WEBVTT - Crypto, Trump & NZX: 2024 in review 0:00:00.200 --> 0:00:02.800 How do you revitalize New Zealand capital markets? And you 0:00:03.200 --> 0:00:06.680 go through some of the investment houses and they've been 0:00:06.720 --> 0:00:11.240 putting out articles one way or another, sometimes disguise, but 0:00:11.360 --> 0:00:15.080 asking those re same questions, how does New Zealand capital 0:00:15.160 --> 0:00:16.960 markets actually get a shot. 0:00:16.720 --> 0:00:18.759 In the arm given that you know, there's a fair 0:00:18.760 --> 0:00:21.080 amount of New Zealand beef that goes into the US, 0:00:21.079 --> 0:00:22.960 and I'm pretty sure a fair amount of that probably 0:00:22.960 --> 0:00:28.200 goes onto McDonald's Burger's. Given Trump's interest in the Golden Archers, 0:00:28.240 --> 0:00:30.920 maybe there's a trade opportunity for us. 0:00:31.000 --> 0:00:36.440 The cryptocurrencies now have an investment legitimacy which will not 0:00:36.600 --> 0:00:40.480 be broken notwithstanding what happens, and it will speed up 0:00:41.200 --> 0:00:45.880 moves by central banks and other mainstream financial service providers 0:00:46.240 --> 0:00:49.000 to get into the space somehow. 0:00:52.040 --> 0:00:54.920 Cura and welcome to Shed Lunch, brought to you by Cheesy's. 0:00:55.320 --> 0:00:58.000 My name is Helen Madison, and today on the program 0:00:58.120 --> 0:01:01.040 we'll be looking back at twenty twenty five, the good, 0:01:01.440 --> 0:01:04.400 the bad and the ugly, but we'll also be looking 0:01:04.480 --> 0:01:08.640 towards twenty twenty five and Watson's Store. I'll be joined 0:01:08.680 --> 0:01:11.400 by Giles Beckford, the business editor at R and Z 0:01:12.040 --> 0:01:17.039 and Informetrics chief economist Brad Olsen. But before we get started, 0:01:17.400 --> 0:01:18.640 he's some important information. 0:01:19.160 --> 0:01:21.760 Investing involves the risk you might lose the money you 0:01:21.800 --> 0:01:25.080 start with. We recommend talking to a licensed financial advisor. 0:01:25.840 --> 0:01:29.640 We also recommend reading product disclosure documents before deciding to invest. 0:01:29.920 --> 0:01:32.280 Everything you're about to see and here is current at 0:01:32.319 --> 0:01:33.160 the time of recording. 0:01:33.600 --> 0:01:36.959 Thanks for coming in, Giles and Brad, Welcome to the 0:01:36.959 --> 0:01:39.880 studio and our last episode of shed launch for twenty 0:01:39.880 --> 0:01:44.520 twenty four. Let's start with January this year when the 0:01:44.840 --> 0:01:49.559 Security and Exchange Commission that's the US regulator, actually approved 0:01:49.920 --> 0:01:54.680 bitcoin exchange traded funds. That's a real difference for crypto 0:01:54.880 --> 0:01:57.680 and probably legitimizes the fact that it could be an 0:01:57.680 --> 0:02:00.960 asset class. Giles, how do you think the feed since then? 0:02:01.160 --> 0:02:04.000 Well, that was the good housekeeping seal of approval, wasn't it. 0:02:04.040 --> 0:02:06.480 When the SEC comes out and says, yeah, you know 0:02:06.520 --> 0:02:10.560 it's going future, and everybody figured, let's not play around 0:02:10.560 --> 0:02:13.440 with actually getting into the crypto. Let's get into the 0:02:13.440 --> 0:02:18.240 crypto operators. Hence the ETFs that got set up and bang, 0:02:18.560 --> 0:02:22.080 that was just the touching the blue paper and away 0:02:22.200 --> 0:02:24.440 it went, and all we've seen since then is just 0:02:24.480 --> 0:02:30.800 a complete appreciation. Right, it's dominated by bitcoin. You have 0:02:30.919 --> 0:02:33.840 to say that there's much about the crypto scene which 0:02:33.880 --> 0:02:38.320 is still dodgy. It is questionable. You just know that 0:02:38.400 --> 0:02:41.800 there's so much dark stuff happening under the surface, and 0:02:41.880 --> 0:02:45.120 the amount of crypto that's been stolen so much for 0:02:45.200 --> 0:02:51.760 it being necessarily secure investment. But all that aside. Once 0:02:51.800 --> 0:02:55.799 the bandwagon gets rolling, everybody keeps chasing the train, and 0:02:56.200 --> 0:02:59.079 that's what's happening. And with the prospect now with the 0:02:59.120 --> 0:03:02.520 new Trump administration saying you know, we're going to make 0:03:02.560 --> 0:03:05.359 it easier, when you've got the likes of Musk being 0:03:05.400 --> 0:03:11.120 able to hype it up in particular doge, how coincidental 0:03:11.280 --> 0:03:17.079 is it that the new department he's going to run 0:03:17.520 --> 0:03:20.160 to take out the red tape and make government more 0:03:20.200 --> 0:03:25.639 efficient and cheaper and easier as the acronym doge as well. 0:03:25.840 --> 0:03:27.960 I mean, oh, it's a complete meme, right, I mean, 0:03:29.680 --> 0:03:31.839 and they're not going to have the US government sealed there. 0:03:31.880 --> 0:03:34.080 What they're going to have, in fact, is probably the 0:03:34.120 --> 0:03:39.120 portrait of being on Musk right behind every employee there. 0:03:39.560 --> 0:03:44.720 But you have to say that cryptocurrencies now have an 0:03:44.760 --> 0:03:49.640 investment legitimacy, which will not be broken notwithstanding what happens, 0:03:50.240 --> 0:03:54.120 and it will speed up moves by central banks and 0:03:54.480 --> 0:03:58.480 other mainstream financial service providers to get into the space. 0:03:58.720 --> 0:04:01.160 Somehow, I think it's well though. I mean, yes, it 0:04:01.320 --> 0:04:03.480 legitimized it a touch, but I think it also gave 0:04:03.520 --> 0:04:06.320 it a crypto more generally, a bit of an easier 0:04:06.520 --> 0:04:08.760 entry method, and rather than people having to figure out 0:04:08.760 --> 0:04:10.920 how their own wallets and everything else worked, you know, 0:04:10.960 --> 0:04:13.520 you didn't have to go through all the hoopla that 0:04:13.680 --> 0:04:16.479 was sometimes either a bit dangerous, dodgy or otherwise, and 0:04:16.520 --> 0:04:18.920 it actually just made it a little bit more convenient 0:04:19.040 --> 0:04:22.320 through those ETFs and similar I mean, there's still, I think, 0:04:22.680 --> 0:04:24.360 like you say, a lot of caution, a lot of 0:04:24.360 --> 0:04:27.080 worry in some areas about it, and people are still 0:04:27.160 --> 0:04:29.400 dropping new coins all the time. And there was another 0:04:29.440 --> 0:04:32.359 popular one the other day, the hop tour Girl released 0:04:32.440 --> 0:04:34.000 a coin that you know, shot up in price and 0:04:34.040 --> 0:04:37.080 then immediately crashed ninety percent. So again, some people are 0:04:37.120 --> 0:04:39.560 still putting some pretty serious money into things that they're 0:04:39.560 --> 0:04:43.159 not fully or aren't fully regulated. But now there's a 0:04:43.200 --> 0:04:46.880 little bit more of I guess some guardrails around it. 0:04:46.880 --> 0:04:49.120 That provides a little bit more legitimate to So you're right. 0:04:49.320 --> 0:04:53.080 It would be interesting to see actually how firm those guardrails 0:04:53.120 --> 0:04:56.640 are because the US will set the standard for regulation 0:04:56.720 --> 0:04:59.559 and everyone else is going to take it around the world. 0:05:00.320 --> 0:05:03.760 Like about one of the bigger operators here in New Zealand, 0:05:04.200 --> 0:05:08.760 and we've spoken to them a few times recently. They 0:05:09.520 --> 0:05:14.359 I think are probably being extremely responsible by saying, look, 0:05:15.040 --> 0:05:18.159 do your due diligence, right, but don't take this as 0:05:18.200 --> 0:05:20.760 being the be all and end all of your investment future. 0:05:21.320 --> 0:05:25.240 This firm whom I won't name, but they're saying, look, 0:05:25.960 --> 0:05:28.919 regard crypto as say a five percent part of a 0:05:28.960 --> 0:05:33.240 diversified portfolio, right, just be sensible. And I'm thinking these 0:05:33.240 --> 0:05:35.120 are people who are actually going to earn money out 0:05:35.160 --> 0:05:39.080 of it, but they're taking a really responsible view, trying 0:05:39.120 --> 0:05:41.560 to advise people and keep the custom. 0:05:41.800 --> 0:05:43.480 Well that that's with everything though, right, I mean, the 0:05:43.560 --> 0:05:46.320 risk conversation is always the biggest one. I still all 0:05:46.360 --> 0:05:48.200 the time, all through this year, all through the last 0:05:48.200 --> 0:05:51.200 couple have people coming up and there generally three questions 0:05:51.200 --> 0:05:52.760 that people on the street want to know. You know, 0:05:52.800 --> 0:05:55.320 what's the housing market going to do, What's my personal 0:05:55.320 --> 0:05:57.680 interest rate that I should fix on for and what's 0:05:57.720 --> 0:05:59.800 my investment strategy? And I always go back, well, what's 0:05:59.800 --> 0:06:02.800 your tolerance? You know, if you're real happy to sort 0:06:02.800 --> 0:06:05.160 of maybe put it all on on one thing and 0:06:05.440 --> 0:06:07.720 it'll either blow up or blow down, as the case 0:06:07.800 --> 0:06:09.800 might be, then then that's cool for you, if you're 0:06:09.800 --> 0:06:12.080 willing to lose it all or gain it all. But 0:06:12.120 --> 0:06:14.000 for a lot of other people who aren't, it's then going, well, 0:06:14.040 --> 0:06:15.560 how do I sort of match things through? So you're 0:06:15.560 --> 0:06:18.280 totally right, that's a much more appropriate response and sort 0:06:18.320 --> 0:06:20.240 of plow it all in on the one option and 0:06:20.240 --> 0:06:22.360 sort of hope that hope, like heck it works. 0:06:23.080 --> 0:06:26.400 Sticking with the US, guys, I'm just thinking Donald Trump, 0:06:27.000 --> 0:06:31.240 president elect. Tariffs has been a big topic, and what 0:06:31.320 --> 0:06:35.240 will happen to New Zealand In other countries, uncertainty seems 0:06:35.279 --> 0:06:38.520 to be what we're going for in twenty twenty five, Brad, 0:06:38.560 --> 0:06:41.599 What are you thinking given the US is our second 0:06:41.720 --> 0:06:42.960 largest trading partner. 0:06:43.240 --> 0:06:45.240 Yeah, well, and that's only happened this year, right, the 0:06:45.400 --> 0:06:47.840 Chinese economy hasn't been going as well. We've now been 0:06:47.839 --> 0:06:50.800 doing more with the US because their economy has been 0:06:51.040 --> 0:06:54.560 a lot stronger. That's great, But equally you're right that 0:06:54.640 --> 0:06:58.200 we're seeing more uncertain times, but perhaps we're seeing more 0:06:58.720 --> 0:07:02.160 certain uncertainty. You know, it's going to be maybe not 0:07:02.200 --> 0:07:04.440 as volatile, but there's just so many moving parts that 0:07:04.480 --> 0:07:07.240 are sort of heading forward. So I think increasingly when 0:07:07.240 --> 0:07:10.720 we're looking at the US markets and more generally the 0:07:10.800 --> 0:07:12.880 US economy, I think we know that we're in for 0:07:13.000 --> 0:07:16.720 quite a lot. You saw some of those early talks 0:07:16.760 --> 0:07:19.520 this year by Trump saying, look, I might levy tariff's 0:07:19.560 --> 0:07:23.680 on Mexico, Canada, and China. Now knew about China, we 0:07:23.760 --> 0:07:26.160 didn't necessarily know who was going to be first off 0:07:26.200 --> 0:07:28.560 the ranks for the other ones. But again, the reaction 0:07:28.720 --> 0:07:32.080 that had one changed the currency around quite a bit 0:07:32.120 --> 0:07:34.480 for New Zealand. But also some of our providers like 0:07:34.560 --> 0:07:37.720 so Officier and Piker Will they've got manufacturing sites in 0:07:37.760 --> 0:07:40.640 Mexico that supply North America. So I think it also 0:07:40.760 --> 0:07:43.800 highlighted to us again sort of the importance in the 0:07:43.800 --> 0:07:46.480 financial system that the US occupies. We've known that for 0:07:46.480 --> 0:07:48.600 a long time, but it's been a bit more latent 0:07:48.680 --> 0:07:50.640 or background, and now all of a sudden it's back 0:07:50.680 --> 0:07:53.640 to the forefront, because whatever happens there will have sort 0:07:53.640 --> 0:07:56.720 of ripple effects and maybe bigger ripples than before through 0:07:56.720 --> 0:07:57.440 to the rest of US. 0:07:57.600 --> 0:08:02.480 I think Trump's last administration it's slightly indicative of how 0:08:02.520 --> 0:08:06.880 we might feel the whole thing about tariffs and the like. 0:08:07.320 --> 0:08:10.400 You know, the one thing that sort of directly affected us, 0:08:10.400 --> 0:08:13.840 and it was only small fry, was aluminium steel, which 0:08:14.160 --> 0:08:16.640 the tariffs cost us in the region of say six 0:08:16.720 --> 0:08:21.560 million bucks I think over that period. But the bigger impact, 0:08:21.600 --> 0:08:26.480 in fact was the paralysis that attached and Trump brought 0:08:26.600 --> 0:08:29.960 to the World Trade Organization. Now we believe in the 0:08:29.960 --> 0:08:35.000 World Trade Organization because it's the referee of the world 0:08:35.080 --> 0:08:39.080 trading system. It's rules based, and little people like this, 0:08:39.160 --> 0:08:42.080 when you haven't got financial clout right, you've got to 0:08:42.080 --> 0:08:44.880 rely on the rules to help you. And the Trump 0:08:44.880 --> 0:08:50.320 administration last time round, they basically froze the WTO into inactivity. 0:08:50.360 --> 0:08:55.439 They made it impotent as a trade referee, very simply 0:08:55.520 --> 0:09:00.640 just because they refused to nominate people to be appellate 0:09:00.880 --> 0:09:04.960 judges to work out the disputes between people who trying 0:09:05.000 --> 0:09:08.800 to work out. What's interesting for me is it sheds 0:09:08.800 --> 0:09:10.920 a bit of a light that there are a significant 0:09:11.000 --> 0:09:15.120 number of small New Zealand tech companies who have domiciled 0:09:15.120 --> 0:09:18.880 themselves essentially in the States, and that might be our 0:09:18.920 --> 0:09:22.800 little secret back door, right that we've got Kiwi firms 0:09:23.480 --> 0:09:26.559 doing business in the States who will actually be to 0:09:26.559 --> 0:09:29.760 some extent insulated. Right, they actually might get the advantage 0:09:29.760 --> 0:09:32.080 of these sorts of things. But we'll wait and see 0:09:32.120 --> 0:09:36.880 on that one. Trump. Look, there's more bluff and bluster 0:09:37.200 --> 0:09:38.920 right than you would find Niagara Falls. 0:09:39.800 --> 0:09:41.640 Well, you just don't know, and I think that's one 0:09:41.640 --> 0:09:44.000 of the big challenges for everyone, not only in New 0:09:44.080 --> 0:09:46.320 Zealand but around the world. You're just not sure what 0:09:46.559 --> 0:09:49.320 is ever going to necessarily come through. I mean, the 0:09:49.400 --> 0:09:51.840 wider tone I think from this is that trade is 0:09:51.880 --> 0:09:53.960 going to be more difficult, which is not great news 0:09:54.000 --> 0:09:56.920 for New Zealand. Equally, I've been quite impressed that this year, 0:09:56.960 --> 0:09:59.520 you know, we have had a greater focus on trade deals. 0:09:59.559 --> 0:10:02.160 We've got with the UAE, We've got trade deals with 0:10:02.240 --> 0:10:04.960 the Golf Cooperation Council, we've got some with Costa ECRA 0:10:04.960 --> 0:10:07.880 in Switzerland recently. So is still a lot of good 0:10:07.960 --> 0:10:10.000 moves there. We've had in the last couple of years, 0:10:10.080 --> 0:10:12.400 both the EU and the UK Free Trade Agreement, So 0:10:12.600 --> 0:10:14.680 we've still got a lot of options out there, but 0:10:14.720 --> 0:10:18.440 I think that trading environment is more difficult. The challenge, 0:10:18.480 --> 0:10:20.880 I think is that the US economy is still such 0:10:21.200 --> 0:10:24.360 a hefty part of the global market that you know, 0:10:24.440 --> 0:10:27.640 this year, for example, we saw that when our meat 0:10:27.720 --> 0:10:30.439 wasn't going as well into China, we could pivot that 0:10:30.520 --> 0:10:32.440 quite quickly a lot of it, not all of it, 0:10:32.520 --> 0:10:34.440 but a lot of it into the US because they've 0:10:34.440 --> 0:10:37.000 got the lowest beef stocks and I think seventy years, 0:10:37.040 --> 0:10:39.560 so you know, that's where we can send our meat. Now, 0:10:39.640 --> 0:10:41.920 it does always come through. And you know, we've talked 0:10:41.920 --> 0:10:44.600 about not only the tariffs but the possible exemptions that 0:10:44.679 --> 0:10:47.240 maybe we need to try and focus on because Trump 0:10:47.280 --> 0:10:49.440 won't be looking to target New Zealand, it'll just be 0:10:49.440 --> 0:10:52.200 probably across the board thing. But given that, you know, 0:10:52.240 --> 0:10:54.400 there's a fair amount of New Zealand beef that goes 0:10:54.440 --> 0:10:56.440 into the US, and I'm pretty sure a fair amount 0:10:56.440 --> 0:11:00.520 of that probably goes into McDonald's burgers. Given Trump's interest 0:11:00.679 --> 0:11:04.400 in the Golden Archers, maybe maybe there's a trade opportunity 0:11:04.440 --> 0:11:06.679 for US there, or you know, some sort of exemption. 0:11:06.800 --> 0:11:09.319 But I mean just the consumption numbers that you're seeing 0:11:09.320 --> 0:11:11.920 in the US. They are spending like no tomorrow. And 0:11:12.000 --> 0:11:13.959 I must say, looking at the markets as well, there's 0:11:14.000 --> 0:11:16.679 part of me that goes, we're too next. I mean 0:11:16.679 --> 0:11:18.640 that just what's going on there. 0:11:19.040 --> 0:11:21.080 I'm keen to see what you think of that, Giles too, 0:11:21.120 --> 0:11:24.400 because the tech stocks and video and the like, it's 0:11:24.440 --> 0:11:26.600 been insane, but there seems to be no bottom. 0:11:27.520 --> 0:11:30.440 Well, I don't know, let's be honest. You know, things 0:11:30.520 --> 0:11:33.840 can run their course. We've been through these sorts of 0:11:33.840 --> 0:11:37.600 cycles in the pastime thinking that I've been around so long, Right, 0:11:37.600 --> 0:11:43.480 the Internet wasn't invented when they started journalism. Microsoft was 0:11:43.520 --> 0:11:47.120 just a twinkle in Bill Gates's eye. But what then 0:11:47.720 --> 0:11:51.520 turned out was that we are we very quickly had 0:11:51.920 --> 0:11:56.360 the dot com bubble bang right just on the turn 0:11:56.440 --> 0:12:00.720 near the late nineties, right, we had the e commerce 0:12:01.880 --> 0:12:05.360 like that. You know, everybody built so much promise into it, 0:12:05.480 --> 0:12:09.120 right bang it fell away. But I think, you know, 0:12:09.360 --> 0:12:12.520 we've got to say that the tech stocks now they 0:12:12.600 --> 0:12:15.400 have such clouts. You know, when the likes of Nnvidia 0:12:16.440 --> 0:12:19.240 is what one hundred times bigger than the New Zealand economy, 0:12:19.280 --> 0:12:22.520 I think there's evaluation of it, so like that, you go, yeah, 0:12:22.520 --> 0:12:26.800 they're probably here to stay. It's the games that the 0:12:26.880 --> 0:12:30.080 investment funds want to play, I think, and where the 0:12:30.200 --> 0:12:33.320 technology will take us where we see that you know, 0:12:33.559 --> 0:12:38.679 artificial intelligence will be the driver for two, three, four, 0:12:38.880 --> 0:12:42.160 five years, right, the invidios of this world and all 0:12:42.160 --> 0:12:46.439 the other chip makers and the associated tech companies must 0:12:46.480 --> 0:12:50.600 continue to thrive. The Magnificent seven. Who knows if there'll 0:12:50.640 --> 0:12:55.680 actually be seven or seventeen or three allies all the 0:12:55.720 --> 0:12:59.640 same companies and who will own them. I mean politics 0:12:59.640 --> 0:13:02.520 comes in to play because there's a lot of Chinese 0:13:02.600 --> 0:13:07.040 influence in that tech sector, like it or not, and 0:13:07.400 --> 0:13:10.800 do the politics of a Trump administration wants to punish 0:13:10.880 --> 0:13:13.320 the Chinese, as we've just actually seen in the past 0:13:13.400 --> 0:13:17.160 few days where there's a district court judgment in the 0:13:17.200 --> 0:13:21.360 States right that TikTok's got TikTok's got to be divested. 0:13:22.360 --> 0:13:25.520 And so from that point of view, you know, technologies 0:13:25.520 --> 0:13:27.880 here of the state, there will all be companies and 0:13:27.960 --> 0:13:33.080 money that drive that. We're going to see more boom, 0:13:33.120 --> 0:13:35.280 I think. But I think we're just going to say 0:13:35.360 --> 0:13:37.480 there will be busts somewhere as well. 0:13:37.760 --> 0:13:39.520 Well. It has been interesting. I saw a chart the 0:13:39.520 --> 0:13:41.640 other day that because let's be clear, this is mostly 0:13:41.679 --> 0:13:44.600 about the US markets. It's not that generally you know, 0:13:44.679 --> 0:13:46.960 stocks and equities and that are just on a rocket 0:13:46.960 --> 0:13:49.240 ship to the moon. It's the US. And I saw 0:13:49.280 --> 0:13:51.240 something the other day I think that said that, you know, 0:13:51.360 --> 0:13:55.200 the US markets are you know, now so far away 0:13:55.240 --> 0:13:58.040 relative to Europe. It's like the biggest the GAP's ever 0:13:58.080 --> 0:14:00.520 been in terms of sort of you know, the positioning 0:14:00.559 --> 0:14:03.040 on the US compared to Europe. And I mean that 0:14:03.480 --> 0:14:06.679 does highlight that again, there's a lot of growth and fundamentals, 0:14:06.679 --> 0:14:08.440 there's a lot of money going in there, there's a 0:14:08.440 --> 0:14:11.880 lot of consumer spending. But I go, the markets are 0:14:11.920 --> 0:14:15.520 high when interest rates have been high. If interest rates 0:14:15.559 --> 0:14:18.240 then come down normally that would stimulate a greater level 0:14:18.240 --> 0:14:21.080 of investment in spending, which would then put the markets higher. 0:14:21.120 --> 0:14:24.040 So if the markets are high when interest rates are high, 0:14:24.120 --> 0:14:25.960 and when they're low, then, like you say, I mean, 0:14:26.280 --> 0:14:29.240 my question is when does it turn around? But I 0:14:29.240 --> 0:14:31.280 mean the reality is you look at the sorts of 0:14:31.360 --> 0:14:33.920 numbers that New Zealanders invest, we do put it into 0:14:33.960 --> 0:14:35.800 the US as well. We're not alone in that fact. 0:14:35.840 --> 0:14:38.240 So there seems to be correct me up from Wronghound, 0:14:38.240 --> 0:14:39.920 but there seems to be sort of quite a focus 0:14:39.960 --> 0:14:41.840 there on people wanting to look at it well. 0:14:41.880 --> 0:14:44.360 I find interesting though, is that you talk about how 0:14:44.480 --> 0:14:48.160 the US is just well ahead of the rest of 0:14:48.160 --> 0:14:53.120 the world. Is that also introduces distortion into capital allocation 0:14:54.120 --> 0:14:57.000 around the world, And you've got to say, well, if 0:14:57.040 --> 0:15:01.280 the US is sucking it all up or is putting 0:15:01.360 --> 0:15:06.280 most of its own resources into the sector, right, how's 0:15:06.320 --> 0:15:06.880 the rest. 0:15:06.640 --> 0:15:08.640 Of the world going with the rest of it? 0:15:08.800 --> 0:15:10.800 That's right? Where's ourbit right? 0:15:10.800 --> 0:15:12.880 Well, that leads me to the fact that here in 0:15:12.920 --> 0:15:15.800 New Zealand we've had our highest trading days ever at 0:15:15.880 --> 0:15:19.080 Cheersey's a lot of that is US fueled because everybody 0:15:19.120 --> 0:15:23.640 sees great returns, prospects, etc. They're not seeing the same 0:15:23.680 --> 0:15:26.440 with our own market. Then dead X and Giles. You know, 0:15:26.480 --> 0:15:29.320 there's been a few shockers and terms of earnings, there's 0:15:29.400 --> 0:15:32.240 many companies I could talk about, Spark in New Zealand, 0:15:32.320 --> 0:15:34.240 the Warehouse, the list goes on. 0:15:35.480 --> 0:15:40.280 Yeah, it's the incredible shrinking inz X, isn't it. You 0:15:40.360 --> 0:15:45.440 contrast it with thirty forty years ago where it was 0:15:45.560 --> 0:15:49.680 well driven, well supported. But the in X, you have 0:15:49.800 --> 0:15:53.960 to say, has just not being able to make any 0:15:54.000 --> 0:15:59.120 headway in persuading local companies that the exchange is the 0:15:59.160 --> 0:16:03.240 place for them. What is the ENDINEX for? Essentially, it's 0:16:03.280 --> 0:16:06.320 a way of raising money. Why do you invest in it? Well, 0:16:06.360 --> 0:16:09.480 because you, as an investor have confidence in the way 0:16:09.520 --> 0:16:12.440 companies are run. You would have to save that over 0:16:12.480 --> 0:16:15.760 the past two to three years in particular, and the 0:16:15.840 --> 0:16:20.080 case for some companies for the past decade, they've been 0:16:21.080 --> 0:16:25.240 less than competently run. Right, And I was channeling up 0:16:25.240 --> 0:16:30.320 the number of companies in this country that have not 0:16:30.480 --> 0:16:33.280 been paying dividends for the past couple of years. There's 0:16:33.320 --> 0:16:40.320 some really big ones, right, Sky City, Fletcher Building in 0:16:40.360 --> 0:16:45.440 New Zealand, some of the retail stocks, right, But they're 0:16:45.480 --> 0:16:49.440 all saying we're saving our cash, well, saving the cash, well, 0:16:49.480 --> 0:16:52.800 saving the cash actually to cover some rather big holes 0:16:52.840 --> 0:16:56.400 in their balance sheets because they made really bad decisions. 0:16:57.160 --> 0:16:59.520 And I think that's one of the features is that 0:17:00.840 --> 0:17:05.200 the level of corporate governance and commercial nous that's been 0:17:05.280 --> 0:17:09.200 applied by some of our publicly listed companies has been 0:17:09.400 --> 0:17:14.080 shown to be woefully inadequate. Leave aside the one off 0:17:14.119 --> 0:17:17.840 effects of the pandemic because everybody got a kick in 0:17:17.880 --> 0:17:20.000 the backside and a kick in the balance sheet for that. 0:17:20.520 --> 0:17:23.840 Well and good, but you have to say that, you know, 0:17:24.119 --> 0:17:28.359 the level of shareholder return and the New Zealand market 0:17:28.400 --> 0:17:33.760 is essentially supported by investors who want dividends. That's what 0:17:33.840 --> 0:17:36.959 it's all about. It tells you everything that the NSINEX fifty, 0:17:37.080 --> 0:17:41.320 the benchmark index, includes dividends, right, a lot of other 0:17:41.560 --> 0:17:45.040 places around the world it doesn't. And I think that 0:17:46.119 --> 0:17:51.640 a lot of people will have been woefully disappointed. And 0:17:52.400 --> 0:17:55.359 you can see why people don't have much enthusiasm for 0:17:55.440 --> 0:17:58.080 actually getting in there. If there's going to be a 0:17:58.080 --> 0:18:04.840 big IPO. Say, you know, let's just pretend bank k gosh, 0:18:05.520 --> 0:18:09.280 aren't they just the spectral vision on the horizon? Now 0:18:09.280 --> 0:18:11.600 that's going to save us? Or Kiwi Bank? 0:18:11.920 --> 0:18:12.320 Are they? 0:18:14.119 --> 0:18:17.080 But the point being is that say Kibibank were to list, 0:18:17.520 --> 0:18:20.040 everybody would be in like the way that people were 0:18:20.080 --> 0:18:24.560 in for the gent tailors, right, Meridian, Mighty River Power. 0:18:24.640 --> 0:18:27.480 We're talking twenty eight, aren't we, now, Child, Well, if 0:18:27.480 --> 0:18:28.280 it happens. 0:18:28.000 --> 0:18:30.400 At all, it may not happen in any of our 0:18:30.480 --> 0:18:33.080 investing lifetimes. 0:18:34.000 --> 0:18:35.040 I've got a lot of time. 0:18:34.880 --> 0:18:37.240 I think, but I mean I think, you know, serious 0:18:37.320 --> 0:18:40.480 questions come down to how do you revitalize New Zealand 0:18:40.480 --> 0:18:43.320 capital markets? And you go through some of the investment 0:18:43.359 --> 0:18:47.760 houses and they've been putting out articles one way or another, 0:18:48.480 --> 0:18:52.520 sometimes disguise, been asking those very same questions, how does 0:18:52.600 --> 0:18:55.639 New Zealand capital markets actually get a shot on the arm, 0:18:56.040 --> 0:18:58.600 And I'm not sure that anybody's actually got a reasonable 0:18:58.640 --> 0:18:59.320 answer about that. 0:18:59.600 --> 0:19:01.520 Well, the question I start to ask is, you know, 0:19:01.520 --> 0:19:04.120 when does this come to a head, Because you've got 0:19:04.119 --> 0:19:07.320 those the issues with just canvas, the fact that increasingly 0:19:07.480 --> 0:19:09.600 seems to be a trend of businesses that are either 0:19:09.680 --> 0:19:14.560 looking to only list on the Australian markets in Australian Exchange, 0:19:14.840 --> 0:19:17.120 or they're actually going unlisted here in New Zealand because 0:19:17.119 --> 0:19:19.160 they don't want all the big obligations and the costs. 0:19:19.200 --> 0:19:21.360 And so I think one of the reasons that you're 0:19:21.359 --> 0:19:23.520 not seeing, for example, there as many young people. I 0:19:23.560 --> 0:19:25.199 know that there's an easy way to vote now and 0:19:25.240 --> 0:19:27.879 I've done that myself with Macheesy's app, But I look 0:19:27.920 --> 0:19:29.439 at that and I do find that a lot of 0:19:29.480 --> 0:19:32.640 times people go, well, I've continued to get the same results, 0:19:32.680 --> 0:19:34.320 and I feel like, you know, it's not like I 0:19:34.320 --> 0:19:36.560 can put up a director or eything else. You know, 0:19:36.720 --> 0:19:38.480 I've sort of got to vote on the pictures that 0:19:38.520 --> 0:19:41.479 are made by those that sort of seem to have 0:19:41.480 --> 0:19:43.439 more of the power. What's the point. I'm sort of 0:19:43.440 --> 0:19:45.240 just voting for the same old, same old. So I 0:19:45.320 --> 0:19:48.119 think there is a real lack of engagement and a 0:19:48.160 --> 0:19:51.119 real level of disappointment amongst investors, but who are voting 0:19:51.200 --> 0:19:53.640 with their wallets and going, well, stuff it, I'll find 0:19:53.640 --> 0:19:54.800 something better, and they are. 0:19:55.080 --> 0:19:58.520 Yeah. The one little candle of confidence, if I can 0:19:58.560 --> 0:20:02.480 call it that, is that I like the more assertive 0:20:02.680 --> 0:20:07.560 and prominent attitude that the Shareholders Association has taken in 0:20:07.600 --> 0:20:10.520 the past few years, where they've been willing to stand 0:20:10.640 --> 0:20:13.960 up whether it's big company or small company and saying 0:20:14.280 --> 0:20:18.680 what you're proposing isn't good. It works against the interests 0:20:18.720 --> 0:20:20.919 of small shareholders and us be honest, you know, the 0:20:20.920 --> 0:20:24.800 Shareholders Association looks after little folks, little folk like me 0:20:25.160 --> 0:20:28.200 who've got their three hundred shares and you know ABC 0:20:28.359 --> 0:20:34.040 dot Com, and we we feel the person who's got 0:20:34.359 --> 0:20:37.720 ten million shares right, well, we've done so why bothered? 0:20:37.720 --> 0:20:40.919 But you know, we've got some sort of return. But 0:20:41.040 --> 0:20:44.440 the Sharehold Association says no, you know, big company or 0:20:44.480 --> 0:20:47.399 small companies say you've got a standard of care and 0:20:47.400 --> 0:20:51.600 the standard of duty and a fiscal, a fiduciary and 0:20:51.720 --> 0:20:56.720 legal obligation to look after all shareholders, big or small. Right, 0:20:56.760 --> 0:21:00.240 So I applaud the Shareholder Association. I actually I think 0:21:00.280 --> 0:21:02.960 that if there was an organization to belong to as 0:21:03.000 --> 0:21:05.600 an investor, that would be one that you would look 0:21:05.640 --> 0:21:08.640 at and say it's worth giving our support, because if 0:21:08.680 --> 0:21:10.800 somebody's going to be a voice against some of the 0:21:10.840 --> 0:21:12.440 bigger powers, it'll be then. 0:21:12.800 --> 0:21:14.520 There's been a bit more sort of talk as well, 0:21:14.520 --> 0:21:16.600 I feel this year and last as well about sort 0:21:16.640 --> 0:21:18.320 of putting your money where your mouth is, you know, 0:21:18.440 --> 0:21:21.239 making sure that for some of those people who are 0:21:21.280 --> 0:21:24.080 on boards and even a management you know that they 0:21:24.119 --> 0:21:26.159 need to have some skin in the game to recognize 0:21:26.200 --> 0:21:28.320 why this loss of value and the lack of outcome 0:21:28.760 --> 0:21:31.840 is actually important. And I mean you brought up keep Bank, 0:21:31.840 --> 0:21:33.880 and I sort of feel like that's sort of similar there. 0:21:34.280 --> 0:21:37.199 I find it pretty difficult to stomach the idea that 0:21:37.240 --> 0:21:39.400 the government thinks that having a bank is so good, 0:21:39.800 --> 0:21:41.439 but it's not good enough for them to bank with. 0:21:41.840 --> 0:21:44.080