finance
This podcast gives you a smart, cool headed and down to earth wrap on the latest finance and investing news from Australia & around the world. Investing legends Scott Phillips and Andrew Page walk you through what’s really going on and what you need to know to make great financial decisions. Subscribe to get your regular fix of BS-free money advice. Sign up for the newsletter at fool.com.au/LiSTNR For more episodes download the free LiSTNR app
The podcast discusses the dual nature of AI, with Scott Phillips and Andrew Page debating whether AI will be an accelerant for existing businesses or a disruptive force. They ponder if AI's accessibility democratizes innovation or creates new barriers for competition.
Scott Phillips and Andrew Page identify data and network effects as the most crucial competitive advantages for companies navigating the AI-driven landscape. They argue that businesses possessing these advantages are better positioned to adapt and thrive.
The discussion touches on whether brand loyalty will diminish as AI-powered recommendation engines become more sophisticated. The hosts question if consumers will prioritize AI-driven efficiency over established brand names when making purchasing decisions.
Andrew Page asserts that the success of Strawman, an online investment club, is built on non-replicable elements like his personal approach and the fostered community, rather than just the underlying technology. This personal touch is highlighted as a key differentiator against potential AI-driven competitors.
The hosts discuss how AI is removing the historical 'mote' of difficulty in creating businesses and services, such as online investment clubs. While this increases accessibility for new entrants, it also intensifies competition, forcing established players to focus on unique, non-replicable strengths.
A listener named Devin questioned whether Australia's Future Fund qualifies as a sovereign wealth fund, prompting a discussion on the show. The hosts clarified that while the Future Fund is a government investment fund designed to grow national wealth, its purpose differs from the commonly cited Norwegian model, focusing on specific obligations like public service superannuation rather than broad national savings.
Andrew points out that Australia's various Future Funds have underperformed market benchmarks since their inception. He acknowledges this might be unfair due to the funds' liquidity requirements and conservative benchmarking, but notes the distinction between maximizing returns and managing volatility.
The discussion delved into the origins of the Future Fund, with Mark explaining it was established to cover liabilities from defined benefit public service superannuation schemes. He noted that Peter Costello transferred the third tranche of Telstra shares into the fund, a move that was politically expedient but also served the practical purpose of managing future government budget pressures.
Scott Phillips and Andrew Page discuss the concept of compounding, using the grain of rice on a chessboard analogy. They highlight how even small, consistent growth can lead to astronomical numbers over time, emphasizing the importance of starting early and letting investments grow.
Andrew Page shares a statistic suggesting that 98% of Warren Buffett's wealth was accumulated after he turned 55. This highlights the significant impact of long-term compounding and continued investing throughout one's career, providing hope for later starters.
The discussion delves into the concept of the 'last double' in investing, where a significant portion of wealth accumulation occurs in the final years. Scott Phillips explains that while a prediction of tripling wealth in 5 years sounds good, the psychological impact of being half as rich the year before can be disorienting.
Andrew Page states that in his experience, no retiree has ever expressed regret about saving for superannuation. He contrasts this with individuals who initially dislike mandatory contributions, emphasizing that the long-term benefit of a secure retirement generally outweighs any short-term dissatisfaction.
Scott Phillips points out that the steady, predictable growth shown on an investment spreadsheet often doesn't reflect the volatile reality of market fluctuations. He notes that compounding, while powerful, doesn't occur in a straight line, and the latter years of investing can involve rapid gains coupled with significant year-on-year drops.
Andrew Page mentions being a guest on Australia's second-highest-ranked finance podcast, giving a shout-out to hosts Alex and Bryce of the Equity Mates podcast. The discussion on that platform touched upon small caps and Bitcoin, and the nature of investment realities versus spreadsheet projections.
A listener named Michael expresses frustration with the Australian political system, citing a pattern of parties proposing acceptable policies then contradicting them with 'ridiculous' vote-buying tactics. He laments that competent individuals are often in the private sector rather than politics.
The podcast hosts discuss the listener Michael's question about fixing the Australian political system, touching on the need for incentives and economic realities. One host suggests that government spending, especially borrowed money, creates detached political classes.
In response to Michael's query about improving Australian politics, the hosts propose concrete changes. One key suggestion is to limit large political donations and remove money from the political process, arguing that it grants access to power and influences policy.
The discussion on fixing Australia's political system emphasizes the role of the voter. The hosts suggest that while systemic changes like removing political donations are important, ultimately, electing individuals committed to these changes is necessary.
The podcast promotes the investment analysis tool 'Strawman', co-founded by Andrew Page, encouraging listeners to join. A discount code 'MINGA' is offered for new members, with the current membership drive closing on Sunday at midnight.
Scott Phillips discusses his book, 'The One-Page Investing Plan', noting that books narrated by their authors tend to be in high demand. He encourages listeners to purchase the book online, specifically mentioning Amazon, to support its visibility with retailers.
Andrew Rampage discusses the evolution of economic terminology, noting the shift away from terms like 'unicorns' and 'green shoots' to more contemporary concepts. He observes that the term 'cost of living crisis' has become prevalent, leading to a potential dilution of its meaning.
Andrew Rampage shares a list of 18 investment and tech buzzwords generated by Chat GPT, including SPACs, memes stocks, NFTs, and the metaverse. He notes that while some terms like 'diamond hands' and 'tendies' (profits) are related to meme stocks, others like NFTs and the metaverse are broader investment concepts.
The discussion touches on the performance of Australian tech companies, specifically mentioning WiseTech and Afterpay. Andrew Rampage notes that WiseTech is down 60%, and expresses doubt about the success of Afterpay's acquisition by Block, suggesting it has not gone well.
Andrew Rampage reflects on an AI training model, noting that while it was initially successful, it later experienced a significant fall. He posits that the thesis for its importance in training was sound, but the method of execution may have been flawed.
Andrew Page's investment journaling platform, Strawman.com, is celebrating its fifth anniversary as a serious outfit. Scott Phillips noted that while an early free version launched in late 2017, the company considers 2021 its official start date.
Strawman.com is reopening its doors to new members, with an announcement made during the Motley Fool Money podcast. Listeners can receive a 10% discount by using the code "Munga".
The initial concept for Strawman.com, according to Andrew Page, was to create a platform where individuals could journal and share their investment ideas. This core idea has remained central to the business's development.
An anonymous listener shared their challenging start in investing, including a significant loss during the GFC after using leverage. After restarting in 2012 without borrowed funds and living frugally, they have achieved over 20% annual returns for 14 years.
A 50-year-old doctor who has achieved significant investment returns questions whether their practice of providing free or low-cost healthcare is distorting the market. They are seeking advice on investment strategies to preserve purchasing power while maintaining their fulfilling medical career.
Andrew Page and the host discuss the psychological impact of market downturns, emphasizing the difference between a 'paper drawdown' and a permanent loss of capital. Page advises listeners to understand what they own and why, as market fluctuations are a normal part of investing.
Andrew Page shared his recent accomplishment of coding a new website using AI, a feat he initially doubted he could achieve. He transitioned from not knowing basic IT terminology to successfully building and implementing the website, highlighting the accessibility of AI tools for personal projects.
Mark recounted his recent four-week holiday exploring Cape York Peninsula in Queensland, Australia. He described the trip as "brilliant" due to the warm weather and the opportunity to see diverse landscapes, from rainforests to station country.
Andrew Page advocates for a "Peter Lynch approach" to investing by encouraging listeners to get hands-on experience with technologies like AI. He believes this direct engagement provides a more nuanced understanding than relying on external hot takes, even suggesting a small investment in AI tools for personal experimentation.
Andrew Page cautioned against dismissing AI as merely a bubble, comparing its revolutionary potential to the early internet. He advised listeners to avoid blindly buying into all AI-related stocks based on hype, suggesting that while some AI companies may be overvalued, the underlying technology is a fundamental shift with long-term implications.
Andrew Page urged listeners not to let skepticism or fears about AI's implications cloud their judgment about its inevitable impact. He acknowledged valid concerns about job displacement and creative industries but stressed that the technology is already here and advancing regardless of individual desires or opinions.
Listener James is holding significant profits in Nvidia shares acquired in 2018 based on a thesis about GPU demand in cloud computing. He is now uncomfortable with the large weighting in his self-managed super fund and seeks advice on whether to sell some or hold, considering Nvidia's growth potential versus past experiences with volatile stocks like Redflow and Pointerra.
The podcast hosts discuss the concept of Universal Basic Income (UBI), exploring its policy implications and its connection to economic prosperity. They differentiate between focusing on GDP growth and focusing on individual well-being as the primary goal of economic policy.
The hosts delve into the definition of 'the economy,' arguing that it should be understood as a means to improve people's lives rather than a focus on abstract metrics like GDP. They suggest that economic policy should prioritize individual well-being and comfort.
The conversation touches on the potential impact of robots and AI on employment, questioning what humans will do if machines perform most tasks. One host suggests that new careers like 'podcasting' and 'influencing' have emerged unexpectedly, challenging the premise that automation will eliminate all jobs.
One host suggests trialing Universal Basic Income (UBI) in Tasmania due to its geographic isolation and manageable population. This proposal aims to test the effectiveness of UBI with reasonable rules and gather data to determine its viability.
The discussion contrasts the differing views on UBI from the political left and right. Conservatives fear it disincentivizes work, while progressives argue it's an excuse to avoid job guarantees. The hosts aim to move beyond knee-jerk reactions to understand UBI's potential mechanisms.
The fundamental concept of economics is presented as the study of scarcity versus unlimited human wants and desires, involving trade-offs and opportunity costs. The hosts explain that economics deals with how to obtain desired goods and services, who performs the work, and how the benefits are distributed.
The hosts define Universal Basic Income (UBI) as a welfare concept where every person receives a fixed amount of money regularly, without means testing. This approach aims to simplify welfare distribution.
A listener named Louis raised concerns about whether ETF holders are being "scammed" into buying expensive IPOs from companies like SpaceX, OpenAI, and Anthropic at peak valuations. He questioned if the reduced timeframe for these companies to enter the NASDAQ 100 index, down from 12 months to 15 trading days, exacerbates this issue.
The podcast hosts discussed the nature of passive investing, explaining that it requires holding stocks within an index regardless of personal preference. Andrew highlighted that this strategy, while often successful, can force investors to hold companies they dislike, such as banks in the Australian market.
Listener Henry challenges the hosts' critical stance on Australian politicians, arguing that public sentiment is often manipulated and that competent politicians deserve respect. Andrew believes politicians are fair game for criticism, drawing parallels to executive pay and performance in private enterprise, stating that politicians can't claim credit for good times and blame external factors for bad times.
Scott Phillips agrees with listener Henry that much political criticism can be undeserved and unfair. However, he argues that politicians, by nature of their job and the democratic process, are subject to public scrutiny and criticism, and those with 'thin skin' are in the wrong profession.
Andrew Rampage critiques executive pay, calling overpayment for underdelivery an 'egregious crime'. He argues that leaders should not take all the credit for a company's success, as external factors like market booms can significantly contribute to performance, using the example of a gold mine owner when gold prices surge.
Scott Phillips pushes back on the idea that politicians can't act on their convictions because 'circumstances don't suit them.' He asserts that if politicians avoid doing what they believe is right due to difficulty, they should 'bugger off,' and he has zero sympathy for such justifications.
Andrew Rampage highlights the democratic privilege of speaking truth to power without fear of reprisal, referencing Grace Chen's 'side eye' to the Prime Minister as an example. He argues against the notion that leaders must always be given utmost respect, regardless of their actions.
Andrew Page of Strawman.com discusses the "fellow kids" meme as a humorous analogy for how economic policies or corporate actions can sometimes misalign with their intended audience. He draws a parallel to how government interventions or market strategies might not always resonate as expected.
Scott Phillips and Andrew Page of Motley Fool Money explore the different levels of economic involvement, from free markets to government-provided services. They aim to analyze where these approaches are effective and where they might fall short of their intended outcomes.
The traditional bottleneck in app development, requiring extensive coding skills and significant time/money, is being shattered by AI. Andrew mentioned that a one-person business, not a developer, built an app with AI and is now securing funding.
Andrew shared that the barrier to entry for app development has significantly lowered due to AI coding tools. He highlighted a personal experience where someone without prior coding knowledge successfully built an app using AI, which is now attracting funding.
Scott Phillips shared an observation from interviewing a CEO that creativity has become the primary bottleneck in development, a shift from the past where developer talent was the limiting factor. He emphasized that AI has democratized app creation, allowing anyone with an idea to build it quickly.