1 00:00:01,000 --> 00:00:04,520 Speaker 1: You're listening to a share these podcast. I guess a 2 00:00:04,559 --> 00:00:06,600 Speaker 1: few things that we would look at as an active 3 00:00:06,680 --> 00:00:11,520 Speaker 1: investment manager would be undervalued stocks, or in fact overvalued 4 00:00:11,560 --> 00:00:16,520 Speaker 1: stocks in terms of the decision to sell. But let's 5 00:00:16,520 --> 00:00:19,520 Speaker 1: take an undervalued stock. For example, there might be a 6 00:00:19,720 --> 00:00:23,400 Speaker 1: really well run company that has some temporary bad news 7 00:00:24,239 --> 00:00:26,840 Speaker 1: that's going to affect the share price. A passive fund 8 00:00:26,920 --> 00:00:30,200 Speaker 1: will take that bad news and it'll just hit the index. 9 00:00:30,600 --> 00:00:33,440 Speaker 1: An active manager will look at that bad news and say, hmm, 10 00:00:34,000 --> 00:00:37,680 Speaker 1: does that bad news fundamentally change the strategic price of 11 00:00:37,720 --> 00:00:42,200 Speaker 1: this company and its outlook? Take for example, in video 12 00:00:42,920 --> 00:00:46,120 Speaker 1: sold off a couple of weeks ago on the Deep 13 00:00:46,159 --> 00:00:50,760 Speaker 1: seek News twenty percent. I think drop on the day. 14 00:00:50,800 --> 00:00:52,479 Speaker 2: Yeah, massive, like a trillion dollar loss. 15 00:00:52,320 --> 00:00:55,520 Speaker 1: But absolutely however, fundamentally quite a strong company. So a 16 00:00:55,600 --> 00:00:57,680 Speaker 1: number of active managers at that point might have gone, 17 00:00:57,880 --> 00:01:00,920 Speaker 1: you know what, we might be continuing to hold, or 18 00:01:00,920 --> 00:01:03,280 Speaker 1: we might acquire a little bit over this period of 19 00:01:03,320 --> 00:01:06,319 Speaker 1: time as we see how that Deep seek news plays out. 20 00:01:07,240 --> 00:01:09,280 Speaker 2: If we're looking at the activity that you do as 21 00:01:09,319 --> 00:01:13,240 Speaker 2: an active fund manager, you're kind of testing the market, 22 00:01:13,240 --> 00:01:18,279 Speaker 2: aren't you. You're kind of discovering prices so to some extent, 23 00:01:18,360 --> 00:01:20,840 Speaker 2: then are the passive funds kind of taking a bit 24 00:01:20,840 --> 00:01:21,640 Speaker 2: of a free ride on you. 25 00:01:22,200 --> 00:01:24,520 Speaker 1: Well, I think the passive funds aren't really doing too much. 26 00:01:24,640 --> 00:01:26,800 Speaker 1: I mean, the passive funds, in my eyes, are like 27 00:01:27,319 --> 00:01:29,600 Speaker 1: a train getting from A to B on a train track. 28 00:01:29,880 --> 00:01:31,880 Speaker 1: You know. The active funds are probably more like having 29 00:01:31,920 --> 00:01:34,280 Speaker 1: a GPS in there and they're kind of going, oh, 30 00:01:34,360 --> 00:01:36,120 Speaker 1: my goodness, there's a bit of traffic here, or there's 31 00:01:36,120 --> 00:01:37,720 Speaker 1: a bit of weather here, and therefore we're going to 32 00:01:37,760 --> 00:01:40,200 Speaker 1: have to take this route to get there quicker or faster, 33 00:01:41,080 --> 00:01:43,800 Speaker 1: Whereas the train you kind of just actually that noise 34 00:01:43,840 --> 00:01:46,479 Speaker 1: in the market you're probably not making decisions on because 35 00:01:46,520 --> 00:01:48,880 Speaker 1: you are just buying the index and you're taking the 36 00:01:49,000 --> 00:01:52,000 Speaker 1: ups and downs with the index. I think one of 37 00:01:52,040 --> 00:01:55,560 Speaker 1: the bigger risks that those are in passive funds need 38 00:01:55,640 --> 00:01:58,960 Speaker 1: to consider obviously, is that you know, in periods of 39 00:01:59,600 --> 00:02:04,600 Speaker 1: under perform months, you will just take the underperformance, whereas 40 00:02:04,640 --> 00:02:07,640 Speaker 1: an active manager will be working hard to consider where 41 00:02:07,680 --> 00:02:11,800 Speaker 1: the opportunities are to beat the index in terms of 42 00:02:11,800 --> 00:02:15,760 Speaker 1: that underperformance. They might be doing that maybe because you know, 43 00:02:15,880 --> 00:02:20,040 Speaker 1: they've recognized the market trend. For example, one market trend. 44 00:02:20,040 --> 00:02:21,720 Speaker 1: You know that I kind of look back in our 45 00:02:21,760 --> 00:02:26,920 Speaker 1: portfolios is around Spotify. At the beginning of COVID. You know, 46 00:02:27,000 --> 00:02:29,800 Speaker 1: we were looking at what Spotify might do, where they're 47 00:02:29,800 --> 00:02:32,960 Speaker 1: going to play a place in streaming, where are they 48 00:02:33,000 --> 00:02:36,800 Speaker 1: going to play a place in podcasts, Through research, through insights, 49 00:02:36,840 --> 00:02:39,919 Speaker 1: through for sights, I guess on what might happen at 50 00:02:39,919 --> 00:02:40,960 Speaker 1: an industry level. 51 00:02:41,880 --> 00:02:43,840 Speaker 2: It must be hard to filter that noise out of 52 00:02:43,880 --> 00:02:46,200 Speaker 2: the market that you were talking about there, because there 53 00:02:46,240 --> 00:02:47,600 Speaker 2: just seems to be so much going on. 54 00:02:48,560 --> 00:02:51,720 Speaker 1: It's funny, I was reading something the other day around 55 00:02:51,880 --> 00:02:55,040 Speaker 1: the noise in the market has never been greater. You know, 56 00:02:55,520 --> 00:03:00,520 Speaker 1: take America for example. In the past, decision would be 57 00:03:00,560 --> 00:03:05,520 Speaker 1: made in the White House, they would then be well 58 00:03:05,600 --> 00:03:09,639 Speaker 1: thought about and pushed out publicly. But today decisions are 59 00:03:09,639 --> 00:03:13,280 Speaker 1: being discussed in real time like theater. Effectively, you're watching 60 00:03:13,360 --> 00:03:16,840 Speaker 1: you're watching what's happening out there. But it is really 61 00:03:16,880 --> 00:03:19,600 Speaker 1: important to get back down to the fundamentals of a 62 00:03:19,639 --> 00:03:23,880 Speaker 1: company that you're investing in, the fundamentals of a region, 63 00:03:24,080 --> 00:03:27,160 Speaker 1: or the fundamentals of a sector in terms of where 64 00:03:27,160 --> 00:03:31,080 Speaker 1: we might play and shuffle investments around in those spaces 65 00:03:31,919 --> 00:03:37,040 Speaker 1: and the noise has to be filtered, otherwise you kind 66 00:03:37,080 --> 00:03:39,880 Speaker 1: of drown. Investing involves a risk you might lose the 67 00:03:39,920 --> 00:03:42,640 Speaker 1: money you start with. We recommend talking to a licensed 68 00:03:42,640 --> 00:03:43,520 Speaker 1: financial advisor. 69 00:03:44,280 --> 00:03:48,080 Speaker 2: We also recommend reading product disclosure documents before deciding to invest.