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That means it's not specific to you, you need goals, objectives, so don't act on the information
until you've spoken with your financial advisor. You'll find our full disclosure,
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All right, I think we may be live. I'm saying that slowly, because you never know.
If you can hear us in the chat on YouTube, LinkedIn, Facebook, some of those other fringe ones that
maybe people watch us on, get a, get a, get even. We're on Twitch. No, we need to get a video game
control. Your microphone looks like a Twitch microphone. That's a good
different pop of color. I thought yellow would have been too cliche. Yeah, right. I think
people were expecting yellow. So if you're, if you're just listening on a Saturday morning,
it means that you don't have the full context of two, well, I'm mostly bald. Druse not bald,
he just shaved his head, two, two dudes in sympathy. Yeah. We are testing a live stream format of
the two cents podcast on a Friday. So we're just here on YouTube and everywhere else. And we're
going to answer questions in real time. We can see Matt's got a good question in the chat.
Ball, Jenny's back. Jenny's a season ticket holder. Jackie, there we go. Everyone's in,
Kylie. Good to see you. But we do have a lot of questions. And we're going to talk about
Magellan financial group. The decision that's going to merge Magellan with Baron Joey,
which is going to be the quote unquote next McQuarrie in Australia. Now, we had a great question
sent in advance. What are your two worst ASX200 stocks from the past five years? And what can we
learn? That was from Jack Investor. So we'll cover that in a second. But before we get to any of that,
the bit that everyone rocks up for, which is the general advice disclaimer. Well, Drew and I love
financial planning and personalized financial advice. Any of the information that is displayed
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So yeah, Justin says watching watching watching live from a beach in Puket,
Thailand. What time is it over there? Yeah, what time is it? 10 p.m. or something, hopefully.
Yeah, that's it. Nothing like the Australian Investors podcast into Thailand. We're global.
So Drew, let's start off. Let's get straight into some meat rather than just chewing on the veggies
for a second. So what do you get to worst as sex 200 stocks from the past five years? And what
did you learn? Now you said you've got three. Do you have to learn something? That seems like
the big one. Maybe you learned something from all of them. Maybe you made the same mistake over
and over. Yeah. What is it? Yeah, was this a general question or was this a personal question?
I think it was general just like the way Jack framed it was what's the biggest flop stock,
which is pretty funny. What's the biggest flop stock in the past five years? Because I think
we got a bit of controversy last week when I said that CSL is the most overrated hunk in
junk on this. We don't look for controversy. It's fine. This is rage back. Interestingly,
I had to look into this and I did a little bit of research to work out what the worst stocks
of the last five years were. And my initial suspicions were true, which was that I owned two,
but perhaps three of the worst stocks of the last five years as well. So I think the winner
has to be Zip. For me, depending on when you bought it, the company's delete. I think the hard
part here is it's probably quite a few companies that gone bankrupt and have disappeared, but we
kind of think once they're out of their index, we kind of forget about them. I mean, at least I
try to. But Zip had a, I think it was something like an 85 to 90% fall that went, I think it
went from 20 cents to like $8 or $9. He's going to bring the chart up just to show him what I
in my defense. So zip by now, it was like a by now pay later. It was caught up in the afterpay.
Interestingly, after pay got that deal at like 140 bucks a share and then started tanking before
it went into block payments. Zip never got that option. Never got that opportunity. So in my defense,
so this will be one of the worst for that five year period for sure. At least if you measure it
from the high, if you measure it from where it started, well, it's probably still a 10-bagger.
If you bought it 20 cents, what did you pay? I mean, I bought it initially at like 30 cents and
wrote it to like $2 and then bought it again at $2, wrote it to six, then bought it at eight and wrote
it today. So are you breaking even or? No, not quite. I think I got more confident as I bought
multiple times and I ended up buying at the high and still sitting on it, probably sitting on
a 60% loss still on that today. I feel like though, like having touched base with Zip a few times
over the years, I feel like in general, it would probably be a better business today than it was
when it was straight up in that hype off the COVID like it. It's a solid business today.
10 times better. And it doesn't do the same by now, pay later that afterpay has like owned or
over Australia or whatever that I mean, I use it all the time. But zip I think zip code does
larger purchases. It's also expanded to us. It's had earnings growth. It has the biggest problem
though. I was just watching there was a highlight from Silicon Valley. I'm not sure if you watch
that TV show. The problem these companies had is when they started to have revenue. When you
pre-revenue or pre-profit, you just talk. The guy in Silicon Valley was talking about when you
pre-revenue, they can't compare your revenue. So as soon as you get to cash flow and profit,
they got hit at that time when interest rates started to increase. Everyone worried about venture
capital loss making businesses. And then they started to get measured on free cash flow, which
they weren't aiming for. They were trying to own the market before they went for free cash flow.
That's when they got hit. Their cash flow couldn't take up. They were worried they couldn't access
capital. Capital got more expensive. And down 60, 70, maybe 80% from the high.
Depends what point you measure this off. But in most instances, it's down heavily.
You can say total income for the period. This is in Q3, 2026,
like solid at 335 million transactions of 27.4 million transactions.
It's like Nvidia numbers. Amazon numbers.
Yeah. Well, let's not go too far because
the full disclosure drew a drew. Don't stop. Let's be honest. But seriously, it's not as bad
as it once was. For me, you're sorry. You've got as many battle scars as I do.
I've not more. So long-suffering.
Like I, but I know. Yeah. I mean, dubber is easily the biggest blemish I think on my personal
investing track record. And also my public investing track record. So I bought dubber and then
worse still as I recommended it to our old members as like a buy. And it is a dog's breakfast.
So I did not trading hope or is it just that volume? Maybe just no volume. So just for people
who are listening, you can't see my screen. But over five years, it's down 98.95%. This is a company
that did voice reporting. And like it does like call analytics and things like this. And it had
grand expansion plans to put it mildly. And it was from a perspective of like ASX governance and
PR and that sort of stuff. It was a nightmare. I don't want to go too far into the personal stuff
because I'm it could still be a court case in waiting. But in effect, there was a legit misappropriation
of certain things and funds and that sort of stuff. The company was recording pretty good results.
But I guess my big I was so I bought I bought it. And I was talking about it to our investors at
the time. And I sold it within three to five months. I think it was somewhere. It was very quick
because what I dug into further was to this company was rapidly expanding and telecommunications.
But I noticed that more and more of the management incentives and importantly the directors
incentive. So it's one thing to have management incentives. It's another thing to have director
incentives because the directors overlook the management team, right? They're supposed to be like
governance in place. But the directors were also benefiting from really unusual types of
incentives. Like for example, they would sign up at telecommunications company like BT
or one of like British telecom or one of these like Telstra Optus. But revenue wouldn't really go
up. And you'd be like, well, isn't that like the biggest telecommunications company like ever?
And you revenue wouldn't go up. But the incentives would go up. And you'd be like, what the?
So that didn't make sense. MOUs? Well, they're just signing like we're going to want to think about
making a deal and announcing it. From memory, I wrote at length about this. I think it was like,
let's see if I've got this. This is cathartic. This feels cathartic for you. Yeah, this is
the confessional. So dubbers missing millions was a podcast that you and I did.
2024. This is your cast on the cast. I used to be next door. What do we talk about?
What's going on? What's going wrong with dubber? Where's the 26.6 million dollars?
So yeah, that was that was the kind of the end point. And it involved something fun. Oh,
hello to Brandon from New Money on YouTube. Jump it into the DMs. Good to see him. I'm
Nando. You too, Steve. Yeah, so dubber, I think at one point reached the ASX 200,
which is obviously when index fund stuff is up, but yeah, buying it and then it just
face planted and it's currently 1.1 cent per share. So I think you beat me there for sure.
My month, I mean, my month wasn't far off. It looks better. I think dubber is 10 bagged in the last
like six months or five bagged or something. Oh, really? That's it. It has cash flow. I mean,
don't check. Don't check the stats on it. But my second one is an abs. There's probably
similar to dubber. It's just an absolute 101 catch a falling knife if you've ever seen one before.
Okay, for I mean, you had it. There was a good story with dubber, though. It was like pre AI
before the AI theme, which you've been ranting about. I linked in as well.
Okay, like voice recording, all these things are fantastic. Uh, new weeks.
Oh, yeah. Cyber security. Cyber security or data analysis had felt like a
hell and tear in Australia almost to make when I was initially looking at it. So I didn't get it
in the float. In fact, I think thankfully, I'm not sure, thankfully. I'd be I'd be
in 2020. It looks like $8 a share or thereabouts. I'm like, oh, I've like cyber security data analysis
to secure all these sort of things. It makes it look mythos. So we're talking about Claude's
mythos and how that's going to, you know, they were afraid to release it because it's going to
find all these gaps. But new X IPO'd tanked within three months. There was, I think they were talking
about fluffing the numbers in the in the prospectus or something that they were overstated and a massive
earnings downgrade. And if you covered the catch the episode when I was talking to Mitch a few weeks
ago, what would you put into a falling knife? At least one earn is down downgrade for sure.
Preferably two. All the brokers jump off it. I think they jumped off it too.
And it just proceeded, I think I bought it at six bucks and proceeded to tank and tank and tank
and tank and tank management to turnover. CFO to everything just turned over. And that's, I mean,
what buying it maybe six months ago makes a lot more, oh, there you go down 76% since I appear.
There's a class action. That's a falling knife. Like, I felt like the company was good. I didn't
want to be involved. I don't really love being involved in IPOs. It kind of gets out of your
control unless you're a pre-IPO investor who's already made all your money. You don't really want
to be in an IPO in my experience. And this one way I did, thought I'd trade it poorly. All right,
that's good. Shumped in like a GYG almost. Because IPOs are very much set up for existing shareholders
in a lot of cases. But that was, that's got to be, there's, I mean, there's one big one that
hurts probably most. And now we're going to cover that one in a bit more detail separately,
I think too. Yeah, yeah. We've got it more news on that one, which for the reveal is it's
Magellan. So, yeah, so that's, I remember the ironic thing about Nuix. Because it was IPO'd and
like all IPOs, it was like hyped up because the people that are selling you on the IPO are trying
to get a stag profit like they're trying to see it jump. But the real irony at that time was that
Asick, who's the financial services regulator, was using this clinic software and was then
investigating Nuix. So, it was kind of like this circular logic. Yes, sure. Yeah, I can't say that.
Like the kids are around today, so I go and get money in the jar. But an issue is this way.
They're enough. So, my second and final one, what have I got for folks today? I mean,
I mean, Wystech, but, well, Wystech still alive. No, the other one that I was going to say is EML
payments. So, for folks that don't know, I'll bring this up on screen. Give cards. Yeah, give cards,
rechargeable cards, corporate benefits, that sort of stuff. So, EML payments, it's still alive,
but it's down 93.5% in five years. So, like, if you're not counting falls in the 90% you're not
really doing it right. I thought I was bad. I'm under 80s, I think. So, I'm doing pretty
well comparatively. So, I was covering EML for quite a while, pre-COVID, and then obviously COVID
here, and then it got, I thought it was more interesting. But again, I guess the lesson here is like
when the EML payments business was global, and it would make money from rechargeable cards,
like you go to Westfield, and you get a Westfield gift card, and then you could go around to
any of the stores at Westfield and use that card, kind of like a mastercard or a visa.
And that's pretty powerful technology. It also did things like when you sign up for a Fintech,
they would handle all the money flow for the Fintechs to do stuff. So, quite complicated,
and it built this kind of platform. But then they kind of got these global expansion plans,
where they were just like, well, buy this one, and then in the UK, we'll do this. And then that,
and they bought something in the UK. In cash too, it wasn't? Yeah, it was from a couple.
There was a contingent, like an earn out attached to it. I won't, again, it did result in court
cases, I think as well. But effectively, they bought something in the UK, which was sold to them
by a couple who owned that business, which was a similar business to EML. And it turned out
it was like all fluff. So it's not like a real genuine business. And they sunk, not only did the
share price fall, but the actual business that they bought was close to worthless. And then they
got investigated by the Irish regulator and the UK regulator. So it was like three years.
Liability almost. Yeah. Yeah. Oh, they bought that and it over again. So absolute nightmare.
It's good to say that it's still kicking, but it's not like, yeah, it's not a business that's
easy to understand. It's probably my big takeaway for investors is don't get involved with something
you don't understand. That's a big one. And don't, I mean, what that, essentially what they were
trying to do was like a roll up or, you know, getting into a fragmented market, and you're buying
companies into cheaper P, then you trade on, and then you get the uplift in the value of your capital.
But if you're not integrating and the companies are the same quality as yours, will they end up
actually diluting the good parts of what you're doing? That's it. And that's why they crash so hard
at the other end. Yeah. And there was just on the Google related companies. There was Tyro
payments. Another one that is a, you know, a special for me. So yeah, there's a few of these.
Steve says in the chat, wouldn't on-chain payment platforms take over that space? Yeah, maybe,
but we haven't really seen that too much. At the time, the blockchain stuff was really big,
and that was probably an opportunity. But we're seeing like, we haven't just on that,
like broadly, like on-chain payments and that sort of stuff. We haven't really seen that take off.
Have we like, people still use Visual Remastered, like people are still using that. And if you
want to send money around the world, you just use wise or one of these platforms. So the PID makes
a pretty, in PID, we just put the phone number in basically. That makes it so much easier in Australia.
Yeah, if you're routing money just in Australia, but globally, like the big interchange networks
still make the most sense. Other news this week comes from Magellan, which is something that we
got asked about last week in the questions for the show. We did get a question about like,
what's going on with Baron Joey and what's going on with Magellan? Is there something that we
should know? Is it not kosher? Toronto, you've looked at this quite a bit. So what have you found?
What did you take away from it? I mean, it's just smart investment banking, really.
And it's kind of, it's somewhat of a reverse takeover, if that makes sense. So Magellan,
for those who, you bring, which one you bring up, not the Joe Aston? I mean, any time Joe Aston
covers something, there's obviously a bit of fishiness about it. Everyone getting, I wouldn't say,
a far log in there. So Baron Joey was an investment bank founded in like 2020 from memory,
major Hamish Douglas, back to via Magellan, by their private investments business,
that also back GYG and a few other companies as well. So they basically put some additional capital
in Barclays, the other, the global investment bank, English, had some capital in there as well.
And it was basically a startup. So losing money constantly for the last, for the first kind of,
I guess, two, three years, but they're investment banks. So they do research, they do some research,
they do some deals, they're involved in restructures, capital raising, all that sort of stuff.
And they're top five, I think, in the, in the books now. So Matthew Grounds, I think it was XUBS,
all the kind of big names. The thing is, Magellan shrunk so quickly, and this would be my third
falling knife or my third worst performing stock. Magellan, the fund manager shrunk so quickly,
Hamish Douglas, where obviously saw what happened there. We had assets fall from over 100 million
to like 40, 100 billion, to 40 billion today, to the point that I think the company end up being
with 1.5 billion or something on the ASX. So the value of it went down so much, it was still making
money, still having dividends. But the performance of barringery, which they owned, a Porsche,
a significant portion of, was so much better that it's actually now valued at more than Magellan itself.
So what do investment bankers do? They find a deal.
Yep. And essentially, they've, Magellan has, has purchased Baron Joey or increased it,
sharing Baron Joey and Reeve first, engineered that into Magellan, the holding company, which most
people, I don't know if they've announced it'll be called Baron Joey at some point, but most people
assume will be Baron Joey at some point. So funds manageants fall away, investment banking
has increased significantly. But what people are worried about, I think, is that what Joe Aston
called out as the lack of disclosure around these shareholder deals. So I think, apparently,
they didn't disclose the liabilities of Baron Joey as part of the shareholder applications,
noting 90% of people voted for this deal. I think it was less than a week ago. So it is going ahead.
They're saying, I think the lowly family were issued stock in an institutional placement that
saw them go to like 5% shareholders in the new business, in the merged entity. So that's more
about the equality of the capital ratings that occurred beforehand. And then they did a small
capital raising, which means existing shareholders been diluted at a low price. If you held Magellan
at 70 bucks, like I did, you've been diluted at a low price when this deal has gone ahead,
whereas the institutional offer weren't managed to get significant new shareholders in the company.
So it's more that decisions have been made without individual shareholders having a real say
in what was happening with this. But it seems like most of shares are owned by institutions,
fund managers, and all of them are kind of happy with the deal. And it provides, hopefully,
a... They see it as this positive spin on, you know, it could be the next Macquarie group,
could be this... I know we joke about Baron Joey's analyst all the time.
I think it's just the lack of transparency that's come as part of this deal for the individual
shareholder. Yeah, yeah. That's a long spiel, hopefully. No, no, it does, because you've effectively
got... So this is summarized. You've got Magellan, which is on the stock exchange. That owned like
38% of Baron Joey from memory, something like that. And it's saying, well, we'll just issue more shares
and acquire the other, say, 60% of it that we don't own. And those shares will go to the existing
holders of Baron Joey. So 57% of existing share capital was issued to Baron Joey's bankers.
57%. Okay. So then effectively, they're the bigger part of it. And that's the reverse point
that you made. But then it was like, as anyone that's been around this type of thing long enough,
you know that like these types of things tend to happen when... They... To get a private company
to make a public decision, effectively every one of the stakeholders, like people that already
own Baron Joey outside of Magellan, want their pound of flesh. And they will manoeuvre and manoeuvre
and manoeuvre until like they get their pound of flesh. And that's very different to when you're
on the stock exchange where everyone's treated equitably or equally. Everyone has the same votes
most of the time. Everyone gets the same dividends. It's very different to negotiate with a private
company. And I think that's probably where they're the bit of uncertainty and I guess new field
comes into it true. And I always say Joe Aston does great. I know you've interviewed him for the book
about the quantum thing. He does great work. And there is always... And he's always going to call
out any lack of transparency. But it can be... It is there to drive headlines too, if that makes
sense. The language is clear. It calls out important issues. Yeah. Yeah, you've got to get the
clicks. Hopefully some watching. No, not many things to do. So the other company, so let's just
zoom out a bit. If this does work out, like it has the potential to work out very, very well.
The market seems to love it. Broke it seemed to love it. Like this idea of an enlisted investment
bank because you can't get one. There's three... Once this happens, there's three effectively.
There's Macquarie, which is MQG. There's a ticker symbol. So that's like a juggernaut. And it's
naughty bill. Yeah, it's a huge company. It's a global bank and some net Australians should be
very proud of. Because it's a bank, a financial institution that is globally relevant, not just
here in Australia. So Macquarie is obviously like the Apex. But then you've got MA Financial.
What was the ticker symbol? So MA Financial is a much smaller business at one billion. So
you still call it mollus. Yeah. And it's a business that is growing really well underneath
the surface and investors do love it. So if this Baron Joey Magellan vehicle sits in there,
like it, it makes a lot of sense that there's a lot of appetite for this. And I think investors
should be running the ruler over it. Like Baron Joey has grown very fast. Something had to change
at Macquarie. I think that's the... No Macquarie at Magellan. Like it was very hard to change sentiment.
You think about most of the people investing into Magellan funds were at financial advisors.
I know there was a lot of direct share investment as well. But a lot of it was financial advisors.
And the sentiment towards the company had to change and maybe there's a way to change it
to get invested back, to get access to capital back, and to get growth again. I personally don't...
I mean, it's active funds management. Incredibly difficult when you're not doing that well
to have a solid share price. So that's a way to challenge. Yeah, to turn it around is very tough.
Just trying to load the ASX website here. So we'll probably just wait. We'll come back and
maybe just break for lunch. Come back in 45 minutes and we'll get this page to load. But would this
be up there as a... I mean, it hasn't performed that badly though. ASX has it... That could have
started at least. I'm just trying to bring up a Jenny in the chat who said she's held MGF forever
and hopefully this will work out well for us during global. Yeah, so Magellan Global Fund.
The thing is, we'll see it market index. They'll be able to do it. Which is very different.
So it's a global equity fund that invests into global shares, not Magellan itself.
I think it's important to understand is that the stock of Magellan on the ASX is very different to
the funds like MGF and stuff like that. Like the funds have done... They've been resilient. They
haven't been probably what some people want to but they've been good and some of the funds are
excellent. So that's not necessarily what's being called into question. It's just more so what
the strategy was for shareholders. But I think the point about doing a capital raising at a lower
price is always something that's, you know, shareholders going to know it out. Like if your shares are
10 bucks, the company's share price falls and then they issue more shares at three bucks to new
investors, it is something that people are going to know it about. But then I don't know if I'm
looking at this too simplistically. I'm just like, well, you could just buy more shares if you
want more shares. I like it when it's a one for tip, like when there's non-diludive. I think I
can't remember exactly how this one worked, but when it's like you can buy up to $10,000. But
an investment bank was allowed to have a hundred million or something like that. That's where it
kind of gets unfair in these kind of situations. And it was, I mean, it was trading at like a 20%
discount premium to the capital raising price. So Jenny did correct herself with MGFG.
Institute. I would actually love to know if people in the chat like you're and I just shared
a bunch of our miseries with Darber and can you beat us? Yeah, can you beat us? Like what have you
owned in on the stock market, not in like private markets or anything like that? What have you owned
that's fallen more than like 90% let's say? I doubt, I doubt. Okay, baby. Yeah, I mean we say
some stuff. I think interestingly, our portfolio, I mean, my personal superfund portfolio has
portfolio has overcome those and done quite well despite those big loses within it. Okay,
interesting. Well, that's pretty good. Yeah, I'm exercising. Yeah, I mean, that's it. You have,
there's actually a good question on this about that investing style. So there is a game that is
running up. So I'll just bring that up called stockgeneers.com.au. We did it in partnership with
Nevexa. Now Drew, when was the last time you checked the leaderboard? Don't check now. When was the
last time you checked? A couple of weeks ago. Okay, so at the start of the year, the two of us and the
honorable RAS community got a chance to pick a $100,000 fake portfolio. Now it started towards the
beginning of the year. What do you think the leading person is up? Like how much have they
gone up to last time I saw it was like 120% I reckon it's like 85%. All right, you're going to be
surprised. 200% mockingbirds bill. Mockingbirds bill. You're getting a tattoo like Dan does for you.
Well, basically, yeah, I did make a promise that if I didn't, if I got beaten by a thousand people,
then I would get a tattoo. So just bringing up the the the RASC household here. I just
wait for it to load on the stockgeneers app. Come on, Nevada, bloody hell, make it load faster.
Okay, I'm going to wait for that to load. But in effect last night when I checked it, I was at
position like 1,500 Drew, you were doing better than me. Oh, yes. So you always do better the year.
After the competition ends, maybe just not a short term investor, you know, just set for that
medium term period. What's the definition of a long term investment, Drew? For me,
four to five years. It's a short term investment gone wrong. That's the joke.
Nandu says how do all of these stocks at some point probably got out of them with wounds,
though. That's fair. So any thoughts on PLS, which is Pilbra Minerals, sometimes called Pilbara.
PLS Drew is a lithium play and it's been a good performing stock amongst all of the tech and
healthcare SaaS Salaf. Do you have a view on lithium generally, Drew? I think any commodity stock
like this is really good for trading. And like I tend to not hold anything like a woodside or a
BHP over multiple cycles, if that makes sense. Yep. So I think, I mean, look at that rally.
It's been a sensation. It's gone $1.23 up to six bucks after tanking.
A year. Yeah. Well, well above that. Like, I mean, now it's heading towards all time highs.
I find it really hard. There was so much bluster around lithium back in the day. So like four,
five years ago, how we had a shortage within they kept finding more supply than the price went up
significantly than tank significantly. I think they're going to be cyclical. So I don't,
I'm not like massive bullish on lithium and a shortage. But this is a proper producing
hopefully not quite dividend paying company, but dividend paying company soon.
So I just look at that. What's the what's the kind of medium-term outlook for the price? How does
it, you know, the old saying of trading a buying a resource company when the P's high and selling it
when the P is low? Yep. As the opposite to normal, because there's a lag in earnings. So yeah,
I mean, don't hate lithium, but I'm also not, I prefer to be exposed to lithium in a more
diversified way. Yeah, fair enough. Yeah. So that's what I was just bringing up on screen for people.
Is the ACDC ETF from GlobalX. GlobalX is a sponsor of the show shout out to GlobalX.
The what's it going beyond ordinary? So
inside the ACDC ETF, PILBRA is number three in the list. And the thing that's always made the
ACDC ETF unique, in my opinion, is it's the full value chain of battery technology and lithium.
So I think like Tesla's in here alongside the lithium plays. So it's kind of like full value
chain. You got Panasonic in here. You got a bunch of Sigma lithium, Samsung,
well, minerals, also everything about that. Yeah, Rio, the battery. I think that
does make more sense to like if you're trying to get a diversified exposure, your management risk
on a lithium, particularly an explorer, is huge. Like what if you see it with gold all the time,
where production gets it or they've hedged, they've been forced to hedge too much because of their
insurance or something or their liabilities or something like that. New ways end up kind of
putting brain too much management risk into a single investment. Yeah. Yeah.
But yeah, that's a good question. When I spoke to the then CFO of BHP a few years ago,
I said, why don't you guys do more lithium? And he said, because it's everywhere. It's like,
what do you mean? And he said, well, we don't like to dig things out of the ground or buy
tenements and mind sites that have stuff that's everywhere. I'm like, oh, yeah, fair enough.
He was like, that's why we're focusing on copper and gold and iron ore because you can't just,
you know, lithium is one of the most abundant resources, right? It's just whether it's hard or soft,
like where you get it from is the kind of key thing which costs to get to market. Yeah. And they,
like they could do anything, like BHP is the biggest mining company. So they could do anything.
And I think they just made a choice that there are finite amounts of copper. And as we know,
by the end of this decade, if you're thinking about like the electric vehicles, the renewable
and sustainable energy sources, they all require copper. And by the end of this decade,
there should be a structural deficit of copper versus say lithium, which is becoming more abundant
because there are more mind sites starting up. So I tend to look for that as well. I was at the
movies watching a kids movie the other day. And the BHP ad came up. Yeah.
But then you push movie Australia forward or something like that with all their forward-facing
commodities. I was like, oh, that's refreshing. Happy to be a shareholder.
Yeah, but what are they? Why? It's like industry funds. We're like, why are we sponsoring so much?
It's not. You know why. Like what I mean, you know why it's because, well, it's because they
are focused on PR, right? They're trying to convince the Australian population that somehow,
roundabout way, they're good for jobs and they're good for Australia. Don't tax us, don't tax us,
don't tax us. Even though they're the biggest taxpayers in the country.
Yeah, I mean, you got all that. You got offshore oil and gas joints that are paying virtually
no tax. Let's be honest. Let's not be honest. They just aren't. So go and tax them first.
They don't have ads on the cinema. What did you guys say at the cinema anyway, Drew?
I was going to say Super Mario, but we'd already seen that. So we went and sold goat
the Steph Curry kids movie. Like basketball. Yeah, it was pretty good. It was fine.
Yeah, okay, fair enough. Not really there with the zeitgeist of the other things watching at the
moment, but it's up there. Yeah, fair enough, fair enough. Now we do have some questions sent in
advance. A good one from green came in. I don't know why they said green. Maybe it's the color of
the book. Green wrote in and said, Oh, and would you mind explaining why you think David
Gardner of the Motley Fool is the best investor of all times? I didn't mean all time. I just
meant in the recent generation, FYI, how he has he outperformed and thus being the best like
buffered of Berkshire Lynch of Magellan and Don Valentine of Sequoia as an example. Thank you.
Not an Australian Magellan. Yeah, not that. So it's very important to understand how we've had David
Gardner on the show before for folks that aren't aware. David is the author of the book,
Rule Breaker Investing and has a podcast of the same name. So this is the podcast here that we
did with David. He's absolutely brilliant in the way he thinks speaks acts and he is so
different to everyone that you will come across in the Australian and international investing
landscape. Like so different. Was he all about tech? No, not necessarily. Like some of well,
he's biggest winners of Netflix booking holdings, which is booking.com, which was then price line.
He's other winners like Tesla and these types of things. But the important point is he's not like
a technologist. So he doesn't. Yeah. It was just because those were good business. It was just
good timing. Yeah. But the way I think about what makes our great investor is obviously a good
track record. But I believe good investors in my eyes are not just people that have good
returns. They're people that help other people get good returns and create wealth for more than
more people than just themselves or their own people. And David's definitely done that. So over
the last 30 years, he's basically educated probably close to 20 million people through the Motley
for globally that have come across his work or kind of derivatives of his work.
Like even right here in Australia, many people who are long suffering listeners of the Australian
investors podcast will remember episodes have done with people like Joe mega. Joe mega studied
under David for quite a few years. These are like phenomenal investors that have come and kind of
been cut from the same cloth. As David, Brian, for old people will know there are many other investors
so I see that as an impact. But in terms of actual returns, it's very hard to get a sense of David's
track record because he doesn't invest people's money. Doesn't have a fund there. Yeah. That's right.
True. Yeah. Yeah. So he does the investment newsletter of the Motley Fool and he gives stock picks
and there's some great literature out there on his returns and people have kind of plotted it
against other investors. But like if you just took a thousand dollars and you put it behind every
stock pick that David gave over the few decades, his returns would be like, I don't know at the
top of my head, but it would have to be close to double the US stock market. So yeah, he's shown
people what it means to be an ultra long-term investor. And his book is brilliant. If you haven't
already read it, I don't matured it recently in our team. I'm bringing up for people. Real
breaker investing. It's got a green book cover and it's only come out recently. Fantastic book. It
got some awards recently. Yeah. It runs some awards recently as well. So fantastic book.
I haven't seen you smile that much in a podcast with me. Oh, no. Yeah, no. That's not the way it works,
true. We'll just come on and talk. Well, we're talking about Dubber and Zepp and I listed it.
He's talking about buying Tesla. No, the future. Two bucks. And he bought Amazon at like a $2.30
before it split the stock back a million times. He bought Netflix before anyone else knew what
even Netflix was. He bought, you know, price line back in the early 2000s. He bought Costco.
He bought 2009. We're buying others. And we thought this could be the next AI cover. Who knows?
You always go, I mean, he would have gone. We were going to send the same conviction that he
went in. And that's how it turned out. Yeah, we couldn't be further apart. But yeah, I think that
if the final thing that I'll say about David's track record and the way he invests is
it's open to everyone to invest that way. It's just that most people can't handle the risk and
the volatility of it. That's the thing that you can't do. Like say, where is Warren Buffett, right?
Warren Buffett, he's lessons of investing sound simple, but the way he actually invests,
not a lot of people can do like private markets. Yeah, we can't just go buy a whole company.
We can't, you know, in the GFC, which is where Warren made a heap of money, we can't just go
go to Goldman Sachs and be like, yeah, I'll give you a $5 billion option on your stock
and then make multiples of that within a year or whatever. We can't do that. And in the case of
Sequoia, it's much the same. We're not venture capitalists. We can't go and do that.
What we're restricted to is the public markets in many instances. So David's up there.
Now, we do have some time for probably another question here.
Oh, maybe this is more of a question for you, Drew, from ETF superfan that came in and advanced.
They say, due to our aging population, I'm worried about the ASX when Australians get to the point
that they're drawing a lot of money out of super, other than what's going in. How will we avoid this?
Will compulsory contributions rather have to go up for the amount of people drawing money out
of super Drew? How do you think about that? This is something that a lot of people talk about and
it sounds like a really big risk, like more people retiring, $4.5 trillion in super.
Eventually, that money has to come out and pay for people's retirement and it's starting to
happen now. Is that a huge systemic risk? We're talking about the impact on, I mean, there's two
questions there. The first one, you're talking about the balance of superannuation. And I think
the key here is that your redemptions aren't, like if you're taking money out of super, it's not
funded from someone else's contribution. Your account, your member account within any super
fund industry funds, SMSF, all of them are always your capital. There's no leverage within
a super fund, so it's not like a bank where you can get a run on it and it runs out of money.
But then I saw the second layer of this question, which is a broader theme, which is the fact that if
our industry super funds are so big, we own such a big portion of the ASX. If they're then forced to,
if say 300 billion in Australian super becomes 250 billion in Australian super and 30% of that 50
billion was in Australian shares, is that a natural seller of Australian equities? I think,
I mean, that's not a reason why you'd increase compulsory contributions. Compulsory contributions
are there because it's supposed to be an appropriate amount to help people save for their own
retirement or self-fund their retirement using the age pension or have this support of the age
pension. But that's an interesting theme because over the last kind of five years, since your future
you're super came in, industry funds were forced to buy more of the biggest companies and the index
because they were being marked against the end that they couldn't underperform, not their
risk losing members. So they were forced to buy more of the ASX. I feel like these things will
happen so slowly and there will be other influences that come into it that it's not something that
would keep me up at night at the moment. They may have to sell 50 billion, but that's probably
going to happen over 50 years or 30 years or 40 years and our contributions continue to go up
as well. But they're also reducing their exposure to Australia generally and they have done so
over the last 15 or 20 years and it's had no impact on the ASX, the ASX keeps going up. So they've
increased private markets more, they've increased US more, they've increased all these other
credit significantly more. They're probably holding less than usual in Australian shares and it
hasn't had impact on the share market. Because there's always an incremental buyer of equities,
particularly if they get to a point that they're so undervalued, then global fund managers will come
in like a whole group of investors will then come back into the market. Yeah. So it's kind of like
capitalism in action. We had Brian Parker on the show recently. He's the not on the show. We
recorded the episode last week that will come up in a week or two here on the podcast. He's the
chief economist of the second biggest super fund in Australia and they've got about 350 billion
dollars that they invest and he was making that point and there's been a bit of news about that
recently too with like the super funds making decisions to look further offshore because they've
got so much money now. The super funds have more money collectively than you could buy the whole ASX
and another half and they would probably have money left over. So they got off the surface. He's
a lot of them. Yeah. Yeah. And he was saying that actually he was saying that when their investment
team now go to New York, you know, 20 years ago, they would be, they'll be like, one, who?
And now they're like, oh, okay, yes, please, this way, sir. So very different attitudes towards
the Australian financial system because of these gigantic super funds and the kind of thing to
understand here is that similar to ETFs and I'm glad that person asked this question in that name.
When you have ETFs that get really big, the problem there people think is like that it becomes a
bubble. Yeah. But actually as ETFs get bigger, they get more efficient because what happens is as
the ETFs get bigger, there are more buyers and sellers and no longer do the ETF providers have to drop
into the actual underlying stocks and start trading. A lot of the buying and selling activity is just
with investors passing units back and forth. But when an ETF is new, it's actually the opposite. If
you're buying, there's more buyers than sellers, there's no market for that. So I don't want to
bore people too much with the technicals, but that's where the market maker gets involved and things
change dramatically. So it's almost like as it gets more efficient, the whole system gets more
efficient. And I'm not too worried. I know there's a lot of doom saying about super. As always,
with finance, ladies and gentlemen, if you hear people saying something really negative about something,
like, you know, the counterpoint. Yeah. And find out they're incentive, right? Like the loudest
people are often the people that have the biggest acts to grind and money to make. So there was one
final question here, maybe from Matt in the live chat. And it's like, get everyone a question.
This is directed at me. You have a 5% position in lake house global growth and some of your portfolios
with a management fee of around 2.59%. And not the best performance. Do you see it turning around?
It's already down 26% each day. Great question, Matt. Always love your questions.
So with this lake house fund, the management fee is not 2.59%. It's actually got a performance fee.
So that performance fee is on top of the management fee and it earns dollars for good performance.
The performance recently, however, has been pretty brutal. It's been sold off. And so whenever you
think about allocating money to an active manager, effectively, you have a choice to make. So you
don't have a choice to just make, like, do you buy it or sell it, but you have to determine what
it is in the way that that company invests that you like. And then are they doing the thing that
you want them to do? And so what I mean by that is like, if you go and invest in a fund manager
that offers you a growth style exposure as lake house does, and then the share price falls,
like the ETF or the fund falls, when interest rates are up and there's a global war on,
or AI comes in, well, you should expect that it's going to happen.
But if you go and invest in a, say, a bond ETF and then those things happen and it falls,
well, you shouldn't expect that to happen. And so it's important to understand
why things are in your portfolio and when they're going to react the way that they did.
Now, you said that, yeah, lake house as an ETF is down quite heavily recently,
which is not good, right? Like, I don't want to see an investment that we've made go down in value.
We started this position as a very small position in most of our portfolios at 2.5% for
this very reason. And for the vast majority of its lifetime, you can see that lake houses
drastically outperformed its benchmark. So then you get down to a point where it's not performing,
like Magellan was a few years ago or something like this, and you go, well, why is, what do I do now?
Do I sell it or loss? Or do I keep holding on? So how do I, this is an individual build conviction in
that? Well, I want to hear from the fund manager. I want to know has the process changed. I want to
know where the performance is down. And one of the things I'll keep it brief now is repeatedly in
recent updates, Nick and the team at lake house who run that fund have repeatedly said, like all of
our companies are actually reporting growth, some of them 20% quarter and quarter, some of them
more than that, like they're growing fast. The share prices have been smacked because of AI and
disruption and that sort of stuff. And so when I see fundamental growth of the portfolio going up,
share prices coming down, I don't rush to sell. I'm mindful that it's not good to lose money on
a managed fund or an ETF, but I'm more likely to be like, well, should we be buying more?
Not selling. This is not personal advice or anything like that. Obviously, I have skin in the game
here through our portfolios, but it's yes, it's something that I'm mindful of, but
every like different seasons for different strategies. Had I known or sell off was coming,
I wouldn't have held it, but we don't know that. So that's how I feel. I don't know Drew, just
quickly on that. How do you think about like if you have fund or an investment that you've maybe
also have fund that's underperformed? How do you then like make the decision of buy also?
I mean, it's going back to its original purpose and you invested like us because you wanted high
quality growth companies that tended to be software. So it's more about has their has their approach
changed. I'm more worried if they go, if this group then goes, I'm going to go back towards the
index or I'm going to go back to consumer staples. You bought them because you wanted high quality
fast growing companies. I think that's one of the keys. Has that the have they just missed as a
hit rate? So they're like success full stocks gone down. That happens from time to time. And the best
investors only get like 50 to 60% hit rate anyway. But has their thesis changed? So like
we had we've got held GGG. GGG was off technology, but we knew they were they're a highly active
group in terms of they'll make they'll go heavily into energy. They'll go into consumer staples.
They go into tech. They're off tech. They've had they've had the worst like similar to
Lakers, even though they weren't holding as much holding tech. They underperformed by so much
comparatively. But then they just didn't an 8% month in February. So one diversification, if
if you want to be diversified, some of your investments are going to do poorly in comparison to
the others. But then the question becomes does it still warrant a position in my portfolio and
does still add something in that way? Or is it changed? There's another fund we've had. I won't
say which one. Similar performance probably to Lakers. And it has changed its thesis. So we've
removed it basically. Yeah. Yeah. They'll say they didn't, but we think they have and that's
why we remove it. Yeah. So and this is the tough point for the fund managers themselves because
they're like thinking, well, we are a growth investor, but our shares are falling. We should go
to cash and protect our investors money. But the financial advisor is like, hey, I bought you
because you're growth. I don't need you to do that. I can control how much clients have
in cash or my clients can decide for themselves, how much they want in cash. I don't need you to
just make that decision. I want you to be growth. And yeah, it's tough, but I want you to do it.
But the fund managers are thinking, well, we're going to lose performance fees. We're going to
lose management fees. We're going to lose all this stuff if we don't make a decision. So it's
really interesting bit of education that Matt is like, who are the different stakeholders in that
chain? And why do they make decisions? And why do the fund managers do what they do in times
of crisis? And why do advisors do what they do in times of crisis? And it's probably worth noting
that your portfolio is that what all have done really, really well still, even though there's been
bad investments in there. Yeah, you can have bad investments and still overall do really
well. That's a power of a diversification. Real quick from Zane says, what are your thoughts on
P1, which is from Pangana? It does our private equity and that sort of stuff. I think it's really
fascinating. You don't get many investments on the stock exchange that give you exposure to private
market companies. I kind of like GPEQ. It's tanked pretty heavily. It owns the private equity
managers. So KKR, I3, all those kind of massive group Blackstone. It's had a difficult period.
P1 owns, I think it's got exposure to SpaceX potentially there as well. That owns co-invest
into some individual companies, has access to companies, invest in funds of funds.
There's GPEQ or GPEQ. GPEQ. There we go.
There we go. So this owns the private equity managers. And basically you're buying like KKR at
nine times P.E. So a similar reason software sold off is P.E. sold off because they're worried
about their gating on private credit funds or they're worried about the performance of software
companies held within P.E. funds. But the prices they're trading at now in like I think there's
a great opportunity here. You've heard of those. Aries, Blackstone, KKR, partners group,
like the biggest private equity nerd. And they've all been like, this is Paul Kev2ee,
and he's support fellow. KKR for like 35%. Let's not bring this one up. I'm probably negative
by now. I don't mind that. I thought interestingly. So you talked about the like likehouse and
technology. I saw the data this week that so Beteshire said they've attracted more inflows into
the ATK ETF in this year than all of last year. I think that's in your portfolio is doing it.
So it's up. Yeah, that's probably they've had 133 million this year compared to 156 all of 2025.
So that's you can see where technology started to tick up. And I thought the other thing I
noticed was that the NASDAQ, maybe until last night, had done 11 days straight of gains.
I think it's offset. Look at that. I think it's offset like half of the fall it had from its all-time
high on the back of like a ceasefire. And that I think we were talking about last week.
There was one comment. It was like the worst. What's the worst piece of was worst comment you've
had from a client or something like that. And it would be, I'm just going to wait and to all of
this settles down before I buy into the market. I literally had it two weeks ago. It's like,
what was too late? If that's like if you're in cash and that's what you wait for, the NASDAQ's
up 11 days straight, it's up 156% in a very short period of time. That's the only thing better
than I'm just going to wait for this to settle down is that there's a crash coming like. Yeah.
Okay. Well, there's no uncertainty. But then there's no uncertainty. The market's going to be
40% higher. There is always uncertainty. We like to do this at the start of every year.
All the things that went wrong during the year, there's already a long enough
let's get longer every year. Well, last year's list was like 50 things that went wrong.
The stock market still went up 20%. It's going to be really interesting how when we do that
end-of-year stock tag, the NASDAQ ETF NDQ is down only 3% this year.
Yeah. It feels like it's the end of the world, but that's down 3%.
Yeah. That's big. So you can get in contact with Drew at waterpartners.com.au.
You can get in contact with me and the team at rask.com.au.
Drew's also got a book called The Golden Years Co-authored with us over there.
That rapper. I can't remember his name. What was his name again?
Jay Neb. Yeah. I won't go into detail. I'm apparently I'm a band from mentioning who that
rapper famous rapper is. But The Golden Years is out now. I got the wrong one. I think you took
Matt Co-authored. We're talking about, yeah, I know. Everyone knows which one.
Yeah. Anyway, we'd love to know if you liked the live format. We could do this more often.
We're hoping to do it more often. It's just a bit more engaging, a bit more fun.
Jackie's one. Jackie. Howdy. Let me see. Yeah. Thred says there could be further
downside, given Trump's latest commentary about the ceasefire. Any drops would be filling the stocking.
I like that thinking. In effect, we would like to go live a bit more often. Let us know what you
think. We enjoy it, but we want to know if you enjoy it too. If not, you can listen to the show
every Saturday morning at 7am. We also air episodes on a Wednesday. Sometimes on a Monday,
so check it out. The Australian Investors podcast. Drew also features every Thursday
on the Australian Retirement Podcast. You can Google that super popular. I think Drew is famous
now. If you just go to like Drew, Toyota Prado, something more common. Don't go on LinkedIn.
Reset standards. Why did you stop doing monthly videos on
rescue vest performance insights? I'd love to do more reset standards. I'd love to do more,
because we just do so much content. I had to pick what was working. But you can to subscribe to
the newsletter or go to the website 24-7 as well. But that's a good prompt, actually.
I've probably scoted it before. Live is good. It's not the quarterly would-back sense.
I feel like monthly can be too often. Yeah. Yeah. Nandu says it's live is good. It's a lot of
waffle anyways. Might as well see your reactions. All right, guys. Well, thank you for today.
Thanks for joining us live. If you're tuning in on Saturday, have a great weekend. Drew, I'll
see you next week. See you next week, but not before a dad joke. Oh, yes. We need to
judge our give it to us. Give it to us. I was going to tell you a time travel joke, but you didn't like
it. I see what you did there. You had me stumped for a second. What about time travel?
We did. Oh, wrong side. Yeah. I can't see it. Yeah. There's a nice photo of Vam Drew and the
team from stepbrothers on there. Yeah. There's nothing like a there's nothing like a family photo
there, Drew. Wow. Wonderful. So thanks for that. Thanks for letting us get a glimpse into
your actual personal life. But everyone, have a great weekend. Have a great week ahead.
Onwards and upwards. Invest with optimism. And I will see you next week. Bye for now. Good to see you.
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