1 00:00:03,560 --> 00:00:06,480 Speaker 1: Kirakoto. Welcome to Shared Lunch, brought to you by Chersey's. 2 00:00:06,559 --> 00:00:09,200 Speaker 1: I'm Garth Bray. We're in the home stretch as we 3 00:00:09,280 --> 00:00:12,480 Speaker 1: record today the last full week of trading on markets 4 00:00:12,680 --> 00:00:15,640 Speaker 1: here in Australia, the US and Europe. So what have 5 00:00:15,720 --> 00:00:17,479 Speaker 1: we learned this year and how has it set us 6 00:00:17,520 --> 00:00:20,800 Speaker 1: up for twenty twenty six. Joining me for some thoughtful 7 00:00:20,840 --> 00:00:24,320 Speaker 1: recons are pulmcbeth from the bottom Line and Shamabul Yakub, 8 00:00:24,560 --> 00:00:28,040 Speaker 1: chief economists at Simplicity. But before we turn to them, 9 00:00:28,360 --> 00:00:32,320 Speaker 1: let's hear some important information you should always consider before investing. 10 00:00:32,440 --> 00:00:35,000 Speaker 2: Investing involves the risk you might lose the money you 11 00:00:35,040 --> 00:00:38,360 Speaker 2: start with. We recommend talking to a licensed financial advisor. 12 00:00:39,080 --> 00:00:42,880 Speaker 2: We also recommend reading product disclosure documents before deciding to invest. 13 00:00:43,159 --> 00:00:45,720 Speaker 2: Everything you're about to see and here is current at the. 14 00:00:45,640 --> 00:00:49,960 Speaker 1: Time of recording. Two of the hardest working posters on 15 00:00:50,640 --> 00:00:54,560 Speaker 1: Kiwi LinkedIn. I would say Shamabil Yaka from Simplicity, Pulmcbeth 16 00:00:54,680 --> 00:00:58,440 Speaker 1: from the bottom Line, Welcome to Shared Lunch. Merry Christmas, 17 00:00:58,480 --> 00:01:03,160 Speaker 1: Merry Christmas. There is a movie from the sixties called 18 00:01:03,640 --> 00:01:06,920 Speaker 1: Doctor Strangelove or How I Learned to Stop worrying and 19 00:01:07,000 --> 00:01:09,639 Speaker 1: love the bomb. Is this the year that we learned 20 00:01:10,160 --> 00:01:12,360 Speaker 1: to stop worrying and love the word or at least 21 00:01:12,400 --> 00:01:14,880 Speaker 1: not fear the word tariffs? Did we get over that now? 22 00:01:15,400 --> 00:01:17,640 Speaker 3: We definitely got over it in terms of share markets, 23 00:01:17,720 --> 00:01:20,840 Speaker 3: because you know, when the liberation there was announced, we 24 00:01:20,880 --> 00:01:23,399 Speaker 3: all got liberated from our money very quickly and then 25 00:01:23,440 --> 00:01:26,080 Speaker 3: advanced right back. It's been a spectacular year in terms 26 00:01:26,120 --> 00:01:29,880 Speaker 3: of share marker returns, albeit in a few different, few 27 00:01:29,880 --> 00:01:30,760 Speaker 3: specific companies. 28 00:01:30,800 --> 00:01:31,640 Speaker 1: It's a deep, deep goal. 29 00:01:31,760 --> 00:01:31,880 Speaker 4: Jay. 30 00:01:31,880 --> 00:01:33,440 Speaker 1: If you look at that chart, you can just see 31 00:01:33,480 --> 00:01:35,479 Speaker 1: it bang right there, big notch taken out. 32 00:01:35,640 --> 00:01:38,080 Speaker 3: But you know, we're only now seeing the real economic 33 00:01:38,080 --> 00:01:40,080 Speaker 3: effects off the tariffs in terms of the increases in 34 00:01:40,160 --> 00:01:41,960 Speaker 3: flesh and the increases in the cost of goods in 35 00:01:42,040 --> 00:01:44,440 Speaker 3: terms of toys and important things. That's going to be 36 00:01:44,480 --> 00:01:48,200 Speaker 3: hitting Christmas and into the new year. So in financial 37 00:01:48,200 --> 00:01:51,840 Speaker 3: market terms, absolutely, we learned how to love tariffs. But 38 00:01:51,880 --> 00:01:53,960 Speaker 3: in real economic terms, I think we'll come to regret 39 00:01:53,960 --> 00:01:55,480 Speaker 3: it a bit this coming year. 40 00:01:55,760 --> 00:01:58,560 Speaker 1: Is that what you saw looking at the markets? Oh yeah, definitely. 41 00:01:58,640 --> 00:02:01,080 Speaker 4: You had that dislocation so quick, But even with the 42 00:02:01,120 --> 00:02:05,960 Speaker 4: bounce back, people seem to be hating it like there's 43 00:02:06,000 --> 00:02:08,800 Speaker 4: a lot of pessimism out there, even though we're still 44 00:02:08,800 --> 00:02:12,280 Speaker 4: seeing some of those major indices and on Wall Street 45 00:02:12,680 --> 00:02:16,200 Speaker 4: trying to push to new records. Even though we've seen 46 00:02:16,240 --> 00:02:19,480 Speaker 4: the likes of bitcoin come off, it's still I think 47 00:02:19,520 --> 00:02:22,480 Speaker 4: last I saw was about eighty eight thousand US eighty 48 00:02:22,520 --> 00:02:27,359 Speaker 4: eight thousand US dollars. It's almost as though people are 49 00:02:27,720 --> 00:02:31,919 Speaker 4: hating themselves but just continuing to pile on in and 50 00:02:32,080 --> 00:02:34,320 Speaker 4: they've recognized that. You know, you get the sense that 51 00:02:34,360 --> 00:02:37,720 Speaker 4: there's a recognition that these the big arm waving that 52 00:02:37,760 --> 00:02:40,240 Speaker 4: comes out of the White House in the Oval Office. 53 00:02:41,800 --> 00:02:44,280 Speaker 4: There might be some sensible people talking there, but it's 54 00:02:45,040 --> 00:02:48,040 Speaker 4: a lot of its theater. It's that whole get. You 55 00:02:48,120 --> 00:02:51,280 Speaker 4: get the expectation set up high, everyone runs to it, 56 00:02:51,480 --> 00:02:54,080 Speaker 4: and then when it doesn't quite sort of come through, 57 00:02:54,160 --> 00:02:56,600 Speaker 4: then there's a bit of a relief rally. I mean, 58 00:02:56,639 --> 00:02:59,720 Speaker 4: it's still strange out there. Even where we're at, you 59 00:02:59,800 --> 00:03:04,160 Speaker 4: just don't quite get a sense of At international level, 60 00:03:05,200 --> 00:03:07,240 Speaker 4: people are still talking about it at going up, even 61 00:03:07,280 --> 00:03:10,040 Speaker 4: though we're probably due a correction on the on the 62 00:03:10,080 --> 00:03:15,200 Speaker 4: major indices. It's it's hard to sort of draw, you know, 63 00:03:15,240 --> 00:03:17,400 Speaker 4: a common theme through it all aside from it just 64 00:03:17,400 --> 00:03:19,760 Speaker 4: being this this volatility. 65 00:03:19,320 --> 00:03:20,880 Speaker 3: You're going to have a crack though you think there 66 00:03:20,960 --> 00:03:22,720 Speaker 3: is a common theme. The common theme is don't believe 67 00:03:22,760 --> 00:03:25,800 Speaker 3: the headlines. And just because the headline says something doesn't 68 00:03:25,840 --> 00:03:28,560 Speaker 3: mean that's what's going to be implemented or the effect 69 00:03:28,720 --> 00:03:32,760 Speaker 3: is telegraphed. Like I think all the rules of thumbs 70 00:03:32,760 --> 00:03:35,080 Speaker 3: that we've been using haven't been working. So I think 71 00:03:35,120 --> 00:03:36,840 Speaker 3: the lesson of the last twelve months has been a 72 00:03:36,880 --> 00:03:40,440 Speaker 3: lesson in humility that don't be over confident. You know, people, 73 00:03:40,560 --> 00:03:43,200 Speaker 3: we all had great break predictions of what would happen 74 00:03:43,200 --> 00:03:45,240 Speaker 3: after the tariffs. Of course, one the tariffs that were 75 00:03:45,280 --> 00:03:47,760 Speaker 3: announced we're never implemented. And two the effects on markets 76 00:03:47,760 --> 00:03:50,760 Speaker 3: were not nothing like people that expected. So I think, 77 00:03:50,800 --> 00:03:54,160 Speaker 3: you know, to me, it's there's always this reminder. Every 78 00:03:54,480 --> 00:03:57,560 Speaker 3: retrospective that you do off markets is a lesson in humility. 79 00:03:58,400 --> 00:04:00,800 Speaker 1: And that's the big one you've taken away from did 80 00:04:00,800 --> 00:04:01,960 Speaker 1: you take a tumble yourself? 81 00:04:02,240 --> 00:04:02,360 Speaker 2: Oh? 82 00:04:02,400 --> 00:04:05,240 Speaker 3: I always take tumbles, So you know, the whole point is, 83 00:04:05,360 --> 00:04:07,880 Speaker 3: you know, I have my retirement money, which is boring 84 00:04:07,880 --> 00:04:09,520 Speaker 3: and it just does its own thing, and then I 85 00:04:09,520 --> 00:04:12,520 Speaker 3: have fun money that I lose quite quite freely. But 86 00:04:12,560 --> 00:04:14,800 Speaker 3: that's the fun of it, right. You can't not participate 87 00:04:14,800 --> 00:04:18,000 Speaker 3: in the market and not get burnt. Of course, you 88 00:04:18,040 --> 00:04:19,880 Speaker 3: can have some wins, but the burns are the bits 89 00:04:19,880 --> 00:04:21,560 Speaker 3: that are fun, and that's where you learn from. 90 00:04:21,480 --> 00:04:23,400 Speaker 1: You're so right though, this is I guess money makes 91 00:04:23,400 --> 00:04:25,080 Speaker 1: it matter if you're prepared to actually even just put 92 00:04:25,080 --> 00:04:28,120 Speaker 1: a small amount in there. It's surprising how much we 93 00:04:28,160 --> 00:04:30,520 Speaker 1: could be talking a couple of bucks. You pay attention 94 00:04:30,880 --> 00:04:32,919 Speaker 1: to what things are doing, rather than just sort of 95 00:04:32,920 --> 00:04:34,000 Speaker 1: flagging it on a watch list. 96 00:04:34,040 --> 00:04:36,080 Speaker 3: Right, absolutely, and I think it's important to kind of 97 00:04:36,440 --> 00:04:40,839 Speaker 3: do your saving savings part boringly and then having the 98 00:04:40,880 --> 00:04:44,080 Speaker 3: fun money the at risk money doing other things. They 99 00:04:44,240 --> 00:04:46,799 Speaker 3: served very different purposes. It's really important to have different 100 00:04:46,800 --> 00:04:49,400 Speaker 3: accounts in your head. And in physical terms. 101 00:04:49,320 --> 00:04:51,080 Speaker 1: Fair chunk of it though, would have been tied up 102 00:04:51,120 --> 00:04:55,080 Speaker 1: in investments related to the AI phenomenon. I'm going to 103 00:04:55,160 --> 00:04:57,360 Speaker 1: call it at this point because people seem to be 104 00:04:57,440 --> 00:05:01,320 Speaker 1: leaning hard on the bubble and yet just grows and grows, 105 00:05:01,360 --> 00:05:04,520 Speaker 1: and the shrinks and grows and grows. Are we going 106 00:05:04,560 --> 00:05:07,000 Speaker 1: to knock the froth off this one anytime soon? Who knows? 107 00:05:07,480 --> 00:05:10,480 Speaker 3: I mean, you know the experience of these kinds of 108 00:05:10,640 --> 00:05:15,680 Speaker 3: mega new technologies is you get massive investment booms. Some 109 00:05:15,760 --> 00:05:18,839 Speaker 3: investors will absolutely lose their shirt through the process somewhere, 110 00:05:18,880 --> 00:05:21,400 Speaker 3: but we don't know when. But will the technology prove 111 00:05:21,440 --> 00:05:24,160 Speaker 3: to be very useful and last for a long time. 112 00:05:24,360 --> 00:05:27,039 Speaker 3: My prediction is yes, you know, to me, it's more 113 00:05:27,120 --> 00:05:30,440 Speaker 3: like the railway or the Internet. These are big technologies 114 00:05:30,480 --> 00:05:32,560 Speaker 3: that came through and changed how we live our lives 115 00:05:32,680 --> 00:05:35,240 Speaker 3: for better and for us, and I think is going 116 00:05:35,279 --> 00:05:36,280 Speaker 3: to do exactly the same. 117 00:05:36,600 --> 00:05:39,520 Speaker 1: Yeah, pretty heavy dit load on some of these companies though. Yeah, 118 00:05:39,520 --> 00:05:41,920 Speaker 1: I mean I don't claim to be an AI expert 119 00:05:42,000 --> 00:05:44,000 Speaker 1: at all or a financial one really, I'm just chatting 120 00:05:44,040 --> 00:05:44,160 Speaker 1: to you. 121 00:05:44,520 --> 00:05:45,480 Speaker 4: But it's quite a big difference. 122 00:05:45,520 --> 00:05:45,640 Speaker 1: Right. 123 00:05:45,680 --> 00:05:48,280 Speaker 3: You look at companies like Cisco VERSUS companies like Google right, 124 00:05:48,360 --> 00:05:50,800 Speaker 3: and some are still spending out cash and others aren't. 125 00:05:50,839 --> 00:05:54,200 Speaker 3: So there's a real divergence in quality of businesses. 126 00:05:54,360 --> 00:05:58,760 Speaker 4: When you're looking at the likes of Measure and gogal 127 00:05:58,800 --> 00:06:02,080 Speaker 4: Parent hell for Bit paying out of cash free cash flow, 128 00:06:02,600 --> 00:06:06,479 Speaker 4: where you're looking at say Oracle, which and you know 129 00:06:06,520 --> 00:06:09,440 Speaker 4: it's funding its investment and infrastructure. It's been dead fueled 130 00:06:09,440 --> 00:06:10,800 Speaker 4: in the last sort of ones. And this is where 131 00:06:10,839 --> 00:06:13,880 Speaker 4: that whole circular arrangement starts getting a little tricky. But 132 00:06:14,000 --> 00:06:17,200 Speaker 4: Oracle is borrowed. I think it's about one hundred billion US. 133 00:06:17,800 --> 00:06:21,240 Speaker 4: Like that one hundred billion dollars US to fund this 134 00:06:21,279 --> 00:06:23,120 Speaker 4: sort of stuff. That's like more than all of New 135 00:06:23,240 --> 00:06:27,479 Speaker 4: Zealand's businesses borrowing from the bank combined. It's and this 136 00:06:27,560 --> 00:06:29,360 Speaker 4: is where people get a bit iffy about it. Debt 137 00:06:29,400 --> 00:06:31,479 Speaker 4: is a beautiful thing when it's working for you, but 138 00:06:31,600 --> 00:06:32,520 Speaker 4: when it goes. 139 00:06:32,440 --> 00:06:35,840 Speaker 3: Nasty, leverage cuts both way. That's the whole point of leverage. 140 00:06:35,839 --> 00:06:38,000 Speaker 3: It gives you plenty of upside and gives you plenty 141 00:06:38,000 --> 00:06:40,520 Speaker 3: of downside. It cuts really deep on both sides. 142 00:06:40,560 --> 00:06:42,599 Speaker 1: And the predictions seem to be that we'll see like 143 00:06:42,680 --> 00:06:45,880 Speaker 1: one point three trillion dollars worth of leverage applied to 144 00:06:45,960 --> 00:06:48,120 Speaker 1: that problem of how to make enough power and data 145 00:06:48,160 --> 00:06:50,360 Speaker 1: centers for AIS that's once that that seem to be 146 00:06:50,360 --> 00:06:53,440 Speaker 1: floating around. These are pretty astronomical numbers. I mean, are 147 00:06:53,440 --> 00:06:54,599 Speaker 1: they anchored at all? 148 00:06:54,640 --> 00:06:56,800 Speaker 4: It's where and I mean this is where, like Sam 149 00:06:56,839 --> 00:06:59,320 Speaker 4: Oltman from open Ai, it starts coming under a bit 150 00:06:59,360 --> 00:07:01,880 Speaker 4: of pressure and very snippy in a podcast not long 151 00:07:01,920 --> 00:07:06,000 Speaker 4: ago where he got challenged about the forecast cash generation 152 00:07:06,480 --> 00:07:10,480 Speaker 4: versus the infrastructure spend. Now, of course those forecasts are 153 00:07:10,520 --> 00:07:12,680 Speaker 4: just over a short period of time and the expectation 154 00:07:12,800 --> 00:07:14,400 Speaker 4: is that they'll be able to do it. But what 155 00:07:14,440 --> 00:07:16,800 Speaker 4: if they don't. Yeah, so, and this is the whole 156 00:07:16,800 --> 00:07:18,840 Speaker 4: thing when you're looking at as Chamaville was saying, like 157 00:07:18,960 --> 00:07:23,640 Speaker 4: with these early stage this revolutionary shift, there'll be some winners, 158 00:07:23,760 --> 00:07:25,640 Speaker 4: but there's also going to be a bunch of losers. 159 00:07:26,440 --> 00:07:28,440 Speaker 3: This is entirely normal. I mean, history is littered with 160 00:07:28,480 --> 00:07:31,960 Speaker 3: his experiences and these kinds of examples. So to me, 161 00:07:32,000 --> 00:07:34,520 Speaker 3: it's less about going will the investment take lesson will 162 00:07:34,520 --> 00:07:35,120 Speaker 3: oli it be? 163 00:07:35,160 --> 00:07:35,360 Speaker 1: God? 164 00:07:35,360 --> 00:07:38,239 Speaker 3: The answer is, of course not, because we're still finding 165 00:07:38,280 --> 00:07:41,520 Speaker 3: out what's going to work. And that's okay, But you 166 00:07:41,600 --> 00:07:44,160 Speaker 3: just need to be aware as an investor that some 167 00:07:44,240 --> 00:07:46,920 Speaker 3: of those investments will go about. We don't know when, 168 00:07:47,040 --> 00:07:49,880 Speaker 3: we don't know how. But will there absolutely be winners 169 00:07:49,880 --> 00:07:51,040 Speaker 3: out of it over the long term. 170 00:07:51,120 --> 00:07:51,560 Speaker 1: I think so. 171 00:07:52,040 --> 00:07:54,480 Speaker 3: You know, I'm always reminded of pets dot com during 172 00:07:54,560 --> 00:07:57,240 Speaker 3: the dot com eraror right, there was a company that 173 00:07:57,280 --> 00:07:59,000 Speaker 3: was valued at all these things. It had no business, 174 00:07:59,000 --> 00:08:01,480 Speaker 3: They had no revenue was valued lots of money. That 175 00:08:01,600 --> 00:08:05,080 Speaker 3: company disappeared, but other companies became real things in the 176 00:08:05,120 --> 00:08:07,400 Speaker 3: aftermath of it, and I think the same thing will 177 00:08:07,400 --> 00:08:11,000 Speaker 3: happen with AI. So it's more about how we're going 178 00:08:11,000 --> 00:08:14,679 Speaker 3: to see the winners shape the markets or feature years. 179 00:08:14,840 --> 00:08:17,679 Speaker 3: And that's why again, trying to pick winners at single 180 00:08:17,680 --> 00:08:20,600 Speaker 3: points in time is very difficult, and being active in 181 00:08:20,640 --> 00:08:24,240 Speaker 3: the market, being partsciplined in the market through time, through cycles, 182 00:08:24,440 --> 00:08:25,160 Speaker 3: is so critical. 183 00:08:25,440 --> 00:08:28,440 Speaker 1: I guess it's an opportunity for some right if you're 184 00:08:28,520 --> 00:08:31,960 Speaker 1: under forteen, you're trying to save. Increasingly we're seeing people 185 00:08:32,000 --> 00:08:34,520 Speaker 1: more comfortable with the idea of it or invest rat 186 00:08:34,720 --> 00:08:38,520 Speaker 1: of investing in the market rather than the traditional forms 187 00:08:38,520 --> 00:08:39,920 Speaker 1: of property and so on. And these are probably the 188 00:08:39,960 --> 00:08:42,600 Speaker 1: same people whose jobs are most at risk of being 189 00:08:42,640 --> 00:08:44,920 Speaker 1: pitched out by the very technology they're investing in. Is 190 00:08:44,920 --> 00:08:46,080 Speaker 1: there a bit of an irony there. 191 00:08:46,040 --> 00:08:48,680 Speaker 4: Well, there is, But are those jobs actually at risk? 192 00:08:48,720 --> 00:08:51,760 Speaker 4: I mean, what happens when you get that dislocation? Some 193 00:08:51,880 --> 00:08:54,760 Speaker 4: jobs go, but new ones are created, Like it's not 194 00:08:54,880 --> 00:08:58,480 Speaker 4: a you know, you don't just lose everything. And AI 195 00:08:58,600 --> 00:09:00,400 Speaker 4: is not going to come for everyone's job, And then 196 00:09:00,440 --> 00:09:04,200 Speaker 4: that's what do we do. We've set our systems up, 197 00:09:04,280 --> 00:09:06,959 Speaker 4: so you've still got to have people at least getting 198 00:09:06,960 --> 00:09:10,440 Speaker 4: some kind of cash unless we fundamentally change how we. 199 00:09:10,400 --> 00:09:11,320 Speaker 1: Live, I think. 200 00:09:11,400 --> 00:09:13,440 Speaker 3: But I think there is a fear out there, and 201 00:09:13,480 --> 00:09:16,640 Speaker 3: it's really around AI is good at tasks, not at jobs, 202 00:09:16,920 --> 00:09:19,600 Speaker 3: so we will see some tasks being automated, and unfortunately 203 00:09:19,640 --> 00:09:22,640 Speaker 3: for young people, the starter roles are task heavy, so 204 00:09:22,800 --> 00:09:25,240 Speaker 3: that's where the risk is. Some of the tasks get automated, 205 00:09:25,280 --> 00:09:28,640 Speaker 3: so instead of having say twenty juniors, you might need ten. 206 00:09:29,320 --> 00:09:33,000 Speaker 3: So the structure of organizations becomes different, and young people 207 00:09:33,000 --> 00:09:35,560 Speaker 3: will then be much more likely to have less precarious, 208 00:09:35,880 --> 00:09:40,280 Speaker 3: kind of more precarious careers. There might be competing more 209 00:09:40,320 --> 00:09:43,640 Speaker 3: for those few jobs that are of high quality, and 210 00:09:43,679 --> 00:09:46,199 Speaker 3: there might be more people spending longer parts of their 211 00:09:46,240 --> 00:09:50,400 Speaker 3: early lives working in not very good jobs, in service jobs, 212 00:09:50,440 --> 00:09:52,240 Speaker 3: in jobs that don't pay very well, that don't have 213 00:09:52,240 --> 00:09:54,760 Speaker 3: a lot of security, that don't have good hours. And 214 00:09:54,960 --> 00:09:57,480 Speaker 3: there is an entertification of jobs that we have seen 215 00:09:57,520 --> 00:09:59,680 Speaker 3: over the course of the last few decades, and it 216 00:09:59,760 --> 00:10:02,720 Speaker 3: has affected younger people more. So I think that fear 217 00:10:03,000 --> 00:10:05,520 Speaker 3: is real. It's not that jobs will disappear. But the 218 00:10:05,600 --> 00:10:07,720 Speaker 3: quality of jobs early part of a career I think 219 00:10:07,840 --> 00:10:10,200 Speaker 3: is definitely something we need to be really mindful of. 220 00:10:10,800 --> 00:10:13,000 Speaker 1: Does that have a long lasting impact though, on someone's 221 00:10:13,000 --> 00:10:15,680 Speaker 1: ability to earn, on the investment opportunities that they have 222 00:10:15,720 --> 00:10:18,160 Speaker 1: available to them, on all of these things you're starting 223 00:10:18,160 --> 00:10:19,400 Speaker 1: out from a lower base. 224 00:10:19,720 --> 00:10:22,520 Speaker 3: I think it stratifies people, right, So those who get 225 00:10:22,520 --> 00:10:25,440 Speaker 3: those opportunities to get into those well paid jobs with 226 00:10:25,480 --> 00:10:28,480 Speaker 3: as well earning industries or whatever you tend to see, 227 00:10:28,559 --> 00:10:31,080 Speaker 3: you will see an accumulation of income and wealth. For 228 00:10:31,120 --> 00:10:33,880 Speaker 3: them that's faster, and for other people they'll be pushed 229 00:10:33,880 --> 00:10:36,120 Speaker 3: behind for a lot longer. And this is why I 230 00:10:36,160 --> 00:10:38,480 Speaker 3: think it's really when you think about saving and investing 231 00:10:38,520 --> 00:10:42,280 Speaker 3: regardless of where you are. It's that importance of thinking 232 00:10:42,280 --> 00:10:46,599 Speaker 3: about the habit of saving versus trying to pick things specifically, 233 00:10:46,760 --> 00:10:49,319 Speaker 3: because I think there's a real pressure for a lot 234 00:10:49,320 --> 00:10:50,880 Speaker 3: of people to go, oh, look, i think I'm not 235 00:10:50,880 --> 00:10:52,440 Speaker 3: going to earn enough, so I need to take as 236 00:10:52,559 --> 00:10:55,560 Speaker 3: much risk as possible to make tons of money and 237 00:10:55,600 --> 00:10:58,520 Speaker 3: then I'll have freedom, rather than actually looking at what 238 00:10:58,600 --> 00:11:01,640 Speaker 3: works for most people, which is if you save consistently 239 00:11:01,760 --> 00:11:04,640 Speaker 3: and regularly do the boring part of saving, that's probably 240 00:11:04,679 --> 00:11:06,760 Speaker 3: going to set you up. But a bit of fun 241 00:11:06,800 --> 00:11:08,760 Speaker 3: money on the side might give you that extra holiday 242 00:11:08,880 --> 00:11:09,240 Speaker 3: or whatever. 243 00:11:10,360 --> 00:11:13,679 Speaker 1: Make a habit out of it, out of doing the basics, right, Yeah, 244 00:11:13,720 --> 00:11:14,280 Speaker 1: well absolutely. 245 00:11:14,320 --> 00:11:16,240 Speaker 3: I mean the way I save is, you know, I 246 00:11:16,320 --> 00:11:18,719 Speaker 3: have my basics, which is really a little bit of 247 00:11:18,760 --> 00:11:20,679 Speaker 3: set and forget. You know, I have a person who 248 00:11:20,760 --> 00:11:22,600 Speaker 3: looks after that money, and then I have a little 249 00:11:22,600 --> 00:11:24,280 Speaker 3: bit of fun money, which is for me to kind 250 00:11:24,280 --> 00:11:25,680 Speaker 3: of go. If I make some money out of it, 251 00:11:25,720 --> 00:11:27,839 Speaker 3: I'll do something interesting or fun out with it. And 252 00:11:28,320 --> 00:11:31,640 Speaker 3: also you learn lots by being you know, by investing 253 00:11:31,640 --> 00:11:34,520 Speaker 3: in markets, by investing in startups. Like I said, you know, 254 00:11:34,559 --> 00:11:36,800 Speaker 3: I've lost lots of money on startups, but I've learned 255 00:11:36,800 --> 00:11:39,439 Speaker 3: so much from it. You just learn, You meet interesting people, 256 00:11:39,480 --> 00:11:44,800 Speaker 3: you learn about interesting technologies, and that closeness gives you 257 00:11:45,080 --> 00:11:47,559 Speaker 3: that you know, that little little buy in and that 258 00:11:47,600 --> 00:11:48,840 Speaker 3: buying is really important. 259 00:11:49,080 --> 00:11:52,000 Speaker 1: I should add this is probably a wholesale investment proposition 260 00:11:52,040 --> 00:11:53,920 Speaker 1: we're talking about here, rather than something that a retail 261 00:11:54,000 --> 00:11:55,120 Speaker 1: investor can get into. Yeah. 262 00:11:55,320 --> 00:11:58,439 Speaker 3: Absolutely, But a lot of young people will be investing 263 00:11:58,640 --> 00:12:02,280 Speaker 3: in individual stocks, so they are making specific bets on 264 00:12:02,320 --> 00:12:04,960 Speaker 3: particular companies, So it might not be for startups, but 265 00:12:05,040 --> 00:12:07,280 Speaker 3: you might be doing it in terms of taking a 266 00:12:07,360 --> 00:12:10,880 Speaker 3: much more risky proposition of being having a less diversified strategy. 267 00:12:11,240 --> 00:12:13,679 Speaker 3: And for me, that's very much for that fund money, 268 00:12:13,720 --> 00:12:16,839 Speaker 3: that investment money, that learning money, rather than the saving money. 269 00:12:16,840 --> 00:12:18,319 Speaker 3: They're not the same things. 270 00:12:18,800 --> 00:12:21,480 Speaker 1: Was there a particular winner you want to start about 271 00:12:21,480 --> 00:12:23,800 Speaker 1: this year, given we're trying to retrospectively look at twenty 272 00:12:23,880 --> 00:12:26,400 Speaker 1: twenty five and go, gee, I'm glad I made that decision. 273 00:12:26,480 --> 00:12:28,360 Speaker 3: Well, I mean I was actually just looking at a 274 00:12:28,440 --> 00:12:30,560 Speaker 3: Q saver the other day. Man, it's done bloody well, 275 00:12:31,120 --> 00:12:33,160 Speaker 3: and you know, like most of the returns, of course 276 00:12:33,200 --> 00:12:35,040 Speaker 3: have come from just the money that you contributed, but 277 00:12:35,480 --> 00:12:37,680 Speaker 3: the fact that it's gone up so much it's pretty extraordinary. 278 00:12:37,760 --> 00:12:39,760 Speaker 1: See the band from a key we saver fun come on. 279 00:12:40,120 --> 00:12:44,079 Speaker 3: But honestly, like I've my kind of whole experience of 280 00:12:44,600 --> 00:12:48,640 Speaker 3: private equity and venture capital is they've not actually had 281 00:12:48,720 --> 00:12:50,840 Speaker 3: very good years for the last couple of years, whereas 282 00:12:50,880 --> 00:12:53,160 Speaker 3: the financial market has done really well. Just being invested 283 00:12:53,160 --> 00:12:55,600 Speaker 3: in markets has given you some pretty good returns. The 284 00:12:55,800 --> 00:12:58,720 Speaker 3: x X has been woeful. Yeah, Yet they don. 285 00:12:59,600 --> 00:13:02,480 Speaker 1: You say, I'm sure Paul will pull back on this. 286 00:13:02,760 --> 00:13:04,120 Speaker 3: While the returns on. 287 00:13:04,120 --> 00:13:06,000 Speaker 4: The fifty you're looking about two and a half percent 288 00:13:06,080 --> 00:13:07,880 Speaker 4: year to date, on the small cap you're looking at 289 00:13:07,920 --> 00:13:08,640 Speaker 4: about twenty five. 290 00:13:09,360 --> 00:13:11,400 Speaker 1: So there as gold and then they are hells right, 291 00:13:11,520 --> 00:13:13,720 Speaker 1: there's stuff if you prepare to take a risk, well, 292 00:13:13,840 --> 00:13:15,440 Speaker 1: let's talk about that, not even the risks. 293 00:13:15,640 --> 00:13:18,480 Speaker 4: It does sort of correlate more with the idea that 294 00:13:18,520 --> 00:13:20,840 Speaker 4: New Zealand's economy is on the term domestic sort of 295 00:13:20,880 --> 00:13:23,640 Speaker 4: fundies out there. The institutional investors have been looking at 296 00:13:24,360 --> 00:13:27,000 Speaker 4: the signs of life in the New Zealand economy, those 297 00:13:27,120 --> 00:13:29,240 Speaker 4: rate cups that take a long time to work through, 298 00:13:29,280 --> 00:13:33,360 Speaker 4: and of course stock market's been forward looking. Those domestic 299 00:13:33,400 --> 00:13:36,840 Speaker 4: focused companies have sort of done better out of it, 300 00:13:36,960 --> 00:13:40,000 Speaker 4: like freightways, everyone's favorite economic bell weather, I think was 301 00:13:40,080 --> 00:13:42,640 Speaker 4: up about thirty percent or so year to date so far, 302 00:13:43,040 --> 00:13:47,160 Speaker 4: and of course that's also going Australian operations. But in 303 00:13:47,280 --> 00:13:50,240 Speaker 4: terms of looking at signs of life in New Zealand's economy, 304 00:13:51,240 --> 00:13:54,000 Speaker 4: those MidCap and small cap companies are sort of saying, yeah, 305 00:13:54,040 --> 00:13:56,959 Speaker 4: we're getting ready for things, and the prices have gone 306 00:13:57,040 --> 00:13:59,880 Speaker 4: up accordingly. As you know that big end of town 307 00:14:00,400 --> 00:14:01,440 Speaker 4: hasn't quite seen the same. 308 00:14:01,480 --> 00:14:03,040 Speaker 3: But also the beg end of time does not really 309 00:14:03,080 --> 00:14:06,000 Speaker 3: look like the economy, right are the types of businesses 310 00:14:06,000 --> 00:14:07,880 Speaker 3: that are They're so different from the make up. 311 00:14:08,559 --> 00:14:12,920 Speaker 1: And it's not Briscoes and. 312 00:14:14,040 --> 00:14:16,960 Speaker 4: Really and Fisher and Pikele which dominates so much of it, 313 00:14:17,000 --> 00:14:20,760 Speaker 4: and that's largely an export focus thing hinged on Mexican 314 00:14:20,800 --> 00:14:23,840 Speaker 4: manufacturing as well. Yeah, it's got issues, even though it's 315 00:14:23,880 --> 00:14:25,800 Speaker 4: sort of flatlined. I think it was down to touch 316 00:14:25,880 --> 00:14:29,320 Speaker 4: last I saw, but Infratil getting probably dragged down by 317 00:14:29,320 --> 00:14:33,920 Speaker 4: the AI unhappiness with its CDC exposure, the data center 318 00:14:34,160 --> 00:14:39,080 Speaker 4: or main freight Global Logistics a little bit off the boil, 319 00:14:39,480 --> 00:14:42,880 Speaker 4: so you know that that bigger, bigger type thing struggling. 320 00:14:43,080 --> 00:14:46,640 Speaker 4: But primary producers love and life fon Terra's shield is fun. 321 00:14:47,160 --> 00:14:48,720 Speaker 1: They had a bit of a sugar hit this year. 322 00:14:48,920 --> 00:14:53,040 Speaker 3: They did two billion, but fair price fabulous, ridiculous. That's 323 00:14:53,040 --> 00:14:55,040 Speaker 3: why our butter and cheese gost so much. Yeah. 324 00:14:55,200 --> 00:14:59,720 Speaker 4: Yeah, Rights has been sort of on a tiar Scales Corp, 325 00:15:00,160 --> 00:15:04,840 Speaker 4: Apple exporter and also refrigeration type things going great turners 326 00:15:04,840 --> 00:15:07,920 Speaker 4: and grows at TG Global these days, which is on 327 00:15:07,960 --> 00:15:11,440 Speaker 4: the block because it's German controlling parents as its own 328 00:15:11,480 --> 00:15:12,320 Speaker 4: dishes to sort out. 329 00:15:12,360 --> 00:15:14,120 Speaker 1: But these are all things you think you could have 330 00:15:14,120 --> 00:15:16,480 Speaker 1: seen at the start of twenty twenty five to some extent. 331 00:15:16,560 --> 00:15:21,600 Speaker 4: Ah, not necessarily. I mean, if you're looking at just 332 00:15:21,680 --> 00:15:26,960 Speaker 4: that primary sector is always cyclical, right, commodity prices of 333 00:15:27,120 --> 00:15:31,040 Speaker 4: raw materials, but foods, minerals, whatever goes up and it 334 00:15:31,080 --> 00:15:35,000 Speaker 4: goes down. And anyone who just predicates it ongoing up, yeah, 335 00:15:35,000 --> 00:15:39,120 Speaker 4: they'll normally get burned. But you know, these prices have 336 00:15:39,160 --> 00:15:41,320 Speaker 4: been doing well. Fish prices have been going well in 337 00:15:41,360 --> 00:15:45,640 Speaker 4: Sandford is another one that's been hadding a tear. You 338 00:15:46,880 --> 00:15:48,720 Speaker 4: do have to have that confidence over the long term, 339 00:15:48,760 --> 00:15:51,000 Speaker 4: but you can sort of you can look at these 340 00:15:51,000 --> 00:15:53,280 Speaker 4: things and go, oh yeah, yeah, that's I'm feeling a 341 00:15:53,280 --> 00:15:55,720 Speaker 4: bit more optimistic about New Zealand, and I was less 342 00:15:55,800 --> 00:15:58,520 Speaker 4: of and less bearish about the local economy. I've been 343 00:15:58,600 --> 00:16:01,520 Speaker 4: sort of polyannerish, probably since the middle of the year 344 00:16:01,560 --> 00:16:04,360 Speaker 4: when I just started seeing some of those retailers, you know, 345 00:16:04,400 --> 00:16:07,200 Speaker 4: the JB high fliers of this world, actually seeing a 346 00:16:07,200 --> 00:16:10,520 Speaker 4: bit more coming in the door, and yeah, you just 347 00:16:10,520 --> 00:16:13,440 Speaker 4: start thinking, maybe it's not that bad. Maybe we're not. 348 00:16:13,800 --> 00:16:15,920 Speaker 4: We're talking ourselves a bit too much into a slump 349 00:16:15,920 --> 00:16:18,760 Speaker 4: because it's you know, regular people feel it more and 350 00:16:19,080 --> 00:16:21,200 Speaker 4: we don't feel the upswing that corporates do. 351 00:16:21,480 --> 00:16:25,000 Speaker 1: Weirdly enough, I think the PSI, the Serviance of Services 352 00:16:25,000 --> 00:16:28,440 Speaker 1: Index popped out today, and although it's in contraction and 353 00:16:28,680 --> 00:16:31,400 Speaker 1: rather steeply so, yet again, the one thing that was 354 00:16:31,440 --> 00:16:33,960 Speaker 1: improving was the sort of negative self talk factor. I 355 00:16:33,960 --> 00:16:36,520 Speaker 1: think their own sort of the negative comments had dropped 356 00:16:36,600 --> 00:16:38,520 Speaker 1: yet again. So people sort of seem to be saying 357 00:16:38,560 --> 00:16:40,480 Speaker 1: things are bad, but we believe they're going to get better. 358 00:16:40,640 --> 00:16:42,120 Speaker 1: Is that what you're saying, Well. 359 00:16:41,960 --> 00:16:44,280 Speaker 3: I mean we've seen that all year. What we've said 360 00:16:44,400 --> 00:16:46,480 Speaker 3: is it's currently terrible, but I think it's going to 361 00:16:46,520 --> 00:16:48,600 Speaker 3: be better in the future. And we've been wrong for 362 00:16:48,600 --> 00:16:50,360 Speaker 3: about twelve months, and at some point in time, it's 363 00:16:50,360 --> 00:16:51,520 Speaker 3: like a broken clock. You're going to be right. 364 00:16:51,560 --> 00:16:53,840 Speaker 1: We actually bought these mincepies last year. We're just looking 365 00:16:53,880 --> 00:16:55,040 Speaker 1: forward to enjoying them now. 366 00:16:55,400 --> 00:16:55,600 Speaker 4: Yeah. 367 00:16:55,640 --> 00:16:58,000 Speaker 3: But the thing is like, also, it's partly because I 368 00:16:58,040 --> 00:16:59,920 Speaker 3: think this cycle has been just a lot longer than 369 00:17:00,040 --> 00:17:03,160 Speaker 3: people expected. So by all rights, if you look at 370 00:17:03,200 --> 00:17:05,680 Speaker 3: historical patterns, we should have had a recovery by now. 371 00:17:06,040 --> 00:17:09,160 Speaker 1: So why did New Zealand's economy spend twenty twenty five 372 00:17:09,240 --> 00:17:09,879 Speaker 1: on the couch. 373 00:17:10,480 --> 00:17:13,480 Speaker 3: Well, we had quite a strong recovery late last year 374 00:17:13,560 --> 00:17:15,399 Speaker 3: and then and pretty much at the end of the 375 00:17:15,400 --> 00:17:17,919 Speaker 3: summer it fizzled out and we had this kind of 376 00:17:18,520 --> 00:17:20,640 Speaker 3: the middle of the year was weird and now we're 377 00:17:20,640 --> 00:17:22,600 Speaker 3: starting to see those green shoots again. And partly it 378 00:17:22,640 --> 00:17:25,880 Speaker 3: was because the Reserve Bank, in all its glory, decided 379 00:17:25,920 --> 00:17:28,080 Speaker 3: that it had done enough and it didn't want to 380 00:17:28,080 --> 00:17:30,600 Speaker 3: do anymore. And so the signal was very much that 381 00:17:31,040 --> 00:17:32,840 Speaker 3: everything is fine, and people are like, no, it's not. 382 00:17:33,080 --> 00:17:36,000 Speaker 3: Actually things are still quite painful. So I hear what 383 00:17:36,000 --> 00:17:37,679 Speaker 3: you're saying, Paul. But at the same time, you know, 384 00:17:37,720 --> 00:17:39,679 Speaker 3: you look at what was going with the jobs nothing, 385 00:17:39,920 --> 00:17:43,560 Speaker 3: you look at what's going on with business insolvencies rising. 386 00:17:43,920 --> 00:17:46,240 Speaker 3: So people were still getting the signals that were still 387 00:17:46,320 --> 00:17:49,680 Speaker 3: quite challenging. But really at the household level, what people 388 00:17:49,680 --> 00:17:52,399 Speaker 3: are experiencing, My cost of my necessities are going up. 389 00:17:52,440 --> 00:17:55,040 Speaker 3: I have less money available. That was the biggest shue. 390 00:17:55,080 --> 00:17:57,560 Speaker 4: You are saying more money getting spent on groceries, like 391 00:17:57,600 --> 00:18:00,520 Speaker 4: as a proportion, it's more starting to turn around now, 392 00:18:00,760 --> 00:18:03,080 Speaker 4: and I think, but that was it, right. I mean, 393 00:18:03,119 --> 00:18:05,240 Speaker 4: you look at you know, we talked about commodity prices, 394 00:18:05,280 --> 00:18:07,560 Speaker 4: and you know the reason your butter prices went up 395 00:18:07,720 --> 00:18:10,199 Speaker 4: is because global butter prices went up. You know the 396 00:18:10,240 --> 00:18:13,000 Speaker 4: reason why we had high food prices because global commodity 397 00:18:13,000 --> 00:18:13,640 Speaker 4: prices are up. 398 00:18:14,040 --> 00:18:16,040 Speaker 3: And it wasn't just that. It was also insurance and 399 00:18:16,119 --> 00:18:18,280 Speaker 3: rates and electricity, so it was all these kind of 400 00:18:18,280 --> 00:18:20,719 Speaker 3: things that came on top of each other. But you know, 401 00:18:20,840 --> 00:18:22,919 Speaker 3: for me, the optimism forward next year is very much 402 00:18:22,960 --> 00:18:27,440 Speaker 3: around everybody's kind of really fed up with the recession. 403 00:18:27,600 --> 00:18:29,800 Speaker 3: They really want to do stuff right. You can't just 404 00:18:29,840 --> 00:18:33,199 Speaker 3: stop and sit on your hands forever, but you need something. 405 00:18:33,320 --> 00:18:35,080 Speaker 3: Somebody needs to move first. Who's going to be the 406 00:18:35,080 --> 00:18:38,199 Speaker 3: first mover? And I think the Christmas season is going 407 00:18:38,240 --> 00:18:40,760 Speaker 3: to be the critical one for retailers. If the punters 408 00:18:40,800 --> 00:18:42,840 Speaker 3: turn out and spend a bit of money, I think 409 00:18:42,840 --> 00:18:45,800 Speaker 3: that's what we'll kickstart everybody doing a bit more. 410 00:18:46,080 --> 00:18:48,439 Speaker 1: Yeah, you mentioned the Reserve Bank there, So we've had 411 00:18:48,520 --> 00:18:50,880 Speaker 1: quite an interesting scene just playing out as we're recording 412 00:18:50,880 --> 00:18:52,480 Speaker 1: this in the last sort of day or so, with 413 00:18:52,560 --> 00:18:55,680 Speaker 1: the new Reserve Bank governor jaw boning the market something 414 00:18:55,720 --> 00:18:58,080 Speaker 1: I don't remind me when the last time that happened 415 00:18:58,200 --> 00:18:58,840 Speaker 1: was what. 416 00:18:58,800 --> 00:19:01,840 Speaker 3: Happens fairly regularly as soon as they go, Oh, markets 417 00:19:01,840 --> 00:19:05,040 Speaker 3: are completely misreading this, even though even though their forecasts 418 00:19:05,080 --> 00:19:07,680 Speaker 3: very clearly show increase in interest rates from the limit 419 00:19:08,080 --> 00:19:11,159 Speaker 3: later next year. Right, So the reason they're doing it 420 00:19:11,240 --> 00:19:14,760 Speaker 3: is because they didn't expect mortgage ress to start rising yet. 421 00:19:14,840 --> 00:19:17,920 Speaker 3: They wanted more time for people to lock in low 422 00:19:18,000 --> 00:19:21,160 Speaker 3: mortgage rates and start borrowing again so the economic recovery 423 00:19:21,160 --> 00:19:22,120 Speaker 3: would kick off. 424 00:19:22,640 --> 00:19:25,760 Speaker 1: The average time to get a mortgage application considered now, 425 00:19:25,840 --> 00:19:27,560 Speaker 1: once it's sloaded with the bank, because someone was talking 426 00:19:27,600 --> 00:19:29,760 Speaker 1: to that, was about seven to ten days, So good 427 00:19:29,800 --> 00:19:32,240 Speaker 1: luck getting it done before Christmas. There is a log 428 00:19:32,359 --> 00:19:34,480 Speaker 1: jam of people rushing totally try and get around. 429 00:19:34,520 --> 00:19:37,080 Speaker 3: But also you can't get pre approvals and all those 430 00:19:37,119 --> 00:19:39,240 Speaker 3: kinds of things. So it's actually been everything slowed down 431 00:19:39,280 --> 00:19:41,359 Speaker 3: a lot, right, And it's partly because a lot of 432 00:19:41,400 --> 00:19:44,480 Speaker 3: banks had reduced their staffing capacity on the mortgage books 433 00:19:44,480 --> 00:19:45,879 Speaker 3: because the market had been so quiet. 434 00:19:46,119 --> 00:19:49,280 Speaker 1: It's all those younger task related jobs that's showing out 435 00:19:49,280 --> 00:19:50,200 Speaker 1: of the market already. 436 00:19:50,280 --> 00:19:50,679 Speaker 4: There we go. 437 00:19:51,520 --> 00:19:53,440 Speaker 3: But the thing is, I think there is a bank 438 00:19:53,520 --> 00:19:55,560 Speaker 3: is right to worry because what we don't want is 439 00:19:55,600 --> 00:19:58,160 Speaker 3: a signal that says everything is hunky dory. You don't 440 00:19:58,200 --> 00:20:01,359 Speaker 3: need to change anything. We still need a bit behavior 441 00:20:01,480 --> 00:20:04,639 Speaker 3: change and the behavior changes. Yes, there is reason just 442 00:20:04,680 --> 00:20:07,440 Speaker 3: to be optimistic, but that will only be true if 443 00:20:07,440 --> 00:20:10,399 Speaker 3: we're doing stuff, and that means spending money, business is 444 00:20:10,480 --> 00:20:13,760 Speaker 3: hiring people, and businesses investing. If those things are not happening, 445 00:20:14,000 --> 00:20:15,600 Speaker 3: there is no real economic recovery. 446 00:20:15,720 --> 00:20:19,080 Speaker 1: And presumably as long as there's some transmission into the 447 00:20:19,200 --> 00:20:21,560 Speaker 1: leaning rates from the oci that lives set. 448 00:20:21,720 --> 00:20:23,480 Speaker 4: And there were I mean for anyone rolling off, there's 449 00:20:23,480 --> 00:20:26,080 Speaker 4: still will be even with sort of Westpac. I think 450 00:20:26,119 --> 00:20:28,200 Speaker 4: am Z joined the bandwagon. 451 00:20:28,240 --> 00:20:30,320 Speaker 1: Now it's key. We ban can as be sort of 452 00:20:30,400 --> 00:20:31,080 Speaker 1: quietly quit. 453 00:20:31,680 --> 00:20:35,120 Speaker 4: But you're still rolling off six or seven percent down 454 00:20:35,200 --> 00:20:37,840 Speaker 4: to something a bit lower, like, yes, you're still relief. 455 00:20:38,320 --> 00:20:41,200 Speaker 4: There's you might be missing out on maybe twenty bucks 456 00:20:41,240 --> 00:20:45,040 Speaker 4: a week, which that matters, but you're still sort of 457 00:20:45,080 --> 00:20:47,600 Speaker 4: pocketing another four hundred or so. It wouldn't maybe not 458 00:20:47,600 --> 00:20:49,240 Speaker 4: four hundred a week, geek, that would be all right? 459 00:20:50,160 --> 00:20:50,920 Speaker 1: Where are you living? 460 00:20:52,680 --> 00:20:54,400 Speaker 3: Or he has a really big mortgage. 461 00:20:55,480 --> 00:20:56,359 Speaker 1: I have no mortgage. 462 00:20:56,400 --> 00:21:01,040 Speaker 4: I'm a renter back to generation rent shammer bill. You know, 463 00:21:01,160 --> 00:21:05,200 Speaker 4: it's they are going to have more cash in their pocket, 464 00:21:05,240 --> 00:21:06,879 Speaker 4: and it's just whether or not they're gets mopped up 465 00:21:06,880 --> 00:21:10,520 Speaker 4: by the supermarkets and the petrol chains and the power 466 00:21:10,560 --> 00:21:12,080 Speaker 4: bills and the rates bill. 467 00:21:12,400 --> 00:21:14,399 Speaker 3: Well, but there's a context here, right. Only about a 468 00:21:14,440 --> 00:21:16,560 Speaker 3: third of hussles in New Zealand have a mortgage, two 469 00:21:16,640 --> 00:21:19,119 Speaker 3: third stones for older people. That's falling interest reds is 470 00:21:19,160 --> 00:21:22,080 Speaker 3: actually a really big issue there. You know, I'm hearing 471 00:21:22,119 --> 00:21:24,520 Speaker 3: about people who are going out looking for more risky 472 00:21:24,560 --> 00:21:28,120 Speaker 3: types of yield investments and it gives me the shivers. 473 00:21:28,160 --> 00:21:30,840 Speaker 3: Remember the whole finance company to barkle, Well, not that 474 00:21:30,920 --> 00:21:31,280 Speaker 3: long ago. 475 00:21:31,720 --> 00:21:34,199 Speaker 1: There's another great podcast we could promote that a colleague 476 00:21:34,200 --> 00:21:35,919 Speaker 1: of mine is doing all about the fall of the 477 00:21:35,920 --> 00:21:38,040 Speaker 1: House of do Valent. I'm interested. I suppose in the 478 00:21:38,119 --> 00:21:41,160 Speaker 1: other the actual bubble that really has burst, which is property, 479 00:21:41,240 --> 00:21:43,520 Speaker 1: and the sort of the massive drop that we've seen 480 00:21:43,680 --> 00:21:45,600 Speaker 1: that really hasn't recovered. I mean we're sort of twenty 481 00:21:45,600 --> 00:21:49,320 Speaker 1: to thirty percent drops in real terms in the value 482 00:21:49,359 --> 00:21:53,160 Speaker 1: of some people's assets and so on. Have we finally, yeah, 483 00:21:53,200 --> 00:21:55,200 Speaker 1: I mean, have we learned our lesson and for how long. 484 00:21:55,480 --> 00:21:57,880 Speaker 3: Well, if you look at where this price to fall 485 00:21:57,920 --> 00:22:00,320 Speaker 3: and the most it's place like Wellington and Auckland. Venture 486 00:22:00,359 --> 00:22:04,000 Speaker 3: prices have fallen nearly as much. But also there rose 487 00:22:04,080 --> 00:22:05,960 Speaker 3: a lot during the COVID period when there was a 488 00:22:05,960 --> 00:22:08,199 Speaker 3: big rise, so they've only kind of given back the 489 00:22:08,320 --> 00:22:10,560 Speaker 3: kind of the very artificial increase we had seen when 490 00:22:10,600 --> 00:22:13,679 Speaker 3: money was practically free and banks were falling over themselves 491 00:22:13,720 --> 00:22:16,000 Speaker 3: to lend money. But if you look at prices relter 492 00:22:16,119 --> 00:22:19,520 Speaker 3: incomes there, they've gone from obscenely expensive to just merely 493 00:22:19,600 --> 00:22:23,199 Speaker 3: very expensive. So it's to me it's I don't think 494 00:22:23,240 --> 00:22:25,760 Speaker 3: we've really learned our lesson in the sense that things 495 00:22:25,760 --> 00:22:29,360 Speaker 3: are still very unaffordable. It's still telling us that relatively speaking, 496 00:22:29,920 --> 00:22:33,560 Speaker 3: huge undersupply of housing across New Zealand still at the margin, 497 00:22:33,880 --> 00:22:36,040 Speaker 3: we're getting better, you know. That's why rents in place 498 00:22:36,119 --> 00:22:39,480 Speaker 3: like Auckland are falling, because we're building enough homes, people 499 00:22:39,480 --> 00:22:42,919 Speaker 3: are leaving to Australia and that you know that kind 500 00:22:42,960 --> 00:22:44,280 Speaker 3: of those two things are coming together. 501 00:22:44,720 --> 00:22:46,560 Speaker 1: Flipping back to the market there a little bit, we 502 00:22:46,560 --> 00:22:48,359 Speaker 1: were talking about how things need to lift up a 503 00:22:48,359 --> 00:22:51,199 Speaker 1: little bit. Looking locally monowere energy, mars and maritime holdings, 504 00:22:51,240 --> 00:22:54,040 Speaker 1: vital endsed wind farms ordered what this year? 505 00:22:54,480 --> 00:22:55,440 Speaker 4: They said, goodbye? 506 00:22:56,160 --> 00:22:58,520 Speaker 1: Are we? It's an emptying out, isn't it. 507 00:22:58,520 --> 00:23:00,720 Speaker 4: It's that annoying part of the cycle where it's hard 508 00:23:00,800 --> 00:23:04,760 Speaker 4: for hard to compete with deep pools of private money 509 00:23:04,760 --> 00:23:07,240 Speaker 4: that can just come up and just whip things out 510 00:23:07,280 --> 00:23:09,760 Speaker 4: so that you know, they were all taken over, some 511 00:23:09,800 --> 00:23:11,800 Speaker 4: of them at decent prices. Some of them made sense. 512 00:23:11,840 --> 00:23:16,320 Speaker 4: That Master Maritime one, in terms of trying to unlock Northport, 513 00:23:17,000 --> 00:23:19,680 Speaker 4: really makes a lot more sense than the convoluted structures 514 00:23:19,720 --> 00:23:22,800 Speaker 4: that that had prior to that. 515 00:23:22,920 --> 00:23:25,239 Speaker 1: But it's but if you look at who's turning up, 516 00:23:25,280 --> 00:23:27,960 Speaker 1: it's a couple of you know, cross listings basically from 517 00:23:28,000 --> 00:23:31,120 Speaker 1: the ASX. But you know, we're not seeing people rushing 518 00:23:31,200 --> 00:23:34,440 Speaker 1: to you know, boy the market and ad listings. 519 00:23:34,480 --> 00:23:37,040 Speaker 4: I mean I would I would wait wait until and 520 00:23:37,080 --> 00:23:38,960 Speaker 4: I know we're not thinking too much about next year. 521 00:23:39,000 --> 00:23:41,960 Speaker 4: But when you've got SpaceX considering an initial public offering 522 00:23:42,440 --> 00:23:45,480 Speaker 4: sort of settling on one point to trillion US as 523 00:23:45,520 --> 00:23:48,640 Speaker 4: your valuation is sort of how Bloomberg was reporting at. 524 00:23:50,119 --> 00:23:51,560 Speaker 1: Do you think that's going to unlock a bit of 525 00:23:51,560 --> 00:23:53,080 Speaker 1: a it'll be like a glacier. 526 00:23:52,760 --> 00:23:57,080 Speaker 4: Life and anthropic as well, so the creator of the 527 00:23:57,200 --> 00:24:00,480 Speaker 4: Claude Ai chat bot. Those sorts of things that have 528 00:24:00,520 --> 00:24:03,920 Speaker 4: been held in those in those private markets where if 529 00:24:03,920 --> 00:24:05,600 Speaker 4: you're rich and you've been able to join the club 530 00:24:05,600 --> 00:24:08,440 Speaker 4: and get hold of those secondary share sales that are 531 00:24:08,480 --> 00:24:12,760 Speaker 4: too too risky for regular people to get exposed to directly. 532 00:24:13,600 --> 00:24:15,840 Speaker 4: That's the sort of thing that then starts thinking getting 533 00:24:15,880 --> 00:24:18,359 Speaker 4: people to think more fulsomely about well, what are those 534 00:24:18,440 --> 00:24:21,159 Speaker 4: valuations in those things and whether or not it's for 535 00:24:21,480 --> 00:24:24,200 Speaker 4: the n z X or the AX or Wall Street. 536 00:24:24,240 --> 00:24:27,560 Speaker 4: I mean, Hong Kong's exchange has been going gangbusters this year. 537 00:24:28,280 --> 00:24:33,440 Speaker 4: Singapore's been sort of quite chunky. India's been going on again. 538 00:24:33,600 --> 00:24:34,600 Speaker 1: What are they doing that we're not? 539 00:24:35,200 --> 00:24:37,400 Speaker 4: Well, there are different points in there in their sort 540 00:24:37,440 --> 00:24:40,720 Speaker 4: of cycle, and they'll I mean Singapore has also had 541 00:24:40,840 --> 00:24:44,000 Speaker 4: a lot of support, direct support and trying to list companies. Here. 542 00:24:44,040 --> 00:24:46,840 Speaker 4: We've been tinkering around with the rules and moving slowly, 543 00:24:47,000 --> 00:24:50,760 Speaker 4: as New Zealand loves to do. You know, let's overthink 544 00:24:50,800 --> 00:24:54,159 Speaker 4: the problem and then have a few consulting rounds and 545 00:24:54,200 --> 00:24:55,320 Speaker 4: then a couple of working. 546 00:24:55,080 --> 00:24:56,800 Speaker 1: Groups change ministers two or three times. 547 00:24:57,080 --> 00:25:01,800 Speaker 4: Yeah, why not? Why not? But it there's also private 548 00:25:02,200 --> 00:25:05,199 Speaker 4: local private equity firms haven't been like you're looking at 549 00:25:05,200 --> 00:25:07,159 Speaker 4: their portfolios and some of those are getting long in 550 00:25:07,200 --> 00:25:10,000 Speaker 4: the tooth. Yes, And even if you think about Direct 551 00:25:10,040 --> 00:25:13,640 Speaker 4: Capitals selling down that stake of as Color just recently 552 00:25:13,680 --> 00:25:15,680 Speaker 4: and they're keeping this seven percent stake or so in that, 553 00:25:15,720 --> 00:25:18,719 Speaker 4: but that had that for about eight or nine years, 554 00:25:19,040 --> 00:25:20,840 Speaker 4: that's a long time for it, even for a New 555 00:25:20,960 --> 00:25:23,280 Speaker 4: Zealand private equity that plays in that middle market. 556 00:25:24,240 --> 00:25:25,639 Speaker 1: We saw the same thing I think in the in 557 00:25:25,720 --> 00:25:28,000 Speaker 1: Aussie with Canvo, which had been held quite for a 558 00:25:28,000 --> 00:25:30,320 Speaker 1: long thirteen years or something, and it's now looking like 559 00:25:30,359 --> 00:25:32,160 Speaker 1: particuly in IPO next year probably. 560 00:25:32,400 --> 00:25:34,800 Speaker 3: Yeah, I think we haven't seen the same level of 561 00:25:34,880 --> 00:25:38,240 Speaker 3: exits from p funds into this share market either. We've 562 00:25:38,240 --> 00:25:40,359 Speaker 3: had some bad ones that came through that burnt a 563 00:25:40,359 --> 00:25:43,000 Speaker 3: few people, and so I think, you know, sometimes there's 564 00:25:43,040 --> 00:25:45,000 Speaker 3: this stigma that takes a while to kind of work through. 565 00:25:45,000 --> 00:25:47,960 Speaker 3: But generally speaking, I'm still very optimistic about the New 566 00:25:48,040 --> 00:25:50,199 Speaker 3: Zealand share market or the longer term in that if 567 00:25:50,200 --> 00:25:52,800 Speaker 3: you think about their weight of capital that's coming through Kivius. Ever, 568 00:25:53,119 --> 00:25:55,159 Speaker 3: the private capital, that's odd that that's going to be 569 00:25:55,160 --> 00:26:00,720 Speaker 3: crystallized from some of these big companies being sold or ipo. Globally, 570 00:26:01,200 --> 00:26:02,920 Speaker 3: we are going to see more capital moving around in 571 00:26:02,920 --> 00:26:04,520 Speaker 3: New Zealand. So I think I don't think we should 572 00:26:04,520 --> 00:26:06,720 Speaker 3: be overly negative about the New zeal market. 573 00:26:07,280 --> 00:26:10,800 Speaker 4: And it's a good market. You know, the inzdex has 574 00:26:10,840 --> 00:26:13,160 Speaker 4: taken its lumps already in terms of you think about 575 00:26:13,240 --> 00:26:15,760 Speaker 4: when it had the massive cyber attack that knocked it 576 00:26:15,800 --> 00:26:19,760 Speaker 4: out endlessly through the tail end of twenty twenty and 577 00:26:19,800 --> 00:26:23,000 Speaker 4: the recognition back then that it had been underspending on 578 00:26:23,119 --> 00:26:25,960 Speaker 4: its tech system. Look across at what's happening in Australia, 579 00:26:26,320 --> 00:26:29,520 Speaker 4: like the ASX just had an interim report come out 580 00:26:30,000 --> 00:26:34,119 Speaker 4: ordered by its regulator that it's now forcing it to 581 00:26:34,160 --> 00:26:36,920 Speaker 4: hold one hundred and fifty million dollars Australian more in capital. 582 00:26:37,480 --> 00:26:39,560 Speaker 4: They have to have a roadmap on how they have 583 00:26:39,680 --> 00:26:43,520 Speaker 4: to spend more on improving their tech system because it 584 00:26:43,640 --> 00:26:46,920 Speaker 4: breaks so regularly. You know, the great, the great nation 585 00:26:47,000 --> 00:26:50,600 Speaker 4: of Australia that we all love and it has probably 586 00:26:50,800 --> 00:26:55,359 Speaker 4: just overstepped in its monopoly position. So we've got a 587 00:26:55,359 --> 00:26:59,640 Speaker 4: good foundation here, which should be encouraging to investors and 588 00:27:00,080 --> 00:27:03,000 Speaker 4: potential listening to come in and go. Actually, this is 589 00:27:03,040 --> 00:27:05,160 Speaker 4: a good This should be a good aftermarket. It looks 590 00:27:05,200 --> 00:27:09,280 Speaker 4: after it creates a good framework for retail investors to 591 00:27:09,320 --> 00:27:11,600 Speaker 4: have confidence in it. If you've got investors who are 592 00:27:11,600 --> 00:27:13,280 Speaker 4: confident in it, you should be able to go to 593 00:27:13,280 --> 00:27:15,480 Speaker 4: them and go, Yeah, by my shares, let's have a 594 00:27:15,480 --> 00:27:17,600 Speaker 4: great time. Let's off into the future. 595 00:27:18,760 --> 00:27:21,160 Speaker 1: That feels like a very optimistic place to leave things here. 596 00:27:21,400 --> 00:27:22,840 Speaker 1: I feel like I need to offer you a pie 597 00:27:22,840 --> 00:27:25,760 Speaker 1: at this point. It's sour cherry, which I think is 598 00:27:25,800 --> 00:27:28,560 Speaker 1: a very very apt way to explain twenty twenty five. 599 00:27:28,800 --> 00:27:32,480 Speaker 1: Shamayel Yuckam from Simplicity and pul macbeth from the bottom Line, 600 00:27:32,520 --> 00:27:34,720 Speaker 1: thank you very much for joining me on the Shared 601 00:27:34,800 --> 00:27:37,679 Speaker 1: Lunch and thank you for joining for listening, for watching. 602 00:27:37,720 --> 00:27:40,520 Speaker 1: For whatever you're doing. Take a little break over the summer, 603 00:27:40,760 --> 00:27:43,400 Speaker 1: but scoore yourself up, get ready for twenty twenty six. 604 00:27:43,520 --> 00:27:45,960 Speaker 1: Think about what you learned in twenty twenty five. Kumatu, 605 00:27:46,080 --> 00:27:46,840 Speaker 1: that's us for now.