1 00:00:05,120 --> 00:00:07,760 Speaker 1: This is what the flax. I'm Brett and I'm Justin 2 00:00:07,840 --> 00:00:09,399 Speaker 1: and it's Wednesday, the fourth of June. 3 00:00:09,440 --> 00:00:12,760 Speaker 2: Douzzy boy. It's good news for two point six million Australians. 4 00:00:12,880 --> 00:00:14,840 Speaker 2: The Fair Work Commission announced the three and a half 5 00:00:14,880 --> 00:00:17,919 Speaker 2: percent increase to the national minimum wage, meaning the national 6 00:00:17,960 --> 00:00:21,120 Speaker 2: minimum is now twenty four dollars and ninety four cents 7 00:00:21,160 --> 00:00:25,360 Speaker 2: per hour or forty seven, six hundred and twenty seven 8 00:00:25,600 --> 00:00:26,680 Speaker 2: dollars a year. 9 00:00:27,000 --> 00:00:30,479 Speaker 1: Very good boost beann in line with inflation. Foxham. One 10 00:00:30,520 --> 00:00:32,920 Speaker 1: of the most popular questions we get asked is where 11 00:00:32,960 --> 00:00:35,760 Speaker 1: to even start investing? So if you're looking to start investing, 12 00:00:35,800 --> 00:00:38,040 Speaker 1: they have no idea what to do? We have got 13 00:00:38,080 --> 00:00:40,560 Speaker 1: you with this month's academy. It's called what even is 14 00:00:40,600 --> 00:00:42,760 Speaker 1: an ETF? And it dishes up what they are, why 15 00:00:42,840 --> 00:00:44,919 Speaker 1: everyone's talking about them, and they how to actually use 16 00:00:44,920 --> 00:00:47,800 Speaker 1: them to build a diversified portfolio and fox Am this 17 00:00:47,920 --> 00:00:50,040 Speaker 1: month we are giving away five hundred dollars worth of 18 00:00:50,040 --> 00:00:53,000 Speaker 1: prizes to the top three in the Flex Academy leader boards. 19 00:00:53,000 --> 00:00:54,800 Speaker 1: If you want to win cash prizes and learn a 20 00:00:54,880 --> 00:00:57,200 Speaker 1: heap about ETFs, make sure to download the Flex app 21 00:00:57,240 --> 00:00:59,200 Speaker 1: and check out the ETF Academy. 22 00:00:58,800 --> 00:01:01,680 Speaker 2: Three mouth watering stories. Today juzzy boy, let's do it 23 00:01:01,720 --> 00:01:05,720 Speaker 2: for our first. IDP Education has warned investors of a 24 00:01:05,800 --> 00:01:09,520 Speaker 2: major earnings downgrade, which saw its share priced humble forty 25 00:01:09,520 --> 00:01:10,759 Speaker 2: eight percent in a single day. 26 00:01:10,720 --> 00:01:12,959 Speaker 1: At a lazy seventy five percent slide this year as well. 27 00:01:13,000 --> 00:01:14,399 Speaker 1: Be Man, so tell me more, okay so. 28 00:01:14,480 --> 00:01:17,680 Speaker 2: IDP Education was founded in nineteen sixty nine and helps 29 00:01:17,680 --> 00:01:22,039 Speaker 2: place international students in universities and runs English language testing. 30 00:01:22,240 --> 00:01:24,399 Speaker 1: Be Man back in two thousand and six seek quite 31 00:01:24,480 --> 00:01:26,959 Speaker 1: a fifty percent share in IDP, but sold a share 32 00:01:27,040 --> 00:01:29,840 Speaker 1: when IDP listed on the ASEX in twenty fifteen and. 33 00:01:29,959 --> 00:01:32,400 Speaker 2: Probably is not regretting that decision at the moment. 34 00:01:32,440 --> 00:01:34,800 Speaker 1: But while international students have been a hot sector for 35 00:01:34,840 --> 00:01:37,200 Speaker 1: the past decade, it certainly slowed down lately. 36 00:01:37,319 --> 00:01:40,399 Speaker 2: Juzzy Boy IDP has announced its earnings will drop by 37 00:01:40,480 --> 00:01:42,640 Speaker 2: thirty percent in FY twenty five, and. 38 00:01:42,600 --> 00:01:47,000 Speaker 1: The reason stricter migration policies across some key markets like Canada, 39 00:01:47,120 --> 00:01:48,480 Speaker 1: the UK and the US. 40 00:01:48,520 --> 00:01:51,480 Speaker 2: In fact, student placement volumes are expected to slump by 41 00:01:51,520 --> 00:01:54,040 Speaker 2: about twenty eight to thirty percent, and while clearly this 42 00:01:54,160 --> 00:01:56,320 Speaker 2: came as a surprise to some investors. It seems like 43 00:01:56,400 --> 00:01:58,280 Speaker 2: other investors had kind of predicted this. 44 00:01:58,360 --> 00:02:01,000 Speaker 1: Yeah, it was actually the sixth most shorted company on 45 00:02:01,040 --> 00:02:04,320 Speaker 1: the ASEX, with nearly twelve percent of its shares sold short. 46 00:02:04,480 --> 00:02:06,760 Speaker 2: And those short sellers are laughing all the way to 47 00:02:06,840 --> 00:02:08,600 Speaker 2: the Education Bank Canal. 48 00:02:08,919 --> 00:02:10,480 Speaker 1: Yep. So what is the key learning here? 49 00:02:10,600 --> 00:02:14,400 Speaker 2: Short Selling is when an investor borrows a stock, sells 50 00:02:14,400 --> 00:02:16,160 Speaker 2: it on the market, and hopes to buy it back 51 00:02:16,280 --> 00:02:17,919 Speaker 2: later at a lower price. 52 00:02:17,720 --> 00:02:19,320 Speaker 1: And then they pocket the difference. 53 00:02:19,400 --> 00:02:22,840 Speaker 2: Basically, you're betting that the company's going to a lot. 54 00:02:22,639 --> 00:02:25,040 Speaker 1: And they man. Shorting can be pretty profitable when a 55 00:02:25,080 --> 00:02:27,320 Speaker 1: business stumbles, but it is pretty risky too. 56 00:02:27,480 --> 00:02:30,160 Speaker 2: Yeah. The upside is cap because the most of stock 57 00:02:30,200 --> 00:02:33,320 Speaker 2: can fall is one hundred percent, but the downside. 58 00:02:32,840 --> 00:02:35,520 Speaker 1: Is unlimited if the share price continues to rise and 59 00:02:35,600 --> 00:02:36,320 Speaker 1: rise and rise. 60 00:02:36,480 --> 00:02:39,080 Speaker 2: That's what made the game Stop saga. In twenty twenty one, 61 00:02:39,240 --> 00:02:42,560 Speaker 2: such a popcorn moment. GameStop was heavily shortened by a 62 00:02:42,600 --> 00:02:45,720 Speaker 2: hedgehunt called Melvin Capital. Reddit uses pump the stock so 63 00:02:45,800 --> 00:02:48,400 Speaker 2: high that it forced Melvin Capital to buy back shares 64 00:02:48,440 --> 00:02:50,680 Speaker 2: at enormous losses just to cover their position. 65 00:02:50,760 --> 00:02:53,160 Speaker 1: Melvin Capital lost six point eight billion US dollars as 66 00:02:53,200 --> 00:02:55,560 Speaker 1: part of the short squeeze and then it eventually shut down. 67 00:02:55,560 --> 00:02:55,919 Speaker 1: But do it. 68 00:02:56,160 --> 00:02:58,560 Speaker 2: In idp's case, the short sellers were correct. 69 00:02:58,639 --> 00:03:02,640 Speaker 1: Yeah, migration policy ship were a fundamental risk to idp's business, 70 00:03:02,680 --> 00:03:06,560 Speaker 1: and when those risks materialized, the stock plummeted. 71 00:03:06,960 --> 00:03:10,920 Speaker 2: For our second story, Treasury Wine Estates, the Australian wine 72 00:03:10,960 --> 00:03:14,120 Speaker 2: maker behind Penfolds and others, has just suffered a major 73 00:03:14,200 --> 00:03:17,280 Speaker 2: hiccup in its big band bowld US strategy. 74 00:03:17,360 --> 00:03:20,040 Speaker 1: Talk about putting a cork in its US ambitions, b Man, 75 00:03:20,320 --> 00:03:21,079 Speaker 1: what's going on here? 76 00:03:21,120 --> 00:03:24,360 Speaker 2: Okay? So, Treasury Wine Estates was spun off from Fosters 77 00:03:24,360 --> 00:03:26,359 Speaker 2: in twenty eleven and has since grown into one of 78 00:03:26,360 --> 00:03:27,680 Speaker 2: the world's biggest wine makers. 79 00:03:27,680 --> 00:03:29,720 Speaker 1: Owned some of the big wine brands across the world 80 00:03:29,840 --> 00:03:32,600 Speaker 1: like Squealing Pig and Nineteen Crimes and Jack. 81 00:03:32,480 --> 00:03:34,720 Speaker 2: But Jazzy Boy. You can't leave out its cash Cow 82 00:03:34,800 --> 00:03:37,040 Speaker 2: and Golden Goose Penfolds, but be Man. 83 00:03:37,080 --> 00:03:39,000 Speaker 1: It went even further in the premium market. Back in 84 00:03:39,040 --> 00:03:42,040 Speaker 1: twenty twenty three, Treasury acquired the US wine group Dow 85 00:03:42,200 --> 00:03:45,040 Speaker 1: Vineyards for one point six billion dollars, now be Man 86 00:03:45,200 --> 00:03:48,480 Speaker 1: Treasury's key distributor in California, the biggest wine state in 87 00:03:48,480 --> 00:03:50,240 Speaker 1: the US, is pulling out completely. 88 00:03:50,320 --> 00:03:54,120 Speaker 2: Next minute, Treasury downgraded its FY twenty five earnings forecast 89 00:03:54,280 --> 00:03:55,720 Speaker 2: by ten million bucks. 90 00:03:55,720 --> 00:03:58,760 Speaker 1: So now Treasury is scrambling to find a new route 91 00:03:58,800 --> 00:04:01,160 Speaker 1: to market to distribute in the US, which is one 92 00:04:01,200 --> 00:04:03,600 Speaker 1: of its key focuses. That's interesting, So what's the key 93 00:04:03,640 --> 00:04:05,840 Speaker 1: learning here? In the world of US wine. Having a 94 00:04:05,840 --> 00:04:08,800 Speaker 1: great product isn't enough because you need someone to actually 95 00:04:08,840 --> 00:04:09,160 Speaker 1: sell it. 96 00:04:09,200 --> 00:04:11,400 Speaker 2: This is known as the route to market, and. 97 00:04:11,400 --> 00:04:14,040 Speaker 1: It's critical to getting your product into customers hands. In 98 00:04:14,080 --> 00:04:14,600 Speaker 1: the US, you. 99 00:04:14,600 --> 00:04:16,480 Speaker 2: See Juzy Boy. In the US has a pretty unique 100 00:04:16,640 --> 00:04:18,160 Speaker 2: three tier alcohol system. 101 00:04:18,279 --> 00:04:21,760 Speaker 1: Under this system, alcohol producers like Treasury wine can't sell 102 00:04:21,800 --> 00:04:23,000 Speaker 1: directly to retailers. 103 00:04:23,080 --> 00:04:25,960 Speaker 2: Instead, they need to go through a wholesaler or a distributor, 104 00:04:26,000 --> 00:04:28,719 Speaker 2: who then sells to stores, bars and restaurants. 105 00:04:28,720 --> 00:04:30,760 Speaker 1: So when a key distributor pulls out of a market, 106 00:04:30,800 --> 00:04:33,600 Speaker 1: it creates a huge operational and revenue risk. 107 00:04:33,760 --> 00:04:36,400 Speaker 2: In fact, that single distributor accounted for twenty five percent 108 00:04:36,440 --> 00:04:38,000 Speaker 2: of Treasuries US sales. 109 00:04:37,680 --> 00:04:39,640 Speaker 1: And ten percent of its global sales. 110 00:04:39,760 --> 00:04:42,440 Speaker 2: So while in Australia Treasury can send a few cases 111 00:04:42,440 --> 00:04:45,839 Speaker 2: to Dan Murphy's, but in the US, quality distributor is 112 00:04:45,880 --> 00:04:47,440 Speaker 2: basically your access to the market. 113 00:04:47,520 --> 00:04:50,400 Speaker 1: For our third and final story, McKinsey, one of the 114 00:04:50,400 --> 00:04:53,400 Speaker 1: global leaders in management consulting, has cut its workforce by 115 00:04:53,440 --> 00:04:56,440 Speaker 1: over ten percent after letting AI tools take the wheel. 116 00:04:56,600 --> 00:04:59,360 Speaker 2: Junior consultants are really coppying the hit here, Juzy boy, 117 00:04:59,400 --> 00:05:00,120 Speaker 2: tell me more so. 118 00:05:00,200 --> 00:05:03,000 Speaker 1: McKinsey's one of the world's most powerful consulting firms. 119 00:05:03,080 --> 00:05:06,039 Speaker 2: It advises many of the top companies and big governments 120 00:05:06,040 --> 00:05:09,479 Speaker 2: across the world and loves to include buzzwords. All buzzwords 121 00:05:09,520 --> 00:05:10,040 Speaker 2: under the sun. 122 00:05:10,080 --> 00:05:13,920 Speaker 1: We're talking digital strategies, transformation projects, synergy levers. 123 00:05:13,960 --> 00:05:17,719 Speaker 2: But now McKinsey has boiled the ocean to find the 124 00:05:18,040 --> 00:05:19,120 Speaker 2: low hanging fruit. 125 00:05:19,200 --> 00:05:21,919 Speaker 1: And it's cut around five thousand staff since late twenty 126 00:05:21,920 --> 00:05:22,680 Speaker 1: twenty two, and. 127 00:05:22,600 --> 00:05:25,160 Speaker 2: This is one of the biggest workforce reductions in its 128 00:05:25,200 --> 00:05:26,120 Speaker 2: one hundred year history. 129 00:05:26,200 --> 00:05:28,599 Speaker 1: The reason b man it's new employee, Lily. 130 00:05:28,720 --> 00:05:31,880 Speaker 2: Yep. It's developed an in house AI assistant named Lily, 131 00:05:32,040 --> 00:05:35,000 Speaker 2: who has taken over tasks that junior burgers used to do. 132 00:05:35,120 --> 00:05:38,200 Speaker 1: We're talking generating slides, drafting reports, and a heap of 133 00:05:38,240 --> 00:05:41,799 Speaker 1: other tasks that wants entry level jobs and unlike the staff, 134 00:05:41,880 --> 00:05:45,160 Speaker 1: Lily ain't pushing for a promotion, and the biggest cohort 135 00:05:45,200 --> 00:05:48,960 Speaker 1: suffering that would be entry level employees. So what is 136 00:05:49,000 --> 00:05:52,680 Speaker 1: the key learning here? AI could replace grad jobs in 137 00:05:52,720 --> 00:05:55,839 Speaker 1: major consulting houses. There's a classic path from analysts to 138 00:05:55,960 --> 00:05:59,400 Speaker 1: partner and it relies on a very deliberate apprenticeship model. 139 00:05:59,600 --> 00:06:02,679 Speaker 2: You start doing research, building decks and triple checking data 140 00:06:02,720 --> 00:06:03,640 Speaker 2: at two am. 141 00:06:03,440 --> 00:06:06,680 Speaker 1: And over time you take on more strategic responsibility and say, 142 00:06:06,880 --> 00:06:08,320 Speaker 1: let's unpack that in board rooms. 143 00:06:08,360 --> 00:06:11,240 Speaker 2: But with AI taking over a lot of that grunt work, 144 00:06:11,440 --> 00:06:13,960 Speaker 2: that entry level training ground is vanishing. Ye. 145 00:06:14,120 --> 00:06:16,360 Speaker 1: On the one hand, new hives can skip to more 146 00:06:16,400 --> 00:06:18,200 Speaker 1: strategic or creative. 147 00:06:17,800 --> 00:06:19,320 Speaker 2: Work, but on the other hand, they might miss out 148 00:06:19,360 --> 00:06:21,400 Speaker 2: on the basics or not even get a job in 149 00:06:21,440 --> 00:06:22,000 Speaker 2: the first place. 150 00:06:22,160 --> 00:06:24,960 Speaker 1: In fact, the Man A McKinsey report estimates that between 151 00:06:25,000 --> 00:06:28,039 Speaker 1: four hundred million and eight hundred million jobs worldwide could 152 00:06:28,040 --> 00:06:30,040 Speaker 1: be displaced by AI by twenty thirty. 153 00:06:30,080 --> 00:06:32,440 Speaker 2: The irony is certainly not lost on us here. 154 00:06:33,080 --> 00:06:35,800 Speaker 1: Man McKinsey might just be consulting its way out of 155 00:06:35,800 --> 00:06:39,120 Speaker 1: its own junior roles. Sam, we're giving away five hundred 156 00:06:39,120 --> 00:06:41,480 Speaker 1: dollars in the flex Academy this month to the top 157 00:06:41,600 --> 00:06:44,440 Speaker 1: three competitors. It's all in our academy what even is 158 00:06:44,480 --> 00:06:46,440 Speaker 1: in ETF? So if you're looking to level up on 159 00:06:46,520 --> 00:06:49,400 Speaker 1: understanding ETFs, your investment strategy, or want to win some 160 00:06:49,440 --> 00:06:51,840 Speaker 1: big prizes, make sure to check out the Academy this month. 161 00:06:51,880 --> 00:06:54,440 Speaker 2: Thanks for listening, and we'll see you on Friday.