1
00:00:05,680 --> 00:00:07,880
Speaker 1: Welcome to the Fear and Greed Business Interview. I'm sure

2
00:00:07,920 --> 00:00:09,640
Speaker 1: and al Mark. Fear and Greed is working with the

3
00:00:09,680 --> 00:00:13,760
Speaker 1: team at trading platform Moomoo on a series four Investors.

4
00:00:13,840 --> 00:00:16,200
Speaker 1: Every Friday, we're bringing you an episode exploring how to

5
00:00:16,280 --> 00:00:20,120
Speaker 1: use technology and data the smarter investing. Today, we're going

6
00:00:20,160 --> 00:00:23,360
Speaker 1: deeper into investing strategy and it all comes back to research,

7
00:00:23,440 --> 00:00:27,400
Speaker 1: in particular how to navigate an industry's value chain, including

8
00:00:27,440 --> 00:00:31,320
Speaker 1: its upstream, midstream and downstream companies, in order to find

9
00:00:31,360 --> 00:00:34,360
Speaker 1: the right opportunities. Remember, the information in this episode is

10
00:00:34,400 --> 00:00:37,400
Speaker 1: general in nature and doesn't take into account your own circumstances.

11
00:00:37,640 --> 00:00:41,400
Speaker 1: Michael McCarthy is the chief commercial Officer and market strategist

12
00:00:41,440 --> 00:00:44,280
Speaker 1: at training platform Moomoo, which is a great supporter of

13
00:00:44,280 --> 00:00:47,639
Speaker 1: this podcast. Now a regular guest, Michael, welcome back.

14
00:00:47,800 --> 00:00:50,000
Speaker 2: Thanks very much, So I have to get my regular

15
00:00:50,080 --> 00:00:51,639
Speaker 2: dose of Fear and Greed podcast.

16
00:00:51,960 --> 00:00:56,520
Speaker 1: Ah, fantastic. When we talk about an industry's value chain,

17
00:00:56,880 --> 00:01:00,760
Speaker 1: I'm sure many of us broadly understand Dan what we're

18
00:01:00,800 --> 00:01:06,600
Speaker 1: talking about, but can you perhaps explain what it is well.

19
00:01:06,600 --> 00:01:10,399
Speaker 2: I'd like to give an example of how important understanding

20
00:01:10,480 --> 00:01:13,959
Speaker 2: industry change can be. Now many people will be familiar

21
00:01:14,040 --> 00:01:17,000
Speaker 2: with the work of Michael Lewis. He wrote Moneyball, which

22
00:01:17,040 --> 00:01:20,000
Speaker 2: became a great movie. He also wrote Big Short and

23
00:01:20,080 --> 00:01:22,880
Speaker 2: a number of other great books and articles about markets.

24
00:01:22,880 --> 00:01:25,920
Speaker 2: But his first ever book was called Liar's Poker, and

25
00:01:25,959 --> 00:01:27,960
Speaker 2: it was one of the first books on markets I

26
00:01:28,000 --> 00:01:30,640
Speaker 2: ever read. Now, there are some real people involved, the

27
00:01:30,680 --> 00:01:33,720
Speaker 2: former chairman of Solomon's, the former chairman of Lehman's, but

28
00:01:33,840 --> 00:01:36,880
Speaker 2: there's also some characters that he made up to give

29
00:01:36,920 --> 00:01:40,240
Speaker 2: people anonymous talking points in the book, and in one

30
00:01:40,240 --> 00:01:43,399
Speaker 2: of them describes a character he calls Dash Riprock, and

31
00:01:43,520 --> 00:01:46,600
Speaker 2: Dash is a trader, and Dash explains his view on

32
00:01:46,680 --> 00:01:49,920
Speaker 2: the markets globally. He said they were all interconnected like

33
00:01:50,000 --> 00:01:53,120
Speaker 2: a spider's web, and when you pluck on one strand

34
00:01:53,160 --> 00:01:56,960
Speaker 2: of the web, the vibrations go throughout the markets throughout

35
00:01:57,040 --> 00:02:00,000
Speaker 2: the world. And he gave the example in the book

36
00:02:00,000 --> 00:02:04,200
Speaker 2: book of what happened when there was a nuclear explosion

37
00:02:04,280 --> 00:02:06,400
Speaker 2: at a place nobody had ever heard of at that time,

38
00:02:06,520 --> 00:02:10,200
Speaker 2: caused Chernobyl in Russia. Of course, now, the immediate market

39
00:02:10,240 --> 00:02:13,640
Speaker 2: reaction was to buy wheat. It was known that Cherobyl

40
00:02:13,720 --> 00:02:18,040
Speaker 2: was not far from Ukraine. The Belarus key food producing areas.

41
00:02:18,200 --> 00:02:21,079
Speaker 2: But dash rip Rock went one step better, and he

42
00:02:21,160 --> 00:02:24,440
Speaker 2: realized that wheat's a storable commodity, but things like fresh

43
00:02:24,480 --> 00:02:26,560
Speaker 2: fruit or not. And so he bought apples, and he

44
00:02:26,600 --> 00:02:30,480
Speaker 2: made a small fortune out of anticipating where the ripples

45
00:02:30,840 --> 00:02:33,400
Speaker 2: on that web would turn up in the market, and

46
00:02:33,440 --> 00:02:36,280
Speaker 2: buying apples was a much better trade than the very

47
00:02:36,320 --> 00:02:39,480
Speaker 2: crowded buying wheat trade. And it's the same idea with

48
00:02:39,560 --> 00:02:43,000
Speaker 2: the industry chain. When something happens with a company or

49
00:02:43,000 --> 00:02:46,280
Speaker 2: in an industry, sometimes the best play is not the

50
00:02:46,360 --> 00:02:50,040
Speaker 2: immediate one. It's not necessarily buying Tesla, but perhaps looking

51
00:02:50,120 --> 00:02:53,440
Speaker 2: down the chain to buy into lithium producers, or to

52
00:02:53,520 --> 00:02:58,160
Speaker 2: buy into car and parts resalers and retailers. So understanding

53
00:02:58,160 --> 00:03:01,760
Speaker 2: the industry chain gives in es and traders more options,

54
00:03:01,840 --> 00:03:05,120
Speaker 2: more ability to pick the key sweet spots in an

55
00:03:05,160 --> 00:03:07,760
Speaker 2: industry that might be most affected by an event.

56
00:03:08,440 --> 00:03:10,880
Speaker 1: Okay, so I remember reading about data centers in the

57
00:03:10,919 --> 00:03:13,520
Speaker 1: last couple of weeks, and someone was investing in air

58
00:03:13,560 --> 00:03:17,640
Speaker 1: conditioning companies whose main clients were data center builders because

59
00:03:17,680 --> 00:03:19,359
Speaker 1: they figure the more data centers, the better the air

60
00:03:19,360 --> 00:03:22,680
Speaker 1: conditioning supply will do. So it's that kind of thing.

61
00:03:23,520 --> 00:03:26,120
Speaker 1: Tell me how did the industry chain tools on the

62
00:03:26,160 --> 00:03:30,280
Speaker 1: Moomoo platform work? Then with that as background, well.

63
00:03:30,160 --> 00:03:33,760
Speaker 2: There's a whole component area of the app that has

64
00:03:33,919 --> 00:03:36,440
Speaker 2: the industry change in it, and there are dozens of them,

65
00:03:36,800 --> 00:03:39,920
Speaker 2: and they built around different ideas. So some are built

66
00:03:39,960 --> 00:03:43,000
Speaker 2: around companies I mentioned Tesla. There's another one built around

67
00:03:43,000 --> 00:03:45,800
Speaker 2: in Vidia, another popular trading stock, and people wanted to

68
00:03:45,840 --> 00:03:49,080
Speaker 2: know who the downstream retailers and users of their tips

69
00:03:49,080 --> 00:03:51,760
Speaker 2: were and who were supplying them with their raw goods.

70
00:03:52,040 --> 00:03:53,800
Speaker 2: And those who are able to look up and down

71
00:03:53,840 --> 00:03:57,520
Speaker 2: the industry chain possibly spotted better opportunities than getting into

72
00:03:57,560 --> 00:04:01,960
Speaker 2: an already frothier in Vidia. Right, So we've got dozens

73
00:04:01,960 --> 00:04:05,560
Speaker 2: of changes I mentioned. They do everything. Obviously, tech is

74
00:04:05,560 --> 00:04:08,120
Speaker 2: a bit of a focus. So there's a chat, GPT chain,

75
00:04:08,320 --> 00:04:12,080
Speaker 2: electric vehicles chained, semiconductors chains, all the ones you would expect,

76
00:04:12,200 --> 00:04:14,480
Speaker 2: but you might not expect to see a drone or

77
00:04:14,600 --> 00:04:17,359
Speaker 2: cloud computing chain. You might not expect to see a

78
00:04:17,400 --> 00:04:21,640
Speaker 2: gold chain or coal chain. There's travel and transportation, cancer, drugs,

79
00:04:21,800 --> 00:04:24,760
Speaker 2: all of these different industry chains, and they all are

80
00:04:24,920 --> 00:04:27,719
Speaker 2: backed up by the companies that are involved in those

81
00:04:27,760 --> 00:04:32,360
Speaker 2: different parts of the chain. Whether they're upstream, whether they're midstream,

82
00:04:32,400 --> 00:04:35,599
Speaker 2: or whether they're downstream parts of the industry train, they're

83
00:04:35,640 --> 00:04:37,719
Speaker 2: all there, and when you click through the chain, you

84
00:04:37,760 --> 00:04:41,000
Speaker 2: can click through and see which companies do what in

85
00:04:41,760 --> 00:04:45,160
Speaker 2: that industry chain, So you very quickly get an idea

86
00:04:45,320 --> 00:04:48,680
Speaker 2: of who's interconnected and how an event might ripple up

87
00:04:48,680 --> 00:04:52,000
Speaker 2: and down an industry chain and make it much easier

88
00:04:52,000 --> 00:04:54,560
Speaker 2: to sleep. The better way to get exposure to that

89
00:04:54,680 --> 00:04:55,240
Speaker 2: idea or.

90
00:04:55,320 --> 00:04:57,680
Speaker 1: Theme, Yes, that's a better way. So it's kind of

91
00:04:57,680 --> 00:05:03,120
Speaker 1: a more holistic approach to a theme like AI. What

92
00:05:03,279 --> 00:05:06,560
Speaker 1: about I mean, what other benefits does it have as

93
00:05:06,560 --> 00:05:08,640
Speaker 1: opposed to throwing all your money at end video, which

94
00:05:08,640 --> 00:05:11,600
Speaker 1: at the moment is well as of a couple of

95
00:05:11,640 --> 00:05:13,520
Speaker 1: days ago, was actually the largest company in the world

96
00:05:13,640 --> 00:05:16,520
Speaker 1: just for a few hours. I mean, what's the advantage

97
00:05:16,760 --> 00:05:18,960
Speaker 1: of not just putting in an end video but thinking

98
00:05:19,040 --> 00:05:19,680
Speaker 1: broader than that.

99
00:05:20,040 --> 00:05:22,039
Speaker 2: Well, we know that one of the most powerful tools

100
00:05:22,080 --> 00:05:25,800
Speaker 2: that every investor can use to spread their risk is diversification,

101
00:05:26,320 --> 00:05:29,400
Speaker 2: and diversifying up and down a chain can allow investors

102
00:05:29,480 --> 00:05:32,719
Speaker 2: to take exposure, particularly if they're longer term holders, to

103
00:05:33,080 --> 00:05:35,920
Speaker 2: a good idea or an industry they believe has superior

104
00:05:35,960 --> 00:05:39,160
Speaker 2: growth without it all being concentrated in one company. If

105
00:05:39,160 --> 00:05:42,680
Speaker 2: you're in one stock and the company secretary runs off

106
00:05:42,720 --> 00:05:44,880
Speaker 2: with the company funds, it doesn't matter how good the

107
00:05:44,920 --> 00:05:48,560
Speaker 2: industry therein is, that company's share price is very likely

108
00:05:48,640 --> 00:05:51,960
Speaker 2: to plummet. So by spreading through an industry will remove

109
00:05:52,040 --> 00:05:54,680
Speaker 2: a lot of the company specific risk that can come

110
00:05:54,760 --> 00:05:57,720
Speaker 2: with the exposures to a single large player in an

111
00:05:57,720 --> 00:05:58,440
Speaker 2: industry chain.

112
00:05:58,800 --> 00:06:00,760
Speaker 1: Stay with me, Michael will be back in a minute.

113
00:06:07,640 --> 00:06:11,919
Speaker 1: I guess this morning is Michael McCarthy from Murmur Okay,

114
00:06:11,960 --> 00:06:16,239
Speaker 1: I just we talk about upstream downstream. Is one better

115
00:06:16,279 --> 00:06:19,160
Speaker 1: than the other when you're using these tools or is

116
00:06:19,200 --> 00:06:23,440
Speaker 1: it just what you prefer or how does that work? Yeah?

117
00:06:23,600 --> 00:06:26,760
Speaker 2: I try to be agnostic about things like this, Sean.

118
00:06:27,040 --> 00:06:30,200
Speaker 2: The reality is that it can happen anywhere in a chain.

119
00:06:30,279 --> 00:06:33,480
Speaker 2: It depends very much on the event that's possibly driving

120
00:06:33,520 --> 00:06:36,360
Speaker 2: the analysis or the theme that an investor is trying

121
00:06:36,400 --> 00:06:38,760
Speaker 2: to explore as to whether or not they want to

122
00:06:38,800 --> 00:06:42,200
Speaker 2: go upstream or downstream. It depends on the industry as well,

123
00:06:42,200 --> 00:06:45,159
Speaker 2: of course. And you know, some people, for example, prefer

124
00:06:45,240 --> 00:06:47,240
Speaker 2: not to be in commodity markets. They don't want to

125
00:06:47,240 --> 00:06:49,920
Speaker 2: suffer the vagaries. So even though they might have a

126
00:06:50,000 --> 00:06:53,719
Speaker 2: view on car manufacturing the amount of steel and copper required,

127
00:06:53,920 --> 00:06:57,680
Speaker 2: they prefer not to be in the miners that are

128
00:06:57,680 --> 00:06:59,520
Speaker 2: digging it out of the ground. They might look at

129
00:06:59,520 --> 00:07:02,479
Speaker 2: a step in between in the chain, the refiners who

130
00:07:02,560 --> 00:07:07,040
Speaker 2: produce the shells that the car manufacturer might use. So

131
00:07:07,480 --> 00:07:11,240
Speaker 2: it depends very much on the personal views and experiences

132
00:07:11,320 --> 00:07:12,080
Speaker 2: of the investor.

133
00:07:12,720 --> 00:07:15,960
Speaker 3: As a long time trader and investor, myself.

134
00:07:15,800 --> 00:07:19,440
Speaker 2: I will go wherever the opportunities present themselves, But people

135
00:07:19,480 --> 00:07:21,560
Speaker 2: have their own views as to whether it's better to

136
00:07:21,560 --> 00:07:24,120
Speaker 2: be upstream, downstream, or midstream.

137
00:07:24,480 --> 00:07:28,000
Speaker 1: Are we talking about specific investors or is this for everyone?

138
00:07:28,080 --> 00:07:31,440
Speaker 1: Memoo's platform being able to use these tools, is it

139
00:07:31,440 --> 00:07:32,000
Speaker 1: for everyone?

140
00:07:32,480 --> 00:07:36,000
Speaker 2: Well, this importantly puts key information in front of investors

141
00:07:36,040 --> 00:07:38,560
Speaker 2: who might even just be starting out and might help

142
00:07:38,600 --> 00:07:42,680
Speaker 2: them formulate ideas. But the more sophisticated the investor or

143
00:07:42,680 --> 00:07:46,720
Speaker 2: a trader using the industry chain tool, the more sophisticated

144
00:07:46,920 --> 00:07:50,800
Speaker 2: the trading that comes from it, and so understanding where

145
00:07:50,920 --> 00:07:55,320
Speaker 2: chains interconnect, for example, can be a next order level

146
00:07:55,520 --> 00:07:58,720
Speaker 2: of understanding of those industries for those who've studied it.

147
00:07:58,880 --> 00:08:01,520
Speaker 2: So it's certainly available to those who are new to

148
00:08:01,560 --> 00:08:04,480
Speaker 2: trading and want to understand industries better. And it's new

149
00:08:04,560 --> 00:08:07,920
Speaker 2: of course for new investors who want to understand where

150
00:08:07,960 --> 00:08:11,200
Speaker 2: the company they're thinking of investing in sits in its industry.

151
00:08:11,480 --> 00:08:14,600
Speaker 2: But it's a very powerful tool for more sophisticated traders

152
00:08:14,600 --> 00:08:16,720
Speaker 2: in investors. And the thing about it is they're pre

153
00:08:16,800 --> 00:08:19,320
Speaker 2: built so that when an event occurs, you can go

154
00:08:19,400 --> 00:08:21,880
Speaker 2: straight to that industry chain get an idea of where

155
00:08:21,880 --> 00:08:22,360
Speaker 2: you want to be.

156
00:08:22,640 --> 00:08:24,920
Speaker 3: Well, perhaps other people are still digesting the news.

157
00:08:25,520 --> 00:08:27,960
Speaker 1: Are the particular industries where these work best or is

158
00:08:28,000 --> 00:08:29,040
Speaker 1: it across the board?

159
00:08:29,360 --> 00:08:30,920
Speaker 3: Well, it's very event driven.

160
00:08:31,400 --> 00:08:34,360
Speaker 2: Some of our investors do use them to identify thematics

161
00:08:34,400 --> 00:08:36,280
Speaker 2: they have a long term thing they want to gain

162
00:08:36,360 --> 00:08:36,960
Speaker 2: exposure to.

163
00:08:37,440 --> 00:08:40,160
Speaker 3: But the way where we often see a spike.

164
00:08:39,880 --> 00:08:42,600
Speaker 2: In usage of the industry changes when there's an industry

165
00:08:42,600 --> 00:08:46,120
Speaker 2: specific event. So you know, if there is a tariff

166
00:08:46,160 --> 00:08:50,040
Speaker 2: introduced on a coal in one of the major buying countries,

167
00:08:50,160 --> 00:08:52,320
Speaker 2: or if there's a natural disaster that.

168
00:08:52,360 --> 00:08:54,559
Speaker 3: Effects the supply of a good.

169
00:08:54,920 --> 00:08:58,120
Speaker 2: Let's hope not, but if it does happen, traders who

170
00:08:58,120 --> 00:09:00,480
Speaker 2: are on the ball can go straight to the industry

171
00:09:00,600 --> 00:09:03,280
Speaker 2: chain and understand what the impacts of that might be

172
00:09:03,520 --> 00:09:06,160
Speaker 2: up and down the chain and across national borders.

173
00:09:06,679 --> 00:09:08,760
Speaker 1: Yeah, okay, so that's the point. It's not just Australian

174
00:09:08,920 --> 00:09:11,960
Speaker 1: or Wall Street here. These chains can go very broad,

175
00:09:12,200 --> 00:09:14,120
Speaker 1: presumably at least in a geographic sense.

176
00:09:14,480 --> 00:09:15,200
Speaker 3: Absolutely.

177
00:09:15,400 --> 00:09:17,480
Speaker 2: At the moment, we've got a focus on the Hong

178
00:09:17,559 --> 00:09:21,880
Speaker 2: Kong and US stocks that are interconnected. Clearly, the trade

179
00:09:21,880 --> 00:09:23,760
Speaker 2: between China and the US. It's one of the most

180
00:09:23,800 --> 00:09:27,920
Speaker 2: important trade relationships in the globe, and so understanding the

181
00:09:27,920 --> 00:09:30,480
Speaker 2: companies on either side of that can be a very

182
00:09:30,520 --> 00:09:33,760
Speaker 2: powerful tool. Over time, we will be rolling that out

183
00:09:33,800 --> 00:09:36,319
Speaker 2: to include as many markets as we can.

184
00:09:37,240 --> 00:09:40,200
Speaker 1: It's interesting. This is our fourth in a series with Mumu,

185
00:09:40,520 --> 00:09:43,320
Speaker 1: and it is amazing the power of technology or AI

186
00:09:43,640 --> 00:09:45,920
Speaker 1: or whatever you want to call it to actually create

187
00:09:46,120 --> 00:09:49,520
Speaker 1: these new strategies, because what you're talking about, having that

188
00:09:49,559 --> 00:09:52,760
Speaker 1: at your fingertips is much easier than a few years

189
00:09:52,800 --> 00:09:54,959
Speaker 1: ago having to find a Bloomberg screen or a Rotter

190
00:09:55,040 --> 00:09:56,760
Speaker 1: screen and do all the research yourself.

191
00:09:57,400 --> 00:09:59,680
Speaker 2: Well, so, I hate to admit it, but when I

192
00:09:59,720 --> 00:10:02,400
Speaker 2: first came into the market, part of my job is

193
00:10:02,440 --> 00:10:05,160
Speaker 2: to take a ruler of free colored pens every day

194
00:10:05,559 --> 00:10:08,680
Speaker 2: and go to the drawing room on the side of

195
00:10:08,720 --> 00:10:11,480
Speaker 2: the dealing room and add to the daily charts of

196
00:10:11,520 --> 00:10:14,160
Speaker 2: the seven major currencies that we traded. We did it

197
00:10:14,200 --> 00:10:16,760
Speaker 2: by hand. Markets have come a long way, and so

198
00:10:16,960 --> 00:10:20,760
Speaker 2: has the technology. But they're just tools, Sean. That's the idea.

199
00:10:20,920 --> 00:10:25,760
Speaker 2: They're therefore investors and traders to use to better enhance

200
00:10:25,880 --> 00:10:28,640
Speaker 2: their activities in the market and to give them a

201
00:10:28,679 --> 00:10:33,800
Speaker 2: better chance of successfully realizing their goals. Their tools, and

202
00:10:34,200 --> 00:10:36,520
Speaker 2: we can get a bit carried away with how powerful

203
00:10:36,640 --> 00:10:40,199
Speaker 2: they are. The reality is they serve investors and traders.

204
00:10:40,200 --> 00:10:40,880
Speaker 2: That's what they're for.

205
00:10:41,520 --> 00:10:43,559
Speaker 1: Michael, thank you very much for talking to Fear and Greed.

206
00:10:44,040 --> 00:10:44,480
Speaker 3: Thank you.

207
00:10:45,000 --> 00:10:47,679
Speaker 1: That was Michael McCarthy from mumou, a great supporter of

208
00:10:47,720 --> 00:10:51,080
Speaker 1: this podcast. For more information on the Moomoo platform, follow

209
00:10:51,200 --> 00:10:53,720
Speaker 1: the link in today's show notes, and remember that information

210
00:10:53,800 --> 00:10:56,320
Speaker 1: in this podcast is general in nature and you should

211
00:10:56,520 --> 00:10:59,040
Speaker 1: seek professional advice and make sure a product is right

212
00:10:59,120 --> 00:11:01,640
Speaker 1: for you before percent. This is the Fear and Greed

213
00:11:01,679 --> 00:11:04,240
Speaker 1: Business Interview. Join us every morning for the full episode

214
00:11:04,320 --> 00:11:06,800
Speaker 1: of Fear and Greed Daily Business years for people who

215
00:11:06,800 --> 00:11:10,640
Speaker 1: make their own decisions. I'm Sean Elmer. I enjoy your day,