Mailbag, incl: How do I respond to the AI threat with ETFs? February 22, 2026

[Music] A list-nuff production. [Music] Cheers, Marka. The S&P, the Irish X to toss. This is the Motley for Money, Mailbag. Welcome to Motley for Money. I'm not going to bid around the bush. Of course, it's our special Sunday morning Maabag edition. I tried to make it different last week. That's not my bag. My bag is doing the same thing over and over again. If you listen to this podcast, you know, that's exactly what we do. What does that mean? Of course I mean. The only way we know how to roll. That man, of course, is Andrew Page, who, despite our tendency to repetition and repeating ourselves and repeating ourselves to repetition, actually launched a brand new idea. It was a kernel of an idea that all of a sudden has become a world-beating business of the like. We haven't seen before. That, of course, is strawman.com. And is Australia's premier online investment club. Of course, Andrew, Ram, Page, Mr. Page, could I? Hello, you mate. How are you feeling, mate? I'm fine. I'm cringing a little bit. Which I know is the intended purpose of that. You might be from the billionaire's brand. All I'm saying is Bill Einer. Thank you. So you can be an air. You see it? It's larger numbers. My Kenna Brooks, who, by the way, lives not far from me, half-time to fame. I can't just see him driving past. It's as close as I get to the money. He's lost $7.7 billion in wealth with a sell-off of text from the US. Oh, I see it. That's it. So the poor bloke, he's now only worth $7.9 billion. I think the market, the market wealth is if you lose $8 billion and not realise it. That's pretty much, you know, his lifestyle is not changing. Dramatic, dramatic fault. Tick has been absolutely smashed. I've drove that a couple of times. But yeah, just all the numbers during the week in the paper. Just happened to come up. People were talking about your billion dollar wealth. You're not quite in his league yet. But if Alessia falls any further, we may well have a strizer to New West. Yeah, I'm just man. That's all I'm saying. Well, we'll see. Man, late 2021, it was 460 bucks near enough of shit. It's 83 today. Crazy, hey. Do I could give it the market take of the way? Yeah, I mean, it's, it's, it's, I haven't done the work on it. But I would imagine a very big part of that is not necessarily the business. Perhaps not performing as well as otherwise might. But just at that point in time, things were just stupidly priced. Can I, can I, can I say it just quickly? So this is US dollars and I can't do the math in my head quickly enough. Americans market cap in the US is $22 billion US dollars. Right. Okay. Get that in your head. Prometheus is Australian market cap after its fall of two thirds is $13 billion Australian dollars. I have nothing to put those two together and say those numbers make sense. Am I missing something? Growth, I suppose, would be the answer. One's got a longer runway potentially. It's hard to disrupt. I mean, this is the problem. It's exactly the problem. It's not, and I, I repeated, you talk about repeating ourselves and not being original. But, I mean, it's, people have got to go beyond the, but it's a good company. It's like, yeah, okay, that's good start. Good start. Good start. Keep going. I guess it's a good price. That's so strong. For the most part. It's a necessary start, right? Particularly with the Lassian as well. I actually think this has been overdone. Like the narrative to sure at moment seems every business out there. It's going to vibe code its own CRM and its own workplace communication. So, which is, I just, I feel as if we're a long, long, long, long way from, from, from that. So, I suspect it's probably the market doing what the market does, which is like taking a nugget of truth and running too far with it and then running too far in the other direction. Yeah, that's right. Which is not an recommendation to say it's cheap. Now, I don't know. I haven't looked close enough. But, but it tends to be the way, right? And I can tell you this, more people would have been buying back at 460 than they are at 83. That's also true. And that's, told me a Friday about, you know, you get, you get sentiment amplifies, whatever's happening in the line business. Generally not every time. And if nothing much is happening, it doesn't change much. But when it gets to extremes, that we're starting really does go all over the place. Very reasonable to believe that maybe Lassian was stupidly evaluated at 450 bucks and maybe so I evaluated at 80. Or it could be the case that was, you know, fair value at $300 only 12 months ago. And now it's worth two thirds of that. I mean, take what you want from it. Just to lay it out a little bit more, just looking at the most recent. Is this quarterly? Yeah, December 2025 quarter revenue grew 23%. You know? And then income was down. That's, yeah. You know, it went up as well. I mean, it's always a complex story. But it's like, you know, not too many business owners would be upset that they sold 23% more. It's quartered and they did the previous quarter. So, it's me in which I come to the week after a temple or a webster. E grew, it's like 20% in the half year. And the shares fell like 33% on the day. And you kind of, again, you can't guarantee revenue is going to deliver profit. And that profit's going to be enough to justify the current price. But you do wonder what people were expecting. This is a business that's been running at break even try built scale. And I do think sometimes, you know, this is where it's worth. Don't be contrarian for the sake of it. Don't just disagree with the market or, or say, the markets up there for I should sell. Well, the market's down there for I should buy that. That's mad because sometimes the market's right. And sometimes it's down because it was just stupid expensive in the first place. Maybe, maybe the market thought the sales would double rather than up up by 20%. But if you're doing, I've said before, mate, more customers, more relevant to more customers more often. That is my, I'm not a revenue guy. I'm not a price to sales guy. But if you want to see, is the company in the right, heading in the right direction? There's only more staff to more people, more frequently. That's a very, very, very good sign that the company's doing something right. And I think whether it's Temple of Webster Awards, it's at last year, I have no view on it. It's at last year and all as a stock, by the way. But it's hard, hard to be unhappy with that unless you are the market who just. There's not paying attention to the business, but just focusing on the share price and the fear that's going around. I do wonder, mate, I'm not going to bookmark or date stamp anything. But I wonder, I would like to hope that if we do this podcast in 1999 and 2000, we would have called out the silliness of the tech bubble and the largely rational-ish rationality of the subsequent crash. But I'm also not that arrogant to believe I wouldn't have gone, gee, that's gone down a lot. Maybe they may be pets or commies oversold. Maybe I who is worth more money. Maybe whatever it is, you know what I mean? So I kind of. I'm trying to catch myself, and this is the hardest part with being an investor. It's so much easier if you can just be arrogant because then you don't have a question about judgment. You just want to live through life. You know, not caring. It's a lovely. You know what this is? It's a lovely place to be. If you just go, "I know, I'm sure I'm right. Just do your things." I'm like, "Okay, I guess you're right." I just wonder in hindsight whether we'll look back and go, "Man, it's a massive overreaction to AI cell-off-wheel-right or dudes." These things are rather stupidly valued anyway, and AI wasn't even ever the issue. Or AI actually did destroy South Swarters' business, unless it's business-oriented. You know, a year after this podcast was done, it was sold to Microsoft for a billion dollars. "Yeah, I don't know. I have no idea what will happen." And it's just. It's so tempting to look at this and think we know in any circumstance. And the hardest part is kind of going. It's knowing enough about the bare case to live with those doubts. That's still my engagement call anyway. I have no. I've noticed it's not. I have no of your Prometheus. I think I probably, rather, and less than the Prometheus, if I had to make a choice for I think the current prevailing price is fine. Oh, I get Prometheus. That's your realy. Yeah, yeah, yeah. There you go. So we'll see. What's your cover to next from? To my view. Sorry, man? But here's the other thing though. What have we done the right thing now? Yeah, right. I could very much see. Well, this is what I've done with property, right? So I'll die on this hill. I think it doesn't make any fundamental sense. Everyone knows that. And yet, and yet the facts are the facts. And so given that predilection, I think in 1996, we both could have gone. Yeah, I mean, the internet's interesting. It's kind of cool. Maybe it'll change the world. But really, some of these names that Yahoo, like what the hell is for a serious business name? They don't even have a model. They don't even have revenue. I think the market's frothy. And you know what? I think history has proven that to be a very reasonable conclusion. And yet between 1996 and the peak of the bubble, the Nasdaq went up fivefold. And then when it crashed, it didn't go anywhere near. It was 96. So. Yeah, 100%. I think there's so many lessons to draw from that period. But I think that is one of them. It's sort of like. I have learned the hard way, the paramedic is being a great teacher here on this front, is that you never, ever, ever want to ignore valuation. Price matters. Price matters a lot. We talk about it all the time. But when it comes to very, very fast growing companies with very strong modes and a big large market opportunity, you don't overthink it too much. But even then, you would have got OK. It's silly when the Nasdaq said 1000. Now it's a 2000. Now it's a 3000. I can see myself totally missing the big part of the upside. And then I could see myself crashing and going, "Ah, ha, see. I was right." And then not backing up the truck and making a generational capital allocation decision right then and that. It's easy in hindsight, but I think in the colors rest of the market, the risk for me and my persona, I would have been too early to get out and not quick enough to get back in. I think that's right. I would have mucked it up. I don't know. I was there. I did muck it up. But I mucked it up. If I could go back now, I would muck it up for more sophisticated reasons. I just mucked it up for stupid reasons back then. Mainly being that I was doing all the things that we laugh at, because I was very, very young. Very, very new to it. It was like, "Oh, tech. Oh, prices are going up. Everyone around me getting rich." I want some of that. I want some. That was it. That was it. What is this company doing? I don't know. Internet? Something internet? I don't embarrass you. I don't disagree with you. I only don't want to assume that I necessarily know better this. Because you look like, "Yo, I was so silly then I won't be silly anymore." 20 years old will look at you and go, "I was so silly then I won't be silly anymore." I know. Human nature is human nature. It's not about the circumstances. Look at the text now. Text now of 14-14 hours, 12 months on the ISX. I don't know what the NASDAQs would mean when you're as much as I suspect, but maybe it is. You can look at that and go, "Oh, I mean down a lot looks like down a lot in cheap, but if down a lot is 85% of the NASDAQ is a cheap no. Not as expensive at that point, but not obviously cheap." I don't know. I'm not making a case either way, other than to hold out the reality of that situation. Absolutely. Here's another easy mistake to make. We talked about it last year. It was at 400, would I say, 460 in November 2021. I'm very smart, level-headed, patient investor. I'm not getting involved in that. That's ridiculous. I wait a little bit. Let's wait one year until November of 2022. Now it's $123. I'm going to buy it. It's definitionally cheaper. Yet here we are four years later and it's down 60% from there or whatever it is. This stuff is hard. It's always illustrating the point that you may. It's like whatever decision framework you need, it's not the recent trajectory of the share price is going to be your least useful thing to focus on. Especially over the long term. It may or be that if a share is falling because people hate it and change their minds anytime soon, maybe not who knows. But over the long term, that doesn't determine the business quality as you pointed out or what actually does or its ability to earn money. Hey, my land's had us a message. We should get on to a question from our listeners. I only 12 minutes and that's actually bad for us. Highscore in Andrew says Milan. Milan, Milan. I'm going to say Milan and I hope I'm getting it right. Firstly, thank you for your persistence, which I think you mentioned, we repeat ourselves a lot. In educating us on Australian companies and the ASX. While investing in overseas businesses is important due to the potential greater returns, I think it's important and prudent to have exposed to your home land's businesses so your ability to engage and passionate to educate on the businesses listed on the greatest country on earth is greatly appreciated. Thank you. That's a very kind of you. Now, after that, a question from a Cosmisshae. No, no, it's a question. No, it's a question. I own shares at an ASX listed insurance company. I'm fond of. And I bought some shares a couple of years ago. Since then, the share prices are appreciated by a good amount. But I'm still as bullish as ever on the business. I believe it has a lot more room for appreciation of the share price. And my investment thesis continues to hold. I do not believe in my mind, this is because of the momentum of the share price growth, but because I believe in the business continuing to perform well. It's a bloody good start so far. I'd like to increase my exposure to the company in my portfolio by buying more shares. But I want to understand how I can determine if I should do so, as the prices increase from what I initially paid. And I'm hesitant to increase my average purchase price. We know about the common idea that if a business you like has had a dip in the share price, buying more can be a good strategy, as it can be looked at as if the shares are on sale. But I'm not sure about the other direction. How do you ensure, Asmalan, you aren't buying because of the increase in share price, being seduced by short-term movements, but because you still believe the fundamental business is good value at that price, regardless of it being elevated from your initial purchase. How can you determine you may have initially underestimated the quality of the business, or is it better to avoid altogether to ensure your ego isn't clouding your judgment? Thanks, and all of us, Malan. That is a remarkably level-headed and prescient question to ask. Very, very nice. You don't even understood. Your self-healing said, "You should very, very well." So the question remains, how can you be sure when you're buying more at a higher price, you're not just doing it because you feel good because the price has gone up? Well, you can't, because you're the easiest person to fall. Forget which investor said that, but it's true. Like we will convince ourselves of anything to preserve our ego. So you can't ever be 100% sure. I think the only way, the only sensible way I've ever been able to answer that question for myself is to do a valuation, which always puts people off because it sounds hard, and it's really hard, and it's tricky. But I think we just talked about it with Atlassian. The share price is not, as Malan has rightly said, it's not going to be useful to you at all. So it's like, the only thing I need to know, I mean, it's simple, but not easy. The only thing I need to know is how much is the company, quote unquote, really worth and is the market giving me an opportunity to buy it for less than what it's really worth. And if it is, I should buy it. Like that's pretty much it. Maybe there's some considerations around waiting and that kind of thing, but other than that, it's as simple as that. So as I've said before, I mean, you might have bought it at twice the current price or at one tenth the current price. It doesn't matter. It's at the current price. Should you hold? If you've done a valuation and you think shares cheap, based on some conservative reasonable assumptions, then you should hold. In fact, maybe you should buy some more. If it's fallen in half and you do that same analysis and you're going, "God, it's not actually not that cheap." Well, then you should sell. I mean, I say it as if it is easy. Conceptually, it's super easy. How do you know? But as I've always said, it's, you'll never know, but going through the process and trying to know, we'll get you a lot closer. It's better than just going on vibes, right? Or share price momentum. But you know, it's just like some numbers out of the air, right? It's a starting point just to get a feel for it. I don't know. They make in a dollar per share in earnings. I know. 10% a year, that's what they've seemed to have done. Management's talking and going, "I reckon they can grow 10% more." I'm like, "Great. Do that for five years. What's the earnings per share then?" Brilliant. What kind of multiple do you think the market will give it? I don't know. Just give it a nine of 16 as a start. It tends to be the long-term market ever. What does that give you? Is the share price up or down? Account for the time value. You can discount it back to today's price. But that's it, really. And of course, you'll be going, "Well, I can make that number anything I want by just choosing the right two variables." Yes, you can. Yes, you can. That's the point. The point is that you know, the value is that a quage in there. If that is what the market is trading at multiple-wise, if that's what the earnings per share is, that is exactly what the share price is. It's a circular logic. It's implicit in the very calculation that you're making. But at least I now know what needs to happen. It's not just, I think, the share price will go up. I think a combination of earnings and multiple growth will give me a price that's around that. That's what you're doing. And so, yes, you're still making a guess. You're still having to rely on the assumptions of the future. But it's not just in terms of what Mr. Markets is going to do. It's just purely on how much you think it can grow. I've often found it more as a reason not to do something. It's like, well, you look at a particular business and you go, "All right, I'm just going to take management at their word. They reckon they can do that. Let's see they do that." And I'm going to assume the market's in a really great mood. And it's trading at a very elevated PE. And you go through the exercising and goes, "Wow, I do that." And I grow earnings per share at 50% per year for 10 years. And then I give it double the market multiple. And it's still below the current share price. All that, now, those forecasts might be incredibly wrong. But I now I know what needs to happen. It says to me, if you're buying shares today and expecting a good return, you must expect some combination of higher than 50% compound earnings growth or higher than double market multiple, one of the two or a combination of the two. And then the question is much easier. Do you think that is likely? Not do you think it's possible? Anything's possible. There's all kinds of nonsense, irrational things out there. But is it likely? And for five years' conversation, is it likely based on some reasonable interpretation of the facts? Not just because you think it is. So it's kind of there's some groundedness of what would have to happen for that to be possible. And go a couple of levels there. Is it possible sales go 20%? It's possible. Is it likely? Okay, yes. Okay, why is it likely? What are they going to have to do? Is it a pricing crisis? Is it a new market? Is it a new product? Is it new customers? Is it market growth? Have a view on those things to get to the point of the judging the likelihood with some degree of rational? Not even, it's because there's no evidence for the future. But how will they get there? Well, they have to do. And how will you know if they're doing it? And I want to really low bar to hang over. I want to mention the stock. Because it's too liquid. But I was mentioning a stock to you off air before we hit record. They've released results. So I'm really happy with Sun really well, right? But part of it's not an exciting business. It's really not an exciting business at all. But when I was doing the analysis, it's kind of like, well, hang on. The p at a time was eight or something insanely low. And it's like, even if they only grow at, you know, GDP type levels of growth, even if margins don't move, even if it's sort of like, it was really easy to get a good return. It doesn't mean it was guaranteed. But in terms of the future potential outcomes of all the 200 different scenarios you could have done, 90% of them gave you a great return. And 10% of them didn't. So it's sort of like, there's that asymmetry again. I don't know the future. But it's like, not a lot has to go right for me to make money on this. As opposed to everything has to go right with these other business and then some. And then I might get a market every return. Like, you know, I guess right. Milan, I'll look at that from from Ram's perspective is the question you got to ask yourself, the price is higher. That's good thing. Most prices do go higher on quality businesses. Big any company that, when you grow company of today and look at the share price 20 years ago, I asked myself which one you wouldn't have bought at that price because that would have been up on the price five years earlier. More often than not, right? They have the actual years but work with you as a broad idea. So, you know, CSL went from two to 300. At what point between there are those numbers, would you, would you not bought? Now it's fallen since. Maybe there's a point, but would you two five, 10, 20, 40, 100. All those prices below the current share price. So don't be frightened of prices increasing. You're right to be concerned about confirmation bias, particularly when it's a host-stroking confirmation bias. Look how much genius I was right. This company is really great because the share price up things going well. Now you've said you won't be impacted by that and you're right, but you're also mindful saying, "Maybe it's a ego, so how do I make sure that I don't fall under the trap?" And that's exactly the right question. Ram's point is the right one. Look at the earnings power of the business. Don't look at the share price. If the share price got up because of the PEs expanded, that's probably not great. I know, let's feature it genuinely brighter. If you've got up 'cause earnings are working and the PEs stayed the same and share price up 'cause earnings are up, that's great. Again, as long as they have future growth ahead of them, because that's the other thing, if they've got to maturity all of a sudden, banks have a great example. They spend, well, these are better examples, actually, because banks are controversial. Well, I worked for these in the 80s and 90s. They. Yeah, come on. You're not that old. You're paying the child's noise. 92,000. 90s, 90s, 90s, 90s. 80s, 90s. Well, maybe the child's labor was a bit different. I mean, I know my old bro, but that's. That's what he is in my mind. With the same age and just with my own sanity, I cannot believe that you're in the workforce proper in the 1980s. What in his in nine months? No, I was actually. Well, this was my first part-time job. It was the early 90s, you're right, but it was very early 90s. You're more productive than me. I was playing Super Mario Bros. I had a few on the go. So, yeah, so my point was they went almost broke. I think I might have even learned in the administration. I certainly bought out by private equity at one point. They released on the stock market. And they spent the best part of 40 years consolidating the grocery industry. Those guys and Colts. We kind of think of Woolies and Colts when there's massive behemoths there and they are. They worked back then. I think they started with the 20% market share age, which is massive in the global context. In Australia, that's just not even trying. And so they, you know, Woolies bought Safeway, Colts bought Biolomem, Biolomem. Woolies bought Fleming's. So, you know, my point is there was a growth phase and a maturation or maturity phase. And you can expect stronger growth when a business is maturing, when it is growing to its, you know, future science. And there are few, you should expect lower growth. That's perfectly great. It's fantastic. If you get to maturity, you're doing really well because you've absolutely, you've dominated your industry. Right, that's great. You've grown, you've achieved something and you've got to a stasis level. So the question for you, Milan, is where does the company go from here? And does, as Ram said, that price you're paying justify that. Don't you get the past price? As Ram said, could a double look, could a fall in by 90%? Who cares? The only question is, if you pick this business up today and to write, the price is this. That implies, based on, and Ram said just evaluation work, the thing you do is the, the old reverse DCF, which we've talked about, which is just how much growth does it have to achieve to justify today's price. And then you can do better than that. So I, whichever way you do it, that's exactly the way to do it. So don't worry about where you've been, don't worry about it. And by the way, you don't want to average up. You don't want to increase your average purchase price. I would allow to increase my average purchase price. My average purchase price is increased dramatically on Berkshire Hathaway and Amazon is two examples in the US. That's a humble break. Why? Because they just keep getting better so I keep buying shares. If it's only a higher, buy higher, average up. Of course you would. You know, if it's only from a hundred or a thousand and you want your first shares at a hundred and that's 150, don't, yes, average for God's sake average up. Please average up. I don't know about this company, mate. You haven't mentioned the name, so that's good to me to have to talk about it specifically. But yeah, it's all about the future. Is the business growth intact? Other results coming through? Is the price still attractive relative to those future results? If they ask, yes, yes, yeah, by shares. If not, maybe you're selling the shares. Don't look at the past price performances. Anything other than an interesting curiosity. It is not an indicative, it is not guaranteed. It's not a driver. In the short of medium term, these things can happen because sentiment in the market changes, you know, rarely, but what it does, but they can change dramatically. Yeah, so just be thoughtful. Okay, really hammer that point home because you mentioned CSL in that. So it started 2020 with 310 bucks a share. And I remember, I remember distinctly, you know, everyone going, yes, but it's great. It's a great company. It is. I mean, I actually would easily put it in the top 10 of all businesses in Australia on the ASX. It's an incredible success story. Actually, back in 2020, so they were earning about $6.72 per share. Last full financial year, they earned $9.33. Yeah, that actually grew their earnings from the COVID period. 40%. So why is the shares 150? But why is it that they've halved? They're more than half. It's like, yeah, because they were trading at a pay of 40. If you compound that growth, it's less than 7%. An incredibly strong, ginormous, defensive, lovely, lovely, lovely, shallow praise upon it. They grew their earnings at 7% per year. And you were paying 40 times earnings for that. What were you thinking? And I thought you in particular, like the biggest and best gigabrain financial experts in the world were always rationalizing how this was. And it's like, look, I know multiples can do kinds of crazy things. And maybe someone who was a megaball might have said, well, I actually didn't think that they could grow at 10 or 12%. No one was saying they're going to grow at 20% nonstop over a five half decade period. But that's kind of, if you're trading at those multiples, this isn't like a little bit greater than average growth. You need really strong growth, really sustained growth. I was like, I'm just making myself feel better, because I didn't buy any. The longest I've ever been. I love it, but it's expensive. You know, the other flip side that I always think of too is afterpay. People just just got to remember the hype around all of that thing. And the day I was like, yeah, I mean, just, just okay, let's run some numbers on this. Doesn't make any sense. Right? Oh, gosh, what's the other one too? Oh, I've gone blank. Oh, brain chip. Brain chip. Brain chip, I've mentioned before, we just had your meme stock. And interesting enough business, but it just went to the moon. And I was just like, it made, you had to assume that this tiny Aussie company was going to basically steal a significant part of the global chip fabrication, like the chip design market. You're competing against the Koreans. There's no way that that was going to happen in any kind of short time frame. Unless it was really, unless you were banking on an absolute paradigm shift once in a species kind of event. And I was just like, I mean, the thing is you're making this argument well before it got to the top. But it's very frustrating when you go, that doesn't make any sense. I'm super smart and level-headed. I'm doing all the things Andrew and Scott say, so I'm not going to do it. The reality is you do that. And then you watch it go up another 10%, and then another 10%, and then another 10%. And it is pain. This is why Isaac Newton, one of the greatest brains of our time, saw these shares in the South Sea company when I got a little bit heated. And then I just kept on going up and he capitulated because all these mates were getting rich, so he bought back in right at the top. And then sold right at the bottom. So you've got to be really comfortable with forming a probability-based expectation and then sticking to your guns. And the market is going to test you. I said to you off-air, it's like, it is a machine. Only the market can give you 100 bagger and make it the most painful experience in the world. Exactly. Now, if you can multiply your wealth by 100 and you feel. Yuck at the end of it. Or at least the destination I suppose once you're there is different. So about that journey is anything but. Right. Correct. It's a funny opportunity, isn't it? Yeah, I'm really. Yeah, by the way, brain chip, I looked up the numbers. These shares topped out at $1.76 in January 2022. Four years later. It's 90% down. 14 cents. More. That's at least more than 90%. Just a bit. Yeah, they might still crack it, right? I would actually. We spoke to the CEO a couple of times. I haven't looked at it for forever, but they've probably made some progress. I mean, they actually had some interesting tech. It's easy and hindsight to go. Well, maybe it doesn't work. I'm completely out of touch with it. But it wasn't as though every good market narrative, even when it's full of hot air, there's a kernel of truth to it, right? You can't. You can't. You can't fake it that much, right? You have to have at least that. munchot potential that it could do that. But it's just coming back to the question with Milan and the insurer. What do you reckon? Play around with some numbers. If the hurdle is too high or just too line ball, that tells you exactly what to do. Yeah. Even though you sell and it's going to double the next day. Or you won't sell and it'll halve the next. I mean, it's just. It's going to do that to you. I won't. But I got a lot of grief on Twitter about brain shit when I was on. I was business. I always told you it was business. I was back then about. I said, "It's something a bit like a love-future ticket." And I will say again, that's exactly what it is and always was. It's been a bit of a couldn't pay off. But you point out Munchot's exactly that, right? Yeah. Of course, these companies are trying to create the next big thing. Because that's what we're doing and people want to do it. It's worth the challenge and hassle. But. No, don't get there. Because that's just not the way this works. That's why we love entrepreneurs and why we love people who are trying to create. you know, brand new solutions to new and existing problems. It's probably. I mean, that's how the world progresses. So ball power too. But it doesn't mean you have to invest in them in the result. You think the brain chip. The brain chip crew are rough. They're after pay crew. Oh, yeah. You couldn't say anything without just basically, I mean, you've got a higher security whenever you go in and it's like. You said something that was slightly less bullish than I thought. That's right. Yeah, what do you mean, there's people aren't the gods? Let's go to a question from Chris Mate. First of all, so it's Chris, can I say, long may the rant rain. I know I'm absolutely here for the mission of Ram shouting at the clouds and shaking his fists. Captive in my tractor cabin, it is so nice to hear two people speak so passionately about both good and bad ideas. And best of all, fire off a few shots at those in a power with my road that leads to. What we do. It's what we're doing. Now, after the obligatory bent knee kissing of the ring, a question. We have seen gold and silver prices going to lift off, presumably as a store of value. In times where Air Force One looks more like Conair. I like that. I haven't used that one for it. That's great. I just trumped fans, but it's kind of pretty good. Why then has the Bitcoin price been declining? I always thought it seemed to climb in uncertain times. What is this basic farmer missing from the picture? Regarding the metaphorical gold coming, Ram might say the metaphorical Bitcoin. Chris, we won't do touch on Bitcoin mate, but I don't think we talk about air or water. It's a question, doesn't it? This morning we talked about it off air. I'll finish the other one. So that's kind of the. You could have the thesis right. I mean, the gold buyers and the Bitcoin buyers effectively have the same broad idea. There's differences around the edges, and I don't want to insult any gold bugs or Bitcoin bugs. Knock yourselves out. Okay, carefully. I know, right? But broadly, hey, if money gets to base, if inflation takes off, if you want something hard, the store of value, you don't printing it, gold and Bitcoin, it's the same root cause for most people I would suggest. Some of their speculation, some of their for the jewelry, whatever whatever. Broadly speaking, you're saying, I want to scarce, unprintable asset in times of meaningful inflation. I think that's not particularly controversial thing to say. Actually, you get the diagnosis right, or at least, maybe I'm not right, you have the same diagnosis, and you go for the same kind of thing. And yet the prices, I mean, it's about bifurcation. I mean, you've got one skewer off the left one, skewer off the right. We're then theory the same rationale. So it does make the question, and we're going to be going too deeply, because we've done plenty of it. But what's your best guess as to why we're seeing the same thesis broadly? End up in two very, very different outcomes. Yeah, well, I can only guess because I don't know, right? No one really does, although there's a lot of confident opinions that are out there. But it does, I mean, there's been so many. I mean, the best part of it has been all the memes that come out is like, you know, when your macro thesis plays out perfectly, but you're back to Ronald, I was just like, "Ah, are you kidding me?" I think the error was in what you kind of set off hand there. It's just for most people, this is the thesis. Well, it's like a lot of things, right? There are some people who buy CSL because they're a believer in their long-term earnings capacity. There's others who are rotating into healthcare because they're broke or thought it was a good idea given the upcoming presidential election or blah, blah, blah, blah, blah. Same asset. The same asset. The same asset. The same asset. Different people. Different interpretations, different narratives. The reality is as much to the chagrin of me and other sound money enthusiasts. I think the reality is much of Wall Street in particular and a very large speculative cohort of people just see it as a textile. Now, I mean, I'm not going to bore everyone with why that is a really bad take. It's a risk trade, right? It's just. Yeah, risk on. Yeah. And so people. I mean, a lot of the tech stocks, a lot of the risk on trades have come off. I would be actually quietly laying eggs if it was sort of like that was down and absolutely everything was up. It's like, "Why is it? This doesn't make any sense, but it is very, to my mind, at least it seems pretty clear that it's part of a broader risk off narrative." Bitcoin always does. If I say Bitcoin, but it's true of all assets, but particularly Bitcoin, you know, it attracts the hot money when it's pumping. Everyone piles into it for all of the wrong. They're not there for the mission. They're there to get rich quick. They don't get rich quick. It's all a scam. They dump out, you know. So it's happened a million times before and all. What I said to you off-air is like, "I'll be winging to you in five years' time how it's crashed to $500,000, right?" And it's just like, "Oh, it was a million a day, it's fine." It is always the way. So I would answer this question in the same way I would answer if it was a stock. In fact, exactly how we answered it with IAG, not IAG, the insurance company. You know, what's changed? What's changed with the thesis? Just for clarity, you mentioned IAG. I don't know what the company was. I wasn't ignoring the company's aim or I'm not sure what the company was. No, I see. Why don't we work on it on that company at all? I'm sure you guess so I put it on my screen. No, no, no, no. I just wanted to say, because I may not sound like I didn't use the name, but you know the name or something else. You just said people know we don't know which company it was. Yeah, yeah, yeah, yeah. Yeah, it could have been Cubi Agu nois. It doesn't matter. It doesn't matter. The point is whether it's Apple stock, whether it's BHP, whether it's CSL, whether it's your investment property and Adelaide, whether it's a lump of gold or whether it's even Magic Internet Beans, you've always got to ask yourself that you know these prices get traded on open for largely free markets. They're determined by the mood and sentiment of a lot of irrational, emotional human beings. And it just fluctuates always has always will. I mean just to think that you're going to buy into some kind of you know big multi decade long paradigm shift and think it's just a steadily just 10% climate here is just the height of insanity, right? It's absolutely not going to happen. So I would argue that the risk reward propositions are bad as good as it's ever been. I'll give you some stats on this not not to people use these stats as in an argument as to why it's going to pump from me. I'm not saying that but I'll give you one set that I came across re sat that I came across recently which just urges urges you to take a more sanguine sort of look at all of this. But obviously Bitcoin dropped to 50% lots of drops 70 80% many times in its life. But if you had bought every 50% drop a year later 90% of the time you're up an average of 125%. Now people hear they go I mean I should buy no no no no no no no no the market is going to psych you out history rhymes it never repeats. I'm definitely not saying that but I mean I can pull the same stat out with apple shares I can pull you know anything you like so it's just what's changed. If I've said many many times this is again I'm trying to make it more broader than this particular I said but but you are going to find that the best opportunities are when the market fundamentally misunderstands what it's got. You've got a lot of crypto bro idiot momentum traders out there that thought that they would get rich they didn't they're on to the next shiny thing gold pumping and said I'm piling into that you know commodities are pumping instead I'm going to I'm going to I'm going to pile into that. And I sit back and go well hang on it's the exact same thing underneath the hood everything is strengthening terms of a thesis and it's it's half price it's two for one for one deal walk no worry. And if you want to make outsized returns get used to it because this is going to happen again and again how's that for a bit of code mate was that all right for code that's pretty good. The kids like to say yeah that's a good cover is I said it's not my it's not my first radio I've lost count of the number of times my net wealth is dropped 50% and the only the only frustration at this point I should clarify that because it makes it sound like I'm completely a luf and don't care it's really annoying. It's like I'm giving you wrong it's I don't like it but but I know in earlier on my career when it happened the emotion that you feel was was terror I was going to say fear fear is not strong enough absolute gut wrenching terror you're this is my question my very sanity and ability to reason in the world like well how could I get it so so wrong where is this time whether it's this thing or it's other things that I've owned you know catapults another great example man I ate that for a good years I just had my face rubbed in that kind of stuff and it's like the thesis didn't change stay with it right easy to say hard to do I keep keep keep focusing on the on the tractor there my friend and one day you're only regret will be waited and I get more when I had the chance can't give advice not advice disclaiming I was wise declining and I thought we would avoid a Bitcoin prompt but the ego always pumping the coin so I yeah because I look I I largely agree with Ram Bitcoin has I don't I'm not on the analysis I actually ask you to graph it for me couldn't do it when it's a more data from me so I can't do it. It seems to me the Bitcoin's as as an as an interested observer for a long time and now I have a very small amount of it half what are you trying to do as much as you said you were you were the you were the I think we said at the time when you were now sit on the fight I said that's it that's the top that was the top was quite it already for a little bit so you're about the absolute top but it's a fight to say the price hasn't been back to what I paid since so you know but don't take you take your views from that not yet here so so look I think by the way if you don't think not yet you should sell just a different underlying the point yeah yeah yeah um matters of the price the so Chris um my experience from the outside this you're going to be careful with what you think you know because sometimes you only notice the stuff that confirms to your view where you see a few things and assume that's a pattern and so I haven't done the number I haven't done the graph side by side. Ramsman about being like tech stock I think is true in most senses but it does I mean risk on risk off as a stupid set of cliches and phrases and jargon but effective of people are feeling bullish and excited and want to make a lot of money and feel like everything is going to go up and they're what are you part of the party they jump into the stuff that they think is going to go off and do well and so you see a lot of money rushing to the hot stock story stocks do exactly the same thing and chip anybody um so you know that that that story is is really common and it strikes me that the people buying and selling Bitcoin in large numbers on the edges of the trades. Remember if you don't buy or sell you're not adding to buying or selling pressure if if 99.9 said that people don't touch the Bitcoin but the point 1% that sell oneself the half the current price the price will fall in half yeah similarly by the way the sample also being happened in reverse and like every asset maybe comes never worth 125 grand it was just a lot of buying pressure so we shouldn't assume that it was right then and wrong now or wrong then right now or you know anywhere between you're just seeing the you're seeing the market do its thing the people the number people want to buy and sell are at different points of time and different prices when you do see with all sorts of hot stocks again look at I have to pay look at the price you plenty of others besides I can't think of on the top of my head you see exactly that story of everyone wants to buy the air wants to sell and when the buyers of well the seller's the price goes up when the sales over on the buyers the price goes down and why is it operating differently Remy Tommy off air I don't give you anything away here some charts you tell who owns what the reality is most of the gold is owned by institutional holdings now if you think about the dynamic there if the issue holds already owner they probably own it for reasons that aren't related to the current very specific circumstances we find ourselves in but there's some are buying some for those reasons but they're buying this what they already holds probably pretty small so what's the available supply of gold who's selling who's buying the installs of the institution of about you know manage funds but largely governments sovereign stuff frankly on the flip side you mentioned your fair mate that 65% to 3rd of Bitcoin's owned by individuals now think about the dynamics there of how I just a little bit more so you add up all governments and this bunch of governments that are at up all corporations at up all of the ETFs at up all of institutional holdings 50% of the available float it's tiny it's the inverse of gold because it's such a it's such a relatively new thing so and sorry sorry you go ahead I'm going to go off on another angle okay hold that hold that thought okay so if that's the case think about why they own what they own it for whether they're more likely to trade than gold owners are likely to trade think of who the marginal buyer is likely to be what the marginal likely to do that kind of stuff is exactly what I suspect is making it operate like a textile you know the big mature businesses that institutions own you know gee doesn't get with sort around because now we're cares about general right CSL's about the prices fall and it's obviously volatile normally now people have changed their minds on some maybe there's a bad example to choose um toss was probably better actually you don't you don't get you have messy volatility because it's a known business no one's buying or something to get rich or not or to avoid losing money they're there for different reasons so gold most of the owners are there because they just want a long term stable asset to hedge or diversify or whatever some of you buyers are buying for different reasons but who are they buying from a limited number of sellers because the answer is not selling so who you buy from all the demand is coming on on very few who want to sell trice goes up Bitcoin I don't know what the what the average Bitcoin owner is doing but there's a trackable retail ownership out there that's probably not held for the same sorts of reasons so that's probably in my view what's happening again Ram you might start about and we don't know and that's a million percent true right we all speculate and guess it's a speculation no more valid or in all this valid than anybody else's I suspect if you look at it the that's probably what happening even when people decide about tech stocks again I suspect everyone's in there all that all makes the money a pilot and everything including Bitcoin because they kind of feel like it's one of those it's a tech product in most people's minds I said it's over currency or a store of value it's a it's a it's a it's a cool tech toy that goes up I suspect that will happen as well but is a reminder and kind of this is the key point the even if your thesis was correct and you bought gold or you bought Bitcoin you have very very very different outcomes and some reminder not to play the geopolitics the macro economics too much because again you had the same thesis maybe you did and you said oh this is happening by Bitcoin oh this is happening going to buy gold one didn't really really well one didn't really badly at least up to now even though the even though the key point right over any any yeah well I mean this is that this is the this is the the curse of our industry is that you can make any point you want by just being selective in your data points and I was just about to do it I was about to go back two three four you like any other period and it's just there's no competition and people go yeah but you're cherry picking it's like well but some of the bears though if you're just going to take the most recent high and the make so by that argument CSL is a is a meme stop right you know why that I last year last year is like an absolute joke and there's nothing yeah I was like well that's not exactly true is it so there's there's nuance to to all of this and the other thing I mentioned to you as well is that I think I mentioned this previously is that you've got to understand that for the longest time where it was even more than two thirds of all the available stock owned by individuals there's a lot of people out there you can't it's hard to imagine going back to the year 2011 and you've just got your laptop at home mining Bitcoin and every block that you secure you're getting what was at that point 50 Bitcoin 50 right and and that's when you we don't have to guess we can look at wallet addresses and chain data and the rest and there's like there's there's there's you know relative to the global population a tiny number but like you know thousands and thousands of thousands of thousands of very very lucky you fast-sighted people that that just have thousands of coins and they have now for the first time ever got the regulatory clarity which is important so you can actually sell it without the FBI knocking on your door you've also got the depth and the liquidity of Wall Street providing that bid you've never been if you tried to dump a thousand Bitcoin you know a few years back you would create a price 90% that just wasn't enough by the man to do it this is what I think everyone's missing everyone's looking at the the selling not realizing that every trade is one seller and one buyer the more important question is how is that a trillion dollars of this asset has been dumped and we're only down 50% there's someone is accumulating on the other side of that there's not retail by look at Google trends no one's you know none of it crazy uncle Ted's not ringing you up saying how do I get this stuff you know like it's it's just completely not in the news cycle and even if it was I mean to the average mum and dad punter have a few hundred million dollars to be like someone's buying as well as you know that that's just that's a that's a deductive logical sort of statement and and does it mean that these OGs of like lost cause in the mission if I had a thousand coins and I've been holding them for 15 years and I'm now a billionaire I'm going to sell some and I could probably only sell 30% of them and still have a stack the size of Christmas but also get to reap the reap the benefits of of you know the investment that I made so it's sort of like this is inevitable and unavoidable going forward anyone who's in this in fact any I just brought anyone is in the share market again I just I can't I think you need to almost be a bit Charlie Munga super derisive and critical and sharp and slap people around the head with this if you think you're getting into any of these games and it's just going to be an easy ride to to to Valhalla you just you we all be more buffered if it was that easy right you know now that's that that's not to say there are other people out there let's be balanced on this is is nonsense that's going to zero and if that's your view of them it's still expensive and you drop another 89% from here and still be too expensive so comes back to the insurance stock question beginning like what do you think is a reasonable way to value this and what do you think it's worth and if it's above that then you should definitely not buy or vice versa makes sense right yeah so Chris the answer is because not everyone's buying us live for the same reason there are different groups of people who are doing the buying us on those two different asset classes and even if you get the thesis right if that is your thesis doesn't mean the market has to follow with those assets whenever they happen to be um chick choose health care health care there will be more health care uh okay health scope went broke all right last look you know so so the no see him in the straight one and funeral times remember that all the aging demographics we're going to die yeah like what terrible investments for other reasons but but a reasonable sounding narrative absolutely God awful investment how you know when I'm broke for Apple right he bought it in 2012 right you know he went from 23 to $12 in that year there you are it's $264 right now I mean yeah I don't know what else to sort of say motley full money for more subscribe to the free newsletter at full dot com.au/listener Jeff says good agents long time listener first time question welcome Jeff thank you for asking your question thanks for the great educational information over the years he says that has helped me to retire six months ago at the age of 60 in brackets yes Scott there was no reason to hate me um I don't hate you because you young Jeff I may hate you because you retire so this is the reasons I can find a reason if I can find a reason I'm not a head of generally speaking but you know if you if you challenge me I'll find one if you're younger than me or retired then you get you I don't like it just just just quite the matter as we get older there's not many people who aren't in other of those brackets you are the younger than me all retired that's the one of the minimum time to be alive right as I have been transitioning to retirement says Jeff I've been gradually in removing individual stocks and moving to ETFs to concentrate on having fun fair enough more of a barefoot set and forget style most money outside of super has got to say Nasdaq Oztech and ASX ETFs on a recent podcast you discussed what you might avoid due to the AI revolution but how do you avoid it if you're largely invested in broad based index following ETFs would you consider thematic ETFs i.e. industrials resources i.e. own robotics etc. I know you know you usually found a thematic ETFs Scott yes you're right but does this looming disruption change your mind in any way now Jeff goes actually found out the same question Chris asked about the Bitcoin and Goldie moving in different directions but but I'll be cheers Jeff I hope we're done justice to your second question with Chris answer Chris's question let's stick with the first one mate if you're an ETF investor what if anything do you do in response to the risks the threats the opportunities of AI nothing i think it's kind of the point of being buying a broad based ETF is saying i don't actually know what's going to happen on a stock specific or sector specific basis i just know that on average equity markets will track the bigger best performing companies whatever they're in and i'll i'll get exposure to it I'm very deliberately targeting mediocrity in a good way you know because the media could return you know as far as the market it's great return I'm not going to I'm not going to triple my money in a year but I'm probably not going to like lose my shirt either so straight now right down the middle that's exactly what is and that and it's a very sensible thing to do particularly in this case too if you want to focus on other things so so as soon as you depart from that which is fine i depart from it but but you know you you you can't have your cake and eat it too right you might have to be passive and just let the market do its thing and know that you know whatever there there might be a future in the next ten years that a new technology yet to be discovered comes out next year and it is the dominant market sector in ten years time and that's what it is now if you've got an ETF you've got it right well done yeah yeah so so go with that I I would otherwise if you got it if there's nothing wrong with sort of playing a thing but I'll let you answer that part of it I just think usually particularly the really big mega trends we use that word the other day it's just sort of like they can be true or overall but even leave you with a pretty ordinary average so I mean if you bought if you bought a hundred bucks of every single mining company on the ASX you have not done well even though commodity prices have gone well so so don't don't don't broaden yourself out too too much people people forget this about diversification it's a wonderful thing but you can absolutely be over diversified right so don't don't do that and then it's like well so now you're saying I need to actually start picking some socks on yet that's what I'm saying you know and but I don't want to do that yeah that's totally cool too but by by an ETF right by broad based index tracking ETF like I'm trying to think of I'm trying to think of some trends that largely played out but where the ETFs that tracked them didn't do that well and there's actually loads of examples I can't believe I'm drawing a blank on this but and the reason is is because like particularly in tech the economics and the mechanics of it tend to be that these are very the global markets that tend to be winner take most which dominated by a really small handful of players we're never going to live in a world where there's 400 ride sharing apps because you just lose the critical mass dynamics and the network effects and all it just there's no world but can stay in that many different operations and we're all going to be running out many sort of different apps so you know if if there's only going to be a handful of winners and at this stage there's a hundred contenders and the other the other 97 are going to go to zero you know now it's different I've often talked about you know that approach of taking a bit of risk and expecting you know five out of 10 or six out of 10 to only work on the rest not to the master works on that because you get a big enough game somewhere else it makes up for the losses but when you've got a hundred stocks or 200 stocks it's like well the master works it's just that the few that do win have to like really win and really win rather or rather immediately so so and and and so rather than if I was going to try and walk a middle path here I would put 90% or make up a number a majority of my money in the ETF and I'd have a little play money portfolio where I can sort of scratch that itch with what you know of of prosecuting my my thesis on where the world is going that way if I'm right I get I get a bit of a sweetener and if I'm wrong I'm still left standing. Yeah I'm I mean now that I'm front my nothing is the answer because if you're passively investing ETFs that's what you're trying to do and by the way unless I destroy market value overall those who use AI in the public that I public listed will benefit from whatever the beauty of the ETF raise you in the mall so as Walmart suffered Amazon grew yeah as as the soup as the newspapers you know Fairfax and use corp fell seek and cast as an R.A. rose and so that that kind of that's the point of the passive ETF right you get whatever changes happen now for those to private companies that's a different that different thing of course but you know Google's got Gemini I share in alphabet owns Google Microsoft's got a sake in open AI you know I don't know where to whom the value will accrue and I don't even know that will this a crude or public company at all it may not frankly I might my working how about this is most value for AI to the consumer not not to a provider but for all of that you will get the benefit of AI through the market and you'll probably lose some value from some companies in the market but overall as long as the listed share markets remain we mentioned a Friday the kind of idea that as much as there's a lot of the loss on the on the public markets it still remains the single best subset we can get access to a value creation from capitalism in the world so I am we discuss what to do with avoid the I.I. revolution but that's if you're picking socks if you're getting everything I would I want to put in the positive I would bet a reasonably large amount of money quite literally because I own the Nasdaq ETF and a Vanguard total market ETF in the US I'm betting a reasonable amount of money I would bet even more money that the share market is higher than you is in ten years from the days today now could crash the day before but you know the work with me hypothetically here despite and or because of the growth of AI same as the internet right the internet was going to disrupt a whole we could have we could have had this question Jeff and by the way it's a great question I'm not not a criticism at all we if you ask this question 1999 and said how can I avoid you know how I avoid the disruption caused not 95 how do I avoid the disruption of the internet I don't know what I would have said but I hope I would have said I don't know keep your ETF because the market will be higher in 25 years time that is today and that would have been a hundred percent right now I'm not a genius I'm no forecast but until and unless publicly succumb to stock creating value there's a very good chance it goes up so I would sleep very well with your ETFs if you want to pick stocks pick stocks that's what I do as a day job but if you're happy with ETFs I think sometimes the worst thing to do with ETFs is try to be actively passive that is I'm in ETFs and choose passive ones but I'm going to choose which ones of those I get well what you've done is you pick stocks and just convince yourself the ETF now yes you've avoided picking the individual stock as I said a million times if you pick a you mentioned I ETF Jeff so use that one you pick the I ETF because of the theme right that's fine and you know what I'm going to say because you know I'm critical of it's the net ETFs if you board an I ETF the question to me would be how's it made up is it made up just of pure play I I companies or is it every company has some sort of AI going on in their business you see a lot of what was that what was the big thing trying to think back in the day there's ETF you remind me remember I think it was Bitcoin but it was something anyway and like these are in mask up when they're because they use the payment rails or something there was it was a really really ETF a was a crypto ETF thank you that's a lot and kind of like okay well and again follow I wish you're asking for the most of the more change ETFs which is a lot more hilarious yeah and so you kind of in that context that was that was a setup I just you could remember why that why they're in ETF but the point the point of that is that you know that vision of ask a point of the most the crypto coins frankly for reasons that ram will happily rant about for ages later oh yeah but the the idea was you said well I don't know which crypto is going to win all by crypto it's like well all them crap and diversifying didn't help you and so to that it was a category error but any right and that was kind of my point so think about the think about the AI what's actually the AI ETF or or even industrial's ETF what's excluded I yeah long answer Jeff I would just buy the ETF and enjoy you so you want to do it to cause around having fun I can't really we should do Jeff but if I was if I own if I had only ETFs or moving to ETFs I wouldn't lose a wink of sleep about the coming AI impact on my on my ETFs not because I know it won't happen just so they don't know that it won't and I can't make any objective decisions otherwise and so I would stick with the strategy I already have which I was very comfortable with I found a good example there's a badish airs global robotics and artificial intelligence ETF and what has happened on that front oh my god everything's happening on that front that is the place to be yeah yeah and so I haven't picked something that everyone thought was going to be good and then wasn't I pick something that everyone thought was going to be good and was about the ETF is still trading below the high that it reached in 2021 so could you imagine that I used four years ago five years ago my gosh this is not like a short term thing I think imagine the person you're having you're having lunch with a friend who goes I really think this thing is going to take off and robots is like the future man and he's like yeah that absolutely right like and you've not made any money but that's exactly right I'm not cherry picking the dates I know but but it's just sort of like that's the point there's a issue that you can actively choose the company and the price and by only when you get that price on that date you're just picking a date you know if I just invested then based on a theme I wasn't doing the value thing I wasn't doing the that the company selection I was doing the blind purchase of a theme idea I mean yeah I mean again you can always mix it up if you want I just wouldn't I wouldn't I wouldn't tinker with the core tinker tinker at the edges don't don't I mean you just you just you want it life Jeff you're 60 and you're retired like do you think do you think man like this is it like you know what what I mean what what's the best case scenario here maybe three four percent extra compound annual over the remainder of your life it's not I mean I mean on the first to admit that those things add up over a long period of time but in terms of if you're talking about you shouldn't buy green bananas anymore not that far off that myself but it's just like I just I just don't I think what matters I only you know what matters to you but I'm going to assume what matters to you is that you can maximize your healthy lifespan and you know experience life to the full now that you've not working for the man right like I'm not going to I don't know I'm maybe you love it which is a different story but but if you don't and you're doing all that extra working taking that risk for what might end up being a slight out performance it's for me for me I'd rather go sailing go fishing play golf whatever it is that that floats your boat. And frankly for the average investor who doesn't know which way I was going to go and wants to be least exposed the idea for the best option you know I don't know as exposed as well but like I know what's going to happen to me either so be exposed to an entire index and like it's almost literally the perfect scenario on this you want to make a bet and say I will bet on AI or against AI as a concept even then just typically hard try and do it scale anyway but you're saying I know AI is going to be a big thing is going to add value to track for you I don't know is going to add value to individual companies or to a whole sector or to nobody or consumers I don't know so then you back to I just might be the consumer the value of cruise to right that's the other thing well. I mean we talk about the internet companies like Google and say how big that I was like well I look all the money they made from the internet it's absolutely true Google doesn't expect the internet no one is no one is using you know a Google version of yellow pages right just as an exist so there are companies that have absolutely made massive amounts of money and value for as native internet only businesses even Amazon shareholder Amazon doesn't exist for the internet but retail doesn't go anyway I mean just you know like it so where the value go well the value went to one month lost value Amazon gained it and the consumer did a whole lot better because now I can jump online from all my woolies order to be here in an hour's time I mean that's that's the consumer value of the internet and it is I'm convinced it is is orders and orders of magnitude greater than the value but in monetary and not money to chose by the way then the value that is accrued to individual companies that happen to be internet specialists I suspect the same as true of AI use of what you've used it for for work mate I've used it for work I use it for home all the time I'm looking to you can't portray that replace what we've got now and I have just absolutely flogged the hell out of it to compare right now and it's just a really simple example right it's not you know you get back to you it's a one way to all like the internet use the internet go actually yellow pages was bad I can't wait for fire yeah exactly yeah you know this car thing looks alright but I'm going to stick with horses things like it just doesn't happen right and the consumer but I'm going to put it on the board it's what it's going to yeah I was going to question one one but we're a little point there you said for people who don't know where AI is going I would actually include the experts in that too not because they're idiots but because you find this for a lot of cutting edge technologies they're very hard to forecast you could look at the great quantum musical grade example they're like you know in fact studies have shown that people closest to it are most likely to overestimate its success because you kind of see the potential you know what I mean and it's like I'm going to shut this yeah yeah and there's Sam outman doing the you know he's running raised money so he's going to talk a good game better you know I was like oh AGI next year and is it like well now how many people on the planet know more about AI than Sir Malton not many not the eight billion people on the planet I'm sure there's you know several thousand people there's engineers and the PhD gigabrain but but not many and yet and I always I always come back to that it's just stuck in with burnt into my mind that Bill Gates interview with David Letterman from the 90s sorry I do like so because it tells that story and here is the guy the guy at the forefront is writing the wave of this new innovation this massive disruption this massive paradigm shift and he could not imagine anything beyond a chat room and listening to a ballgame like it was the radio that was his vision of the internet is he an idiot no he's he's a very intelligent man right and he was a v expert and he called it wrong and and so these things are just dire but especially in the early in the early phases when it's sort of like you can I mean I can remember because I was there you you were too maybe the internet was a thing I was convinced the internet was a thing right yeah I was I for marks Andrew you picked it I but I didn't I didn't foresee how it was going to be a thing you know yeah and and most people didn't and I even love to show Charlie Munger under the bus here too is probably I can't think of someone I respect more as an investor I was like you know just completely through shade at the internet for ever and just like he was wrong on it and and and like to think that Jerry I give you a million examples right so so what I like I just make the point how do you reconcile all of this is that I can I mention Buffett in Apple in 2012 when there is a genuine paradigm shift and AI is exactly that you can you don't have to be in on day one at the ground floor to do well right because if this is if this is what we think it is this is going to play out over a multi decade decade time frame it just integrates every single aspect of our life but at least if you wait a little bit yeah you lose the really big upside but you're also betting with a much better risk reward proposition that it's been de-risk when it went in 2012 you didn't have to be a lot of the more enormous to know that Apple was going to be a great company right I say that I did by any but you want to mean it was but the person who bought Apple in 1999 really was going out on a limb like you just it was really I just see yeah that that point in time now fast forward to 2026 it's Berkshire's biggest equity position and it's absolutely so I just mentioned the share price before it shot the lights out that's how you invest in knowledge from my mind and it's it's very something I'm pretty wedded to as a way of thinking which is don't go don't be super early you you how do I want that phase of the gardener hype cycle where you've you've gone through the peak of inflated expectations and then you know it's called the trough of disillusionment right it's sort of like it's going to change the world where it goes to the moon like oh wait I still don't have a robot but the boob crashes down and then and then you have this slope of enlightenment where the technology matures and people get busy their role this these up they actually build it and I would even say now some of the AI tools I'm using in 2026 which is not just blow blow everything away from from last year and it feels in the moment it feels glacial right but then you step back and think gosh and so anyway I would I would be I would be very tempted if that's what's exciting and I don't blame you if it is exciting you to show some to show a little bit of restraint because if this up for me I'm a smarter smarter people will probably have a better handle on it but for me I can't handicap the odds of like who is AI going to be a thing hundred percent who's going to win it and how are they going to win it I can't tell you in five years time it turns out that an anthropic is absolutely smashed is it is a random example open AI and Gemini and all the other models and they just made some breakthrough that's all IP protected and and now it's it's it's called it's embedded into everything okay I'm going to go in and it's like and I'll be buying it at five times ten times the price that it is now but if that is true and and there are serious networks and serious sort of what I like to what trapped or most is big switching costs with that I'm gonna I'm gonna I'm gonna keep riding this horse right why would he why would he get out of that hundred percent hundred percent yeah let's go back to it finish with a question from Nessie who very into us a couple of weeks ago I've got Andrew thank you for answering my question about mean reversion very informative and balanced apologies to Scott as I said I love to Andrew more because I was a straw man premium member this is a bracket a great service by the way Nessie you're not helping mate Scott to make you feel like you're a piece of beer later so thank you for while I began I would say I was a multiple service monthly full subscriber he says was right not it was I don't know if you feel any goodness and thanks to your us pics in share advisor my us portfolio has returned 25.4% per annum last 12 years I should say I'm not gonna take total credit for that Nessie we a lot of ideas we've got all of our ideas come directly from the US and then we kind of vet and and this the ones that we are comfortable to recommend I was it back at uni as a mature student last two years and just didn't have time for everything but I will be back soon I will hold you to that Nessie right into us when you do and I'll answer your question no I'll get further to the discussion on mean reversion could you perhaps take us to a working example to show us your thought processes and wisdom prefer to keep the curtain closed in that one Nessie we might be the Emperor's new clothes or wisdom behind the curtain maybe Rams favorite medicus is the recent massive drop in price a mean reversion of the PE sentiment lower expectations or a combination of all three and how do you decide to weather the PE crush and continue to hold or sell I must admit I often stick my head in the sehan down recite be slow to buy and slow at a sell plus a little finger crossing and trusting of management appreciate your thoughts Nessie I'm going to start very quickly range with his last point in the 30 years of straw man member Lisa clearly put his chips in your camp which is fine this note no I don't I'm not even slightly upset about Nessie I'm fine I won't even think about it after this podcast I went to Ellen I won't talk about it I won't complain to my wife later the trusty management thing is is only interesting in the context of the business and the investment out the same thing very much on the friday and you know I know you know that Nessie because you're a straw man member so you're very good at think about companies and the other valuation other things but trusting management of the world's most overvalued companies probably still look great so I don't know you're not saying that but if we talk about mean reversion was about share price it's kind of one of those things where by only trust managed to execute but for me reversion when it comes to pricing share price which is kind of where you're talking about here I think you know it's entirely what you're talking about I wouldn't trust management let's say let's take soul pats right let's say soul pats goes from $38 which I own shares roughly is $2,000 a share tomorrow because people get excited about it I trust Robert Milner implicitly to do the right thing for she held is proven over 30 something years he's acting in the interests of she holds so I trust you to do that so I trust you to justify $3,000 share price no I don't and again I'm not saying that you're saying that either mate but it's important to separate the investment from the business put it back together at the end because you're going to work out what the business is before you work out how much to pay for it but trusting management or distrusting management won't probably solve your valuation question about mean reversion necessarily it does if you think about the difference in potential future growth but again that's kind of partly separate all right mate over to you then so with these premier I saw not choose a different company if you want huge drop in price about two thirds give or take it jumped a little bit I think I'll use weeks maybe not down quite so much anymore is it a mean reversion of the PE is that sentiment is it lower expectations of the business something else or a combination of all well you kind of said the same thing three different ways sentiment expectations and PE I mean that's right right it's kind of it's kind of all the same thing I think I think that's exactly what's happened. Promethic has actually dropped their results this week and let me just very tactically come all around as I open it last one I was very good sake fluff fluff I can't even find it it was an excellent result it was an insanely good result companies would sell their mother to get the kind of growth that they're getting and yet the share price is done what it is done and in fact if you look back at just the per share earnings of this business I mean last year it was $1.10 then it was 80 cents that was 58.43 so if you go back just five years so we will ignore some of the base effects from working on very small base here you know they've compounded their per share earnings that close enough to 40% per annum right so they deserve a very high multiple because absolutely they do. If they can keep it going. I don't know that but I just want to be really clear the past is the past if it's maturity and it's not growing then it's not worth anything if growth increases massively it's worth it more but if it can keep doing anything like that sort of number it's certainly to show itself to be a quality business growing very very well. Absolutely right you're absolutely right so the PE ratio as I speak today is about 90 I believe also so even though we've done that incredible growth in the earnings we've actually back then the average annual PE ratio was 125 or something so there's a 30% headwind for you right there just on that and so it's not as so when we talked about mean reversion previously PE ratio is with a great example right because that's just just what they do as we also said I think they're not anything you can set your watch by and time but it always what it means is is that when you're buying a stock with a very high PE you got to expect that over time maybe it's gradual maybe it's slow and maybe it settles at a higher than average kind of rate but it's just it's a very curious all let's just call it bold investment thesis that says the PE will always trade at 200 in fact it'll go from 200 to 300 now great if that happens fantastic but be gosh that's really going against every observable fact we we tend to notice in markets and when it comes to market multiples so so I think I think that's exactly what what you're saying you know and still up there so I said it still up not I look at they again again we talked about this at the start of the pod let's go what are they dollar ten per share in 2025 grow that for 40% for 10 years do that even give it a P of 25 which is like contracts a lot more you still making money right you still making my not not not in sane amounts of money but that's what you want and that's how I do it with growth companies I just I just I can't predict predicting a PE is like predicting the market price I'm literally trying to guess sentiment so I don't try and guess it I just assume that it's going to mean revert because what I like about that approach is if I'm wrong and it didn't mean return like oh you mean my return is even better than I was expecting like this is I thank you thank God I was wrong like it's okay to be like I don't mind being wrong when being wrong means I made more money than I expected to make I don't want to be wrong is just like oh I the whole thing rested on this never ever reverting but that and again that's that's the numbers that you've kind of got to do can they sustain that kind of growth rate you know and if you think that they can then I would argue it's dirt cheap in fact plenty of people on strom and doing that that right now that's the bet they might be wrong it might it might actually be that they only grow at 15% compound for the next 10 years and then traded to be of 16 or bet you know it's like you're not going to lose your shirt but it's going to be a really mediocre investment does that make sense perfect sense they're thinking about growth by the way so I think it compounds which everyone knows kind instinctively but if you've got to grow up 40% this year and 40% next year and 40% year after the dollar value of the growth you have to find is largely why trees don't grow to the skies where elephants can't dance choose your favorite overused hackneyed metaphor at some point you just can't add enough dollars now I'm saying this is a case of pro-medics I'm just making the point that I'll go back to the numbers right the earnings per share went from nine cents to 12 cents from 2017 to 2018 those are 30% increase right so big but only required three cents a share to increase now they currently spend a dollar 10 a share if they grow that at 30% they're going to find 33 cents worth of growth in other words they're going to add three times as many customers as they had in total in 2018 now often they can because you have a big a sales force you've got better reputation you've got use case studies let me split that out and so I'm not saying copy down here at all I'm just making the case that the incremental increase in percentages hides the sheer number of people I'll make a slightly unrelated but also kind of totally related reference here to population growth people say I'll put it go 2% so that every year since 1940 it's nothing new it's like a key year that's absolutely true except that in 1940 we had X number of people so 2% these days is worth a lot more of those people and by the way with use up most of the available housing land so trying to house 2% more people when your population is 28 million rather than I'm not a double numbers were 2% more when your population was 12 million not is it a much lower number but you've got much less space to put them in in relatively soon inside sitting in your milk and all I mean you can go to over the mountains and I don't want to talk to the analogy too bad hey hey stay away from the mountains it's sacred exactly yeah and the highlands so there's something some symmetry about that you're on the mountains on the highlands so yeah my point is adding that number of people is not the same circumstances as the same number or same percentage when things were when you had a bigger potential white happens go West Young Man in the US right they went west they're a whole lot of Native Americans there and horrible stuff there so you know again it's an uncomfortable analogy but there's a lot more than they could simply by unforeseen unreasonably take a quiet just occupy but at some point look go to California now you know the number of people of the percentage growth all that kind of stuff is absolutely the same so just be careful of that it's easy to kind of go our 30% of year last X number of years and not you're not saying this round at all they've been able to do it this far it's like yeah but just understand the size of the problem you mentioned CSL back in the day mate part of the problem I have with CSL 300 bucks is you kind of go well hang on how much they have to grow at that rate okay it's this much but these guys are already an enormously large business they've got to find billions of dollars with the revenue somewhere where they're going to come from now maybe they find it but it's like that's not just hey guys let's go and sell in the couple of blood vials to the bloke down the road that is invent an entire new category of treatment and hope you dominate it and just it's just a much much higher mountain decline it's why big businesses slow down when they could be will these gets to 45% market share is probably reasonably done market share wise why because I've so picked it all up there's nice so much more they can do so I understand the difference between the early growth stages and the maturity stage we talked about that before I think it's a really really important part of thinking about it here on on me reversions specifically in the essay though do you want to it's a it's a very valid concept general is statistically most of the time so I use generally most of the time to literally there to to walk this one back a little bit we you could play me reversion of pro medicuses p and say hey the p has been 100 for the last five years and now it's 50 so if I mean reverse goes back to the average that means that would be mean reversion in in that very narrow sense if you said average is 10 to or number center of the mean you would say well pro medicus p is lower than it's been in ages therefore it's going to go back up again and you were saying about Woolworths and you want to say the same about you know insert insert slowing CSL if everything was mean reverting you would sell everything with the trade above its p is so p and and by everything's below its historical p is and you're probably going to lose a fortune try to that so when we talk about mean reversion just be careful about the data set you're making this mistake necessarily but given you ask the question it's a really good opportunity for us to talk to all listeners about exactly that idea don't just look at the careful mean you're using I guess is what I'm saying now over time if the market doesn't change dramatically at a market level when you've got lots and lots and lots of different diversified companies the more it's the more what do they call up anything observations you have in your sample then you start getting close to mean reversions and when the mean itself tends to be built on mathematical reality which is a p is a function of price and earnings and earnings tend to want to go out of a reasonable rate over time over the very long term and the analysis tells us that if you pay more than about 15 16 times earnings for an average as a ASX company earnings rates probably not going to pay for that that's wise there's a reason that those p is tend to revert don't assume the companies p has to revert to anything necessarily other than over the very very long term and remember that it reverts not because it has to in this case it might be in any way but because the math of valuation mean that by the time it's growing it for percent a year it should only be trading it up here 15 just because that's that's fair value so it's not so much it goes 15 because it has to because it should because everything does it's more that if you believe in the numbers of discounted cash flow valuations the you can't grow forever so your growth probably going to slow and if you grow the slow is the price you can afford to pay is going to slow and the average company is worth about 16 times earnings because of the rate of its growth and I know I know I think that doesn't feel too academic or esoteric but that's kind of why you expect it to fall over time towards the markets p e but Amazon's been above market p e for 25 years now is that over value maybe I don't know but you know it can say very high for a very long time if it does above average growth so think about the mean reversion I would argue closer to either the total market at maturity which one might look at it or effectively a mean reversion of sorts which kind of talks to a DCF valuation which is just at a given level of sales of growth the price you pay should be about X and that should kind of get you pretty close how's that going around do I mess that up yeah you know it's great I'll I'll try and do it with just just to stick with Prometheus to use the example brought some numbers up here is with the help of my my junior analyst and what's your name I'll see yeah I know I'll be getting the coffees so the core radiology market that they operate in that's called packs for an archival you know and I still get into what Prometheus does but the market that they call that they operate in globally is worth 5 billion dollars the code cardiology as a separate field that they think that they can get into I think they can too by the way that's probably about four billion dollars and then there's the otherologies as well that there's potential for this visage seven product is sort of creep into you add all of that together and you get a total addressable market of 15 billion US dollars that's a lot right they're not doing that at the moment I can tell you to them but if you extrapolate their revenue growth forward for 15 years they own their revenue is bigger than the entire addressable market now the addressable market itself micro they might invent something else entirely that allows them to get into a different field and all of that kind of stuff but there's a lot of ifs there you get tired to pull the rabbit out of the hat five times in a row and just do it is yeah perfectly each time so this is where you've got to this is where I just to illustrate the point it's sort of like well the person who rests their thesis and I'm not saying too many people are necessarily doing this although arguably a year ago they they must have been because how much did they justify the value yeah but they're saying well it's always grown at 30% they only own about 10% of their addressable market just within the pack sector I think they can keep growing it's like well okay let's do some mass on that let's take their 200 million dollars in Aussie revenue let's grow it by 30% per annum and you know after a while you just because of the nature of compounding you're just dealing with such vast vast numbers that you're actually big even the most successful company in the world is never going to capture 100% market share so we're expecting them to capture 100% market share the market itself to continue to grow at an extreme rate and then at the end point once they've somehow managed to do that which would just be the most unheard of thing ever for a company to go to zero to only 100% of the market in a short space of time well then what there is no more market you've got it all there's no you can't go beyond 100% of the market right so how is it how you attracting a 90 p at that point is like well where is the growth possibly going to come from now maybe at that point of time they've invented some other widget thing and that you know but that's what you need to do so I'm not saying this can't happen before we get a bunch of emails and telling me where I'm wrong and this and that because people get very annoyed if you talk about a stock that they like and I love this company I've said it for the record actually personally it's getting extremely interesting right but it's not the bargain basement price you think it is by virtue of just looking at what has happened so far and for even to get to a decent valuation at this point I'm still have to factor in some mean reversion with the PE and on top of that some very strong very sustained revenue growth and ongoing margin expansion is all possible and if anyone can do it they can do it but it's it none of that shouldn't shouldn't isn't and I would argue for others shouldn't be predicated on no no no they're always traded a P of 50 or something like that because just I can I can be really confident in that assertion because all I have to do is look so I like to say history is a great teacher look at any developed market over any length of time you will never see a company sustain that for the duration they won't they can't the market for that irrational you know so and again that doesn't mean it can't go double from here in terms of it's already shown us that that can happen but long term that gravity and that mean reversion is going to drag it down sorry yeah it must I mean after about Berkshire saying it can't keep growing at the historical rate forever because eventually becomes bigger than the US market the US economy which could be not possible right so it's it's a treat or grow to the straw as I say and that's that's the challenges at what point does it mature and is there enough room left in your assumptions for that to be the case sooner than otherwise might hope it will be the case because maybe it does and maybe it's brilliant I can say about two but one thing I know I've no expert on prime medicates but I've said this before in the pot I know I have I'm sure I'm must have I used to love high margin businesses the longer I do this the more I tend to not shy away from them but it's the business of your margin is my opportunity line it's like well so what do you've done as you've proven that you're making a stupid 73% gross margin that I'm lost from there from their announcements like that's spectacularly great and take the money and take the money and take the money right except if I can do something almost as good for third of the price who's who do you choose doesn't need either very very best goal played it maybe does because medical devices I don't have a view but there's a lot of room there for someone else to go do you know what I could have a shot at that I think I think I could do something like that and I could put some money into it and if I'm half successful I'm happy to take a 40% margin or 70% margin because money's money I'll take the money you know it's not saying every company successful will necessarily be swamped by competitors how does that even view of Nvidia by the way the cheap maker it's at the front of its technological story right now the question really is what what it enables it to remain at the front what enables it to retain that competitive advantage to retain that price and power and I'm saying premier is doesn't have it I'm just saying you have to believe you're what you're talking about margins expanding I mean I would start by saying you have to believe no competitive will come and erode those margins in the first place and I'm not saying well I will happen I'm just saying if you're very rare you get 75% gross margins on challenge without some sort of really serious network effect like a classified or a social media business or something else where that network effect just means that customers gravitate to you and probably because I might have one again it's not a criticism it's just like a I look at those margining videos in another one it's like well isn't the biggest and best right now yeah could someone do something similar-ish for a cheaper price I mean maybe the chips are two thirds as fast because half the price okay well I'll just buy more chips yes I'm going to do it every day of the week now will happen I don't know and that's I'm not I'm not shorting it I'm not saying it's going to fall I just think if I look at that and go I have to imagine the more confident I need to be at the about the standard of the competitive advantage and if I am that's great if I'm not it's a long way down even if you don't there's a dollar of sales but have to cut your margins to compete that puts a decent size hole in the investment case so again not saying it's going to happen I don't have an informed view too much for me so my view is currently I guess I'm saying away if I knew it was stupidly I value I'd short it not that I short but yeah if I had that conviction I might be I would but yeah I just too hard for me because other things that have to remain true will be unchallenged or expand to justify the current process I can't personally get there without conviction to buy it doesn't matter right yeah I mean this is why modes are so important yes I mean the very the very nature of capitalism properly framed is that high margins like a moth like moth to a plane is going to what you're bad only cost you that much to make it I'm going to do it it's just it's inevitable whenever you see a company this is how I identify modes that not necessarily what the mode is but the the presence of a mode is almost axiomatically determined by high sustained margins my favorite go to examples I love to bash them is the as yes the company that's listed on itself you know they got they got insane my I think it's like 50% margins like the kind of margins that just make no sense and would never happen in any world where competition was allowed to sort of function or maybe there's just a natural monopoly with with what they do but what is it last year they had five dollars 81 per share in sales and they made $2.59 in per share earnings like that is like that is amazing right and they have managed to do that even though they've been really badly run and all the rest of it it's sort of like not many companies enjoy the regulatory protections and natural market dynamics that this company does and so you're right I'm just trying to illustrate your point yeah no I think you're going to imagine you can imagine what they're kicking so when when any threat that that would open up to other marketplaces or in any serious kind of way you would be in big travel sales might stay the same because you managed to you know hold your own in terms of much but you're you know your profits are going to fall and and all of a sudden your P.E. is going to compress this is this is I'll wrap it up we got to go I wrap it all up just by like I think everything that we've tried to say during this podcast and also on Thursdays is that the future is entirely unknowable and anyone who thinks otherwise is kidding themselves so the best you can do is a bunch of different scenario analysis what needs to happen and then try and put some reasonable probabilities around it's the it sounds like oh my gosh that sounds like a bit of a crappiness kind of kind of you know but but but but it's a it's a it's a far more disciplined way to act right and at least at least you're operating in a in a in a manner in which I've set the milestones on the road that I need to see to show that I'm going in the right direction if I don't see these things I know that these is his bust that I need to I need to get out or one or two because the original reason for buying it isn't there you know and and it doesn't matter how smart it your reasoning was and how deep your analysis is you just that's just going to happen all of the time and I think that's what puts a lot of people off it's that not knowing it's that probabilistic nature of it but that's the way that you've got to think about it and so the the person and the investment comes through in a lot of questions you know how do I know how do I know how do I figure this out and we give these really wishy washi well actually you can't figure out it's impossible to know what so how to so it's pointless no it's not pointless at all you've just got to you're just going to make a bunch of mistakes but overall you'll be right you know is it and then you can make mistakes of reasoning and then you can make you can do absolutely no mistakes in terms of process but get a bad outcome and this is one of these weird domains we can do the right thing and be punished and do the wrong thing and get rewarded as I often say and so it's just the way you've you've got to come at it and you will always face that uncertainty but as munger and buffer say all the time just want to I get that's just the nature of it it's not comfortable but it's the way it is but if you can tilt things in your favor if you can just make sure that the odds are never going to be certain but they're they're more bias towards you you know someone offers you a game of two up and the coins are loaded and you know which way they're more likely to fall you'll play that all day long even if you have a really bad losing streak in fact you know a lot of a lot of you know you can do this yourself with spreadsheets or just like getting a piece of paper and flipping a coin we know it's 50 50 that's right there's absolute like you do that a thousand times you're going to find that there's multiple periods where you flipped like 12 tiles in a row you know it's going to happen it's not like one it's not heads tails tails tails tails tails tails tails tails tails heads head and it's all over the shop right and it's sort of like you when you zoom out the pattern is as clear as crystal but in the moment when it's your real money and these periods a year not just a day I'm doing everything right I'm losing and that is why you have to be a psychopath massacistic weirdo I guess to sort of stick at this for any length of time because that's the arena that you're going into you can deny it and try and pretend it's not but it's not going to reality will assert it so well you can embrace it for what it is and and and play according to to the reality of the situation and you know it's smart you probably get it right more often than wrong and it's the best you can hope for yep I think that's about right and that's no it's a probability game it's it's it's literally a probability game that is that is the bottom line you will never find accuracy perfect accuracy and and the pursuit of perfect accuracy means you won't ever make any effort and we know the result so it's it's a case of absolutely making making educated assumptions I said you get guesses here's the other thing let's not pretend that we have some particularly in it reps up there's not really particularly investing is not like if it's not bestowed with some special insight we call what we call them forecast rather than guesses right because somehow it seems better now it's a pretty I guess is made by someone who knows nothing a prediction is made by a weatherman but a forecast oh that's made by an analyst with a spreadsheet you know and it's and it's that's why I Bristol people say oh gambling investing a different I mean they are at some level but only if you're imbued in with certain meanings the rest of the time we're saying that looks like a decent price based on a range of expected outcomes which exactly what you want to track now you know you have a good at the track you might be bad at the track you might be great at the stock market or terrible at the stock market it's the same process you go through and so when we kind of pretend that somehow it turns people off for start which I hate because it's like I can't do that I'm not invested I just you know well okay everyone should be doing it something we shouldn't and that's completely great if you're not capable interested have the temperate for it please don't do it by an ETF get a please for your second from on the same reason I have to use wing suits right it's not going to well kind of jump off a cliff with one of those things right no I'm thinking about those ski jumpers in in my lab let's not go there with this no you're from the controversy on that one oh yes I have it's not light enough yet thanks for being with us we'll finish that one right now until next Friday have a great week full on cheers