1 00:00:00,000 --> 00:00:25,080 Welcome back to the Rated Change with York Wealth Management. 2 00:00:25,080 --> 00:00:29,960 The Rated Change is a podcast which explores the ever shifting momentum of financial markets 3 00:00:29,960 --> 00:00:33,000 through the eyes of some of the brightest minds in wealth management. 4 00:00:33,000 --> 00:00:37,000 I'm your host, Menon Gaddi, and in today's broadcast, we're speaking with Kevin Batoli, 5 00:00:37,000 --> 00:00:40,960 the co-portfolio manager of PM Capital. 6 00:00:40,960 --> 00:00:46,000 PM Capital was founded in 1998 by CIO and Chairman Paul Moore. 7 00:00:46,000 --> 00:00:53,960 Its goal is to build long-term wealth by investing in global markets and Australian markets with patience and conviction. 8 00:00:53,960 --> 00:00:58,960 I would say PM Capital embraces the true definition of a go anywhere strategy. 9 00:00:58,960 --> 00:01:04,960 And I quite like the patience to avoid firmer rallies and wait for the strongest company in space to survive a sector pullback 10 00:01:04,960 --> 00:01:09,960 before exploring investing and favorable valuations for the long term. 11 00:01:09,960 --> 00:01:16,960 With this approach, PM Capital has consistently beat the average of the market since inception, 12 00:01:16,960 --> 00:01:27,960 with the Global Companies Fund, as an example, averaging 12.4% over five years, 23.9% over three years, and 9.6% over the past year. 13 00:01:27,960 --> 00:01:36,960 The fund has returned 9.7% since inception, and whilst the benchmark of the MISCI World Index has returned 5.8% in this period. 14 00:01:36,960 --> 00:01:42,960 Kevin breaks down the process philosophy, and after returning from a very enjoyable trip in Europe, 15 00:01:42,960 --> 00:01:45,960 he shares what they look for when investing in companies. 16 00:01:45,960 --> 00:01:52,960 For me, I found the conversation of when they time their entry into companies to be the most interesting, 17 00:01:52,960 --> 00:02:02,960 the patience and discipline required to avoid firmer rallies and wait for the strongest to survive in a sector before exploring buying into that business. 18 00:02:02,960 --> 00:02:14,960 On this point, Kevin dives into detail on investing in European banks, commodities like copper, oil and gas, and other areas such as the gambling industry. 19 00:02:14,960 --> 00:02:24,960 In summary, he explores investing in out of favor businesses at the right time, which I found really interesting. 20 00:02:24,960 --> 00:02:33,960 Before we get into this podcast, I'd also like to encourage you to listen to the disclaimer at the end of this broadcast and to keep your feedback company. 21 00:02:33,960 --> 00:02:36,960 You can reach me at mghatty at ywm.com.au. 22 00:02:36,960 --> 00:02:54,960 With that being said, I hope you enjoy this conversation as much as I did, so sit back, relax and enjoy it. 23 00:02:54,960 --> 00:02:58,960 Kevin Bottoli, welcome to The Rate of Change with York Wealth Management. 24 00:02:58,960 --> 00:02:59,960 Thanks for having me. 25 00:02:59,960 --> 00:03:00,960 Good to be here. 26 00:03:00,960 --> 00:03:07,960 Why don't we kick things off by telling us a little bit about yourself, your formative years and how you got into financial markets. 27 00:03:07,960 --> 00:03:08,960 Yep. 28 00:03:08,960 --> 00:03:12,960 So I've been in the industry for about 18 years. 29 00:03:12,960 --> 00:03:14,960 Grew up in South Australia. 30 00:03:14,960 --> 00:03:17,960 Grew up in a little country town called Wakerie. 31 00:03:17,960 --> 00:03:23,960 Basically, I grew up in a family where we had a lot of entrepreneurs and small business operators. 32 00:03:23,960 --> 00:03:33,960 I got a really good sense early on watching people run businesses and seeing businesses fail, seeing some businesses succeeding. 33 00:03:33,960 --> 00:03:39,960 It really drove a passion in me to understand why businesses succeed and fail. 34 00:03:39,960 --> 00:03:45,960 I went to university, did a commerce degree, did a finance degree. 35 00:03:45,960 --> 00:03:55,960 Through that process, fell in love with investing capital and the idea of investing capital as a profession. 36 00:03:55,960 --> 00:04:04,960 Basically, through my reading, came across PM Capital in the early days back in 2004. 37 00:04:04,960 --> 00:04:10,960 Paul, who's the founder of our business, had a position in Birdswood Casino. 38 00:04:10,960 --> 00:04:16,960 At the time, they were being acquired by James Parker. I remember seeing that article in the AFR. 39 00:04:16,960 --> 00:04:23,960 Basically, from there, following the business and then getting the opportunity when I came over to Sydney to work with Paul. 40 00:04:23,960 --> 00:04:27,960 I've been at PM Capital for 18 years, as I said. 41 00:04:27,960 --> 00:04:34,960 When I first came into the business, it was really about, as an analyst, building out our coverage of the Asia region. 42 00:04:34,960 --> 00:04:41,960 If you look up until that point, you didn't really need to participate in Asian equities from a local perspective. 43 00:04:41,960 --> 00:04:48,960 You either bought really good quality businesses with IP in the US or Europe or Japan, which might have manufactured in China. 44 00:04:48,960 --> 00:04:54,960 That wasn't really a China or Asia story. It was a global consumer story. 45 00:04:54,960 --> 00:04:58,960 We bought commodities as these emerging markets build out their infrastructure. 46 00:04:58,960 --> 00:05:05,960 What we saw happening and the business saw happening at the time was this domestic consumption story growing. 47 00:05:05,960 --> 00:05:10,960 I was tasked with building out the coverage of that sector and that area of the market. 48 00:05:10,960 --> 00:05:19,960 Over time, it's morphed. We've had a period where now, if you look at my role within the business, 49 00:05:19,960 --> 00:05:26,960 co-portfolio manager of our global product, co-portfolio manager of our Aussie equities product, 50 00:05:26,960 --> 00:05:34,960 look after the commodity space, look after the gaming space, look after parts of the consumer space. 51 00:05:34,960 --> 00:05:38,960 A wide variety of coverage, but that's essentially how we work within the business. 52 00:05:38,960 --> 00:05:46,960 We don't pigeonhole people to sectors. We really want them to go out there and find the best ideas they can possibly find in markets. 53 00:05:46,960 --> 00:05:53,960 Right. Let's dig into PM Capital a bit more. Paul Moore was the founder and then you joined. 54 00:05:53,960 --> 00:06:00,960 What was his founding philosophy? You touched on you do cover quite a lot of areas. 55 00:06:00,960 --> 00:06:03,960 What's actually the investment approach? 56 00:06:03,960 --> 00:06:07,960 Essentially what we're really trying to do, and we've got a great slide in our presentation deck, 57 00:06:07,960 --> 00:06:12,960 and at the top it talks about the key objective, and that's really building long-term wealth for our clients. 58 00:06:12,960 --> 00:06:19,960 That's a pretty generic statement, but it's important about how you go about that. 59 00:06:19,960 --> 00:06:24,960 Our belief, and the belief that Paul's built and instilled in us in the business, 60 00:06:24,960 --> 00:06:30,960 is to achieve a return over and above the index over the long term, you have to be doing something different. 61 00:06:30,960 --> 00:06:34,960 The reality is all investors tell you they will do something different, 62 00:06:34,960 --> 00:06:39,960 but the vast majority of people are hugging your benchmark and they're doing very similar things. 63 00:06:39,960 --> 00:06:47,960 What does that mean for us? What it means is we're really focused on a select subset of the market. 64 00:06:47,960 --> 00:06:53,960 The portion of the market, the 5% to 10% that we deem to be undervalued, 65 00:06:53,960 --> 00:06:58,960 and then on the flip side, the 5% to 10% that we deem to be overvalued. 66 00:06:58,960 --> 00:07:01,960 We really want to focus on those parts of the market. 67 00:07:01,960 --> 00:07:07,960 Again, people say they do that, but if you look at the vast majority of portfolios that talk about concentration, 68 00:07:07,960 --> 00:07:11,960 high conviction, they might have 100, 150 stocks. 69 00:07:11,960 --> 00:07:18,960 The reality is our business is built around, and our portfolios are built around concentrated portfolios, 70 00:07:18,960 --> 00:07:27,960 typically 20 to 30 stocks, but even that masks a greater allocation to what we consider 71 00:07:27,960 --> 00:07:32,960 four, five, six, seven broader themes across a portfolio, and we really build them out over time. 72 00:07:32,960 --> 00:07:35,960 How do we get to that point? 73 00:07:35,960 --> 00:07:40,960 As I said, we're really focused on how business generates capital over the long term, 74 00:07:40,960 --> 00:07:43,960 how it generates its cash flow over the long term, so we're focused on that, 75 00:07:43,960 --> 00:07:46,960 but what drives the decision to look at a stock is valuation. 76 00:07:46,960 --> 00:07:55,960 We're really looking for that valuation observation in the beginning that drives the decision to start the detailed research process. 77 00:07:55,960 --> 00:08:00,960 Valuation in and of itself can't be the entire part of the puzzle. 78 00:08:00,960 --> 00:08:07,960 We need to see and understand the entry catalyst that allow you to buy something or that makes something mispriced, 79 00:08:07,960 --> 00:08:12,960 and then along that journey in doing the research, we need to understand pretty quickly the catalysts 80 00:08:12,960 --> 00:08:17,960 that are going to allow that business to rerate over time, because often what you do is when you find 81 00:08:17,960 --> 00:08:21,960 what you consider to be undervalued stocks, they can stay undervalued for a very long time. 82 00:08:21,960 --> 00:08:26,960 They don't have the catalyst to drive that rerating, so valuation alone is not enough. 83 00:08:26,960 --> 00:08:31,960 We need those entry and exit catalysts, and another thing that we do, 84 00:08:31,960 --> 00:08:38,960 which is probably different to a lot of managers, is we set our exit criteria when we buy a position. 85 00:08:38,960 --> 00:08:47,960 We know the catalyst that we want to have play out, and we don't change those consistently. 86 00:08:47,960 --> 00:08:49,960 We don't run a 12-month target price. 87 00:08:49,960 --> 00:08:51,960 We're a long-term investor. 88 00:08:51,960 --> 00:08:56,960 What we see in a lot of our positions, and what I often say, is we're arbitraging our long-term view on a sector 89 00:08:56,960 --> 00:09:00,960 or a business with short-term machinations in markets. 90 00:09:00,960 --> 00:09:02,960 We all have long-term assumptions. 91 00:09:02,960 --> 00:09:07,960 It might be around the earnings growth and what type of multiple that should trade on. 92 00:09:07,960 --> 00:09:09,960 It might be consolidation in an industry. 93 00:09:09,960 --> 00:09:14,960 It could be many different things, and we're really waiting for those dynamics to play out, 94 00:09:14,960 --> 00:09:16,960 and they can play out over five, seven, ten years. 95 00:09:16,960 --> 00:09:18,960 Global brewing is a good story. 96 00:09:18,960 --> 00:09:25,960 It's a story we had in our portfolio in a sector thematic that at its peak was 20% of the portfolio, 97 00:09:25,960 --> 00:09:28,960 but that's something we played over a 15-year period. 98 00:09:28,960 --> 00:09:34,960 It was a global consolidation, global premiumization story, and through the course of that, 99 00:09:34,960 --> 00:09:41,960 we owned 13 to 15 different businesses, and of that, half of them would have been taken out. 100 00:09:41,960 --> 00:09:43,960 We're a long-term investor in nature. 101 00:09:43,960 --> 00:09:47,960 We're concentrated, and we're very high conviction around our positions, 102 00:09:47,960 --> 00:09:50,960 and that's built on the research that we do from the bottom up. 103 00:09:50,960 --> 00:09:56,960 Right. Before we dig into the two funds which I want to discuss, can we discuss the mechanics a bit? 104 00:09:56,960 --> 00:10:04,960 From what you're saying, is the strategy essentially growth and raise of price bottom up, 105 00:10:04,960 --> 00:10:06,960 but is it a go-anywhere strategy? 106 00:10:06,960 --> 00:10:10,960 Because you're discussing you can do commodities, you can do tech, you've got the global and the Australian. 107 00:10:10,960 --> 00:10:12,960 Is it a go-anywhere type of strategy? 108 00:10:12,960 --> 00:10:13,960 Because I'm looking at the website. 109 00:10:13,960 --> 00:10:17,960 There are a number of different vehicles and funds which you currently cover, 110 00:10:17,960 --> 00:10:20,960 and the other question, which I wouldn't mind you answering off the back of that, 111 00:10:20,960 --> 00:10:23,960 if it's a go-anywhere strategy, and I'm looking at a lot of the numbers, say, 112 00:10:23,960 --> 00:10:27,960 comparing the global fund compared to a lot of global fund managers out there, 113 00:10:27,960 --> 00:10:31,960 they all got, unfortunately, had a very, very good run-up after COVID, 114 00:10:31,960 --> 00:10:34,960 and then a lot of them essentially gave back their returns for two years 115 00:10:34,960 --> 00:10:37,960 and about three months when essentially the interest rates changed, 116 00:10:37,960 --> 00:10:43,960 but your fund appears to take a little bit of a dip and then continued that move up, 117 00:10:43,960 --> 00:10:46,960 I assume that's associated with the commodities. 118 00:10:46,960 --> 00:10:50,960 Can you also discuss, as you're saying, you're looking at the exit? 119 00:10:50,960 --> 00:10:56,960 We're discussing off air essentially how you use derivatives to deal with that level of volatility 120 00:10:56,960 --> 00:10:59,960 to protect what you're comfortable getting out of, 121 00:10:59,960 --> 00:11:01,960 but also to try to get a bit more cream on top. 122 00:11:01,960 --> 00:11:04,960 I'd be really interested to hear how that all mechanics work. 123 00:11:04,960 --> 00:11:11,960 Yeah, it's a bit to unpack there, but back to the kind of first question, you're correct. 124 00:11:11,960 --> 00:11:20,960 It goes back again to the point I made in my previous remarks around to generate a return 125 00:11:20,960 --> 00:11:23,960 over and above the mark, you have to be doing something different. 126 00:11:23,960 --> 00:11:28,960 So what we've found is that by having a very open mandate, 127 00:11:28,960 --> 00:11:33,960 that allows us to be different to other people. 128 00:11:33,960 --> 00:11:37,960 So it again goes back to the founding of our business. 129 00:11:37,960 --> 00:11:42,960 Our funds were founded with our own capital and the way we would invest our own capital. 130 00:11:42,960 --> 00:11:48,960 So we want to have maximum flexibility in our ability to buy opportunities when they arise. 131 00:11:48,960 --> 00:11:53,960 So what that means is long, short, no limitation on the amount of cash we can hold, 132 00:11:53,960 --> 00:11:56,960 which is important in a fund that invests around thematics, 133 00:11:56,960 --> 00:12:02,960 because a lot of the time when a theme plays out that might be say 15 to 20% of your portfolio, 134 00:12:02,960 --> 00:12:06,960 you tend to be selling a lot of the stocks at the same time. 135 00:12:06,960 --> 00:12:12,960 So we want to have the flexibility to sell that and not be constrained by 10% cash limit. 136 00:12:12,960 --> 00:12:20,960 We're also not sector, we're not focused on gig sectors, we're not focused on geographic limitations. 137 00:12:20,960 --> 00:12:24,960 We're basically asking our pool of analysts, and we think we're all analysts, 138 00:12:24,960 --> 00:12:28,960 I might have a title as a portfolio manager, but I view myself first and foremost as an analyst. 139 00:12:28,960 --> 00:12:33,960 What we're out there to do is go and find the best opportunities that we can find. 140 00:12:33,960 --> 00:12:41,960 One of the mistakes I think other managers make is they think having a big team is better 141 00:12:41,960 --> 00:12:46,960 and making sure you have full coverage of an entire universe. 142 00:12:46,960 --> 00:12:52,960 But if you think about how that actually plays out from the perspective of the people that are doing the work, 143 00:12:52,960 --> 00:12:59,960 you might say, Murdoch, you're going to be looking after the commodity space for me. 144 00:12:59,960 --> 00:13:01,960 That's your sector, that's your Remy. 145 00:13:01,960 --> 00:13:06,960 I want you to go out and look at that, and I want you to come back and give me some ideas. 146 00:13:06,960 --> 00:13:10,960 How are you compensated? You're compensated by coming up with ideas. 147 00:13:10,960 --> 00:13:13,960 And if you're compensated by coming up with commodity ideas, what are you going to do? 148 00:13:13,960 --> 00:13:17,960 You're going to come up with commodity ideas, regardless of whether or not you actually think there's true mispricings. 149 00:13:17,960 --> 00:13:25,960 What we tell our analysts to do is go out and find the idea wherever it might eventually. 150 00:13:25,960 --> 00:13:31,960 We have a pool of analysts that are essentially out there to do that. 151 00:13:31,960 --> 00:13:37,960 The second point was around recent performance. 152 00:13:37,960 --> 00:13:43,960 Obviously, that goes back in heart to our focus and our myopic focus on valuation. 153 00:13:43,960 --> 00:13:47,960 That's the starting point. 154 00:13:47,960 --> 00:13:52,960 And valuation is not just important at the point of entry. 155 00:13:52,960 --> 00:13:55,960 It's important across the journey of owning a position. 156 00:13:55,960 --> 00:13:59,960 It gets a point where fair valuation is reached. 157 00:13:59,960 --> 00:14:10,960 And by setting that exit criteria and setting the catalyst that we believe will create a stock to rerate over time 158 00:14:10,960 --> 00:14:17,960 at the beginning of the investment, that allows us to be very disciplined around selling positions when they reach those targets. 159 00:14:17,960 --> 00:14:22,960 So a classic example for us has been the commodity space. 160 00:14:22,960 --> 00:14:27,960 Now, we were investing very heavily in that during COVID period. 161 00:14:27,960 --> 00:14:36,960 And it was all based on our view of downside protections for valuation and a flaw being placed in some of the commodity markets, 162 00:14:36,960 --> 00:14:44,960 particularly commodities like copper, which meant that the downside in the spot price was relatively protected. 163 00:14:44,960 --> 00:14:50,960 But the fundamental view for owning those positions was around our view of the incentive price 164 00:14:50,960 --> 00:14:55,960 and the need for a much higher copper price longer term to drive new supply into the market. 165 00:14:55,960 --> 00:15:07,960 Now, when we were investing in the space in 2020, people were telling us we were crazy because COVID, economic recession, Dr. Copper. 166 00:15:07,960 --> 00:15:09,960 You couldn't have got a worse period for commodities. 167 00:15:09,960 --> 00:15:16,960 But when we looked at the valuation of a business like Freeport Macmaron in the US, at spot prices, 168 00:15:16,960 --> 00:15:21,960 which we thought were protected to the downside, the business was trading at a mid-teens free cash flow yield. 169 00:15:21,960 --> 00:15:32,960 If our view of incentive pricing was right, which was $354, you had a business that was on 30%, 40% free cash flow yields. 170 00:15:32,960 --> 00:15:34,960 So that's how we form that. 171 00:15:34,960 --> 00:15:37,960 And we have that view of where we think those commodity prices will go over time. 172 00:15:37,960 --> 00:15:41,960 And when they get there, we start trimming and exiting those positions. 173 00:15:41,960 --> 00:15:51,960 And as you mentioned, we can use derivatives and we use derivatives options primarily in a couple of ways to help us get set in new positions. 174 00:15:51,960 --> 00:15:53,960 So stock might not quite be there. 175 00:15:53,960 --> 00:16:01,960 So we can sell puts, allows us to get into where we want to enter a position, makes us be disciplined around that entry price. 176 00:16:01,960 --> 00:16:11,960 And then on the exit, again, the same thing, we can sell calls and it allows us to, it puts us in a position where we're disciplined around selling or trimming positions 177 00:16:11,960 --> 00:16:18,960 and allows us to take advantage of volatility or heightened volatility in some of the sectors we might be in. 178 00:16:18,960 --> 00:16:20,960 So I think so. 179 00:16:20,960 --> 00:16:29,960 So the key point around the differences in the moves over the last couple of years has really been that focus on valuation. 180 00:16:29,960 --> 00:16:32,960 Stocks performed well, particularly growth and momentum. 181 00:16:32,960 --> 00:16:38,960 And if you've got a fundamental view of where valuation sits, sometimes you might get out early. 182 00:16:38,960 --> 00:16:43,960 But what you're not doing is you're just not playing that momentum story. 183 00:16:43,960 --> 00:16:58,960 And eventually when that momentum story changes, and it was when rates moved in the back half of 2021, that you saw a big pitulation in those sectors because there was no downside support for valuation. 184 00:16:58,960 --> 00:17:04,960 And again, it goes back to the comment I made in the introductory remarks around alignment. 185 00:17:04,960 --> 00:17:11,960 We've got our own capital in these businesses and we've been doing this for, I've been doing it for 18 years. 186 00:17:11,960 --> 00:17:15,960 Paul's been doing it for 30 years. PM Capital has been around for 25 years. 187 00:17:15,960 --> 00:17:21,960 It's the same process and philosophy that we've been applying for a very long period of time. 188 00:17:21,960 --> 00:17:23,960 We've done it across multiple cycles. 189 00:17:23,960 --> 00:17:30,960 One of the things that I think you've seen with some of these new funds that have entered the market is there's lots of Johnny-come-lately funds. 190 00:17:30,960 --> 00:17:39,960 They pop up, they get one sector correct, they get one cycle correct, and they look like superstars. 191 00:17:39,960 --> 00:17:43,960 The reality is you need to be able to prove that you can do it over multiple sectors. 192 00:17:43,960 --> 00:17:54,960 So that's the tough part, and it's very hard for investors to rotate across themes and ideas and market cycles. It's very difficult. 193 00:17:54,960 --> 00:17:57,960 Yeah, I 100% agree with that. 194 00:17:57,960 --> 00:18:04,960 The other thing I've seen close that helps in that particular space is a hedge fund out of the States that runs the JIT model, 195 00:18:04,960 --> 00:18:06,960 growth, inflation, government policy, and then breaks it down with the four quads. 196 00:18:06,960 --> 00:18:11,960 So essentially using monetary policy and identifying which asset class does well or poorly. 197 00:18:11,960 --> 00:18:16,960 That's the only way that I've currently seen as somewhat of a Rosetta Stone that half does that, 198 00:18:16,960 --> 00:18:22,960 but it's another thing to actually execute and get that done well for an 18-year period. 199 00:18:22,960 --> 00:18:34,960 It is very hard because while we might be long-term investors in nature, and people like the sound of contrarian, high conviction, etc., etc., 200 00:18:34,960 --> 00:18:40,960 a lot of the time what that means is you're talking to people about stocks that are grossly out of favor. 201 00:18:40,960 --> 00:18:51,960 Because it's common sense to say that for something to be mispriced, it needs to be unloved or misunderstood. 202 00:18:51,960 --> 00:18:59,960 So if everybody understands something and everybody likes something, it's difficult to find things that are mispriced. 203 00:18:59,960 --> 00:19:06,960 So when you have that view, it's hard to maintain the conviction because as an industry, 204 00:19:06,960 --> 00:19:12,960 we draw ourselves to the shortest of data points, which is daily share price and daily unit price. 205 00:19:12,960 --> 00:19:16,960 And that can make it difficult. 206 00:19:16,960 --> 00:19:22,960 So there's two funds which I use quite a lot. 207 00:19:22,960 --> 00:19:32,960 It's the PGF PM Global Opportunities Fund and the Global Companies Fund. 208 00:19:32,960 --> 00:19:39,960 The two questions I have, because I really want to get into the macroeconomics and you've covered how the philosophy and everything works there, 209 00:19:39,960 --> 00:19:42,960 is how's the performance been for both of those? 210 00:19:42,960 --> 00:19:53,960 And the other part I want to mind you covering is the PGF pays a phenomenal dividend and it's quite robust for a number of years to come. 211 00:19:53,960 --> 00:19:59,960 It's not guaranteed, but it's quite robust. Can you also cover why that is the case? 212 00:19:59,960 --> 00:20:06,960 So essentially, as you said, there's two global products that we have. 213 00:20:06,960 --> 00:20:11,960 It's essentially the same strategy. So we look at that pool of capital as being one pool of capital. 214 00:20:11,960 --> 00:20:15,960 It's just segregated into two different vehicles. 215 00:20:15,960 --> 00:20:21,960 And the two vehicles basically allows different types of investors to capture. 216 00:20:21,960 --> 00:20:25,960 So we've got the Managed Fund, which is the Global Companies Fund, which is a unit trust. 217 00:20:25,960 --> 00:20:32,960 And then you've got the PGF or the PM Capital Global Opportunities Fund, which is a listed investment company. 218 00:20:32,960 --> 00:20:39,960 But essentially, they have the same remit and mandate around what they do and they have essentially the same positions. 219 00:20:39,960 --> 00:20:48,960 Now, the Managed Fund has been around since 1998, which was the first fund that PM Capital had upon founding. 220 00:20:48,960 --> 00:20:56,960 And the PGF was a fund or a listed investment company that we launched in 2013. 221 00:20:56,960 --> 00:20:59,960 So again, the strategy is very similar. 222 00:20:59,960 --> 00:21:05,960 Big differences between those two is obviously a Managed Fund unit trust pays out distributions. 223 00:21:05,960 --> 00:21:09,960 A listed investment company, you know, you'll pay a dividend when you have retained earnings. 224 00:21:09,960 --> 00:21:12,960 So obviously, good performance over a long period of time. 225 00:21:12,960 --> 00:21:19,960 If you look at the PM Capital Global Companies Fund, which has been around since 1998, 226 00:21:19,960 --> 00:21:24,960 we've generated three times the return of the index over that period. 227 00:21:24,960 --> 00:21:31,960 Now, if you look at the listed investment company, it's been around since 2014, a lot of retained earnings. 228 00:21:31,960 --> 00:21:33,960 So it gives us the ability to actually pay a consistent dividend. 229 00:21:33,960 --> 00:21:40,960 One of the things that we've learned over time is that the vast majority of investors in those products are retail investors 230 00:21:40,960 --> 00:21:43,960 and to them, dividends are very important. 231 00:21:43,960 --> 00:21:50,960 So the ability to pay a consistent dividend, and that's obviously dictated to by the board of the PGF, 232 00:21:50,960 --> 00:21:57,960 which is a separate vehicle in and of itself, but the ability to pay that is really important. 233 00:21:57,960 --> 00:22:04,960 And we think that's something we've guided that the dividend that we have today is one that we think we can sustain, 234 00:22:04,960 --> 00:22:08,960 given our current retained earnings for the next four or five years. 235 00:22:08,960 --> 00:22:11,960 So it's very important to maintain that dividend. 236 00:22:11,960 --> 00:22:13,960 So what is that dividend? 237 00:22:13,960 --> 00:22:16,960 So that dividend is essentially our retained earnings over time. 238 00:22:16,960 --> 00:22:22,960 So when we sell stocks, we realize the capital gains because the LICs, they are essentially everything. 239 00:22:22,960 --> 00:22:24,960 So on the income account, what's the percentage? 240 00:22:24,960 --> 00:22:35,960 So I think today, quote me if I'm basically, I think it's about an 8 to 10 percent dividend yield. 241 00:22:35,960 --> 00:22:40,960 So past 12 months, including, you know, what would that average return be? 242 00:22:40,960 --> 00:22:41,960 So the average return. 243 00:22:41,960 --> 00:22:48,960 So if you look at our broader equity funds over the last couple of, so the way I think about it is from the underlying return of the portfolio. 244 00:22:48,960 --> 00:22:55,960 So over a long period of time, as I said, we've done that kind of three times, you know, the market. 245 00:22:55,960 --> 00:23:04,960 And I think that's the most important number to kind of really focus on because what people often forget when they see a one or two year number or three year number, 246 00:23:04,960 --> 00:23:13,960 and our numbers have been very good and it's been around those those investments in particularly in commodities, but also European banks, 247 00:23:13,960 --> 00:23:19,960 is the is the impact of compounding over a long period of time. 248 00:23:19,960 --> 00:23:22,960 And that's really the most important part. 249 00:23:22,960 --> 00:23:25,960 Yeah. So I'm just looking at the benchmark here actually on the chart. 250 00:23:25,960 --> 00:23:38,960 So in 2000, if you stuck in 100 grand, it would probably be worth about just shy 600000 whilst the growth fund would be worth what's that nearly 1112. 251 00:23:38,960 --> 00:23:41,960 Comparison. Yeah. 252 00:23:41,960 --> 00:23:46,960 It's very interesting. So you just got back from Europe. Yes. God, I wish we were all in Europe right now. 253 00:23:46,960 --> 00:23:51,960 Sitting on a beach, hitting up Reims. I want to go back to Grace. Miss Grace. 254 00:23:51,960 --> 00:23:55,960 We just screwed up our travel really bad and now flights are so expensive. 255 00:23:55,960 --> 00:24:00,960 And then Buddy Joyce came out as well and said everyone's like, he's going to bring the flight prices of flights down in there. 256 00:24:00,960 --> 00:24:02,960 Like, yeah, not yet, champ. Yeah. 257 00:24:02,960 --> 00:24:09,960 Anyway, how was Europe? Yeah, it was good. So I was over in Europe pretty much all of March. 258 00:24:09,960 --> 00:24:15,960 And I was over there with our other co portfolio manager of the Aussie and global portfolio is John Whelan. 259 00:24:15,960 --> 00:24:21,960 And there was really two kind of purposes for the trip. Got a lot of positions in Europe. 260 00:24:21,960 --> 00:24:28,960 So essentially went and met the management teams and the companies that we own in the portfolio. 261 00:24:28,960 --> 00:24:33,960 So portfolio maintenance and then obviously new idea generation. 262 00:24:33,960 --> 00:24:38,960 And that was particularly around, say, the industrial space in Europe. 263 00:24:38,960 --> 00:24:45,960 We went to a couple of conferences while we were there. European industrials, European financials. 264 00:24:45,960 --> 00:24:50,960 So yeah, it was a four week trip. A lot of corporates. 265 00:24:50,960 --> 00:25:02,960 Five countries and hugely beneficial for us and part of the ongoing process for what we do in terms of the background due diligence and work we do on new stocks. 266 00:25:02,960 --> 00:25:10,960 And as you say, it was something that was made more difficult in the past couple of years, given COVID. 267 00:25:10,960 --> 00:25:19,960 Yeah. So with Europe, obviously we've seen a number of banks fall over, you know, Crete, Swir, all type of stuff. 268 00:25:19,960 --> 00:25:24,960 So how robust do you think is the financial system currently offshore? 269 00:25:24,960 --> 00:25:35,960 Yeah, it's an interesting one because if you look at our European, as I said, European banking has been one of our bigger portfolio positions. 270 00:25:35,960 --> 00:25:42,960 And people say when you say European banks again, people go, oh, European banks, you know, that's credit Swiss. 271 00:25:42,960 --> 00:25:45,960 You know, it's some of these big investment banks. 272 00:25:45,960 --> 00:26:05,960 But the reality of what we hold across European banking space is very much concentrated around certain markets where we see the competitive dynamic dramatically changed to what it was 10 or 15 years ago. 273 00:26:05,960 --> 00:26:08,960 It's becoming more Australian like than it is European. 274 00:26:08,960 --> 00:26:15,960 So most people when they think about Europe, they think about it being very competitive marketplaces. 275 00:26:15,960 --> 00:26:22,960 You've got banks from one market going into a neighbouring country. 276 00:26:22,960 --> 00:26:28,960 So pre the European debt crisis, banking markets were actually quite fragmented. 277 00:26:28,960 --> 00:26:34,960 But what you've seen is you've seen the European debt crisis be a catalyst for consolidation in certain markets. 278 00:26:34,960 --> 00:26:41,960 So two biggest areas where we're invested is the Irish banking market and the Spanish banking market. 279 00:26:41,960 --> 00:26:46,960 Now, if you look at, say, the Irish banking market, Irish and Spanish, I was not going to pick that. 280 00:26:46,960 --> 00:26:49,960 I remember back in the good old days was the Irish Dutch sandwich. 281 00:26:49,960 --> 00:26:54,960 He did all your banking on that one street in Ireland and then you had all your intellectual property in Holland. 282 00:26:54,960 --> 00:26:57,960 Yeah, that's I don't think that's the case anymore. 283 00:26:57,960 --> 00:27:02,960 So if you look at you look at the Irish banking markets, it's very attractive banking markets. 284 00:27:02,960 --> 00:27:05,960 There's two banks that dominate. 285 00:27:05,960 --> 00:27:08,960 So Bank of Ireland and Allied Irish Bank. 286 00:27:08,960 --> 00:27:18,960 And given the disruption that was caused over the last decade by the financial crisis in Europe, 287 00:27:18,960 --> 00:27:24,960 it meant regulators allowed incumbent banks to consolidate. 288 00:27:24,960 --> 00:27:28,960 And that's not something they were allowed to do prior to that. 289 00:27:28,960 --> 00:27:33,960 The regulators were happy with fragmented banking markets. 290 00:27:33,960 --> 00:27:34,960 Spain's exactly the same. 291 00:27:34,960 --> 00:27:41,960 Spain is a market where the top three or four banks are now 65 percent of the market. 292 00:27:41,960 --> 00:27:48,960 You go back a decade ago and the top 10 wouldn't have been 60 percent of the market. 293 00:27:48,960 --> 00:27:50,960 So a dramatic change in the landscape. 294 00:27:50,960 --> 00:27:55,960 And there are also markets where the banks have simplified. 295 00:27:55,960 --> 00:27:58,960 They've sold off international exposure. 296 00:27:58,960 --> 00:28:03,960 They've bought focus back on their domestic retail banking businesses. 297 00:28:03,960 --> 00:28:09,960 And that we think that makes for a better business going forward and one that can generate higher returns. 298 00:28:09,960 --> 00:28:11,960 So if I'm understanding correctly, I think I think I am. 299 00:28:11,960 --> 00:28:19,960 So essentially what you're looking for is you're looking for a big sector of the market or a particular area that's had his head knocked off. 300 00:28:19,960 --> 00:28:23,960 And then how you survive down the bottom is they will consolidate, fix the balance sheet, 301 00:28:23,960 --> 00:28:25,960 you know, tighten the belt type routine. 302 00:28:25,960 --> 00:28:30,960 And then you're trying to get in at that particular level, then starting heading up. 303 00:28:30,960 --> 00:28:32,960 You mentioned as well you like the gambling space. 304 00:28:32,960 --> 00:28:36,960 So this is actually very, very topical right now. 305 00:28:36,960 --> 00:28:37,960 I'll tell you all fair why. 306 00:28:37,960 --> 00:28:45,960 But essentially we're seeing due to the increased taxes, the screw ups in the states, you know, it opened up. 307 00:28:45,960 --> 00:28:47,960 There was a huge boom through that particular period. 308 00:28:47,960 --> 00:28:49,960 You said point points bet. 309 00:28:49,960 --> 00:28:54,960 Now points better got torched because there was two main competitors in the state that took all the businesses. 310 00:28:54,960 --> 00:28:57,960 But all the other competitors that they're still the same overheads. 311 00:28:57,960 --> 00:29:08,960 Right. But there's a massive consolidation play currently, both domestically and internationally in that particular space after same scenario, which you're discussing before. 312 00:29:08,960 --> 00:29:10,960 They're the huge uplift with the covid. 313 00:29:10,960 --> 00:29:12,960 Right. You know, everyone loved to gamble. 314 00:29:12,960 --> 00:29:15,960 But then it's all kind of come off. 315 00:29:15,960 --> 00:29:19,960 Is that essentially what you identify as an opportunity? 316 00:29:19,960 --> 00:29:27,960 So it's it's an astute observation because the reality is that is exactly correct. 317 00:29:27,960 --> 00:29:32,960 We want to identify long term structural thematics that we believe will play out over time. 318 00:29:32,960 --> 00:29:43,960 And we want to use the short term machinations of markets to be able to buy that because things go from being over loved to over hated in through a cycle. 319 00:29:43,960 --> 00:29:48,960 So you cannot you can be patient and wait for opportunities to arise. 320 00:29:48,960 --> 00:30:02,960 You mentioned sports betting. Now, it's an interesting one because our gaming exposure is has largely been and still largely is today around Macau, which has been through a lot of disruption through covid. 321 00:30:02,960 --> 00:30:06,960 But we do have a position in Flutter in the sports betting space. 322 00:30:06,960 --> 00:30:13,960 Now, I could talk about Flutter for hours, but I think we've got the time. 323 00:30:13,960 --> 00:30:26,960 But what was and what's really interesting about that story is it was one that was really first identified to us when we traveled to Europe back in 2017. 324 00:30:26,960 --> 00:30:30,960 And we were looking at the sports betting businesses listed in the UK. 325 00:30:30,960 --> 00:30:42,960 So at the time there was GVC, which is now Entain, William Hill, which is now was acquired by Caesars and Patty Power Betfair, which is now essentially the Flutter business. 326 00:30:42,960 --> 00:30:55,960 And we were looking at the sector then because the UK, which was a large, obviously the largest exposure for those businesses, was going through the triennial review, which was looking at regulation into the betting shops. 327 00:30:55,960 --> 00:31:03,960 So your local TAPs. And there was a lot of uncertainty around what that regulation would do to the earnings power of these businesses. 328 00:31:03,960 --> 00:31:11,960 So the stock sold off. We didn't invest at the time because we couldn't get comfortable around what that impact was going to be and end up being a large impact. 329 00:31:11,960 --> 00:31:22,960 But one of the things that stood out to us is that all three operators were talking to us about this opportunity that was they hoped over time going to play out in the US market. 330 00:31:22,960 --> 00:31:29,960 The US market, biggest gaming market in the world, but where you didn't have legalised sports betting. 331 00:31:29,960 --> 00:31:40,960 So we went away and I went away and I tried to do as much work as I could to understand what was at play in the US and how that might unfold over time. 332 00:31:40,960 --> 00:31:50,960 And then obviously in 2018, you got the repeal of the PASPA law, which was the law that prohibited every state outside of Nevada from actually betting on sports. 333 00:31:50,960 --> 00:32:07,960 And it was because Chris Christie, the governor of New Jersey at the time, took that law to the Supreme Court, got overturned on the basis that the federal government couldn't tell states how to tax their populace, which allowed New Jersey to open up. 334 00:32:07,960 --> 00:32:16,960 And over that period of time, you've had, I think there's 30 plus states now that you have legalised sports betting either online or through retail. 335 00:32:16,960 --> 00:32:24,960 Now, what was interesting is COVID pulled forward a lot of demand. 336 00:32:24,960 --> 00:32:27,960 People were at home that... 337 00:32:27,960 --> 00:32:31,960 What else did you have to do except for drink, walk around the block? 338 00:32:31,960 --> 00:32:33,960 Propensity to spare money. 339 00:32:33,960 --> 00:32:40,960 But the other thing that it did is it drove this focus with rates being zero on anything that was growth. 340 00:32:40,960 --> 00:32:53,960 So if you look back at that time, the acquisitions that were being made in the space, the IPOs that were coming to market, points bet being a classic example, people were just chasing market share and customers. 341 00:32:53,960 --> 00:32:58,960 So it led to the market to do some really dumb things. 342 00:32:58,960 --> 00:33:05,960 But then when the rate environment changed, so did the attitude of investors and it became about profitability. 343 00:33:05,960 --> 00:33:13,960 So you had a business like Flutter, which was trading at 160, 165 pound. 344 00:33:13,960 --> 00:33:20,960 Stock basically gets cut in half because there's this concern that the industry is never going to make money. 345 00:33:20,960 --> 00:33:32,960 But we know from the work that we've done, we understand how these sectors or this sector plays out over time and the consolidation you do see and the scale that the number one player 346 00:33:32,960 --> 00:33:35,960 and the benefits of scaling the number one player can bring. 347 00:33:35,960 --> 00:33:43,960 And we actually thought that that was magnified in the US because of the structure of how the market is set, basically state by state legislation. 348 00:33:43,960 --> 00:33:48,960 So it makes it hard for someone to come in and just put their product across the entirety of the US market. 349 00:33:48,960 --> 00:33:55,960 So we bought that position in March of last year when it was trading at about 80 pound. 350 00:33:55,960 --> 00:34:04,960 Now, what's interesting when you look at that business is when we bought the business, we had a fairly conservative some of the parts valuation. 351 00:34:04,960 --> 00:34:18,960 You fast forward to September, October of 2022 and Fox, Rupert Murdoch had the opportunity to buy an 18% or has an opportunity and an option to buy an 18% stake in that business. 352 00:34:18,960 --> 00:34:20,960 But they couldn't agree on price. 353 00:34:20,960 --> 00:34:34,960 So it went to arbitration and arbitration essentially valued the phangel, which is the Flutter's US business, at about 17 and a half billion pound, 354 00:34:34,960 --> 00:34:39,960 which was essentially the entire market cap of the Flutter business at the time we bought it. 355 00:34:39,960 --> 00:34:43,960 So we got over a billion pound of earnings essentially for free. 356 00:34:43,960 --> 00:34:53,960 But it highlights how something can go from being in favor and out of favor, despite the long term structural dynamic in the US market, 357 00:34:53,960 --> 00:34:57,960 not really changing for a business like Flutter, which is the dominant number one player. 358 00:34:57,960 --> 00:35:04,960 So you got a lot of people, particularly here in the local market, they wanted to find something that was exposed to US sports betting. 359 00:35:04,960 --> 00:35:09,960 So they went out and bought the only thing that they could buy, which was points bet. 360 00:35:09,960 --> 00:35:11,960 And the unfortunate thing is- 361 00:35:11,960 --> 00:35:12,960 Points bet lost that battle. 362 00:35:12,960 --> 00:35:16,960 And they did. And they were to be honest, we never had a position. 363 00:35:16,960 --> 00:35:19,960 And it looks silly when the stock went to 15 bucks. 364 00:35:19,960 --> 00:35:27,960 But the reality was it's a capital consuming business in the early stages. 365 00:35:27,960 --> 00:35:33,960 It was competing against a behemoth, really two big behemoths that have big pools of capital. 366 00:35:33,960 --> 00:35:41,960 So Flutter, as I said, had over a billion pound in EBITDA coming from the rest of the world, Australia and the UK being its two biggest markets. 367 00:35:41,960 --> 00:35:44,960 It already had a product. 368 00:35:44,960 --> 00:35:48,960 It had the benefit of product innovation across the globe. 369 00:35:48,960 --> 00:35:54,960 Australia basically created that multi-betting product. 370 00:35:54,960 --> 00:35:58,960 And they've parlayed that into- parlay is another word for multi-betting. 371 00:35:58,960 --> 00:36:02,960 They've put that over into the US market and done very well. 372 00:36:02,960 --> 00:36:07,960 But points bet was 100% reliant on capital markets and their ability to continue to raise capital. 373 00:36:07,960 --> 00:36:12,960 And even if they got another rise off, the reality is would they ever be able to compete against those big boys? 374 00:36:12,960 --> 00:36:14,960 I didn't think that they could. 375 00:36:14,960 --> 00:36:21,960 So when you go looking for these opportunities, do they have to be listed only or do you look at unlisted? 376 00:36:21,960 --> 00:36:24,960 Vastly what we do is listed. 377 00:36:24,960 --> 00:36:29,960 Okay. So, yeah, look, these cycles we see, right? 378 00:36:29,960 --> 00:36:31,960 You used to get this boom, you know, after pay. 379 00:36:31,960 --> 00:36:37,960 You get that particular thing rip up because essentially, you know, one door closes and other opens, right? Opportunities. 380 00:36:37,960 --> 00:36:45,960 So the most recent one, the past couple of months is our good old fan favorite, which helps me out with all my lovely social media. 381 00:36:45,960 --> 00:36:47,960 Our one big friend. 382 00:36:47,960 --> 00:36:48,960 Questions for today. 383 00:36:48,960 --> 00:36:50,960 ChatGPT. 384 00:36:50,960 --> 00:36:53,960 Yeah, I've been looking at Nvidia this morning. 385 00:36:53,960 --> 00:36:55,960 I think Nvidia jumped from like what, a hundred bucks? 386 00:36:55,960 --> 00:36:59,960 Adobe has gone up like four times in the past six months. 387 00:36:59,960 --> 00:37:03,960 Microsoft's gone up, you know, what, 200 or 300? 388 00:37:03,960 --> 00:37:09,960 Do you have any, I always get the question, you know, how do you get access to this space? 389 00:37:09,960 --> 00:37:10,960 How do you participate? 390 00:37:10,960 --> 00:37:15,960 What are your thoughts or do you think you can invest directly in a business to benefit from this? 391 00:37:15,960 --> 00:37:24,960 Or do you think the tool which is being created, you know, that's owned by Microsoft and Google is more of a tool than you're seeing efficiencies improve inside the businesses which have a particular outcome? 392 00:37:24,960 --> 00:37:26,960 What are your thoughts? 393 00:37:26,960 --> 00:37:31,960 Yeah, so what I would say is very early days. 394 00:37:31,960 --> 00:37:37,960 So understanding how this is going to play out is very difficult. 395 00:37:37,960 --> 00:37:49,960 But that's why I say something like Nvidia's performed so well because it's the picks and shovels of, you know, this iteration and technology kind of innovation. 396 00:37:49,960 --> 00:37:51,960 So that's why they're doing so well. 397 00:37:51,960 --> 00:37:59,960 Being able to predict who benefits the most and who's the most impacted is going to be quite difficult. 398 00:37:59,960 --> 00:38:02,960 And you're going to see that kind of play out over time. 399 00:38:02,960 --> 00:38:04,960 So I think we're still early days. 400 00:38:04,960 --> 00:38:10,960 You know, there's certain businesses that we've looked at that we think, you know, have exposure to that. 401 00:38:10,960 --> 00:38:23,960 They might not be the direct end product, but through that supply chain or the various stakeholders, there's going to be opportunity to invest. 402 00:38:23,960 --> 00:38:25,960 It's going to come back again to valuation. 403 00:38:25,960 --> 00:38:28,960 I was about to ask that. Do you mind if I rephrase that, right? 404 00:38:28,960 --> 00:38:36,960 You know, because we're seeing the same thing again, which you see time and time again, you get that foam of fear missing out, people ripping into it, you know, valuations start to pitch up, right? 405 00:38:36,960 --> 00:38:41,960 But just going back to your philosophy about how you invest, you're trying to find, you know, the Dutch-Ire sandwich situation. 406 00:38:41,960 --> 00:38:47,960 You're trying to find, you know, the consolidation in, you know, the gambling space in Australia. 407 00:38:47,960 --> 00:38:50,960 How do you deal with essentially the new tech? 408 00:38:50,960 --> 00:38:53,960 It's up and running. It's moving so, so quick. 409 00:38:53,960 --> 00:38:56,960 You know, you have to be in it. Valuations might not be there. 410 00:38:56,960 --> 00:38:58,960 How do you deal with that? 411 00:38:58,960 --> 00:39:01,960 Yeah, well, I would caveat to say that we don't have to be there. 412 00:39:01,960 --> 00:39:02,960 Right. 413 00:39:02,960 --> 00:39:14,960 So if you look at our history and the ability to generate those long-term returns, we haven't been rotating into the things that are the most popular at the time. 414 00:39:14,960 --> 00:39:18,960 We want to wait until those things become grossly out of favour and then buy them. 415 00:39:18,960 --> 00:39:27,960 So we, when Fang was going, Gangbusters, we weren't in that sector, but we still managed to perform okay. 416 00:39:27,960 --> 00:39:31,960 So to us, it's more, what is going to protect us over time is valuation. 417 00:39:31,960 --> 00:39:37,960 So what we do want to do is we want to monitor these things like a sports betting, like commodities. 418 00:39:37,960 --> 00:39:44,960 And we want to, we want to, we know it's going to be a longer, longer term thematic. 419 00:39:44,960 --> 00:39:49,960 And through that and over time, things will go from overvalued to undervalued. 420 00:39:49,960 --> 00:39:59,960 And we want to be in the right position and have having done the work when things are, when things are being mispriced. 421 00:39:59,960 --> 00:40:05,960 Right. So a good example would be, you know, we had positions in the semi-cap equipment businesses. 422 00:40:05,960 --> 00:40:12,960 So you CLAC, AMAP, the businesses that build the equipment that makes the chips. 423 00:40:12,960 --> 00:40:15,960 And we initiated positions in September of last year. 424 00:40:15,960 --> 00:40:25,960 At the time, everyone was talking about, you know, excess inventories in the space because of, you know, pull forward of ordering through COVID. 425 00:40:25,960 --> 00:40:31,960 Everyone was worried about not having inventories. So going from just in time to, you know, I just need a lot of inventories. 426 00:40:31,960 --> 00:40:38,960 You had China, US blocking of selling chips into China, the impact that would have on equipment spend. 427 00:40:38,960 --> 00:40:43,960 At that point in time in September, no one was talking about chat GPT. 428 00:40:43,960 --> 00:40:47,960 It wasn't on any, it wasn't in any broken notes. 429 00:40:47,960 --> 00:40:52,960 You know, those businesses over a six month period rose by 50%. 430 00:40:52,960 --> 00:40:56,960 But it got to a point where the valuation was no longer attractive to us. 431 00:40:56,960 --> 00:41:00,960 So we sold those positions. Yes, they've gone up a little bit more from there. 432 00:41:00,960 --> 00:41:10,960 But fundamentally, our job is to understand earnings power of these businesses and how you should value them. 433 00:41:10,960 --> 00:41:15,960 And sometimes though that valuation, when people are looking at a share price and the fear of missing out, 434 00:41:15,960 --> 00:41:22,960 what they can forget is the earnings keeping up with the multiple that you're affording that business. 435 00:41:22,960 --> 00:41:26,960 Yeah, it's just such an interesting space. It's like, it's easy to look at hindsight. 436 00:41:26,960 --> 00:41:29,960 Yeah, you don't do that. You wait till it comes off, consolidates, then you buy. 437 00:41:29,960 --> 00:41:33,960 And then you move into the next about it, which is chat GPT. It's up and running. 438 00:41:33,960 --> 00:41:38,960 And then your mind says like, yeah, but I should buy that. Right. 439 00:41:38,960 --> 00:41:43,960 It's like, but then all of a sudden you're back in the next horse. 440 00:41:43,960 --> 00:41:47,960 Yeah, it's just so interesting about it, how it all works out. 441 00:41:47,960 --> 00:41:50,960 So why don't we discuss your outlook? 442 00:41:50,960 --> 00:41:58,960 So, you know, with the markets where they are, you talk to one person on the street, I think the what's they're saying? 443 00:41:58,960 --> 00:42:03,960 The biggest bet on the street right now is everyone thinks he's going to be a hard landing. Right. 444 00:42:03,960 --> 00:42:07,960 And what's interesting about that is looking back at Michael Bori when essentially he called the JFC, 445 00:42:07,960 --> 00:42:12,960 you put the bets on in 2006, Niling went bankrupt and then took two years for that to come out. 446 00:42:12,960 --> 00:42:16,960 So there's an old quote, you know, don't be right, just make money. Right. 447 00:42:16,960 --> 00:42:23,960 So in saying that, and the reason I'm phrasing that way, we've seen everyone's been short this market for a while now, 448 00:42:23,960 --> 00:42:25,960 considering, but the markets had a big rally. 449 00:42:25,960 --> 00:42:30,960 So what are your thoughts on where the market's going and how you. 450 00:42:30,960 --> 00:42:38,960 Yeah. So again, they're always the toughest questions to answer, because for us, 451 00:42:38,960 --> 00:42:48,960 we're more focused on those longer term stories and when the market kind of misrepresents and becomes very short term in focus. 452 00:42:48,960 --> 00:42:55,960 And so when you get these periods where you get, you know, shorter term concern around recession, whatever, 453 00:42:55,960 --> 00:43:01,960 we won't know when we realize we're in a recession, we would have already been in one for two quarters. Right. 454 00:43:01,960 --> 00:43:06,960 So it's kind of backwards looking. It's always looking in the mirror. 455 00:43:06,960 --> 00:43:12,960 So in a short term, it's hard. But what I would say markets, you've seen big caps again rallying. 456 00:43:12,960 --> 00:43:19,960 So you fly to safety. You're seeing it not just globally, but you're also seeing it in the Aussie market. 457 00:43:19,960 --> 00:43:22,960 But underlying, there's actually been a lot of carnage. 458 00:43:22,960 --> 00:43:29,960 So with liquidity tighter, you know, smaller cap businesses, pre profitability businesses have been cut to shreds. 459 00:43:29,960 --> 00:43:36,960 So that is, I think, going to create opportunities for us as investors to invest capital, 460 00:43:36,960 --> 00:43:44,960 because there are some great businesses there that are at the at the point where they can continue to grow. 461 00:43:44,960 --> 00:43:47,960 But the market's not really focusing on them as an individual business. 462 00:43:47,960 --> 00:43:51,960 It's more around a shift and a move in where people are putting capital. 463 00:43:51,960 --> 00:43:57,960 I was having a conversation with an asset allocator a fortnight ago, and he was saying, 464 00:43:57,960 --> 00:44:04,960 yeah, over the last couple of months, we've taken all of our money out of smalls and mids and we've reallocated it to large caps. 465 00:44:04,960 --> 00:44:12,960 I just think it's a bit safer now. So that flow has a material impact on particularly businesses with lower liquidity. 466 00:44:12,960 --> 00:44:20,960 So we think that that actually is a big opportunity at this point to look for new ideas. 467 00:44:20,960 --> 00:44:32,960 One of the things I would also add to that is the most difficult thing today is predicting earnings power or earnings power of a business. 468 00:44:32,960 --> 00:44:44,960 So if you think back prior to Covid, you had a fairly steady market, you had rates low, there wasn't a lot of disruption. 469 00:44:44,960 --> 00:44:50,960 Businesses were just chugging along nicely. You actually go through Covid. It's an interesting period. 470 00:44:50,960 --> 00:44:56,960 For some businesses, it's been hugely disruptive. For others, it's pulled forward a lot of demand. 471 00:44:56,960 --> 00:45:03,960 So on the revenue line, there's beneficiaries and there's ones that have seen Covid being a detractor to their business. 472 00:45:03,960 --> 00:45:09,960 Then on the cost side, you've had inflation, which has come about over the last couple of years. You've had Russia, Ukraine. 473 00:45:09,960 --> 00:45:15,960 So it's trying to get an understanding of the true earnings power. You use Australia as an example because we all know the market. 474 00:45:15,960 --> 00:45:20,960 There's a lot of businesses that are tied to the health of the Aussie consumer. 475 00:45:20,960 --> 00:45:26,960 And as you said, sports betting, what did you have to do? You either walked around the park, you watched TV, you put on a bet. 476 00:45:26,960 --> 00:45:35,960 You also went onto the internet and bought a lot of stuff. You've seen a lot of pull forward. You've seen earnings at record levels. 477 00:45:35,960 --> 00:45:42,960 So where do the earnings of these businesses re-base to is going to be key? 478 00:45:42,960 --> 00:45:49,960 Into an environment where you've had the steepest uplifting rates you've had basically ever. 479 00:45:49,960 --> 00:46:00,960 And preceding that, people are entering into fixed rate mortgages. And that cliff is starting to come off. 480 00:46:00,960 --> 00:46:11,960 We don't know the impact of that. So what it means is it's quite hard to get the E right in a PE or in a multiple that you're looking at. 481 00:46:11,960 --> 00:46:16,960 That's the thing I would say is the most important point today. 482 00:46:16,960 --> 00:46:18,960 Focus on the earnings. 483 00:46:18,960 --> 00:46:22,960 Because the other thing which I'm hearing a lot as well is like there's growth at any price. 484 00:46:22,960 --> 00:46:26,960 People are like, yeah, we'll borrow a huge amount of money today. In 10 years, we'll pay it all back. 485 00:46:26,960 --> 00:46:35,960 And they blew up. And then now I'm speaking to business owners, a very good friend, sub security business, global ones, and all their mates in tech. 486 00:46:35,960 --> 00:46:40,960 All they care about right now is just tightening that belt, making sure it's profitability. 487 00:46:40,960 --> 00:46:46,960 And it just reminds me, it's very reminiscent when Gillard blew up the mining industry with that super tax. 488 00:46:46,960 --> 00:46:53,960 And you remember everything came off. But if you really look to what happened there, again, consolidation player, right? 489 00:46:53,960 --> 00:46:59,960 The miners that survived, the ones that cut all the discretionary spending that wasn't necessary. 490 00:46:59,960 --> 00:47:03,960 They focused on what they were doing. They ensured the profit margins. 491 00:47:03,960 --> 00:47:12,960 They just tighten that belt and they just waited and prepared for essentially because they for the commodity price to come back in their favor. 492 00:47:12,960 --> 00:47:15,960 And then the smart ones sold those assets into strength. 493 00:47:15,960 --> 00:47:19,960 And then they used the last that capital to go and expand again. 494 00:47:19,960 --> 00:47:26,960 Do you think that's essentially the smart, where the smart businesses right now? Is that what the strategy is? 495 00:47:26,960 --> 00:47:32,960 Yeah. So it's like, put it to you like wildfire. 496 00:47:32,960 --> 00:47:46,960 If we left nature untouched, you would get wildfires and it would clean stuff out and then it allows regeneration to occur and the natural process of nature taking its course. 497 00:47:46,960 --> 00:47:55,960 It's the same in business somewhat. You look at what happened again, use Australia here as an example. 498 00:47:55,960 --> 00:48:03,960 Money was free. It changed the way people behaved. It changed their perception of risk. 499 00:48:03,960 --> 00:48:14,960 So you look at assets like cryptocurrency, you look at businesses that were basically show me stories, concept stories. 500 00:48:14,960 --> 00:48:26,960 And that mindset was facilitated by your ability to get capital off people and just tell a great long term story. 501 00:48:26,960 --> 00:48:34,960 And investors were wanting to hear that. So that perpetuated the story again. It just became self-fulfilling. 502 00:48:34,960 --> 00:48:41,960 And management teams, they lapped it up and they went, well, I can grow. I can get capital. I can grow faster. 503 00:48:41,960 --> 00:48:49,960 And then all of a sudden the light switch is flicked and it becomes about profitability. 504 00:48:49,960 --> 00:48:57,960 And then you've got all these businesses that are overextended themselves. They're growing beyond their own cash generating capabilities. 505 00:48:57,960 --> 00:49:04,960 But the market turns quickly. One day they want growth, the next minute they want profitability. A business cannot change that quickly. 506 00:49:04,960 --> 00:49:15,960 So there's a lot of businesses out there and management teams that have been made to look the fool by listening to capital markets 507 00:49:15,960 --> 00:49:19,960 and not running the business how they probably think they should have ran it. 508 00:49:19,960 --> 00:49:26,960 Now, you're right. What this environment does is it weeds out the poor businesses. It reduces competition. 509 00:49:26,960 --> 00:49:33,960 So survivors are in a phenomenal position. We spoke about sports betting. 510 00:49:33,960 --> 00:49:38,960 If you look at that US market today, Flutter is 50% of that market. 511 00:49:38,960 --> 00:49:49,960 Everyone's dialing back expenditure on promotions except Flutter. They're leaning into it because they can. They're the biggest player. 512 00:49:49,960 --> 00:49:56,960 So this flywheel that they've created, this product that they can create by being 50% of the market, reinvesting, making the product better, 513 00:49:56,960 --> 00:50:02,960 and you've got a competitor that sits on 2% or 3% market share, how can you invest at the same rate as a business like Fangill? 514 00:50:02,960 --> 00:50:09,960 You can't. So that goes across multiple industries. So it cleans out the industry. 515 00:50:09,960 --> 00:50:17,960 I think that's a big positive as you move forward. You'll be able to find great businesses that are in pretty good positions to benefit from what's happened. 516 00:50:17,960 --> 00:50:25,960 And I think the best management teams you find recognize that in their businesses and they step into it. 517 00:50:25,960 --> 00:50:34,960 I'm 100% going to acquire that wildfire analogy going forward. 518 00:50:34,960 --> 00:50:41,960 Just the wildfire analogy, you can just see it. It just resets. It's the Australian wildfire. It just makes so much sense. 519 00:50:41,960 --> 00:50:45,960 But if you look back throughout history, historically, it happens all the time. 520 00:50:45,960 --> 00:50:52,960 We've got very short memories. Again, it's because we draw our attention to the shortest data point. 521 00:50:52,960 --> 00:50:56,960 So we write monthly reports. People look at our monthly returns. We can have the utility. 522 00:50:56,960 --> 00:51:01,960 Plus information right now. TikTok, seven seconds. Seven seconds is what it requires to essentially capture your attention. 523 00:51:01,960 --> 00:51:09,960 The youth coming through today, right? It's very interesting to see what happens in about 20 years' time. 524 00:51:09,960 --> 00:51:24,960 So how can listeners and investors access the funds? Are you on platforms? Are you on any investment bonds or anything equivalent? 525 00:51:24,960 --> 00:51:35,960 Yeah. So as I said before, for people out there who want to access our products, you can do it really in two ways. 526 00:51:35,960 --> 00:51:39,960 You've got the managed funds, which is on most of the platforms out there. 527 00:51:39,960 --> 00:51:44,960 So pretty much all of the big platforms, all the relevant platforms, we're on those. 528 00:51:44,960 --> 00:51:53,960 So both our global and our Aussie equity strategies. And then we've also got that listed investment company. 529 00:51:53,960 --> 00:52:01,960 Now, the great thing about listed investment companies is very easy. It's like going to buy BHP, going to buy Commonwealth Bank. 530 00:52:01,960 --> 00:52:07,960 You just go onto ComSec, you type in the ticker PGF, and you can buy a stock like any other. 531 00:52:07,960 --> 00:52:17,960 So it's product for different types of people. So advisors out there, the managed funds, obviously an easier or an easy alternative. 532 00:52:17,960 --> 00:52:21,960 But for retail investors out there, you have the listed investment company. 533 00:52:21,960 --> 00:52:23,960 With the managed fund, what's the liquidity? 534 00:52:23,960 --> 00:52:27,960 Daily redemption. Daily application and redemption. 535 00:52:27,960 --> 00:52:33,960 Yeah, right. So if I stick in, say, with a particular platform at 12 o'clock with a cutoff, I'll get the money out the next day. 536 00:52:33,960 --> 00:52:37,960 That's good to know. How much, sorry, how much money is in the fund currently? 537 00:52:37,960 --> 00:52:45,960 So if you look at the listed investment company, that's about a little over 700 and the managed funds just under 700 million. 538 00:52:45,960 --> 00:52:51,960 And you did touch on alignment, but what are the fees? 539 00:52:51,960 --> 00:52:58,960 So basically the fees, there's your base management fee, which is one percent. 540 00:52:58,960 --> 00:53:03,960 And then you've got a performance fee, which has a cash and index hurdle. 541 00:53:03,960 --> 00:53:04,960 What's the index? 542 00:53:04,960 --> 00:53:08,960 The index is the MSCI Global. 543 00:53:08,960 --> 00:53:12,960 MSCI Global. Another question I keep getting from clients is what's the style of the fund? 544 00:53:12,960 --> 00:53:18,960 And the reason I'm phrasing this is you go onto various research houses and they say, oh, there's people who are active. 545 00:53:18,960 --> 00:53:21,960 But then you do a bit of digging. They're not actually active. 546 00:53:21,960 --> 00:53:26,960 So what would you say is your style of investing from an activity standpoint? 547 00:53:26,960 --> 00:53:35,960 So from a turnover perspective, the turnover of the funds is 25 to 30 percent. 548 00:53:35,960 --> 00:53:41,960 So relatively low turnover, but it's a function of that long term investing. 549 00:53:41,960 --> 00:53:44,960 So we're really focused on the things we do own. 550 00:53:44,960 --> 00:53:51,960 From the tag, you often get the tags of value versus growth. 551 00:53:51,960 --> 00:53:58,960 I kind of don't like those terminologies because my view has always been that those categories are porous. 552 00:53:58,960 --> 00:54:01,960 You want to buy a stock that's in the value category. 553 00:54:01,960 --> 00:54:06,960 You want people to realize or you want your view of the ability of that business to grow, 554 00:54:06,960 --> 00:54:10,960 to be recognized by the market and then has become a growth business. 555 00:54:10,960 --> 00:54:12,960 So Visa is a classic example. 556 00:54:12,960 --> 00:54:22,960 I bought that back in 2011 when it was considered to be an old world payments network. 557 00:54:22,960 --> 00:54:30,960 And it was viewed as being a value stock because people misunderstood or feared transition, 558 00:54:30,960 --> 00:54:33,960 which didn't come to play and impact that business. 559 00:54:33,960 --> 00:54:41,960 And it's continued to execute very well and grow its earnings in the mid-teens per annum. 560 00:54:41,960 --> 00:54:43,960 And it becomes a growth business. 561 00:54:43,960 --> 00:54:50,960 So I think it can be used as an excuse for people because they say, well, our fund was down because we own growth stocks. 562 00:54:50,960 --> 00:55:01,960 No, you own stocks that were being mispriced by the market and the market's now changing the value of how they should price those stocks. 563 00:55:01,960 --> 00:55:04,960 So yes, they were growth, but they were overvalued. 564 00:55:04,960 --> 00:55:10,960 And you didn't take into consideration, it goes to your view or comment before, and growth at any price. 565 00:55:10,960 --> 00:55:14,960 Well, this is what I'm finding difficult sometimes is you go through the list and say this is a growth fund. 566 00:55:14,960 --> 00:55:18,960 But essentially, my understanding of a growth fund, it should be growth. 567 00:55:18,960 --> 00:55:21,960 A global growth fund should be anything global growth. 568 00:55:21,960 --> 00:55:25,960 But what we're starting to see is one just focus on the NASDAQ or just focus on this. 569 00:55:25,960 --> 00:55:27,960 So essentially, this is moving up in line. 570 00:55:27,960 --> 00:55:30,960 And if it comes off like 50%, oh, we still beat the market. 571 00:55:30,960 --> 00:55:31,960 But I'm going to hold on a second. 572 00:55:31,960 --> 00:55:34,960 Your job is to get us up the mountain, down the line of the other side. 573 00:55:34,960 --> 00:55:35,960 Isn't that correct? 574 00:55:35,960 --> 00:55:46,960 And again, that's why our funds have always been a very open mandate because what we found over time is capital can go in and out of whether it's growth, 575 00:55:46,960 --> 00:55:54,960 whether it's value, whether it's emerging markets, whether it's developed markets, whether it's commodities, whatever it might be. 576 00:55:54,960 --> 00:55:57,960 We want to be able to play any of those things when we see opportunities arise. 577 00:55:57,960 --> 00:56:04,960 We don't want to get ourselves pigeonholed and being stuck there and saying, well, we really market ourselves as a growth fund. 578 00:56:04,960 --> 00:56:07,960 And then all of a sudden, what are you going to do? 579 00:56:07,960 --> 00:56:12,960 Or you basically start buying other things and pretending like they're growth things. 580 00:56:12,960 --> 00:56:16,960 Or you see that today with technology and innovation funds. 581 00:56:16,960 --> 00:56:23,960 It's like you look at some of the stuff that these people own and sitting there saying, I can't really quite see the innovation play that you've got there. 582 00:56:23,960 --> 00:56:26,960 But you need it because it's the only place you can find value. 583 00:56:26,960 --> 00:56:32,960 So what we try to do is not label ourselves as being something or, you know. 584 00:56:32,960 --> 00:56:37,960 I think that's something quite politically, you know, maybe in or out of favor. 585 00:56:37,960 --> 00:56:40,960 But like I appreciate what everyone's doing with ESG. 586 00:56:40,960 --> 00:56:41,960 As an example, it's the right thing. 587 00:56:41,960 --> 00:56:43,960 You should be ESG mindset. 588 00:56:43,960 --> 00:56:44,960 But I've looked at the numbers. 589 00:56:44,960 --> 00:56:49,960 That's actually the best way to play the history trade for the past five years has been commodities. 590 00:56:49,960 --> 00:56:55,960 It's not actually to invest in a company that's associated with ESG or has a tagline or makes things pretty or this any other. 591 00:56:55,960 --> 00:57:00,960 If you want to invest in that ESG trade, it's been the commodities play. 592 00:57:00,960 --> 00:57:02,960 You agree with that? 100 percent right. 593 00:57:02,960 --> 00:57:11,960 Now, the interesting thing about ESG is again, it's one of these things that happens in markets, which actually drives the inefficient allocation of capital. 594 00:57:11,960 --> 00:57:19,960 It's pushing capital to areas where people think that it should go. 595 00:57:19,960 --> 00:57:29,960 So if you actually look at and we use that as a filter, we look at those things and say, is that creating an opportunity for us to buy assets that are being mispriced? 596 00:57:29,960 --> 00:57:39,960 So if you look at the best trade around ESG was actually to go and buy the businesses where this capital was sucked from. 597 00:57:39,960 --> 00:57:41,960 So that was fossil fuels. 598 00:57:41,960 --> 00:57:55,960 So if you look at oil as an example, the end of 2021 energy in the S&P 500 as a sector weight was 2.5 percent, the lowest it had ever been. 599 00:57:55,960 --> 00:58:01,960 If you go back to the late 70s, that was closer to 30 percent. 600 00:58:01,960 --> 00:58:04,960 If you go to just before the GFC, it was about 15 percent. 601 00:58:04,960 --> 00:58:07,960 So basically no one was invested in that sector. 602 00:58:07,960 --> 00:58:13,960 On top of that, you had shareholders basically telling corporates not to reinvest in supply. 603 00:58:13,960 --> 00:58:17,960 So basically saying we don't want you to shell Exxon. 604 00:58:17,960 --> 00:58:19,960 We don't really want you to grow production. 605 00:58:19,960 --> 00:58:25,960 We want you to give us all the cash back because we see this cliff of oil demand in 10 years. 606 00:58:25,960 --> 00:58:26,960 So don't reinvest. 607 00:58:26,960 --> 00:58:34,960 Then you had governments going out and telling corporates that they couldn't reinvest back into production. 608 00:58:34,960 --> 00:58:40,960 The US government, a classic example, basically not allowing businesses to reinvest back into production. 609 00:58:40,960 --> 00:58:44,960 The Dutch government telling Shell that they had to reduce their emissions by 40 percent. 610 00:58:44,960 --> 00:58:53,960 So all of this created an environment where it was ripe for supply demand imbalance within oil and gas space 611 00:58:53,960 --> 00:58:58,960 and a mindset of corporates to change their view of returning capital to shareholders and not reinvesting it. 612 00:58:58,960 --> 00:59:04,960 So we invested in that space. We invested in oil and gas. We invested in met coal. 613 00:59:04,960 --> 00:59:16,960 The most overvalued stocks were wind, renewables, and businesses where they hadn't proven to the market 614 00:59:16,960 --> 00:59:21,960 that they could generate a healthy and sufficient return on capital over time. 615 00:59:21,960 --> 00:59:28,960 But capital went there because you had big asset allocators, super funds, big endowment funds saying, 616 00:59:28,960 --> 00:59:32,960 well, we need to have an ESG component. We need to have ESG in our funds. 617 00:59:32,960 --> 00:59:41,960 So push capital to that limited space, limited availability in terms of things you could buy and push this valuation up. 618 00:59:41,960 --> 00:59:46,960 I'm all for ESG if it's done well and correctly and the people benefit. 619 00:59:46,960 --> 00:59:49,960 Like I'm a big fan of like social impact investing and that type of thing. 620 00:59:49,960 --> 00:59:51,960 What I don't like is greenwashing. 621 00:59:51,960 --> 00:59:53,960 Yes, I think that's the outcome to bear. 622 00:59:53,960 --> 00:59:58,960 It's just the human nature and the sociopaths out there that go, hey, you know, great idea to make some money. 623 00:59:58,960 --> 01:00:01,960 Let's just push this thing. And they've got no actual interest in delivering upon it. 624 01:00:01,960 --> 01:00:05,960 And then it just creates an industry, pushes everything up and then, to be honest, 625 01:00:05,960 --> 01:00:07,960 I agree 100 percent. 626 01:00:07,960 --> 01:00:12,960 Because if you think about our business and what we're really doing, as I said, 627 01:00:12,960 --> 01:00:17,960 to answer the first question is when you're looking at when we're looking at businesses 628 01:00:17,960 --> 01:00:20,960 and we're wanting to be owners of businesses over a long period of time, 629 01:00:20,960 --> 01:00:27,960 what's most important to us is the ability for that business to generate and grow cash flows over time, 630 01:00:27,960 --> 01:00:32,960 then what they do with that cash flow and then what the market's willing to pay for that cash flow. 631 01:00:32,960 --> 01:00:39,960 That's the focus. Cash flow in very short periods of time, 12 to 24 months, can get out of whack. 632 01:00:39,960 --> 01:00:43,960 You can have volatility in cash flow, but we're worried about that longer stream of cash flow. 633 01:00:43,960 --> 01:00:52,960 Now, to know that, you have to understand governance, environmental, social. 634 01:00:52,960 --> 01:00:55,960 We've been doing it for 25 years. 635 01:00:55,960 --> 01:00:59,960 You have to do that when you are looking at cash flow. 636 01:00:59,960 --> 01:01:07,960 To say that you don't do that is you're neglecting three things that drive cash flow over time. 637 01:01:07,960 --> 01:01:10,960 So we've been doing it since we started this business. 638 01:01:10,960 --> 01:01:14,960 Paul's been doing it for 30 years. It's the crux of what we do. 639 01:01:14,960 --> 01:01:20,960 We don't need to get out there and wave a green piece flag to tell people that we're doing it. 640 01:01:20,960 --> 01:01:23,960 Now, Kevin, I know you've got another meeting to jump to. 641 01:01:23,960 --> 01:01:27,960 I think we definitely should have you back on because I'm really, really enjoying this conversation, 642 01:01:27,960 --> 01:01:28,960 probably about six months' time. 643 01:01:28,960 --> 01:01:29,960 Sounds good. 644 01:01:29,960 --> 01:01:33,960 I think this will be a lot of fun, probably a bit longer one next time. 645 01:01:33,960 --> 01:01:37,960 So is there any thoughts you want to leave our listeners with? 646 01:01:37,960 --> 01:01:39,960 I think we've touched on a fair bit. 647 01:01:39,960 --> 01:01:40,960 We've touched on a lot. 648 01:01:40,960 --> 01:01:49,960 We'll have happy investing for the next six months and we'll come back and we'll diagnose what's played out. 649 01:01:49,960 --> 01:01:50,960 Sounds good to me. 650 01:01:50,960 --> 01:01:53,960 Well, thank you very much for coming on The Rate of Change again with your cloth management. 651 01:01:53,960 --> 01:01:54,960 And I hope you have a great day. 652 01:01:54,960 --> 01:02:21,960 Cheers. Appreciate it. 653 01:02:24,960 --> 01:02:39,960 Thank you. 654 01:02:39,960 --> 01:02:45,960 Any views expressed in this recording do not represent a view of any other third party and other sole personal opinions of the speaker. 655 01:02:45,960 --> 01:02:49,960 Any reference to financial product does not constitute advice or recommendation, 656 01:02:49,960 --> 01:02:53,960 and before any action you should seek proper advice from your financial professional. 657 01:02:53,960 --> 01:03:01,960 Australian listeners should head to www.moneysmart.gov.au to find more information on obtaining financial advice. 658 01:03:01,960 --> 01:03:10,960 To get in touch with York, head to our website www.yorkwealth.com.au. 659 01:03:10,960 --> 01:03:17,960 Any views expressed in this recording do not represent a view of any other third party and other sole personal opinions of the speaker. 660 01:03:17,960 --> 01:03:21,960 Any reference to financial product does not constitute advice or recommendation, 661 01:03:21,960 --> 01:03:25,960 and before any action you should seek proper advice from your financial professional. 662 01:03:25,960 --> 01:03:33,960 Australian listeners should head to www.moneysmart.gov.au to find more information on obtaining financial advice. 663 01:03:33,960 --> 01:03:52,960 To get in touch with York, head to our website www.yorkwealth.com.au.