1 00:00:09,600 --> 00:00:12,720 Speaker 1: Hello and welcome to The Australian's Money Puzzle podcast. I'm 2 00:00:12,800 --> 00:00:16,400 Speaker 1: James Kirby. Welcome aboard everybody, and thanks everybody for various 3 00:00:16,440 --> 00:00:20,160 Speaker 1: messages over the last few days. Welcome me back, Thank you. Yes, 4 00:00:20,200 --> 00:00:22,880 Speaker 1: I was very far away. I was in Greece and 5 00:00:23,000 --> 00:00:27,440 Speaker 1: I was in Turkey, very interesting places, especially Turkey. Do 6 00:00:27,520 --> 00:00:31,880 Speaker 1: you know what the inflation rate is in Turkey? It's 7 00:00:32,320 --> 00:00:37,280 Speaker 1: thirty percent and the interest rate, the benchmark industrate is 8 00:00:37,320 --> 00:00:41,400 Speaker 1: forty percent, and they are very happy that it's coming down. 9 00:00:41,760 --> 00:00:44,760 Speaker 1: So there you go. You think we got challenges, Well, 10 00:00:44,800 --> 00:00:47,320 Speaker 1: i'll tell you what. There are two themes I think 11 00:00:47,520 --> 00:00:52,200 Speaker 1: dominating investment markets just now. One is AI, which we've 12 00:00:52,200 --> 00:00:57,600 Speaker 1: covered very well, and the other is gold. We cover gold, 13 00:00:57,840 --> 00:01:01,240 Speaker 1: and we've mentioned gold we regularly ested obviously as a 14 00:01:01,240 --> 00:01:05,760 Speaker 1: part of a portfolio. But what we're seeing now is extraordinary. 15 00:01:06,000 --> 00:01:09,440 Speaker 1: Just this last few weeks, gold the bullion is up 16 00:01:09,440 --> 00:01:12,200 Speaker 1: about fifty percent or so this year so far, which 17 00:01:12,240 --> 00:01:15,800 Speaker 1: is extraordinary, not to mention what's happening in other parts 18 00:01:15,840 --> 00:01:19,160 Speaker 1: of the market with particular gold stocks, et cetera. And 19 00:01:19,240 --> 00:01:24,120 Speaker 1: I thought, well, wouldn't this intrigue someone who was called 20 00:01:24,120 --> 00:01:27,640 Speaker 1: the head of investor behavior at NAP Trade, which is 21 00:01:27,720 --> 00:01:29,560 Speaker 1: Jemmie Dale, How are you, Jemma. 22 00:01:30,319 --> 00:01:32,080 Speaker 2: I'm well, thanks, how are you good? 23 00:01:32,160 --> 00:01:36,319 Speaker 1: Good? Have you ever seen anything like this in relation 24 00:01:36,440 --> 00:01:36,919 Speaker 1: to gold? 25 00:01:38,520 --> 00:01:41,360 Speaker 2: No, not personally. I mean there will be people who 26 00:01:41,400 --> 00:01:45,040 Speaker 2: are older than I am who have seen things like this, 27 00:01:45,200 --> 00:01:47,000 Speaker 2: but you have to be quite a bit older than 28 00:01:47,040 --> 00:01:49,000 Speaker 2: I am to have seen this before. 29 00:01:49,120 --> 00:01:50,520 Speaker 1: Like we're going way back. 30 00:01:50,360 --> 00:01:56,280 Speaker 2: So it's fascinating. If you are pre retirement age or 31 00:01:56,320 --> 00:01:59,600 Speaker 2: not war into your retirement, this is probably outside the 32 00:01:59,640 --> 00:02:00,800 Speaker 2: scope of your experience. 33 00:02:00,800 --> 00:02:02,960 Speaker 1: I think it was the late seventies is the last 34 00:02:02,960 --> 00:02:06,600 Speaker 1: time that there was an absolute red hot, raging gold 35 00:02:07,160 --> 00:02:09,280 Speaker 1: rush on gold. And back in those days, of course, 36 00:02:09,720 --> 00:02:12,280 Speaker 1: it was all about you know, you had to buy gold, 37 00:02:12,360 --> 00:02:14,720 Speaker 1: you had to physically buy gold. These is it's very 38 00:02:14,760 --> 00:02:17,440 Speaker 1: different and you can buy no sorts of different ways. 39 00:02:17,680 --> 00:02:19,960 Speaker 1: I mean, one of the things that we should talk 40 00:02:20,000 --> 00:02:24,359 Speaker 1: about first of all and for all investors. And I'd 41 00:02:24,400 --> 00:02:26,240 Speaker 1: be really intrigued to know folks and write in and 42 00:02:26,320 --> 00:02:28,440 Speaker 1: let us know the money posit at the Australian dot 43 00:02:28,480 --> 00:02:30,560 Speaker 1: com dot u If you have gold, how much you have, 44 00:02:30,639 --> 00:02:34,160 Speaker 1: what you think about the concept of holding gold, which 45 00:02:34,200 --> 00:02:37,400 Speaker 1: I am very comfortable with in my SMSF and I 46 00:02:37,400 --> 00:02:41,160 Speaker 1: have had it always, but I've never seen it move 47 00:02:41,280 --> 00:02:44,960 Speaker 1: up like this. And the issue obviously that always restrained 48 00:02:44,960 --> 00:02:48,840 Speaker 1: people traditionally was it had no income and so then 49 00:02:48,880 --> 00:02:53,040 Speaker 1: it was totally a capital appreciation price game. So I 50 00:02:53,160 --> 00:02:55,600 Speaker 1: was saying to you that we've never seen anything like it. 51 00:02:56,320 --> 00:03:00,639 Speaker 1: And what catches my eye, Gemma, is the last great 52 00:03:01,440 --> 00:03:04,360 Speaker 1: tech boom conventional tech boom in the market was the 53 00:03:04,400 --> 00:03:07,680 Speaker 1: dot com boom, which ran in the nineteen nineties, and 54 00:03:07,760 --> 00:03:11,280 Speaker 1: at that point it was distinct and clear parallel with 55 00:03:11,320 --> 00:03:14,919 Speaker 1: the AI boom which is in the markets at the moment. However, 56 00:03:15,160 --> 00:03:18,079 Speaker 1: if you look at what happened back at that point, 57 00:03:18,440 --> 00:03:22,480 Speaker 1: gold did nothing in that last boom. So is that 58 00:03:22,600 --> 00:03:24,560 Speaker 1: what's the sort of working theory as to why we 59 00:03:24,639 --> 00:03:27,160 Speaker 1: have a boom in the stock market off the back 60 00:03:27,200 --> 00:03:29,840 Speaker 1: of tech but gold is rising at the same time. 61 00:03:30,720 --> 00:03:35,720 Speaker 2: Yeah, that's the fascinating thing, right. The parallel for previous 62 00:03:35,800 --> 00:03:40,720 Speaker 2: periods when gold has run quite hard is very different. 63 00:03:40,880 --> 00:03:44,200 Speaker 2: The macro environment was different, but more specifically, the asset 64 00:03:44,240 --> 00:03:49,160 Speaker 2: prices and asset price appreciation in other sectors was very different. 65 00:03:49,880 --> 00:03:54,000 Speaker 2: So traditionally, you buy gold as a defensive asset and 66 00:03:54,080 --> 00:03:57,200 Speaker 2: as a hedge and as the last safe haven when 67 00:03:57,200 --> 00:03:59,600 Speaker 2: everything goes to pieces, your gold is the one thing 68 00:03:59,600 --> 00:04:04,280 Speaker 2: that should retain its value and potentially increase in value 69 00:04:04,320 --> 00:04:06,920 Speaker 2: when everything else is falling. That was always the theory, 70 00:04:07,320 --> 00:04:12,160 Speaker 2: and I find your comment that you've always held goal 71 00:04:12,320 --> 00:04:15,880 Speaker 2: really interesting because for the whole of my career and 72 00:04:15,920 --> 00:04:20,760 Speaker 2: I started an advice working with advisors and asset consultants, 73 00:04:20,960 --> 00:04:25,000 Speaker 2: and the people who structured portfolios for advisors, a lot 74 00:04:25,000 --> 00:04:26,880 Speaker 2: of them go to a sort of centralized pool of 75 00:04:26,920 --> 00:04:30,000 Speaker 2: investment specialist to get advice on what a model portfolio 76 00:04:30,040 --> 00:04:32,280 Speaker 2: should look like. For the whole of my twenty five 77 00:04:32,760 --> 00:04:35,800 Speaker 2: year career, there has been no interest in having a 78 00:04:35,839 --> 00:04:41,000 Speaker 2: specific allocation to gold. It has been from an institutional 79 00:04:41,040 --> 00:04:45,120 Speaker 2: perspective or from a financial planning perspective. You can if 80 00:04:45,120 --> 00:04:47,239 Speaker 2: you want, like two to three percent. 81 00:04:47,320 --> 00:04:51,040 Speaker 1: You know what was the argument against it, and the item. 82 00:04:50,839 --> 00:04:54,360 Speaker 2: Has always been other asset classes are where you get 83 00:04:54,360 --> 00:04:57,159 Speaker 2: your growth, there's where you can value cash flows, that's 84 00:04:57,160 --> 00:05:00,919 Speaker 2: where you get your income from. And as we've financialized 85 00:05:00,960 --> 00:05:06,640 Speaker 2: everything and we've been able to list everything and everything 86 00:05:06,680 --> 00:05:09,760 Speaker 2: can be structured in such a way that you can 87 00:05:09,760 --> 00:05:11,320 Speaker 2: buy it on a market or that you can buy 88 00:05:11,360 --> 00:05:13,840 Speaker 2: it and a unit trust and so on. The attraction 89 00:05:14,240 --> 00:05:18,080 Speaker 2: of holding a physical asset just started to diminish. Certainly 90 00:05:18,080 --> 00:05:20,360 Speaker 2: if you're a financial advisor, how do you charge fees 91 00:05:20,400 --> 00:05:24,279 Speaker 2: on a physical asset? Right, So not necessarily the motivation, 92 00:05:24,480 --> 00:05:25,600 Speaker 2: but it's correlated. 93 00:05:26,640 --> 00:05:28,960 Speaker 1: It's a very important point. So they don't bring it up. 94 00:05:29,040 --> 00:05:31,560 Speaker 1: It's like they rarely see, why don't you hold gianto 95 00:05:31,560 --> 00:05:33,800 Speaker 1: my cash? They don't suggest these things. Yeah. 96 00:05:34,000 --> 00:05:36,320 Speaker 2: No, So it was never part of any portfolio construction 97 00:05:36,440 --> 00:05:41,000 Speaker 2: methodology that I ever saw, you know, but occasionally something 98 00:05:41,120 --> 00:05:44,120 Speaker 2: someone would have a real affinity with gold and feel 99 00:05:44,160 --> 00:05:46,200 Speaker 2: that it was an important part of the portfolio. But 100 00:05:46,279 --> 00:05:48,880 Speaker 2: because equities prices ran really hard during the period you 101 00:05:48,920 --> 00:05:51,760 Speaker 2: were talking about in the late nineties, and then you 102 00:05:51,800 --> 00:05:54,760 Speaker 2: would sort of move to other asset classes, people move 103 00:05:54,880 --> 00:05:57,600 Speaker 2: to property particularly, you know, you would feel that those 104 00:05:57,640 --> 00:06:00,480 Speaker 2: things are going to run really hard, and you don't 105 00:06:00,520 --> 00:06:02,880 Speaker 2: need gold. You don't need it. It's no use to 106 00:06:02,960 --> 00:06:05,440 Speaker 2: you when you're in pension phase. That's the other Thing's 107 00:06:05,520 --> 00:06:08,000 Speaker 2: very difficult to draw down a physical store of gold. 108 00:06:08,320 --> 00:06:11,280 Speaker 2: So that's another part of it that's really important. Most 109 00:06:11,320 --> 00:06:14,920 Speaker 2: advice portfolios are looking to retirement as a critical phase. 110 00:06:15,320 --> 00:06:17,680 Speaker 2: So yeah, just hasn't been part of it. 111 00:06:17,720 --> 00:06:19,640 Speaker 1: To Tooll, I suppose a lot of that, A lot 112 00:06:19,640 --> 00:06:26,880 Speaker 1: of that theory was formed pre ETFs, where suddenly gold 113 00:06:26,960 --> 00:06:29,960 Speaker 1: is liquid, where suddenly you can say I've got whatever, 114 00:06:30,160 --> 00:06:31,839 Speaker 1: twenty thousand in gold and I want to set a 115 00:06:31,839 --> 00:06:34,600 Speaker 1: thousand worth today and you can do that a push 116 00:06:34,600 --> 00:06:36,919 Speaker 1: of a button. Now there are those who say you 117 00:06:36,960 --> 00:06:39,880 Speaker 1: don't have gold, you have paper that pretends it's covering gold, 118 00:06:40,200 --> 00:06:43,120 Speaker 1: et cetera. Well I'm comfortable with that. And when I 119 00:06:43,120 --> 00:06:45,200 Speaker 1: say of gold, I say I have ETF's and gold. 120 00:06:46,240 --> 00:06:48,240 Speaker 1: I think what happened was I covered? Would you believe 121 00:06:48,279 --> 00:06:53,599 Speaker 1: the launch of the first ever ETF in gold, from 122 00:06:53,880 --> 00:06:56,400 Speaker 1: which was launched in Australia, of course, the world's first 123 00:06:56,600 --> 00:06:59,840 Speaker 1: gold ETF was Australian, which was the original company which 124 00:06:59,880 --> 00:07:01,920 Speaker 1: is has now been sold in is now global X 125 00:07:02,520 --> 00:07:05,479 Speaker 1: and remains the biggest gold ETF. That was one thing 126 00:07:05,600 --> 00:07:09,200 Speaker 1: that convinced me. The other thing was after the GFC 127 00:07:09,360 --> 00:07:13,920 Speaker 1: in the grizzly period of two nine, when everything was bad, 128 00:07:14,440 --> 00:07:18,920 Speaker 1: gold held up, and that I think convinced me that 129 00:07:19,040 --> 00:07:21,160 Speaker 1: it was fine. I never had any problems with these 130 00:07:21,240 --> 00:07:23,520 Speaker 1: theories that oh what good is it to you? And 131 00:07:23,640 --> 00:07:26,080 Speaker 1: if the world goes to hell in a handbasket whatever 132 00:07:26,080 --> 00:07:27,600 Speaker 1: the phrase is, what are you going to do with 133 00:07:27,600 --> 00:07:29,360 Speaker 1: the gold? You know, you sitting there at a pile of it. 134 00:07:29,600 --> 00:07:31,560 Speaker 1: I wasn't thinking like that. I was thinking, I want 135 00:07:31,600 --> 00:07:33,520 Speaker 1: something that will go up when everything else goes down. 136 00:07:33,840 --> 00:07:37,280 Speaker 1: Non correlated acid. I don't believe bitcoin is a non 137 00:07:37,320 --> 00:07:40,920 Speaker 1: correlated acid. I do believe that gold is. That's why 138 00:07:41,040 --> 00:07:43,440 Speaker 1: I was comfortable with it. Now. The thing is, of 139 00:07:43,480 --> 00:07:48,840 Speaker 1: course we have the additional excellent option in Australia that 140 00:07:48,960 --> 00:07:53,280 Speaker 1: we have a big gold mining sector. Unfortunately, of course 141 00:07:53,320 --> 00:07:57,000 Speaker 1: some of the most delicious acids have been picked off 142 00:07:57,360 --> 00:08:01,320 Speaker 1: and New crest Our, biggest gold miner, was board right 143 00:08:01,600 --> 00:08:04,160 Speaker 1: smack at the start of this run up of gold 144 00:08:04,200 --> 00:08:06,160 Speaker 1: and they sold it off and that was a terrible thing, 145 00:08:06,240 --> 00:08:08,080 Speaker 1: just like Sydney Airport, one of those things that you 146 00:08:08,200 --> 00:08:11,760 Speaker 1: really wish hadn't happened. However, I'd be really intrigued to 147 00:08:11,880 --> 00:08:14,240 Speaker 1: know just and we're going to get on in a 148 00:08:14,280 --> 00:08:17,120 Speaker 1: minute about what you have found out, what people are doing, 149 00:08:17,160 --> 00:08:18,920 Speaker 1: and it's I think, folks, it's worth the one of 150 00:08:18,960 --> 00:08:22,560 Speaker 1: the reasons I'm asking, Jemma what people are doing on 151 00:08:22,600 --> 00:08:25,720 Speaker 1: the NAP trade platform is I work on the theory 152 00:08:26,040 --> 00:08:28,280 Speaker 1: that it's not what you think is going to happen 153 00:08:28,360 --> 00:08:31,120 Speaker 1: or what you're doing in terms of markets, it's what 154 00:08:31,160 --> 00:08:34,280 Speaker 1: everyone else is doing. So so if everyone else thinks 155 00:08:34,280 --> 00:08:36,079 Speaker 1: gold is going to keep going up, well, guess what's 156 00:08:36,120 --> 00:08:38,760 Speaker 1: going to go higher and higher. And just before we 157 00:08:38,840 --> 00:08:42,240 Speaker 1: get into specifics here as to what's going and what's moving, 158 00:08:43,120 --> 00:08:45,280 Speaker 1: I just want to make the point that gold is 159 00:08:45,280 --> 00:08:49,680 Speaker 1: about fifty percent. It's around the four thousand US mark. 160 00:08:51,400 --> 00:08:54,080 Speaker 1: And I don't know about you, Jemma, but in my 161 00:08:54,160 --> 00:08:57,200 Speaker 1: experience when you ask people was where was gold going 162 00:08:57,240 --> 00:08:59,400 Speaker 1: to go? It was always very simple. Are you anyone 163 00:08:59,440 --> 00:09:02,520 Speaker 1: in the golden said it's going to go up? So 164 00:09:02,640 --> 00:09:05,160 Speaker 1: you ring a gold miner, say hey, what's going on 165 00:09:05,200 --> 00:09:06,719 Speaker 1: with the price of gold? Where is it going? And 166 00:09:06,840 --> 00:09:09,280 Speaker 1: guess what they said, it's going to go up. It's 167 00:09:09,320 --> 00:09:10,720 Speaker 1: a really good time to buy a bit like a 168 00:09:10,720 --> 00:09:15,439 Speaker 1: real estate agent. But the banks didn't say that. But now, 169 00:09:15,679 --> 00:09:19,320 Speaker 1: and this is when it's already up fifty percent these weeks. 170 00:09:19,520 --> 00:09:25,400 Speaker 1: Right now, JP Morgan, Goldman Sachs, Bank of America, all 171 00:09:25,559 --> 00:09:28,000 Speaker 1: saying it's going to go higher, saying it can go 172 00:09:28,080 --> 00:09:31,320 Speaker 1: to five thousand easily. Okay, it's four thousand now, folks. 173 00:09:31,160 --> 00:09:36,839 Speaker 1: That's where we're coming from. Am I naive to take 174 00:09:37,200 --> 00:09:40,960 Speaker 1: the forecasts of the world's biggest and best investment banks 175 00:09:41,160 --> 00:09:45,000 Speaker 1: so enthusiastically? Do you think the point I. 176 00:09:44,920 --> 00:09:48,320 Speaker 2: Was making before about goal not really having a position 177 00:09:48,640 --> 00:09:54,079 Speaker 2: in any model portfolios, but that included institutional portfolios, which 178 00:09:54,240 --> 00:09:56,120 Speaker 2: you're in Australia super fun so, but you look off 179 00:09:56,120 --> 00:10:00,880 Speaker 2: shore and there are certainly enormous institutional mandate that may 180 00:10:00,920 --> 00:10:02,920 Speaker 2: have an allocation to gold, but plenty of them didn't. 181 00:10:03,400 --> 00:10:05,240 Speaker 2: The one that I loved, and this was about a 182 00:10:05,280 --> 00:10:07,559 Speaker 2: month ago, was Morgan Stanley saying we're going to move 183 00:10:07,600 --> 00:10:11,920 Speaker 2: away from the sixty to forty portfolio to a sixty 184 00:10:12,120 --> 00:10:17,560 Speaker 2: twenty twenty of which twenty should be gold. So an 185 00:10:17,600 --> 00:10:22,559 Speaker 2: allocation from zero to twenty is wild, you know. And 186 00:10:22,679 --> 00:10:25,600 Speaker 2: these are the big investment banks making these statements now, so. 187 00:10:25,800 --> 00:10:29,920 Speaker 1: The biggest wealth managers. I mean, our top financial advisors list, 188 00:10:30,040 --> 00:10:33,720 Speaker 1: top one fifty advisors list is dominated by Morgan Stanley 189 00:10:34,320 --> 00:10:37,840 Speaker 1: and the number one is from Morgan Stanley. And they 190 00:10:37,880 --> 00:10:40,319 Speaker 1: have and they would follow these precepts if you like, 191 00:10:40,480 --> 00:10:42,560 Speaker 1: very carefully. If they come out of New York and 192 00:10:42,600 --> 00:10:47,080 Speaker 1: they are saying take twenty percent of investment portfolioes and gold. 193 00:10:47,240 --> 00:10:50,440 Speaker 1: I won't say that it was a dependable call, but 194 00:10:50,559 --> 00:10:54,920 Speaker 1: it was a correct It's a trajectory. Was pretty accurate, 195 00:10:55,000 --> 00:10:56,480 Speaker 1: that's for sure. If you didn't have any, it was 196 00:10:56,480 --> 00:10:58,840 Speaker 1: a good time to get some at that time. I 197 00:10:58,920 --> 00:11:01,360 Speaker 1: have to ask you something before we talk about what's 198 00:11:01,400 --> 00:11:05,800 Speaker 1: really happening. Do you think it's too late to go 199 00:11:05,880 --> 00:11:06,520 Speaker 1: into this. 200 00:11:06,520 --> 00:11:13,840 Speaker 2: Is familiar delation, look to be frank given. And this 201 00:11:14,000 --> 00:11:16,280 Speaker 2: is why I think it's so fascinating when you do 202 00:11:16,480 --> 00:11:19,640 Speaker 2: have And so we've got this sixty twenty twenty, which 203 00:11:19,679 --> 00:11:22,400 Speaker 2: is fascinating. I've never seen that in my career is 204 00:11:22,440 --> 00:11:24,680 Speaker 2: about twenty five years, so you go back a lot further. 205 00:11:24,720 --> 00:11:27,600 Speaker 2: I still I'm not aware of it. Nothing that high. 206 00:11:28,000 --> 00:11:30,920 Speaker 2: There's another talk about a twenty five twenty five twenty 207 00:11:30,960 --> 00:11:33,480 Speaker 2: five twenty five portfolio, of which twenty five is golden, 208 00:11:33,520 --> 00:11:38,079 Speaker 2: twenty five is commodities. I mean, just this conversation, it's 209 00:11:38,120 --> 00:11:40,520 Speaker 2: hard to articulate to someone who doesn't see this stuff 210 00:11:40,840 --> 00:11:44,600 Speaker 2: how left field it is relative to this standard allocation, 211 00:11:45,200 --> 00:11:47,520 Speaker 2: and when you have to move that much money to 212 00:11:47,600 --> 00:11:50,880 Speaker 2: get allocation, even if you go from you know, the 213 00:11:50,920 --> 00:11:54,120 Speaker 2: most institutional allocations. As a story in Bloomberg this morning 214 00:11:54,600 --> 00:11:57,880 Speaker 2: talking about most institutional allocations being less than two percent. 215 00:11:58,920 --> 00:12:02,040 Speaker 2: Obviously you're not going to go from two to twenty. 216 00:12:02,559 --> 00:12:04,880 Speaker 2: But even if you go from two to three percent, 217 00:12:05,080 --> 00:12:07,640 Speaker 2: that sheer weight of money is going to be extraordinary 218 00:12:07,679 --> 00:12:10,080 Speaker 2: in terms of the impact on the price. So even 219 00:12:10,080 --> 00:12:14,560 Speaker 2: if you feel like it's run really hard, future demand 220 00:12:14,760 --> 00:12:18,320 Speaker 2: based on simply what is being said by the large 221 00:12:18,640 --> 00:12:23,880 Speaker 2: asset managers could give you some comfort. There's the potential 222 00:12:23,880 --> 00:12:24,640 Speaker 2: for it to go high. 223 00:12:24,760 --> 00:12:27,920 Speaker 1: Yeah, to put it up, certainly, you are certainly not 224 00:12:28,000 --> 00:12:28,960 Speaker 1: saying it's too late. 225 00:12:30,800 --> 00:12:33,280 Speaker 2: Look, you know, you'd be pretty lonely if you say 226 00:12:33,280 --> 00:12:36,040 Speaker 2: you think it's going to fall in price. No, what 227 00:12:36,160 --> 00:12:40,080 Speaker 2: else seems to be saying that? And it you know, 228 00:12:40,160 --> 00:12:45,800 Speaker 2: the forecasts arising and the reasons for the forecast rising 229 00:12:45,880 --> 00:12:48,760 Speaker 2: are very different to people going as we see with 230 00:12:48,800 --> 00:12:50,880 Speaker 2: equities and any other asset price like, oh, it's going 231 00:12:50,880 --> 00:12:52,520 Speaker 2: to be ten percent higher this year. You're like, it's 232 00:12:52,520 --> 00:12:54,720 Speaker 2: really easy to give that forecast. These are kind of 233 00:12:54,800 --> 00:12:59,240 Speaker 2: weight of money arguments central bank buying, decline of US dollar, 234 00:13:00,280 --> 00:13:02,760 Speaker 2: macro factors that are quite different to I think in 235 00:13:02,880 --> 00:13:05,040 Speaker 2: video is going to produce more chips next quarter. 236 00:13:05,240 --> 00:13:09,640 Speaker 1: What's the factor that you think is the key factor? 237 00:13:09,760 --> 00:13:12,280 Speaker 1: Central banks have been buying gold since the nineteen nineties 238 00:13:12,400 --> 00:13:14,280 Speaker 1: weight of money argument. I never listened to. 239 00:13:14,400 --> 00:13:17,599 Speaker 2: Can Change in the UK was selling gold in the 240 00:13:17,720 --> 00:13:19,160 Speaker 2: nine nineties, so not. 241 00:13:19,120 --> 00:13:23,480 Speaker 1: All of them, well as I as a trend as 242 00:13:23,480 --> 00:13:26,320 Speaker 1: I understand it started maybe the late nineteen nineties. But 243 00:13:26,600 --> 00:13:29,040 Speaker 1: what do you think is the factor? I mean, personally, 244 00:13:29,200 --> 00:13:33,960 Speaker 1: I think it's Trump and the instant the immense instability 245 00:13:34,320 --> 00:13:38,800 Speaker 1: in US and the tarnishing and eroding of the US 246 00:13:38,840 --> 00:13:42,680 Speaker 1: financial system in terms of its reliability of data, and 247 00:13:42,760 --> 00:13:45,679 Speaker 1: it's sort of encroaching sort of cronyism from the top. 248 00:13:45,880 --> 00:13:48,160 Speaker 1: That's what I think. I don't know what do you think. 249 00:13:49,440 --> 00:13:52,840 Speaker 2: I think financial instability is a nice all encompassing term 250 00:13:53,559 --> 00:14:01,720 Speaker 2: for geopolitical risk, extremely top evaluations of most asset classes. 251 00:14:01,760 --> 00:14:04,000 Speaker 2: So there's a bit of a you know, I've got 252 00:14:04,080 --> 00:14:07,920 Speaker 2: to find safety somewhere kind of mentality. And I don't 253 00:14:07,960 --> 00:14:10,760 Speaker 2: trust the US dollar anymore, and I don't want to 254 00:14:10,760 --> 00:14:13,280 Speaker 2: be holding any more US treasuries. And if I'm looking 255 00:14:13,320 --> 00:14:18,200 Speaker 2: for safety, what's my alternative? You know, it might be 256 00:14:18,280 --> 00:14:21,000 Speaker 2: Tina for gold. Maybe it's Tina for gold. Maybe that's 257 00:14:21,040 --> 00:14:21,440 Speaker 2: what it is. 258 00:14:22,480 --> 00:14:24,280 Speaker 1: Explain what you mean by that's just for those of 259 00:14:24,360 --> 00:14:27,640 Speaker 1: us who aren't familiar with that. Trump always maxell whatever 260 00:14:27,680 --> 00:14:28,080 Speaker 1: it means. 261 00:14:28,840 --> 00:14:31,120 Speaker 2: Old Taco was trump O was chickens out. Tina was 262 00:14:31,120 --> 00:14:33,680 Speaker 2: about three years ago, which was there is no alternative? 263 00:14:33,800 --> 00:14:36,400 Speaker 2: Oh yeah, and this was when we cut interest rates 264 00:14:36,400 --> 00:14:38,520 Speaker 2: to zero. When you're like, well, I have to go along. 265 00:14:38,560 --> 00:14:41,040 Speaker 2: There's no alternative. I can't sit and gain. Turns out 266 00:14:41,040 --> 00:14:42,720 Speaker 2: there was an alternative. It was God, but no one 267 00:14:42,800 --> 00:14:45,000 Speaker 2: was buying it three years ago. Yeah. 268 00:14:45,040 --> 00:14:48,480 Speaker 1: I don't believe in Tina. I'm not too sure about Taco, 269 00:14:48,560 --> 00:14:51,080 Speaker 1: and I don't believe in wors of money. Okay for 270 00:14:51,160 --> 00:14:57,360 Speaker 1: another time. Wrong, they are not by no means, by 271 00:14:57,360 --> 00:15:01,080 Speaker 1: no means any expression of a view when you or Okay, now, folks, 272 00:15:01,400 --> 00:15:03,960 Speaker 1: stay with us, because we're gonna look at what people 273 00:15:04,000 --> 00:15:16,560 Speaker 1: are actually buying. Okay, back in a moment. Hello and 274 00:15:16,600 --> 00:15:19,720 Speaker 1: welcome back to the Australian's Money Puzzle podcast. I'm James 275 00:15:19,800 --> 00:15:25,080 Speaker 1: Kirby talking to Jemma Dad head of investor behavior at 276 00:15:25,840 --> 00:15:29,520 Speaker 1: NAB Trade. The online broker Jemma is a regular guest 277 00:15:29,640 --> 00:15:32,800 Speaker 1: on the show, and I've asked her for today's show 278 00:15:32,880 --> 00:15:35,400 Speaker 1: to just take a look at internal data to the 279 00:15:35,440 --> 00:15:38,160 Speaker 1: extent that she can tell us of what she's seeing 280 00:15:38,600 --> 00:15:41,640 Speaker 1: on the platform, because I have found in the past 281 00:15:41,800 --> 00:15:45,800 Speaker 1: it's been very interesting when you see what's going on. 282 00:15:46,080 --> 00:15:48,000 Speaker 1: I have no idea. By the way, Jemma, I'm guessing 283 00:15:48,000 --> 00:15:51,000 Speaker 1: they're piling into ETFs and a couple of big name 284 00:15:51,080 --> 00:15:53,880 Speaker 1: ghost docs, but I have no idea. You haven't told me, 285 00:15:53,960 --> 00:15:55,600 Speaker 1: so what have you discovered? 286 00:15:56,760 --> 00:16:00,840 Speaker 2: So you bang on the money. I love this because 287 00:16:00,840 --> 00:16:02,800 Speaker 2: you're exactly right. The best part of my job is 288 00:16:02,800 --> 00:16:07,280 Speaker 2: looking at what people do, because it is fascinating how 289 00:16:07,320 --> 00:16:12,280 Speaker 2: astute individuals are when they're acting on their own on 290 00:16:12,320 --> 00:16:14,640 Speaker 2: their own account. Right, So we kind of went back 291 00:16:14,680 --> 00:16:16,560 Speaker 2: a couple of weeks ago and went how early did 292 00:16:16,640 --> 00:16:20,600 Speaker 2: this start and how active have people been, and how 293 00:16:21,080 --> 00:16:23,480 Speaker 2: they have they been relative to other things, right, Because 294 00:16:23,480 --> 00:16:27,320 Speaker 2: if everybody's putting more money into the market, and gold's 295 00:16:27,360 --> 00:16:30,560 Speaker 2: been a beneficiary of this broad based enthusiasm, then it's 296 00:16:30,600 --> 00:16:34,320 Speaker 2: not really very telling. So there's obviously many ways you 297 00:16:34,320 --> 00:16:37,800 Speaker 2: can play the gold thematic easy have so a huge 298 00:16:37,840 --> 00:16:40,800 Speaker 2: part of the story. And so the one that you 299 00:16:41,000 --> 00:16:43,400 Speaker 2: alluded to earlier, when we pull it out of our 300 00:16:43,520 --> 00:16:45,680 Speaker 2: data set, it's technically a preference share, so it doesn't 301 00:16:45,680 --> 00:16:47,520 Speaker 2: show up in the ETF data set, shows up in 302 00:16:47,520 --> 00:16:50,040 Speaker 2: the shares data set. That's fine. We've pulled it out. 303 00:16:50,480 --> 00:16:55,800 Speaker 2: Two hundred percent uplifts so effectively triple the volume going 304 00:16:55,840 --> 00:16:57,720 Speaker 2: through that. So there's three ways we can cut it. 305 00:16:57,800 --> 00:17:00,560 Speaker 2: One is the number of people doing it. I'm selling, 306 00:17:00,960 --> 00:17:03,760 Speaker 2: there's the number of trades, and then there's the size 307 00:17:03,760 --> 00:17:04,720 Speaker 2: of those trades. 308 00:17:04,480 --> 00:17:08,600 Speaker 1: In sorry, in gold ETFs are we talking about here, Well. 309 00:17:08,400 --> 00:17:10,240 Speaker 2: This is whenever we look at any data because you 310 00:17:10,359 --> 00:17:12,240 Speaker 2: kind of going, yeah, I want to unpick what's happening. 311 00:17:12,280 --> 00:17:13,960 Speaker 2: Is it a small number of people doing a lot? 312 00:17:14,119 --> 00:17:16,520 Speaker 1: Yeah? But is it a tripling off trades in gold? 313 00:17:16,840 --> 00:17:20,399 Speaker 2: Triple of all three things. So this is specifically in 314 00:17:20,440 --> 00:17:22,760 Speaker 2: the gold ETF that you reference. But when we look 315 00:17:22,800 --> 00:17:25,040 Speaker 2: across the other gold ETFs, because there are a whole 316 00:17:25,080 --> 00:17:27,160 Speaker 2: series of them and they do different things. So there's 317 00:17:27,160 --> 00:17:29,000 Speaker 2: a handful of them that are exactly like the one 318 00:17:29,040 --> 00:17:31,480 Speaker 2: you alluded to with they basically buy bullion on your 319 00:17:31,520 --> 00:17:35,520 Speaker 2: behalf and you're buying a component part of that. And 320 00:17:35,560 --> 00:17:37,840 Speaker 2: as you say, do you trust the piece of paper 321 00:17:37,880 --> 00:17:39,480 Speaker 2: that says you own the bullion or do you not? 322 00:17:40,320 --> 00:17:42,840 Speaker 2: Our guys obviously, do you know it's a huge it's 323 00:17:42,880 --> 00:17:45,639 Speaker 2: a three billion dollar more more than three billion dollars. 324 00:17:45,680 --> 00:17:49,920 Speaker 2: Now you know structure and it owns the underlying asset 325 00:17:49,960 --> 00:17:53,760 Speaker 2: and so on. Our guys are very enthusiastic tripling of 326 00:17:54,119 --> 00:17:57,560 Speaker 2: the value, the number of trades, and the number of people, 327 00:17:57,720 --> 00:17:59,359 Speaker 2: so this is not like it's a small number of 328 00:17:59,400 --> 00:18:02,080 Speaker 2: people doing it or lots of people, but small amounts. 329 00:18:02,520 --> 00:18:06,600 Speaker 2: All three things have risen dramatically over twelve months. We 330 00:18:06,800 --> 00:18:09,920 Speaker 2: have also seen an uplift in other ETFs that are 331 00:18:10,080 --> 00:18:13,000 Speaker 2: related to gold. So you can buy gold minor atfs, 332 00:18:13,240 --> 00:18:15,960 Speaker 2: you can buy international gold miner ETFs, you can buy 333 00:18:16,000 --> 00:18:18,399 Speaker 2: junior gold minor ETFs if you want to. You can 334 00:18:18,440 --> 00:18:20,840 Speaker 2: buy this huge range of things. All of them have 335 00:18:20,960 --> 00:18:26,119 Speaker 2: seen various levels of uplift that are at least double 336 00:18:26,160 --> 00:18:30,080 Speaker 2: what we've seen in overall market activity. So people are 337 00:18:30,080 --> 00:18:32,720 Speaker 2: buying equities, but they're buying a lot more exposure to 338 00:18:32,760 --> 00:18:37,159 Speaker 2: gold miners through ETFs, and they are buying equities, but 339 00:18:37,240 --> 00:18:41,680 Speaker 2: they are buying triple the exposure to just the physical 340 00:18:41,760 --> 00:18:45,800 Speaker 2: gold ETFs or preferences as they happen to be, and 341 00:18:45,840 --> 00:18:46,840 Speaker 2: they're buying the miners. 342 00:18:47,359 --> 00:18:50,120 Speaker 1: That's I was going to say, So, apart from bullion, 343 00:18:51,080 --> 00:18:55,000 Speaker 1: what's the next most popular? Is it like local gold miners, 344 00:18:55,000 --> 00:18:56,360 Speaker 1: international Junior? 345 00:18:57,400 --> 00:19:02,040 Speaker 2: Yeah, So the inn ETF slash preference share, depending on 346 00:19:02,040 --> 00:19:04,880 Speaker 2: which one you bought, is far and away the largest 347 00:19:05,000 --> 00:19:08,440 Speaker 2: uplift and the most significant exposure. And that is partly 348 00:19:08,480 --> 00:19:12,720 Speaker 2: because people, you know, they're not necessarily advised. These are 349 00:19:12,760 --> 00:19:15,119 Speaker 2: self director clients, but they have a portfolio. So in 350 00:19:15,160 --> 00:19:17,600 Speaker 2: a portfolio, they'll make an allocation, be like right, that's it. 351 00:19:17,760 --> 00:19:20,680 Speaker 2: I'm going from zero to gold to five percent, or 352 00:19:20,720 --> 00:19:22,560 Speaker 2: I'm going from zero to one percent, I'm going from 353 00:19:22,560 --> 00:19:24,320 Speaker 2: five percent, ten percent, or whatever it might be. I'm 354 00:19:24,320 --> 00:19:25,720 Speaker 2: just gonna put a ton in. I'm going to do 355 00:19:25,760 --> 00:19:29,520 Speaker 2: it today or over a series of days. The exposure 356 00:19:29,560 --> 00:19:32,800 Speaker 2: to the miners happens in lots of different ways, so 357 00:19:32,840 --> 00:19:35,560 Speaker 2: they will do it via some of the ETFs. They 358 00:19:35,560 --> 00:19:38,480 Speaker 2: can buy the ETFs, particularly in the US, because you 359 00:19:38,520 --> 00:19:41,359 Speaker 2: can buy directly in the US via our platform, and 360 00:19:41,400 --> 00:19:44,199 Speaker 2: we've seen a lot of that too, So to get 361 00:19:44,520 --> 00:19:49,400 Speaker 2: exposure to international miners, to get exposure to very specific 362 00:19:49,520 --> 00:19:53,200 Speaker 2: ETFs that are not available here. And then in terms 363 00:19:53,240 --> 00:19:55,760 Speaker 2: of the miners, and I find this most interesting. So 364 00:19:55,800 --> 00:19:57,879 Speaker 2: it's Northern Star way out in front we see el 365 00:19:57,920 --> 00:19:59,240 Speaker 2: evolution mining. 366 00:20:00,040 --> 00:20:02,600 Speaker 1: So people can hear them really clearly. Northern Star is 367 00:20:02,640 --> 00:20:05,520 Speaker 1: the big one. It's the big one, and then what 368 00:20:05,600 --> 00:20:06,440 Speaker 1: comes next. 369 00:20:06,960 --> 00:20:11,000 Speaker 2: Then it's evolution mining, and then it tends to go 370 00:20:11,040 --> 00:20:16,040 Speaker 2: to the smaller and less sort of secure options. Right, 371 00:20:16,080 --> 00:20:19,359 Speaker 2: so there's sort of more speculative. And what we find 372 00:20:19,520 --> 00:20:22,440 Speaker 2: when people go to the miners once you get outside 373 00:20:22,440 --> 00:20:23,920 Speaker 2: the big one or two, and we see the same 374 00:20:23,920 --> 00:20:27,440 Speaker 2: thing in any kind of mining commodity related stuff, people 375 00:20:27,480 --> 00:20:30,359 Speaker 2: will happily buy a BHP reo on Fortesque. As soon 376 00:20:30,359 --> 00:20:32,680 Speaker 2: as you get outside the big ones that are highly 377 00:20:32,720 --> 00:20:36,560 Speaker 2: profitable and successful, it's a very different cohort of people 378 00:20:36,560 --> 00:20:39,320 Speaker 2: who will invest in and trade those things, and they 379 00:20:39,359 --> 00:20:41,959 Speaker 2: tend to have a lot of expertise in that area. 380 00:20:42,280 --> 00:20:46,280 Speaker 2: They understand production cycles, they understand management capability, they understand 381 00:20:46,280 --> 00:20:49,040 Speaker 2: the management history, they read the cash flows really carefully, 382 00:20:49,040 --> 00:20:51,320 Speaker 2: all that kind of stuff, and those guys will take 383 00:20:51,320 --> 00:20:53,800 Speaker 2: a very different set of plays, but you wouldn't want 384 00:20:53,800 --> 00:20:56,359 Speaker 2: to extrapolate from what they do because they tend to 385 00:20:56,400 --> 00:20:59,160 Speaker 2: be specialists in this area and be able to sort 386 00:20:59,160 --> 00:21:02,919 Speaker 2: of leverage that expertise into their investments, very different to 387 00:21:02,960 --> 00:21:04,359 Speaker 2: the rest of the base, who are like, I'm not 388 00:21:04,400 --> 00:21:06,080 Speaker 2: a mining expert, you know. I mean, I can kind 389 00:21:06,080 --> 00:21:07,720 Speaker 2: of take a guess as to which one of these 390 00:21:08,280 --> 00:21:10,520 Speaker 2: will be successful, But I'd much rather stick with the 391 00:21:10,520 --> 00:21:11,919 Speaker 2: top end of town when it comes. 392 00:21:11,800 --> 00:21:14,280 Speaker 1: To right because they obviously they all say they're going 393 00:21:14,320 --> 00:21:18,920 Speaker 1: to be successful. But there's a tremendous variability in mining companies. 394 00:21:18,920 --> 00:21:21,080 Speaker 1: So you say, oh, you know, it's a gold mine, 395 00:21:21,240 --> 00:21:23,520 Speaker 1: how could you go wrong. If gold is going up, 396 00:21:23,560 --> 00:21:27,200 Speaker 1: then a gold mine will go up even higher. Not so, folks. 397 00:21:27,440 --> 00:21:30,560 Speaker 1: The things that gold mining companies do to blow it 398 00:21:30,680 --> 00:21:32,520 Speaker 1: you just would not believe. I mean a part of 399 00:21:32,600 --> 00:21:35,719 Speaker 1: the fact that they have practical problems or management problems, 400 00:21:35,800 --> 00:21:38,120 Speaker 1: or they have floods in the mine, or the railway 401 00:21:38,160 --> 00:21:41,120 Speaker 1: breaks down or whatever. They do crazy things on hedging, 402 00:21:41,160 --> 00:21:43,919 Speaker 1: and it's amazing how they can get it wrong. You 403 00:21:43,920 --> 00:21:45,960 Speaker 1: would think they all get it right. They can't, which 404 00:21:46,119 --> 00:21:49,399 Speaker 1: brings us back, I think to the attraction of ETFs 405 00:21:49,440 --> 00:21:52,359 Speaker 1: in this space. So okay, if you buy a gold 406 00:21:52,400 --> 00:21:54,520 Speaker 1: ETF that's on miners, you're going to buy some good 407 00:21:54,520 --> 00:21:59,400 Speaker 1: ones and you're going to buy some absolute rubbish. However, certainly, 408 00:21:59,480 --> 00:22:02,480 Speaker 1: in a bullmarket like this, they've been going very nicely, 409 00:22:02,520 --> 00:22:05,520 Speaker 1: haven't they, the gold ETFs. When you said that there 410 00:22:05,520 --> 00:22:09,960 Speaker 1: were people in Australia on your platform, investors, active, independent, 411 00:22:10,080 --> 00:22:13,800 Speaker 1: smart investors, like everyone listening to this show, we might 412 00:22:13,880 --> 00:22:16,879 Speaker 1: just rattle the cage by making the point that bitcoin, 413 00:22:18,840 --> 00:22:23,080 Speaker 1: which is very useful and interesting speculative asset as far 414 00:22:23,160 --> 00:22:27,520 Speaker 1: as it goes during this gold bull run, is not 415 00:22:27,720 --> 00:22:32,280 Speaker 1: keeping up. That's one thing, and very interesting. Some of 416 00:22:32,359 --> 00:22:37,320 Speaker 1: the big bitcoin operators in the US have been buying 417 00:22:37,720 --> 00:22:40,840 Speaker 1: gold mines. Can you believe this? Which I must say 418 00:22:40,880 --> 00:22:43,359 Speaker 1: I mind absolutely deeply. 419 00:22:43,080 --> 00:22:46,680 Speaker 2: Intriguing mining entirely. We all had to learn about bitcoin mining, 420 00:22:46,680 --> 00:22:49,560 Speaker 2: now we have to learn about gold mining. So look, 421 00:22:50,240 --> 00:22:54,120 Speaker 2: the most basic stuff is Spider gold, so Spider gold shares. 422 00:22:54,640 --> 00:22:57,159 Speaker 2: But then you go just looking at what's in the US. 423 00:22:57,280 --> 00:23:01,119 Speaker 2: We've got Vanneck Junior gold Miners Shares Ultra, so that 424 00:23:01,200 --> 00:23:05,680 Speaker 2: is leveraged Vanet gold Miners I shares goal Trust. There's 425 00:23:05,680 --> 00:23:09,000 Speaker 2: a bit of silver gold trying to get exposure to both. 426 00:23:09,480 --> 00:23:12,560 Speaker 2: A handful lot that. There's some minis. Most of them 427 00:23:12,600 --> 00:23:15,879 Speaker 2: are not hugely different to what you can get exposure to. 428 00:23:17,000 --> 00:23:19,560 Speaker 1: Yeah, so I wonder is it a currency play of 429 00:23:19,600 --> 00:23:20,040 Speaker 1: some sort. 430 00:23:20,920 --> 00:23:23,080 Speaker 2: It's quite interesting. Look, we do have investors who just 431 00:23:23,160 --> 00:23:25,439 Speaker 2: like to hold their stuff in the US. Then the 432 00:23:25,680 --> 00:23:30,960 Speaker 2: number of trades is almost immaterial compared to the number 433 00:23:30,960 --> 00:23:33,359 Speaker 2: we see in Australia of the domestic ones. But you know, 434 00:23:33,400 --> 00:23:35,439 Speaker 2: those who are looking for leverage, and we will always 435 00:23:35,440 --> 00:23:37,920 Speaker 2: have those. There's a few junior minor ones that look 436 00:23:37,960 --> 00:23:40,840 Speaker 2: a bit different. There's a handful. There's a couple with 437 00:23:40,920 --> 00:23:43,600 Speaker 2: a specific yield play, which is interesting. I mean, that's 438 00:23:43,640 --> 00:23:45,600 Speaker 2: quite difficult to get in the gold mining space. But 439 00:23:45,680 --> 00:23:48,600 Speaker 2: they're looking for that, so they might just have They 440 00:23:48,680 --> 00:23:50,479 Speaker 2: might be cheaper, that's the other thing. So a lot 441 00:23:50,480 --> 00:23:52,520 Speaker 2: of the ETFs are less expensive in the US for 442 00:23:52,600 --> 00:23:53,640 Speaker 2: various reasons, and so. 443 00:23:53,600 --> 00:23:54,239 Speaker 1: It may be that. 444 00:23:54,680 --> 00:23:57,800 Speaker 2: But they are a very small number of trades relative 445 00:23:57,840 --> 00:23:59,000 Speaker 2: to what we see in Australia. 446 00:23:59,080 --> 00:24:02,600 Speaker 1: Okay, very good, all right, So one thing, last thing 447 00:24:02,600 --> 00:24:06,280 Speaker 1: I wanted to ask you about this whole thing. The 448 00:24:06,400 --> 00:24:09,000 Speaker 1: mainstream press as opposed to the financial press and financial 449 00:24:09,040 --> 00:24:15,600 Speaker 1: media are having great fun watching the cues marketplace, which 450 00:24:15,680 --> 00:24:18,640 Speaker 1: is really interesting, isn't it. I think this is going 451 00:24:18,680 --> 00:24:20,920 Speaker 1: to be a milestone. I don't know what sort of 452 00:24:20,920 --> 00:24:23,240 Speaker 1: a milestone it is. Of course, it could be a 453 00:24:23,240 --> 00:24:26,119 Speaker 1: milestone where we look back at these cues and we say, wow, 454 00:24:26,440 --> 00:24:28,359 Speaker 1: those people were miles ahead, or we look back at 455 00:24:28,400 --> 00:24:31,080 Speaker 1: those cues and we say, gee, they were very close 456 00:24:31,119 --> 00:24:33,800 Speaker 1: to the top. And there's always that theory that you know, 457 00:24:33,840 --> 00:24:36,320 Speaker 1: what was the famous line is it from Wall Street 458 00:24:36,320 --> 00:24:38,520 Speaker 1: in the twenties, when the bellboys buying shares? It's time 459 00:24:38,560 --> 00:24:39,119 Speaker 1: to get out. 460 00:24:38,960 --> 00:24:46,080 Speaker 2: Of shine boys? Who they were? 461 00:24:46,119 --> 00:24:48,480 Speaker 1: What do you think? What does it mean to you 462 00:24:49,240 --> 00:24:54,000 Speaker 1: someone who's whose study is investor behavior when we see 463 00:24:54,040 --> 00:24:56,680 Speaker 1: lines of people queuing to buy gold in a very 464 00:24:56,680 --> 00:25:00,440 Speaker 1: public fashion in the fashion and we've really very I 465 00:25:00,480 --> 00:25:02,520 Speaker 1: don't know you've ever seen that before. I remember seeing 466 00:25:02,560 --> 00:25:05,399 Speaker 1: ques buying gold in Hong Kong when I lived there. 467 00:25:05,640 --> 00:25:07,520 Speaker 1: That was a very particular time, and a lot of 468 00:25:07,520 --> 00:25:09,320 Speaker 1: that was fear of what was going to happen in 469 00:25:09,359 --> 00:25:14,000 Speaker 1: Hong Kong and also preddiction for gold anyway in Hong 470 00:25:14,080 --> 00:25:16,040 Speaker 1: Kong and in China. And also in India, so it's 471 00:25:16,080 --> 00:25:19,639 Speaker 1: a very distinct thing. What do you think it means? 472 00:25:20,200 --> 00:25:22,320 Speaker 2: So this is one question I was going to ask, 473 00:25:22,359 --> 00:25:24,159 Speaker 2: and you know, I've looked at the photos and not 474 00:25:24,280 --> 00:25:27,520 Speaker 2: spend any time trying to unpickt The demographics of Australia 475 00:25:27,560 --> 00:25:30,400 Speaker 2: have changed a lot. We have very large Chinese population 476 00:25:30,480 --> 00:25:33,040 Speaker 2: here and we have an increasingly large Indian population here, 477 00:25:33,080 --> 00:25:35,399 Speaker 2: So there may be a cultural element to it. You know, 478 00:25:35,560 --> 00:25:40,600 Speaker 2: certainly a lot of my colleagues and friends who come 479 00:25:40,600 --> 00:25:43,479 Speaker 2: from China and you are very comfortable owning gold. I 480 00:25:43,520 --> 00:25:47,480 Speaker 2: was telling you earlier that former colleague of mine received 481 00:25:47,520 --> 00:25:50,240 Speaker 2: gold for her wedding, very large amounts of gold in 482 00:25:50,280 --> 00:25:52,199 Speaker 2: the form of jewelry. But it was an asset and 483 00:25:52,240 --> 00:25:54,600 Speaker 2: a gift, and it's locked away and it's there to 484 00:25:54,600 --> 00:25:56,640 Speaker 2: be a store of value. So that may be one 485 00:25:56,720 --> 00:26:01,920 Speaker 2: component of it. I think there is this general awareness 486 00:26:02,160 --> 00:26:05,840 Speaker 2: that people don't have an exposure to gold, like I 487 00:26:05,880 --> 00:26:08,359 Speaker 2: don't own any of that. I've been buying some shares, 488 00:26:08,359 --> 00:26:10,240 Speaker 2: I've been you know, I've been buying other things. I 489 00:26:10,280 --> 00:26:13,639 Speaker 2: haven't gotten gold. Oh goodness, do I suddenly need gold? 490 00:26:13,680 --> 00:26:20,520 Speaker 2: So it might be fomo in the slightly different sense. 491 00:26:20,640 --> 00:26:24,879 Speaker 2: I wouldn't say it's you know, blind ignorance or anything 492 00:26:24,960 --> 00:26:27,600 Speaker 2: like that, but more just I don't have any exposure 493 00:26:27,640 --> 00:26:31,840 Speaker 2: to this, and the fear element I think is quite 494 00:26:31,880 --> 00:26:33,919 Speaker 2: different to the normal fear element, of which is this 495 00:26:33,960 --> 00:26:35,800 Speaker 2: is going to go on a massive tear and I 496 00:26:35,840 --> 00:26:37,840 Speaker 2: need to be on board. It might be more of 497 00:26:37,840 --> 00:26:39,600 Speaker 2: it if things go to pieces. I need to have 498 00:26:39,680 --> 00:26:44,200 Speaker 2: a bit of this. So it's an interesting this place 499 00:26:44,240 --> 00:26:46,920 Speaker 2: of given's risk of vension while also attracting to their 500 00:26:46,960 --> 00:26:49,160 Speaker 2: desire to get into some greater returns from something. 501 00:26:49,200 --> 00:26:52,120 Speaker 1: For a reflection of the billion dollars that's gone into ETFs. 502 00:26:52,119 --> 00:26:54,080 Speaker 1: You don't see that. They don't kill in the streets, 503 00:26:54,119 --> 00:26:56,200 Speaker 1: but been happening too, No, no one cu it's. 504 00:26:56,080 --> 00:26:58,400 Speaker 2: Not for that. We see it, but it's not as exciting. 505 00:26:58,680 --> 00:27:00,520 Speaker 1: Stay with us, folks. I've got so many questions for 506 00:27:00,600 --> 00:27:16,600 Speaker 1: Jemma back in a moment. Hello, Welcome back to the 507 00:27:16,640 --> 00:27:22,840 Speaker 1: Australians Money Puzzitive podcast. Wasn't that interesting about gold? Gee? Folks? 508 00:27:23,160 --> 00:27:24,720 Speaker 1: I have to tell you, as I said at the start, 509 00:27:24,800 --> 00:27:28,480 Speaker 1: there are two themes in the market right now, AI 510 00:27:28,600 --> 00:27:33,040 Speaker 1: and gold. But what's extraordinary about that is that normally 511 00:27:33,080 --> 00:27:36,560 Speaker 1: when you have a market boom, gold doesn't go along 512 00:27:36,600 --> 00:27:40,600 Speaker 1: with it. And so in a way, every phase is 513 00:27:40,680 --> 00:27:42,919 Speaker 1: you know, in a way, every phase is like no 514 00:27:43,000 --> 00:27:45,200 Speaker 1: phase you've ever seen before. No one had ever seen 515 00:27:45,280 --> 00:27:47,760 Speaker 1: zero interest rates before, not that long ago, and no 516 00:27:47,800 --> 00:27:50,240 Speaker 1: one has ever seen this. A hot share market and 517 00:27:50,240 --> 00:27:53,360 Speaker 1: a hot gold market. What's going on? You can make 518 00:27:53,400 --> 00:27:56,480 Speaker 1: your own mind up about that. The fact is it's 519 00:27:56,520 --> 00:27:58,159 Speaker 1: going on, and it looks like it's going to go 520 00:27:58,160 --> 00:28:02,399 Speaker 1: for a while. All right, some questions Jenny. Is the 521 00:28:02,440 --> 00:28:07,520 Speaker 1: ASX fading? I read about its various technical problems, but 522 00:28:07,560 --> 00:28:11,600 Speaker 1: more importantly, it seems that the big Australian companies are 523 00:28:11,600 --> 00:28:15,320 Speaker 1: going straight to Wall Street and ignore the local market. 524 00:28:15,520 --> 00:28:19,000 Speaker 1: Is this a concern? Well, we mentioned how Sydney Airport 525 00:28:19,040 --> 00:28:21,159 Speaker 1: has gone and New Crest is gone, but that's not 526 00:28:21,240 --> 00:28:24,920 Speaker 1: what Jenny's talking about. She's talking about people going directly 527 00:28:25,080 --> 00:28:29,760 Speaker 1: to ignoring these Australian stock exchange like Atlassian famously, and 528 00:28:29,840 --> 00:28:31,800 Speaker 1: just going straight over to the US and becoming a 529 00:28:31,920 --> 00:28:36,400 Speaker 1: multi billion dollar company that you know could have happened here. 530 00:28:36,480 --> 00:28:40,320 Speaker 1: I think Canvall is the big hot IPO this year. 531 00:28:40,360 --> 00:28:42,440 Speaker 1: I think they're talking about due listing. Are they for 532 00:28:42,480 --> 00:28:45,280 Speaker 1: the first time, I think, but what do you think. 533 00:28:46,880 --> 00:28:49,200 Speaker 2: I was going to make the same comment you've made. Actually, 534 00:28:49,280 --> 00:28:54,560 Speaker 2: which is a decade or two ago, the primary option 535 00:28:55,080 --> 00:28:59,360 Speaker 2: for a successful company wanting to raise substantial money and 536 00:28:59,600 --> 00:29:04,160 Speaker 2: or cast shout its founders, which may be a different subjective, 537 00:29:05,320 --> 00:29:10,040 Speaker 2: was the AX. But with the rise of private equity 538 00:29:10,240 --> 00:29:14,600 Speaker 2: and private credit, the range of options available to successful 539 00:29:14,640 --> 00:29:18,680 Speaker 2: private companies is extensive, and I, like you, I don't 540 00:29:18,760 --> 00:29:20,880 Speaker 2: see it as being to going to the US as 541 00:29:20,920 --> 00:29:23,520 Speaker 2: the primary one. If you want to raise a huge 542 00:29:23,520 --> 00:29:28,040 Speaker 2: amount of capital and you're happy with the additional governance 543 00:29:28,080 --> 00:29:32,000 Speaker 2: requirements and the additional investor attention and all of those things, 544 00:29:32,400 --> 00:29:34,840 Speaker 2: then you have choices about which exchange to list on 545 00:29:34,920 --> 00:29:37,360 Speaker 2: if you're a big enough player, and then you get 546 00:29:37,360 --> 00:29:41,360 Speaker 2: an last end situation where it's a more attractive market 547 00:29:41,400 --> 00:29:43,440 Speaker 2: for the founder. They get to do some tricky things 548 00:29:43,800 --> 00:29:45,920 Speaker 2: in terms of retaining their voting rights and so on, 549 00:29:45,920 --> 00:29:51,360 Speaker 2: which are not available on the AX. So that's one 550 00:29:51,680 --> 00:29:56,440 Speaker 2: part of it. But the other component is that you 551 00:29:56,520 --> 00:29:59,040 Speaker 2: can stay private and not take on any of those 552 00:29:59,080 --> 00:30:04,120 Speaker 2: additional obligation and get plenty of money from private market 553 00:30:04,200 --> 00:30:05,680 Speaker 2: to fund your growth. 554 00:30:05,600 --> 00:30:09,880 Speaker 1: And so that too could be a reason that it's 555 00:30:09,040 --> 00:30:15,080 Speaker 1: it's action the other way. Yeah, okay, very good point. 556 00:30:15,120 --> 00:30:17,440 Speaker 1: And the other thing, Jenny. For what it's worth, it's 557 00:30:17,480 --> 00:30:20,120 Speaker 1: not unique to Australia. This is an issue all around 558 00:30:20,120 --> 00:30:22,240 Speaker 1: the world. And say, all the regional markets in Europe, 559 00:30:22,240 --> 00:30:25,000 Speaker 1: for instance, outside of London and Frankfort, et cetera, they're 560 00:30:25,000 --> 00:30:28,640 Speaker 1: really struggling because there's this sort of the money has 561 00:30:28,680 --> 00:30:32,320 Speaker 1: been either sucked into Wall Street or the big markets 562 00:30:32,440 --> 00:30:35,640 Speaker 1: or point. I had not thought about it all. It's 563 00:30:35,680 --> 00:30:37,560 Speaker 1: just not on the markets, doesn't need to be because 564 00:30:37,560 --> 00:30:40,680 Speaker 1: of the boom in private equity. Okay, final question, Blake. 565 00:30:41,200 --> 00:30:44,040 Speaker 1: I'm interested in small cap companies and the idea of 566 00:30:44,120 --> 00:30:47,760 Speaker 1: getting in early, and I've been looking at small cap ETFs. 567 00:30:48,120 --> 00:30:51,360 Speaker 1: My question is how do these ETFs work mechanically? If 568 00:30:51,400 --> 00:30:54,280 Speaker 1: a small cap becomes a big cap, does that mean 569 00:30:54,440 --> 00:30:56,640 Speaker 1: the ETF must sell it and does that mean we're 570 00:30:56,680 --> 00:31:00,560 Speaker 1: selling our winners? Okay, what do you think, gem Matt? 571 00:31:02,080 --> 00:31:05,480 Speaker 2: So this is a really good question. There's probably additional 572 00:31:05,520 --> 00:31:07,800 Speaker 2: things to think about. If this is the area that 573 00:31:07,840 --> 00:31:10,520 Speaker 2: you're interested in, I think the biggest So if you 574 00:31:10,720 --> 00:31:13,000 Speaker 2: are talking about a passive ETF, which is what I 575 00:31:13,000 --> 00:31:15,480 Speaker 2: assume is being talked about, then yes, there's very strict 576 00:31:15,480 --> 00:31:18,200 Speaker 2: requirements around what can be held. If you say we 577 00:31:18,320 --> 00:31:23,080 Speaker 2: only hold x one hundred stocks, we only hold the 578 00:31:23,120 --> 00:31:26,360 Speaker 2: one hundred to the three hundred, for example, then they're 579 00:31:26,400 --> 00:31:29,840 Speaker 2: usually rebalanced every quarter, and if something's gotten too big 580 00:31:30,080 --> 00:31:32,840 Speaker 2: for you sell it, they sell it. They have to, 581 00:31:33,120 --> 00:31:36,280 Speaker 2: and there's specialist timeframe to But if you're talking about 582 00:31:36,280 --> 00:31:39,840 Speaker 2: an actively managed smaller manager, and the one thing I 583 00:31:39,840 --> 00:31:43,240 Speaker 2: do want to say about smaller companies, there's some incredible 584 00:31:43,280 --> 00:31:45,680 Speaker 2: little gems in there that are growing really fast and 585 00:31:45,720 --> 00:31:48,760 Speaker 2: doing incredible things, but an enormous proportion of them are 586 00:31:48,840 --> 00:31:52,440 Speaker 2: unprofitable and will not go on that path. So small 587 00:31:52,480 --> 00:31:54,960 Speaker 2: caps tends to be where you can get more value 588 00:31:55,000 --> 00:31:57,320 Speaker 2: out of having an active manager do it for you, 589 00:31:57,720 --> 00:32:00,600 Speaker 2: and they may have less strict requirements about when they're 590 00:32:00,640 --> 00:32:03,240 Speaker 2: required to sell it, like they're still required to sell 591 00:32:03,240 --> 00:32:05,000 Speaker 2: it at some point if they're going to be specifically 592 00:32:05,000 --> 00:32:07,240 Speaker 2: a small gap manager, but they might be a little 593 00:32:07,240 --> 00:32:10,280 Speaker 2: bit more flexible in what those terms look like, So 594 00:32:10,360 --> 00:32:12,560 Speaker 2: that might be more attractive to you than just buying 595 00:32:12,560 --> 00:32:13,240 Speaker 2: a passive option. 596 00:32:13,440 --> 00:32:16,320 Speaker 1: Yeah, very good point. Very good point, because it's true 597 00:32:16,360 --> 00:32:19,200 Speaker 1: as Blake says, yes, in the unlikely event that is, 598 00:32:19,240 --> 00:32:21,600 Speaker 1: in that kind of thousand to one chants that you 599 00:32:21,760 --> 00:32:24,680 Speaker 1: get a small cap it had a five mediation and 600 00:32:24,680 --> 00:32:26,880 Speaker 1: it becomes five billion, and they must sell it. In 601 00:32:26,920 --> 00:32:30,800 Speaker 1: the unlikely event that happens, and it literally disturbs the 602 00:32:30,960 --> 00:32:33,720 Speaker 1: TF and they must sell it, which it would be 603 00:32:33,840 --> 00:32:36,400 Speaker 1: terrible to see that, and they step away from it. 604 00:32:36,480 --> 00:32:42,680 Speaker 1: But yes, you're right, so active perhaps active managers better there, Blake. Okay, terrific. Kay, 605 00:32:42,680 --> 00:32:45,640 Speaker 1: Thank you very much. Jemma Dale, head of Investor Behavior 606 00:32:45,920 --> 00:32:48,560 Speaker 1: at Naptrade. Great to have you on. As always, we'll 607 00:32:48,600 --> 00:32:49,080 Speaker 1: talk again. 608 00:32:49,360 --> 00:32:50,560 Speaker 2: Thank you so much for having me. 609 00:32:51,400 --> 00:32:55,240 Speaker 1: Thanks Jemma, and folks the money posit at the Australian 610 00:32:55,280 --> 00:32:59,360 Speaker 1: dot com dot au please for some correspondence. Getting lots 611 00:32:59,400 --> 00:33:01,440 Speaker 1: on this new super tax, of course, as I would 612 00:33:01,520 --> 00:33:05,440 Speaker 1: have expected, and I'm not surprised because I don't even 613 00:33:05,520 --> 00:33:08,600 Speaker 1: know all the answers on that one yet. By that, 614 00:33:08,640 --> 00:33:10,600 Speaker 1: I mean we haven't got all the answers yet on 615 00:33:10,680 --> 00:33:14,680 Speaker 1: how it will really work, and how will CGT work, 616 00:33:14,800 --> 00:33:16,560 Speaker 1: et cetera, a couple of things that are left swinging 617 00:33:16,560 --> 00:33:18,760 Speaker 1: in the wind. We'll be back on that one. Talk soon.