> 0:11:23.199 But crucially also are people missing. They're just literally missing. 0:11:23.240 --> 0:11:27.120 There is no AI stocks here. Really, Next you sees 0:11:27.160 --> 0:11:30.480 a data center, Goodman is a property just there is 0:11:30.520 --> 0:11:34.960 no AI monsters here. There is no pharmaceutical phizorus etc. 0:11:35.240 --> 0:11:36.080 That're just not here. 0:11:36.200 --> 0:11:41.400 So we have a different economy and we don't have those. 0:11:42.120 --> 0:11:44.520 The other thing is these are global companies, so we 0:11:44.640 --> 0:11:46.079 talk about them as being US. 0:11:46.120 --> 0:11:48.040 They are US listed, but every. 0:11:47.880 --> 0:11:50.720 Single one of us is using Apple somewhere, every single 0:11:50.760 --> 0:11:53.520 one of us is using Microsoft somewhere in our lives. 0:11:54.000 --> 0:11:55.720 So this idea that they. 0:11:55.640 --> 0:11:58.959 Are US companies is no longer strictly true. They are 0:11:58.960 --> 0:12:02.600 a global company and they have global exposure. Can they 0:12:02.640 --> 0:12:05.560 continue to grow at the rates that are priced in currently? 0:12:05.640 --> 0:12:05.880 Though? 0:12:05.960 --> 0:12:09.480 That's really the big question, Like as overshot, even if 0:12:09.520 --> 0:12:13.480 they're still extraordinary companies doing extraordinary things, have they overshot? 0:12:13.840 --> 0:12:16.280 And we have plenty of investors who think they've overshot, 0:12:16.520 --> 0:12:18.560 and plenty who think they're going to keep running, And 0:12:18.679 --> 0:12:20.160 it's really difficult to know. 0:12:20.960 --> 0:12:23.479 You know, they're very expensive by historical stands. 0:12:23.240 --> 0:12:25.360 They're very expensive via historical standards, but then they have 0:12:25.400 --> 0:12:30.559 tremendous earnings. Tell me structurally though, let's just step aside 0:12:30.600 --> 0:12:33.160 from the anomalies and everything else. The point you made 0:12:33.240 --> 0:12:36.640 is that younger investors, and it's interesting how you would 0:12:36.640 --> 0:12:40.240 define that, but younger investors have a much higher proportion 0:12:40.440 --> 0:12:45.120 to the global and Wall Street listed companies than older Australians. 0:12:46.120 --> 0:12:48.679 Who should make a move? Who should in terms of 0:12:49.600 --> 0:12:53.160 strategy allocation, long term portfolio allocation, I'm not talking about 0:12:53.200 --> 0:12:55.720 today or tomorrow. Who should make a move. Should the 0:12:55.760 --> 0:13:00.920 younger investors shift more towards THEX, so, should the order 0:13:00.960 --> 0:13:06.880 ASX invest just chasing the franctividends shift more towards global companies? 0:13:07.160 --> 0:13:09.560 Good question, So I think what we see so younger 0:13:09.640 --> 0:13:12.040 investors usually do tend to start with the AX and 0:13:12.080 --> 0:13:15.000 they will start buying ETFs, and the proportion of young 0:13:15.080 --> 0:13:18.160 investors and I'm talking sub forty years of age, right, 0:13:18.240 --> 0:13:20.880 not super young. I'm not talking so that you can't 0:13:20.880 --> 0:13:25.000 get an account till you're eighteen, but we have anywhere 0:13:25.040 --> 0:13:28.920 between eighteen and forty year olds, something like forty percent 0:13:28.960 --> 0:13:32.960 of them only own ETFs, which is astonishing. Right, four 0:13:33.040 --> 0:13:35.199 years ago, we would not have been having this conversation, 0:13:35.559 --> 0:13:38.280 but the growth has been incredible and they love that 0:13:38.320 --> 0:13:40.439 strategy and it makes perfect sense and it takes a 0:13:40.520 --> 0:13:42.760 lot of the stress out of investing. They start with 0:13:42.800 --> 0:13:45.720 the ASX two hundred, but they very quickly add the 0:13:45.840 --> 0:13:49.560 S and P five hundred, and it's like it's ASEX daylight, 0:13:49.920 --> 0:13:53.480 S and P five hundred daylight and then everything else. 0:13:53.520 --> 0:13:58.280 So they're very clearly just those two markets for older investors, 0:13:58.400 --> 0:14:02.400 particularly retires, and have these big, chunky portfolios that have 0:14:02.520 --> 0:14:03.800 evolved over time. 0:14:05.160 --> 0:14:06.760 They're managing them for income. 0:14:06.840 --> 0:14:08.880 They tend not to want to run down their capital 0:14:08.960 --> 0:14:11.160 and retirement, which is a different topic entirely. 0:14:11.200 --> 0:14:13.240 They want to live off the yield. 0:14:13.920 --> 0:14:16.000 If you're trying to live off the yield, it does 0:14:16.080 --> 0:14:18.480 make sense to have less exposure to a market like 0:14:18.520 --> 0:14:22.000 the US which has a very low yield, even though 0:14:22.040 --> 0:14:25.320 there's a lot of attraction in that growth opportunity there 0:14:25.400 --> 0:14:27.600 if you're trying to grow some of your capital base. 0:14:28.080 --> 0:14:32.520 So the behavior is actually reasonably rational based on what 0:14:32.600 --> 0:14:36.040 people are trying to achieve, but also where they've come from. Right, 0:14:36.120 --> 0:14:38.520 Young people have come from an app in your pocket, 0:14:38.680 --> 0:14:40.840 buy an ETF it's super cheap, don't have to think 0:14:40.880 --> 0:14:42.200 about it, just do it consistently. 0:14:42.240 --> 0:14:42.880 You're good to go. 0:14:43.240 --> 0:14:45.400 And older people came from the way to make money 0:14:45.440 --> 0:14:48.120 is to buy the big floats in the nineties or 0:14:48.200 --> 0:14:51.440 to buy BHP and the big Australian and those. 0:14:51.240 --> 0:14:53.720 Sorts of things. So their portfolios have evolved based on 0:14:53.760 --> 0:14:54.480 when they started. 0:14:54.560 --> 0:14:58.520 Okay, and folks, it's worth knowing that we have regular 0:14:58.720 --> 0:15:00.480 guests on the show who have said, if you do 0:15:00.600 --> 0:15:04.960 want to increase your exposure beyond the ESX ETFs are 0:15:05.000 --> 0:15:07.000 a very good way to start. I mean they are 0:15:07.000 --> 0:15:10.760 a very good way to start. That's indisputable. Exchange treated funds. 0:15:10.800 --> 0:15:14.960 Sorry, I will say our older investors do that, right. 0:15:15.000 --> 0:15:17.560 So if they have no international experience, they may have 0:15:17.680 --> 0:15:22.200 had some of the listed international LICs and sort of 0:15:22.360 --> 0:15:25.120 actively managed funds. And to be honest, the big ones 0:15:25.120 --> 0:15:27.040 that they bought are very out of fashion now. So 0:15:27.080 --> 0:15:28.800 they had Platinum back in the day, and then they 0:15:28.800 --> 0:15:32.880 have Magellan and those brands are no longer sort of 0:15:32.920 --> 0:15:35.360 where we would ever see anyone putting their money, but 0:15:36.200 --> 0:15:39.040 they may have that exposure now. It's like I'm just 0:15:39.080 --> 0:15:40.520 going to get the S and P five hundred. I'm 0:15:40.520 --> 0:15:41.600 just going to do that easy. 0:15:41.680 --> 0:15:43.840 Unfinitely older investors have bought that too. 0:15:44.200 --> 0:15:46.600 Okay, very a good point. And we're not pushing one 0:15:46.680 --> 0:15:48.280 or the other. Folks. They are all more or less 0:15:48.280 --> 0:15:50.320 the same. They'll all call me now and say that's 0:15:50.320 --> 0:15:54.000 not true. But talk about how many engines on the 0:15:54.040 --> 0:15:56.200 head of a pin? All right, I want to talk. 0:15:56.280 --> 0:15:57.320 I want to come back to you on a couple 0:15:57.360 --> 0:16:06.760 of points, but take short break back in a moment. Hello, 0:16:06.840 --> 0:16:10.760 welcome back, to the Australian's Money Puzzle podcast, James Kirby 0:16:10.760 --> 0:16:13.120 talking to jem at Dale, regular on the show, head 0:16:13.160 --> 0:16:18.320 of Investor Behavior at NAP Trade. It's funny, you know. 0:16:18.400 --> 0:16:20.360 Often I go on things and people joke, Oh well, 0:16:20.480 --> 0:16:22.720 that sounds like a great job, you know, Associate editor 0:16:22.800 --> 0:16:24.720 Wealth on The Australian, you must be very wealthy and 0:16:24.720 --> 0:16:28.160 blah blah blah. And I love your job. You're head 0:16:28.160 --> 0:16:30.760 of Investor Behavior. I just think I just love that 0:16:31.160 --> 0:16:32.640 job title. As you do. 0:16:32.920 --> 0:16:34.840 I don't tell people what to do. I just watch 0:16:34.920 --> 0:16:35.880 what they do. It's fast. 0:16:35.960 --> 0:16:39.360 Yeah, yeah, I could say that too. Actually, all right, okay, 0:16:39.560 --> 0:16:42.160 now a couple of things I want to put to 0:16:42.200 --> 0:16:44.640 you about the market and the nature of it. Just 0:16:44.800 --> 0:16:49.640 now we are looking at well, it's passable market. It's good. Look, 0:16:49.640 --> 0:16:51.600 it's fine. You know at the moment to be ruled 0:16:51.600 --> 0:16:54.120 off the books on the asx's, I say, it's maybe 0:16:54.160 --> 0:16:56.520 a little bit better than average, and if we rule 0:16:56.560 --> 0:16:59.800 off on the US, it's way better than average. Yet again, 0:17:01.080 --> 0:17:04.880 but overall, your share portfolio should be strong and perhaps 0:17:05.000 --> 0:17:08.000 if you are fortunate enough and you have had that 0:17:08.040 --> 0:17:11.480 strategy that Jemma has talked about, that you have both 0:17:11.560 --> 0:17:15.240 directly into the US, certainly in the way of ETFs, 0:17:16.000 --> 0:17:20.439 then they should actually gun your portfolio, your shares portfolio 0:17:20.440 --> 0:17:24.600 well beyond nine percent for the calendar year. All good. Now, 0:17:24.680 --> 0:17:26.960 a couple of things I think that are sort of emerging. 0:17:27.359 --> 0:17:31.280 It's a very lively market. There's also some things starting 0:17:31.280 --> 0:17:33.240 to happen, Like we were just talking before the show 0:17:33.280 --> 0:17:38.920 about this amazing deal of Netflix buying Warner Brothers Discovery, 0:17:39.400 --> 0:17:42.840 and there's a joke in markets about Warner Brothers that 0:17:42.920 --> 0:17:45.879 every time they're in the news, it's the top of 0:17:45.920 --> 0:17:49.040 the market if you remember, and you will remember because 0:17:49.080 --> 0:17:51.679 you mentioned dot com that was the famous merger with 0:17:51.760 --> 0:17:56.639 Aol America Online and that, folks, was the bell. We 0:17:56.720 --> 0:17:58.679 didn't know it, of course, that was the bell that 0:17:58.760 --> 0:18:02.720 said it's over the dot com boom. There's something really 0:18:02.760 --> 0:18:07.159 toppy things starting to happen. And look, another thing in 0:18:07.160 --> 0:18:09.920 this market which I really don't like, which I think stinks, 0:18:10.119 --> 0:18:12.919 is about IPO's new share market floats. There was a 0:18:13.000 --> 0:18:17.080 time where you would participate in a share market float, 0:18:17.080 --> 0:18:19.639 and the whole thing was obviously that you would it 0:18:19.680 --> 0:18:22.560 would rise on the day it floated, especially in a 0:18:22.600 --> 0:18:25.080 strong market which we have at the moment, and we're 0:18:25.080 --> 0:18:27.520 having these outrageous affairs at the moment where there are 0:18:27.600 --> 0:18:32.399 new share market floats and they are instantly falling. This 0:18:32.480 --> 0:18:36.960 is a This is in a strong market. So I wonder, Jema, 0:18:37.000 --> 0:18:42.639 are these signs really of are there signs that we 0:18:42.640 --> 0:18:45.239 were talking about whether the market's too high? Is it 0:18:45.280 --> 0:18:47.720 too hot? But let's put it another way, are there 0:18:47.920 --> 0:18:51.959 signs that the market is seeing a top? I mean 0:18:52.000 --> 0:18:54.960 we talked about you know, we've just seen the Netflix 0:18:55.000 --> 0:18:57.480 deal which was which is kind of a joke really, 0:18:57.520 --> 0:18:59.840 but maybe it's not a joke that when Hollywood do 0:18:59.880 --> 0:19:02.639 these maga, these things go very wrong. We have a 0:19:02.640 --> 0:19:05.359 lot of floats and people are are perhaps there are 0:19:05.520 --> 0:19:08.560 cases where people are exploiting these faces. These floats are 0:19:08.640 --> 0:19:11.640 certainly not in christ properly, that's for sure, and other 0:19:11.760 --> 0:19:14.040 sort of signs. Do you think that's a sign of 0:19:14.160 --> 0:19:15.480 a toppy market? 0:19:16.040 --> 0:19:17.920 It's such a good question, this one. I think. 0:19:18.119 --> 0:19:19.920 I actually had a look back through the float to 0:19:19.960 --> 0:19:22.159 the last six to twelve months, both in Australia and 0:19:22.200 --> 0:19:24.600 in the US, and some of them have been extremely successful. 0:19:24.640 --> 0:19:28.800 So it's not universal that they're all collapsing. It's just pockets. 0:19:29.880 --> 0:19:34.440 We did see at the peak of the Nasdaq three 0:19:34.520 --> 0:19:37.640 years ago, the SPACs coming through, like there's a very 0:19:37.640 --> 0:19:40.359 typical behavior as the market starts to peat. These backs 0:19:40.359 --> 0:19:43.480 and the special purpose acquisition vehicles, cash box companies, and 0:19:43.640 --> 0:19:47.480 you would get cash box, I'm an amazing investor. Give 0:19:47.520 --> 0:19:49.399 me your money, and I shall do something with it, 0:19:49.480 --> 0:19:51.400 and you're not allowed to know what it is until. 0:19:51.400 --> 0:19:52.600 Yeah, just give it to me. I don't know what 0:19:52.640 --> 0:19:54.440 I'm going to do with it, but hand it over. Yeah. 0:19:54.480 --> 0:19:55.919 Yeah, I don't know what I'm gonna do yet, but 0:19:55.960 --> 0:19:56.600 I'm great at this. 0:19:56.920 --> 0:20:00.199 And they almost categorically a disaster one after the and 0:20:00.240 --> 0:20:02.320 everyone said at the time when they came about, oh, 0:20:02.320 --> 0:20:04.359 these things are always a disaster, And then they were 0:20:04.359 --> 0:20:04.840 a disaster. 0:20:04.960 --> 0:20:05.560 What a surprise. 0:20:06.080 --> 0:20:07.920 I So a couple of things I would not One 0:20:08.000 --> 0:20:11.320 is if you are a founder or a business owner 0:20:12.080 --> 0:20:14.879 or a shonky individual on the make who thinks that 0:20:14.920 --> 0:20:18.080 they can get away with raising as much capital as 0:20:18.119 --> 0:20:21.680 humanly possible when the market is high and rising is 0:20:21.720 --> 0:20:24.040 a really good time to do it. So you want 0:20:24.080 --> 0:20:26.359 to if you are listing your company, extract as much 0:20:26.440 --> 0:20:27.760 value as possible from. 0:20:27.560 --> 0:20:30.160 That, and there will be. 0:20:31.480 --> 0:20:35.479 Well intended business owners doing that, there will be private 0:20:35.480 --> 0:20:38.040 equity firms doing that, and there will be others who 0:20:38.080 --> 0:20:38.800 are less. 0:20:38.560 --> 0:20:39.600