1 00:00:06,360 --> 00:00:09,080 Speaker 1: Welcome to Fear and Greed. Business news you can use 2 00:00:09,280 --> 00:00:13,360 Speaker 1: in today's show. Smaller companies outperform large caps on the ASX, 3 00:00:13,720 --> 00:00:17,520 Speaker 1: Toyota increases its dominance in the local car market, and 4 00:00:17,600 --> 00:00:21,360 Speaker 1: the rice crisis in Japan. Plus BHP looks again at 5 00:00:21,440 --> 00:00:25,040 Speaker 1: Nickel and Silver has its moments in the sun. It's Monday, 6 00:00:25,079 --> 00:00:27,720 Speaker 1: the ninth of June twenty twenty five. I'm Michael Thompson 7 00:00:27,760 --> 00:00:29,160 Speaker 1: and good morning, Sean Aylmer. 8 00:00:29,440 --> 00:00:30,960 Speaker 2: Good morning, Michael, Sean. 9 00:00:31,000 --> 00:00:33,440 Speaker 1: With most of the country on a public holiday, it 10 00:00:33,520 --> 00:00:37,360 Speaker 1: is a slightly shorter show today. Then tomorrow we'll be 11 00:00:37,400 --> 00:00:40,640 Speaker 1: back with our regular full length episode and a regular 12 00:00:40,800 --> 00:00:43,320 Speaker 1: interview and ask Fear and Greed and the whole lot. 13 00:00:43,320 --> 00:00:45,000 Speaker 1: But we've still got so much in the Fear and 14 00:00:45,040 --> 00:00:47,479 Speaker 1: Greed playlist, so you will not be without good listening 15 00:00:47,520 --> 00:00:51,080 Speaker 1: today on the public holiday. The main story this morning 16 00:00:51,479 --> 00:00:55,880 Speaker 1: smaller companies Sean have outperformed large caps on the ASX 17 00:00:55,920 --> 00:00:59,200 Speaker 1: this year, not by much, but it has been an 18 00:00:59,240 --> 00:01:02,320 Speaker 1: outperforming after many years of underperformance. 19 00:01:02,680 --> 00:01:06,320 Speaker 2: We've been waiting for small caps to outperform since the pandemic. 20 00:01:06,400 --> 00:01:10,679 Speaker 2: Before the pandemic, and I think three twenty twenty four, 21 00:01:11,080 --> 00:01:15,120 Speaker 2: all the small cap specialists were saying, this is the year. 22 00:01:15,160 --> 00:01:18,040 Speaker 2: Well that hasn't happened until now. The S and P 23 00:01:18,200 --> 00:01:20,920 Speaker 2: Small Ordinaries Index so far this year is up five percent. 24 00:01:21,360 --> 00:01:23,880 Speaker 2: These are the companies ranked number one hundred and one 25 00:01:23,920 --> 00:01:26,880 Speaker 2: to three hundred on the AX. That compares to the 26 00:01:26,920 --> 00:01:31,800 Speaker 2: ASEX Top fifties performance of four percent. The ASEX two 27 00:01:31,920 --> 00:01:34,760 Speaker 2: hundred is up about four and a half percent with 28 00:01:34,880 --> 00:01:38,800 Speaker 2: the top fifty. There have been some standouts, so Commonwealth Bank, 29 00:01:38,840 --> 00:01:42,280 Speaker 2: Telstra and West Farmers. If you take those out, the 30 00:01:42,360 --> 00:01:45,880 Speaker 2: small caps have outperformed even more. As you said, not 31 00:01:45,920 --> 00:01:50,360 Speaker 2: a huge outperformance, but an outperformance. Nonetheless, some of the 32 00:01:50,400 --> 00:01:54,480 Speaker 2: better performing stocks include those under takeover offers. Of examples, 33 00:01:54,520 --> 00:01:57,840 Speaker 2: there are Brickworks which is joining with sol pats Domain Holdings, 34 00:01:57,840 --> 00:02:01,040 Speaker 2: which is being bought by a US company. Others to 35 00:02:01,160 --> 00:02:04,840 Speaker 2: have performed well have just done well. Their strategy has worked. 36 00:02:04,840 --> 00:02:07,520 Speaker 2: Eagers Automotive is a great example. It's up nearly fifty 37 00:02:07,520 --> 00:02:12,960 Speaker 2: percent this year. Helping things along significantly, of course, have 38 00:02:13,080 --> 00:02:15,800 Speaker 2: been the gold stocks on the back of rising prices 39 00:02:15,880 --> 00:02:19,239 Speaker 2: for the rising price of the precious metal. Regius Resources 40 00:02:19,800 --> 00:02:22,480 Speaker 2: are a band of mining gold road. They all fall 41 00:02:22,520 --> 00:02:26,440 Speaker 2: into that category, Michael. For a couple of years, stockpickers 42 00:02:26,720 --> 00:02:30,960 Speaker 2: have expected small caps to outperform. Well, it is starting 43 00:02:31,000 --> 00:02:34,960 Speaker 2: to happen last finally. Now, of course, we are not 44 00:02:36,080 --> 00:02:38,880 Speaker 2: an investment podcast, so I certainly speak to a financial 45 00:02:38,880 --> 00:02:42,440 Speaker 2: advisor before doing any investing. We always say that, keep 46 00:02:42,440 --> 00:02:44,360 Speaker 2: that in mind when you're always listening to us. 47 00:02:44,400 --> 00:02:48,800 Speaker 1: Michael. Yeah, yeah, well said great advice. Sean. More than 48 00:02:48,800 --> 00:02:52,360 Speaker 1: one hundred and five thousand vehicles were sold last month, 49 00:02:52,440 --> 00:02:55,960 Speaker 1: with SUVs now making up more than half of all 50 00:02:56,160 --> 00:02:58,800 Speaker 1: cars sold, which is no surprise. If you look on 51 00:02:59,000 --> 00:03:02,839 Speaker 1: any suburban street, it is SUVs everywhere. 52 00:03:03,040 --> 00:03:04,760 Speaker 2: I remember a few years ago we used to talk 53 00:03:04,760 --> 00:03:10,360 Speaker 2: about SUV's sort of diminishing as a proportion of vehicles 54 00:03:10,400 --> 00:03:14,720 Speaker 2: sold because they were just too expensive to run. No. Never, 55 00:03:15,120 --> 00:03:15,640 Speaker 2: I can't. 56 00:03:15,480 --> 00:03:19,360 Speaker 1: Imagine ever going back to a sedan. I just like 57 00:03:19,440 --> 00:03:21,239 Speaker 1: to be up high. I like to look at the 58 00:03:21,320 --> 00:03:22,720 Speaker 1: people's fences as I drive. 59 00:03:23,320 --> 00:03:26,160 Speaker 2: That said, the stands are less than twenty percent of 60 00:03:26,160 --> 00:03:30,600 Speaker 2: the market nowadays, No, like SUV's about sixty percent, Like 61 00:03:30,639 --> 00:03:35,520 Speaker 2: commercial vehicles about twenty two percent. So yeah, one hundred 62 00:03:35,560 --> 00:03:38,560 Speaker 2: and five, two hundred and eighty five vehicles were sold 63 00:03:38,760 --> 00:03:42,720 Speaker 2: down five percent on a year ago. That's in May, 64 00:03:43,040 --> 00:03:46,200 Speaker 2: but Federated Chamber of Automotive Industry's chief executive Tony Webers 65 00:03:46,200 --> 00:03:48,960 Speaker 2: said the number is pretty good by historical standards, shows 66 00:03:49,000 --> 00:03:52,560 Speaker 2: the market's resilience. Toyota Highlus once again was a number 67 00:03:52,600 --> 00:03:56,080 Speaker 2: one seller, followed by the Ford Ranger, then Toyota Rat four, 68 00:03:56,200 --> 00:04:00,600 Speaker 2: Toata Land Cruiser and Toyota Prada. When you have of 69 00:04:00,640 --> 00:04:03,680 Speaker 2: the top five selling cars, you are going to be 70 00:04:03,800 --> 00:04:07,680 Speaker 2: the dominant manufacturer in the market. In fact, Toyota now 71 00:04:07,880 --> 00:04:12,400 Speaker 2: sells almost three times the number of cars as the 72 00:04:12,480 --> 00:04:16,720 Speaker 2: number two car maker, which is forward quite phenomenal. Then 73 00:04:16,800 --> 00:04:20,320 Speaker 2: comes at Mazda, Kia and Hoyundai Sean. 74 00:04:20,400 --> 00:04:24,919 Speaker 1: This next one's interesting. BHP is looking at re entering 75 00:04:24,960 --> 00:04:28,000 Speaker 1: the nickel industry with a one point five billion dollar 76 00:04:28,080 --> 00:04:31,200 Speaker 1: mine in Tanzania that promises to be a lower cost 77 00:04:31,240 --> 00:04:34,680 Speaker 1: producer than the world beating Indonesian nickel industry. 78 00:04:35,240 --> 00:04:38,200 Speaker 2: Yeah, it's a great geopolitical story. So the Big Australian 79 00:04:38,240 --> 00:04:40,680 Speaker 2: pulled out of nickel mining last year when it suspended 80 00:04:40,760 --> 00:04:45,480 Speaker 2: its West Australian operations. BHP decided to mothball those mines 81 00:04:45,480 --> 00:04:49,480 Speaker 2: and a Perth refinery after a surge of supply from Indonesia, 82 00:04:49,760 --> 00:04:53,160 Speaker 2: where production is largely backed by the Chinese government. As 83 00:04:53,160 --> 00:04:56,200 Speaker 2: a result of that surgeon supply, the price of nickel 84 00:04:56,240 --> 00:04:59,839 Speaker 2: tumbled about seventy percent. It didn't make the Western st 85 00:05:00,000 --> 00:05:04,640 Speaker 2: A nickel operations economical, and that not only hit bhp' 86 00:05:04,640 --> 00:05:08,160 Speaker 2: it hit a bunch of other Australian miners. But BHP 87 00:05:08,279 --> 00:05:10,880 Speaker 2: is expected to decide as early as next month whether 88 00:05:10,960 --> 00:05:14,800 Speaker 2: to proceed with the Kabanga nickel project, which it's been 89 00:05:14,880 --> 00:05:18,640 Speaker 2: quietly developing. According to report in the AFI, Cabanga being 90 00:05:18,680 --> 00:05:22,640 Speaker 2: in Tanzania. Research from BHP's partner in the project, US 91 00:05:22,640 --> 00:05:26,240 Speaker 2: based Life Zone says Kbanger could produce nickel at an 92 00:05:26,279 --> 00:05:29,839 Speaker 2: all in sustaining cost, so that's kind of the common 93 00:05:29,839 --> 00:05:33,920 Speaker 2: industry measure. It includes royalties, payments to local communities, transportation, 94 00:05:34,640 --> 00:05:39,400 Speaker 2: So an all in sustaining cost of seven thousand US 95 00:05:39,400 --> 00:05:43,000 Speaker 2: dollars a ton, that's less than half the current price 96 00:05:43,400 --> 00:05:48,839 Speaker 2: for the commodity. The commodity prices dropped hugely. BHP's talking 97 00:05:48,880 --> 00:05:51,880 Speaker 2: about still doing it at about fifty percent of that price. 98 00:05:52,720 --> 00:05:56,560 Speaker 2: It's about one third of the price required for BHP's 99 00:05:56,560 --> 00:06:00,600 Speaker 2: Australian mind. So incredibly efficient, obviously a low cost country. 100 00:06:00,960 --> 00:06:04,040 Speaker 2: So the HP is looking at getting back in de nickel, 101 00:06:04,080 --> 00:06:06,760 Speaker 2: which no one would have thought that even a couple 102 00:06:06,800 --> 00:06:07,400 Speaker 2: of months ago. 103 00:06:07,680 --> 00:06:11,440 Speaker 1: No, now we talk a lot about gold Sean because 104 00:06:11,480 --> 00:06:16,800 Speaker 1: obviously it has been surging booming in recent months years. 105 00:06:17,360 --> 00:06:21,120 Speaker 1: It's not the only precious metal surging. Silver has hit 106 00:06:21,160 --> 00:06:25,440 Speaker 1: its highest level in thirteen years, helped by investors' desire 107 00:06:25,560 --> 00:06:29,000 Speaker 1: to find safe places to put their money spots. 108 00:06:28,640 --> 00:06:31,520 Speaker 2: Silver is now training around thirty six US dollars announced. 109 00:06:31,560 --> 00:06:36,239 Speaker 2: That's the highest level since February twenty twelve. The price 110 00:06:36,760 --> 00:06:39,279 Speaker 2: the pace of price rises in silver has lagged behind 111 00:06:39,279 --> 00:06:42,000 Speaker 2: gold in recent months, but just now is catching up. 112 00:06:42,080 --> 00:06:46,360 Speaker 2: The two precious metals often move in tandem. They safe 113 00:06:46,360 --> 00:06:50,080 Speaker 2: haven assets, not tied to any political country, no economy. 114 00:06:51,520 --> 00:06:54,080 Speaker 2: In recent times, of course, gold's just taken off. It's 115 00:06:54,080 --> 00:06:57,120 Speaker 2: now worth one hundred times more than silver, though at 116 00:06:57,160 --> 00:07:01,280 Speaker 2: certain times in history it's only been about ten times 117 00:07:01,320 --> 00:07:03,600 Speaker 2: more value than silver. It's now one hundred times that 118 00:07:03,680 --> 00:07:07,800 Speaker 2: gold really has taken off. But silver, in particularly in 119 00:07:07,839 --> 00:07:10,160 Speaker 2: recent times, is just starting to pick up the pace. 120 00:07:10,400 --> 00:07:12,800 Speaker 2: It's got plenty of fans. So I went and did 121 00:07:12,840 --> 00:07:16,200 Speaker 2: a bit of work on why people like silver, right, 122 00:07:16,840 --> 00:07:20,160 Speaker 2: the best conductor of both heat and electricity out of 123 00:07:20,160 --> 00:07:24,240 Speaker 2: all the elements. Also the best reflector of light, which 124 00:07:24,240 --> 00:07:26,480 Speaker 2: is often is why it's often used to make mirrors. 125 00:07:27,080 --> 00:07:29,440 Speaker 1: Who knew? I did not know that if you had 126 00:07:29,480 --> 00:07:31,320 Speaker 1: asked me what a mirror's made out of? 127 00:07:32,560 --> 00:07:36,200 Speaker 2: No idea hows this one for a fact though, according 128 00:07:36,200 --> 00:07:39,720 Speaker 2: to the UK's Royal Mint, silver and gold are formed 129 00:07:39,880 --> 00:07:45,600 Speaker 2: in star explosions called supernovae. Study published in the journal 130 00:07:45,640 --> 00:07:49,920 Speaker 2: astroney Man Astrophysics found that smaller stars that explode produce silver, 131 00:07:50,640 --> 00:07:52,800 Speaker 2: larger stars produce gold. 132 00:07:53,800 --> 00:08:00,960 Speaker 1: Really hmm, you have just you have really gone to 133 00:08:00,960 --> 00:08:06,080 Speaker 1: town on the research for this one is that is 134 00:08:06,080 --> 00:08:07,720 Speaker 1: a deep dive into silver and. 135 00:08:08,200 --> 00:08:12,520 Speaker 2: Jeep Google into stilver and stars. That's right. 136 00:08:13,400 --> 00:08:17,040 Speaker 1: Turning to international news, there's a rice crisis in Japan. 137 00:08:17,560 --> 00:08:21,880 Speaker 1: Sean large queues are regular sites at supermarkets, in part 138 00:08:21,880 --> 00:08:25,280 Speaker 1: because of shortages, but also in part because of price rises. 139 00:08:25,640 --> 00:08:28,520 Speaker 2: So rice is the cornerstone of Japanese cuisine and diet. 140 00:08:28,800 --> 00:08:32,920 Speaker 2: Domestic rice prices in Japan doubled last year twenty twenty four. 141 00:08:33,480 --> 00:08:36,400 Speaker 2: That put on plenty of political pressure on the Prime 142 00:08:36,400 --> 00:08:41,440 Speaker 2: Minister Shagaru Shiba's government. The average price of a sixty 143 00:08:41,559 --> 00:08:45,120 Speaker 2: kilo bag of rice harvested last year hit an all 144 00:08:45,160 --> 00:08:48,000 Speaker 2: time high of twenty six four hundred yen. That's about 145 00:08:48,000 --> 00:08:52,240 Speaker 2: three hundred dollars for a sixty kilo bag of rice. 146 00:08:52,880 --> 00:08:56,720 Speaker 2: Japan hasn't actually run out, but it had a horrendous 147 00:08:56,720 --> 00:09:00,000 Speaker 2: twenty twenty three harvest, and so it still hasn't quite recovered, 148 00:09:00,040 --> 00:09:02,880 Speaker 2: but there's been lots of reports of hoarding by consumers 149 00:09:02,920 --> 00:09:08,520 Speaker 2: and companies withholding stock. The government, for the first time 150 00:09:08,559 --> 00:09:13,959 Speaker 2: ever outside natural disasters, has tapped into its strategic rice reserve. 151 00:09:14,320 --> 00:09:16,960 Speaker 2: I don't know why Australia doesn't have a strategic rice reserve, 152 00:09:17,320 --> 00:09:20,400 Speaker 2: but maybe that's because we don't eat anywhere near enough 153 00:09:20,400 --> 00:09:24,080 Speaker 2: of it. But Japan does tapped into it when part 154 00:09:24,120 --> 00:09:27,520 Speaker 2: of that went on sale last week, QS multi hour 155 00:09:27,600 --> 00:09:30,880 Speaker 2: ques formed at supermarkets around the country. It is a 156 00:09:31,040 --> 00:09:32,400 Speaker 2: serious crisis in Japan. 157 00:09:33,200 --> 00:09:35,400 Speaker 1: Do we have a strategic wheat reserve? 158 00:09:35,760 --> 00:09:38,600 Speaker 2: I don't think of the equivalent. Yeah, beef, strategic beef 159 00:09:38,720 --> 00:09:40,400 Speaker 2: Is it that go off, wouldn't it? You couldn't really 160 00:09:40,480 --> 00:09:42,480 Speaker 2: hold on to beef sent a freezer. 161 00:09:42,800 --> 00:09:45,520 Speaker 1: Yeah, but I would imagine that we would have to 162 00:09:45,559 --> 00:09:49,400 Speaker 1: have a wheat No, we don't. There you go, just 163 00:09:50,120 --> 00:09:53,720 Speaker 1: google googling. Australia does not have a formal strategic wheat 164 00:09:53,720 --> 00:09:57,080 Speaker 1: reserve system like some other countries do. There you go. Now. 165 00:09:57,200 --> 00:10:00,640 Speaker 1: Up next is the Fear and Greed Day. The interview 166 00:10:00,720 --> 00:10:03,880 Speaker 1: something a little bit exotic today, Sean. 167 00:10:03,640 --> 00:10:07,320 Speaker 2: Indeed it is. It's a conversation between you and I 168 00:10:07,640 --> 00:10:11,240 Speaker 2: about your new book, All the Perfect Days, launched last 169 00:10:11,480 --> 00:10:15,200 Speaker 2: Thursday night and function with plenty of fearing greed readers 170 00:10:15,200 --> 00:10:18,400 Speaker 2: and lots of Michael Thompson, the author lovers will turn 171 00:10:18,480 --> 00:10:20,160 Speaker 2: up launched a book. 172 00:10:20,320 --> 00:10:20,800 Speaker 1: I've read it. 173 00:10:20,800 --> 00:10:23,439 Speaker 2: It's fantastic, it really is. You need to get out 174 00:10:23,440 --> 00:10:26,760 Speaker 2: there and buy it All the Perfect Days in bookshops online. 175 00:10:27,040 --> 00:10:29,920 Speaker 2: But if you want to hear about Michael's process of 176 00:10:29,920 --> 00:10:33,040 Speaker 2: writing and how he came up with the idea, lots 177 00:10:33,080 --> 00:10:36,600 Speaker 2: of other bits and pieces, then just stay tuned and 178 00:10:36,720 --> 00:10:39,560 Speaker 2: you can get straight onto that straight off this episode. 179 00:10:39,600 --> 00:10:42,680 Speaker 2: Of course, we've also got the Cook on the playlist 180 00:10:42,679 --> 00:10:45,040 Speaker 2: as well, talking about not a huge week in the 181 00:10:45,080 --> 00:10:47,560 Speaker 2: economy this week, but plenty going on last week, and 182 00:10:47,559 --> 00:10:48,440 Speaker 2: we get his take on that. 183 00:10:48,920 --> 00:10:51,800 Speaker 1: Yeah, No, it's plenty of good listening and our chat 184 00:10:51,920 --> 00:10:55,000 Speaker 1: about the book is just good fun. It is as 185 00:10:55,080 --> 00:10:58,959 Speaker 1: a fun conversation. Thank you very much, Sean, Thank you Michael. 186 00:10:59,160 --> 00:11:01,840 Speaker 1: It is Monday, the ninth of June twenty twenty five. 187 00:11:01,920 --> 00:11:04,600 Speaker 1: Make sure you're following the podcast and please join us 188 00:11:04,600 --> 00:11:08,600 Speaker 1: online on LinkedIn, Instagram, x TikTok and Facebook. I'm Michael Thompson. 189 00:11:08,600 --> 00:11:12,600 Speaker 1: And that was Fear and Greed. Have a great day.