Where Australia’s Top Stock Picker Is Investing Right Now | The Pay Off with Sylvia Jeffreys

[00:00:00]We love the AI supply chain. So whether it's your data centers or a company that supply to the data center, I think that component of the market is extremely exciting and these companies are growing really fast.

[00:00:12]>> So you call them the picks and the shovels.

[00:00:14]>> The ps and the shovels. They are >> well June Beloo, the co-founder of 10 cap hedge fund is a really well-known face and voice in the financial [music] industry. Often described as a firecracker on that scene. But what is the real story behind June Ba's success in an industry where she still feels like she doesn't quite fit in? Well, today she will explain what life was like for her as a teenager when she moved here from communist China, speaking very little English at that stage as well. But she did have a rare knack for reading people and that has served her very well throughout her career. Today we're going to talk about the AI bubble, the SpaceX IPO, and where the opportunities are after a really volatile period [music] in the markets.

[00:00:58]Here's June Bay. June Bay, welcome to the payoff. It's great to have you here.

[00:01:01]>> Thank you for having me.

[00:01:02]>> We've spoken many times before, mostly on the Today Show and for two or three minutes at a time, but we've never spoken before about your history here in Australia, and I think it is a great Australian story. You came here as a young girl, what, 16 years of age.

[00:01:15]That's right. What were your first impressions of this country? Look, my first impression is this is a beautiful country. Um, I remember the blue sky.

[00:01:22]Um, and I remember the white clouds and it was quite rare for China in those days in the '9s. Um, and also, um, I realized how relaxed and then how few people there are. Um, when we first moved here, um, we lived in a suburb called Warwood, which is in the northern beaches in Sydney. Um, you know, it was literally surrounded just by nature. Um, and, uh, you know, from, you know, China, it was something unheard of. Um, I just thought it's a beautiful country.

[00:01:49]>> It was 1996 and you were living in the suburban northern beaches of Sydney.

[00:01:55]Coming from communism, what did you notice in terms of >> the way of life and opportunity in this country?

[00:02:01]>> Yeah, look, I you know this is I should say that to a lot of people whenever um they start complaining about Australia.

[00:02:07]I truly believe Australia has provided so much opportunity uh for someone like myself. um you know chi China was um in the 80s and '9s when I was growing up. I went through the um you know the the Tiam uh square um you know periods where I still remember uh when I was eight I got up middle of the night I saw people you know burning the train and everything else um and all these um everything that h has happened um you know I think Australia certainly um the first impression aside from a beautiful country is that it feels I feel this freedom uh there's no it's the pressure is very very different from a communist country um you know the freedom as in um you know the realization I can be whatever I want to be. I can do whatever I want to do. Uh it's an incredible liberation whereas in China I never thought I could go anywhere. Um you know in it it's not a bad feeling just that um I I just thought you know I will never get to high school in China because no one else does in my neighborhood. um I will never um you know uh uh or I probably will just get a the best job I could ever get is probably be that lady uh in the nearby restaurant to open the door. I thought that's the best job I could ever get and didn't feel bad about it but I thought that would be my life. Um whereas in Australia once I arrived here I felt um sky is the limit. I can do whatever I like. The education system the teacher the encouragement the teacher has given me has been incredible. um I'm not sure if they truly believe I could do it, but they they certainly encouraged me to say you can do whatever you want. And I thought that's uh incredibly um liberating um you know that feeling because that you know probably provided the uh later on you know the um the the tenacity and belief that I can do anything. Um another part of it also in Australia is that there is a lot of focus um you know compared to communism there's a lot of focus on individual um it's things I want to do it's things I can achieve uh whereas in communist country is very much about you're part of a collective um it's not about you um and um anytime when I talk about with my teacher about you know my personal goal and the like it's always discouraged um which is very different [laughter] um I I still remember um my when I was I think it was 12 or 13. I sat next next to this girl and uh she uh uh teacher asked us to write about um you know what we want to be when we grow up and obviously with the communism sort of you know yeah hanging over you we write about what you want to do and then the girl next to me she wrote um and she's a typical you know perfect communism girl which is she said she want to grow up to be this unknown um uh police woman to help the community and uh completely unknown don't want anyone to know and uh it was really really beautiful [laughter] is that I wrote um obviously I didn't see her answer before I wrote mine. Um knowing I will be in trouble.

[00:04:55]Um I wrote I want to be a worldrenowned politician. [laughter] >> Oh my god. My teacher came back and said oh highlighted in red saying please dream of something realistic. Um [laughter] but that's kind of um you know sort of education system that came through.

[00:05:12]Whereas Australia um you know I truly believe that has it's you know there's so much opportunity but it is there for people to really grab it.

[00:05:21]>> Did that mentality that I want to dream big mentality come from your dad? I know that you've credited him with teaching you about reading the markets as as a child. Is that do you think where that came from? Yeah, I I think I think I might be it it might be just something along the line that um you know I just don't feel uh you know comfortable uh in this uh whatever the situation people say I'm I'm I'm that uh because growing up um you know I come from a poorer family even in China um and my mother left to come to Australia so you know my dad is actually and my grandparents raised me and um you know every step of the way um I say I want to do something uh people always tell me oh look you won't be able to get Um and even when I after I come to Australia, you know, for people close to me, people often encouraged against um me wanting to do lots of things. Um I think it's all come from a good place. Um you know, from their own perspective. Um and um but I think I always have this thing that I just don't um you know, [clears throat] I'm going to show you I can do it. Um and a little bit of uh um you know, fighting uh feistiness in me. Um with my father in the finance side, which is super interesting. she he was the early adopter of investing obviously you know don't really know too much about it uh he was a chartist which is looking at all the charts um and uh in early 90s China don't really have a proper share market it was literally just opened um the financial markets and he was trading I think bonds or fixed income or you know or uh I think was a credit or fixed income product of uh companies and uh and then he bought this book and he learned how to chart and we don't have a computer so he bought all these line paper and stick them around his room and then my room and they essentially trying to create the history of the share price um and every day that he will make predictions going up or down and it went so long around his room into my room and go down the stairs and into the living room. So I grew up with all these lines and his daily prediction of where the share prices might go. Um you know it sounds funny but you know I think he's uh probably his characteristics that he is a very very early adopter of uh you know of investing and seeing him uh you know put u money at risk and then generating return. Obviously a lot of time it didn't work um kind of um really helped me to see that kind of investing dynamic.

[00:07:38]>> Did it help you to identify patterns of behavior in the markets? I think um it does in a way because when you look at the charting when people look at the charts and the weather lines going in a way it's actually reflecting investors sentiment um you know when the lines are going up a lot means everyone wants to be in it um you know remember this hot stock um you know the stock price will be going like hockey stick so essentially those charters trying to identify what is happening with investor sentiment so um you know so it certainly does um I think in the share market um there's two important things one is the company fundamental to obviously most important for long-term value. Um and for the short term it's actually the sentiment um you know is everyone suddenly get excited about this particular news flow. It can go on for a long time. So um you know for the for the share market that certainly is uh is quite important.

[00:08:27]>> How has your dad's approach then to teaching you about the markets impacted the way you teach your own children now about investing and money? [laughter] >> I think u what I teach my kids is probably quite different from my dad. My dad really just didn't know anything about the company. Uh he just looking at the lines. Um you know what I have observed from him was really um you know understanding the volatility and understanding um you know maybe the sentiment drive this and that and over the years what I have learned is that you know as a investor the the e the easiest thing and the best thing is actually get to know the company and the sentiment is where you time to buy or sell the com you know is where your timing is but ultimately it's the company that will drive the share price over the long term. So, what I teach my kids is often whenever they use something, I'm trying to always get them to connect to the share market or investing uh with the uh product they're using, it's normally easier. For example, they're going to the JB Hi-Fi, I tell them about the company or they, you know, Apple um you know, Apple the phone that they use, I talk to them about these companies. So, they something they can connect with. Um they um you know, it's much easier to tell them to then they get interested in trying to understand the business. Um, the only problem is my son. Um, all he wants to invest in was SpaceX [laughter] to talk him out of it.

[00:09:45]>> Okay. I'm going to ask you about that a little bit later and whether or not you were buying into the hype. It sounds like you didn't, but we'll get to that in a moment. How did you end up in finance in Australia? You obviously didn't become a world famous politician, but you are a very well-known high-profile um co-founder of a hedge fund here in Australia. How did you land in the world of finance here? Yeah, look, I think uh in a way um I feel I was always going to finance here in Australia. Um in China, I probably will be the waitress, but in here I made it.

[00:10:15]Um you know, so in finance the um as a Chinese kid, you're always growing up thinking you're going to do accounting or finance or one of those or law. Um you know, clearly my English was terrible. Had to learn English here in Australia. Um you know, it took me a little while, but still bit of a stretch at the moment even. Um so law was was out of reach and then finance and accounting was the first one I decided to do in university. Um accounting didn't quite sit with me. Uh it is quite repetitive. Um you know for me I feel finance is much more creative. Um you know sometimes we talk about the share market we work with probabilities. Um you know we we don't have to get 100% of time get things right but if we get 60% of the time right um then it's actually doing really really well. Uh you can generate great returns. But that means you have to live with 40% of the time that you get it wrong. So you know how do you recalibrate and how what can you learn from it? Uh is actually incredible uh incredibly important process for becoming a better investor. Um so yeah so you know finance certainly sit with me much better more creative more interesting and it covers much broader um areas. Um you know when you think about how many different type of company listed on the ASX um you know we got mining companies we and mining company could be gold companies diamond companies not not so much diamond now uh we got copper companies um we got banks listed we've got uh we used to have after pay now we have um uh now we have the live 360 we've got uh you know uh chain zip uh listed you know we've got all these different companies and they're super interesting every one of them are very very fascinating um learning about those it's almost learning about new skill right um you know I find that really really interesting >> and exciting >> oh absolutely it's very exciting I used to I still tell my analysts um you know and lots of people that I feel investing is like treasure hunting um you know you're looking for um you're looking for something that other people hasn't found and when you found it it's very exciting >> like the pirates of the stock >> yeah that's right find that's right >> so when you landed in the finance world here in Australia did you feel like you could belong Were you shunned at all or were you not bothered by any of that? Do you not care about fitting in? [laughter] >> Um I think um you know I I wish I can you know have a much polished answer. Um I I just feel um you know finance is a very small industry. Um I did uh do I feel belong? I don't feel belong because uh you know finance um you know generally it's male-dominated. uh it's uh um you know in these days you have a bit more immigrant but it's still quite rare. It's coming through but still quite rare. Um and uh so I always felt probably a little bit on the outsider and plus my English is not good enough.

[00:12:57]I don't understand people's jokes. Um you know it's always a bit of a challenge for me. I feel oh look I'm not going to make it this way. Um so I kind of always sit outside a little bit. Um maybe in a way it's what what makes um what makes my uh investment uh sort of perspective bit different is that one of the big thing about you know investing is that you you don't want to have any blind side. um you know when everyone's all the same come from the same school from the same teacher you speak the same language you know same parents from the same school then you tend to think bit have a bit of a group thinking um so whereas me uh I come from somewhere else that other background it kind of just complements um the whole dynamic um you know and I always feel that's probably one of the reason why you know our performance over long term is really good because we we we're dynamic u you know we can think of different things and what if this goes wrong and how do um you know how do we take into account those risks and so yeah I >> I know you've also said that um in those early days when you were still learning English >> you also learned to read people really well how has that played into your work in stockpicking >> yeah I think this is a fascinating um so over the years um I think early days when my English was not very good you kind of need to work out what people trying to say [laughter] um I remember the first six month when I was in Australia or arrive first arrived in Australia six month I have to learn English. I did it in the Naraban school high school they had a English as second language space and uh first three months I had no idea what what people were talking about. Um and then by the next three months I kind of worked it out and then to work it out is really just about reading body language and then I think I spent the rest of high school trying to read body language. Uh and then university hopefully my English sort of got a bit better. Um so reading is very important. Um that's what adds to a lot of um uh investor call um the gut feel and things. So when we interview actually you would you know know a lot um because you interview people a lot um you know you sometimes get to uh get a feeling that people are not really telling you um everything they know the truth.

[00:15:00]>> Yeah that's right. And uh and you know and then and then we all know you know if there's bad news people don't want to share all of the bad news. They shift a little bit at the time. That's why you know earnings downgrade come from companies or three in the in a row because people don't want to tell all the bad news. So it's all these behavioral bias that you see um you know over the years also um during certain uh specific times and you know sometimes company management body language very obvious um you know during the GFC I remember uh you know interviewing some of the financial companies just before they're about to collapse. Uh the body language is very very clear you know touching nose using bad language and all of that. Um it's almost textbook uh only when people put under pressure. Um but other time it's a little bit slow burn you know this time we catch up uh we meet up with the management very often um you know first meeting they said this and we get sense of that and next meeting suddenly changed um and uh you know you kind of just go well what has happened. So there's a lot of uh sort of um what do you call a soft skill that goes into the investing not just the actual numbers um the accounting that make account >> well there's the politician in you it's like diplomacy at a high level isn't it you know meeting someone and reacting to that in real time as well that's right >> so you set up Tenap in 2025 uh with your co-founder Jason Todd why did you decide to launch your own fund for a lot of people that seems really high risk [laughter] >> um I think uh if you look at the statistics for people launch small small mediumsiz businesses the fail rate is really high. So you know especially for investor like myself invest in existing businesses why do I do it? I think it's a just one of my um you know streak is that my whole life is that um you know I always want to keep growing. I want to keep moving and keep growing. Um I could have stopped at China. I could have stopped at um you know first job I could have stopped at an uh and then I could have stopped even seven years ago when I took over the fund. Right? So every step of the way um there's people say she can't do this and I just go I'll show you. Um not that I know if I can go far but I it excites me and also um you know I I I always ask myself you know in five years if I see myself doing exactly the same thing how would I feel? Um you know if the answer is like I'm super happy then it's fine. But if my answer is like well no I need to keep growing. I need to learn more. Um so that's the sort of the answer. um but seven years ago after I took over the fund I grew this fund really well it's been very successful and then just in the last few years I certainly feel um you know become limited within another business where there's lots of other business interests um life becomes more politics than just running the fund I love investing I love doing this so I really had the vision to really want to uh have a group of people that's like me um and we can put them together and then do what we're passionate about and then we'll be 100% aligned with our clients because um you know we're not backed by you know any big companies or anything else. Um it's it's it's it's my it's myself and then staff. We own 100% of this company. Uh we're not answering to anyone else and then we just have one fund. We're just going to run it really really well. So that is the key thesis that we want to come out of it and set up by ourself. um you know without really thinking about oh my god how you know all of that I think challenges um running portfolio there's always challenges but you know you can't think about just the negative part um it's um you know you're thinking about if you get all the components right then the outcome has to be right >> so how has it performed since those early days >> yeah look um sadly in the last couple of months it's been a little bit a little bit rough because of the market volatility but it still um performed incredibly well compared to our peers we're still in the top tier of the um uh our competitor any companies that um fund manager compared to the large cap ASX 200 um in the last couple of month because of volatility in the market we have the Iran war we have the um you know the tariff we have everything else has seen the um you know our fund has uh become a little bit volatile but what is really interesting though u my experience in the last seven years whenever these things happen it represent the best opportunity um for the next little period. We've seen it during the GFC.

[00:19:09]We've seen just after the GFC, we've seen it during the uh pandemic. We've seen it a few years ago or we've seen it during the um the liberation day and now we see it again. So, we actually seen the portfolio performance picking up quite quickly because you know market is normalizing. Um finally investors are ready to put the money back into the market and invest in some of those opportunities that is now looking really really uh really really uh attractive at the moment. It is still in so many ways such a strange world that we live in and you know all it takes is for one more rocket to be filed to be fired at Iran and the straight of form closes again and you know there's still so much uncertainty hanging over geopolitics and therefore the market so how do you turn things around in a time like this when there is so much uncertainty?

[00:19:58]>> Yeah, I think uncertainty I always look at uncertainty as an opportunity. So uh first of all uh remember share market always look forward to 12 months. So share market investors always thinking what's going to happen in 12 month time not right now. Um right now uh share market is pricing in uh a lot of those things you know thinking uh interest rate in the US is going to go higher in Australia potentially there's one more small probability um you know our housing market we'll talk to a little bit weaker so market is pricing in a lot of those things in the uh at this moment. uh but my job is to see okay well uh however uh going forward in six to 12 months are some of those character uh factors are going to change and um you know and then what does that mean for the company's earnings uh if some of those earnings are not um you know are are actually not going down as much as people expect um they are becoming too cheap um and also there's quite a lot of those theme uh interesting thematic we talked to that is playing out in the market um that's not being recognized so you know these are the times And um you know particularly when everyone's fearful these are the time where you take position in those companies.

[00:21:04]>> Okay. Well well tell us where do you see the opportunity right now? The dust is settling on the CGT changes as well here in Australia. So >> what's right for the picking at the moment?

[00:21:16]>> Yeah. So there's a um there's a there's a few groups of stocks. So first one is that we love the AI uh sort of supply chain. So the companies that um you know supplies or plays important role to make the AI um uh sort of investment happen.

[00:21:32]So whether it's your data centers or company that supply to the data center your critical mineral uh your copper or your companies that uh sort of plays into the whole electrification of Australia. So I think that component of the market is extremely uh exciting. Um, and these companies are growing really fast and normally they don't get talked about because people just look at the the miners and the banks. Um, and so there's a lot of of companies within that. That's very very exciting.

[00:22:00]>> So you call them the picks and the shovels.

[00:22:01]>> The pigs and the shovels.

[00:22:02]>> AI. Why? So why not the AI platforms themselves?

[00:22:05]>> Yeah, I think AI platform is getting harder because they are all all of them are pouring so much money into the data center in the chips and everything else.

[00:22:13]We just don't know which one's going to make the return. They don't expect return this point. um with the tr actually the expectation is something like around the world $3 trillion will be spent um uh by the end of this decade into data center now who's going to make money out of it is going to be harder to see especially with the those language model uh you know your claw and uh your open AI which one's better they all sound more or less the same and then you got the Chinese model coming up might be cheaper um you know for a consumer to use so we just just too hard to pick the winner I think what where you u you know make your money is because we know all these committed capital expenditure going into uh those data centers and economy then you invest in a company that's making u making money out of this whole um you know decadel long uh sort of thematic um and in Australia we're only just getting started >> a lot of analysts are predicting that the AI bubble will burst at some point where do you stand on that do you see that happening >> uh I don't see that happening but I do think that as we talked to you know these uh which which which big AI why um you know uh hyperscalers are going to win. um it's harder to see and because these companies are now becoming almost like the industrial companies of the old days um you know where they just go money it's almost like a gold rush right they're all going out spending trying to land grab um in the next few years their earnings are going to slow down in terms of growth because of how much money they spend they have to depreciate them um and how long uh the you know the chip prices are going to hold that elevated is going to be the question I think um that certainly is going to see slowdown um you know and I think um we don't know if it's 12 month away or whether it's 6 month away. I think at those businesses it's just ele uh the valuation is quite elevated.

[00:23:59]>> AI is transforming so many things so rapidly right now. So how else is it weighing on your stock picks at the moment? How how else does it drive your decisions?

[00:24:09]>> Yeah. So um AI makes my day easier [laughter] my my personal assistant at the moment.

[00:24:14]Um even though I still miss miss emails which is kind of annoying. Um so look I think AI is it just drives efficiencies across everything but I think the thematic we talk to is um you know f the first first first uh first first uh impact uh is are those pe companies as pigs and shovels and everything else they're going to benefit from it you want to have exposure to that and I think the secondary impact is a little bit longdated but we are paying attention to it. It is true efficiency that can come through for um companies in other sector not just tech and related to the tech sector whether it's your banks your insurance companies um you know there's a lot of efficiencies that can come through um you know we we we haven't even seen the on you know even even any part of it yet um you know tech businesses already started cutting cost so we seen software businesses like u wise tech and I think in the US there's a few of them already started cutting cost more in the development base because you know AI does it a bit faster. Um but the rest of the uh economy certainly there's a lot of efficiencies coming through but we won't see it for at least another few years.

[00:25:20]Um you know to see that efficiency and that's your traditional industry.

[00:25:24]>> You mentioned earlier the SpaceX IPO the largest in market history. The whole world has been talking about it and everyone's been asking do you get in do you not? Do you sit back and wait and see what happens?

[00:25:36]>> Did you buy into the hype? It sounds like you didn't. Oh no, we didn't buy into the hype. We knew it was a structured um uh structured deal that it would do well initially and then will falter. Um it's um it's in today's world um you know the bankers are becoming uh investment bankers are becoming super intelligent and they they they understand how to get the share price uh very strong initially. uh what they have done with the SpaceX was that because uh they only selling very small portion of the shares so there's not liquidity on the market and then they managed to convince all the uh big index like uh you know the the the NASDAQ the Russell and everything to include uh this space X uh in their index now to include in the index there's a lot of index manager has to be forced to go buy those shares um and normally it takes about 6 to 12 months for it to be included and and they managed to speed it down to 3 days to a week. So all these big index are rushing out to buy the shares. That's not many to start with uh in the first three days to a week uh has forced that share price rallied a lot. Um and then since then obviously that was not real demand and sort of faulted. Um but that definitely created the hype that for banker can claim one of the best um IPO listing ever. Um so you know we saw that kind of taking place and we knew it will come back. I think uh over the next six months it will become a bit harder for this company even though my 12 year old does want to buy because it's you know Elon Mus go all these space go to space and all that um it was even at listing was at 97 times earning uh revenue revenue we're talking revenue it's not even profitable um and 97 times you assume it's going to make money for 100 years um and then at the same time um you know the even the earnings projection is very very um you know it's it's it's very very out there you know maybe they can do it but it's just you're paying a lot up front. Uh at the same time you got two other um major mega listing coming which is um uh your anthropic and then open AI uh happening this year as well. Uh so that just means there's a lot of uh you know liquidity.

[00:27:38]People need to sell existing other shares to to buy into that other ones.

[00:27:42]So it just creates probably a little bit too many deals to come through. It does create excitement though into the market but I think it just creates a little bit too many companies unprofitable company that's listed at the same time when Fed which is important uh interest rate is now going potentially going higher in the US um at least probably one or two times this year um when interest rate go higher it creates pressure for those companies that doesn't make money because they're expensive um you know investors look for you know um other places to put their money um so I think next six months might be a little bit tough just for those extremely expensive companies. Um, you know, really requires caution for investors.

[00:28:22]>> So, when it comes to these hyped up IPOs, what's the lesson in the SpaceX experience for someone like your son?

[00:28:29]>> Yeah. So, [laughter] I told him not to do it. Um, and uh, yeah. So, look, I think in a hyped up uh, investment um, you know, you just got to ask her, do I really need to be there? Right? So a lot of time we feel um you know when uh ultimately you need first you need to understand the company and if you if it's so hyped up usually means you're paying a lot for a company. So remember the share price is determined by one is how good this company is two is that how expensive this company is. So you know you may be buying a good company but if it's too expensive you'll still lose money. So I think this is where you go well I do I want to pay 100 times uh revenue that the company probably in a few years will continue to require a lot of uh money to need to raise more money uh to fund its ambition. Uh do I want to do that? Probably not. Um yeah but my son may still buy it. [laughter] >> You just sometimes you just can't stop your son from making mistakes. That's parenting. You know a lot of people out there will also argue that our big banks are in some ways overvalued. How do you feel about that? And are they still a long a good long-term investment?

[00:29:34]>> Yeah, look, I think banks looks just a little bit harder at the moment. Um, you know, taking a long-term um you know, look, you again, we're talking about valuation, banks are still very expensive. Um, they actually perform very well against many other sectors.

[00:29:48]So, um, I think because they're expensive, at the same time, their earnings are looking a little bit shaky because of the uh the tax changes. um the it relative flow on impact on investors market uh for uh for property um you know loan applications down um massively down 20% uh but Westpak just disclosed that um you know so we are looking at pretty slow earnings growth if anything there's no earnings growth and might be even lower uh and we're looking at little bit of margin compression because competition's picking up so you know if comwalth bank just discounted uh their home loan um you know when big gorilla does that everyone else have to discount So you know so in the environment where volume is a little bit slower you got discount margins under bit more pressure so earnings probably looking quite a little bit negative to at best flat I think it's probably negative next 12 month uh so for a big multiple for those banks just looking very very challenge I think it looks a little bit tough >> well auction clearance rates are dropping significantly and prices are either stalling or dropping back dropping back in some areas some parts of the country how Does you know those movements in the property market interplay with what's happening in the stock market?

[00:31:00]>> Uh so stock market is very quick uh again in reflecting uh what is the anticipated change. So immediately after the tax um uh announcement uh the the CGT and uh and the rest of announcement uh in the share market we've seen um meaningful selloff across um you know your property developers like Stockland and MVAC. We've seen um you know listing uh uh home listing board uh REA has been sold off actually in fact it went down something like more than 20% since the uh since that period since the announcement. Uh and then we're seeing you know consumer companies come off. So all of that is share markets um essentially saying look things are getting really really really tough. Um more recently just in the last week or so we started seeing stabilization in those company simply because it seems the interest rate um is not going up thankfully. uh in August because how fast uh the housing market is deteriorating.

[00:31:55]>> There has been a lot of discussion around the CGT changes and how they'll affect people particularly young people who are investing in the stock market because the housing market has until now been out of reach for them.

[00:32:07]>> Have those changes made investing in shares less appealing?

[00:32:12]>> Yeah, look, I don't really think so.

[00:32:14]Look at that obviously the capital gains tax making it uh le uh a little bit less appealing and some say that potentially um you know academically it should shift people wanting to buy more shares with more income more dividend right um but my argument is that I don't think so I think people who wants to buy growth company which normally has a more capital gains attached to it because you know it will go up uh whereas a dividend um you know investor they're very different group of investors um you know if if if I'm a young person wanting to buy a growth company if you're like 360 or or or others um you know I'd expect the share price to go you know 20 30 40% higher rather than thinking about I'm going to pay tax on the presumed growth I'm going to do um I'm not going to swap out life 360 for Commonwealth Bank for example to get a little bit of dividend u just very very different investor base so I think um you know it's not great but I think do think that um you know it doesn't really shifted the investor um it their behavior doesn't change it that much.

[00:33:16]>> You know, um to be honest, a lot of people who come on this show encourage our listeners, given they're mostly young and firsttime or new investors, >> they're they're encouraging those investors to focus on ETFs and the sort of long slow approach to investing.

[00:33:31]>> You're more focused on the active side of investment. Why do you encourage that as as the path?

[00:33:38]>> Yeah, look to be honest, we have ETF too. We have a active ETF which is investing with us and we go and do um the the hard work for you. Um look I always believe um it really depends on what your what your time allocation is.

[00:33:53]Um you know you uh for me I'm an active investor. I feel um you know you you put in the passive uh put in the index level mostly you get is just big miners and banks and little bit of uh healthcare u which you know hasn't really done very well. um really miners now okay but the other hasn't done very well if you look at the outlook for some of those um you know bigger sectors they aren't that great um so as a active investor like myself um I find those company that will do better we talk about pigs and shovels we talk about all these um companies that doing growing really well and they are not that big in the index so if you just buy index you don't actually buy into any of those um so I think in today's world the easy way if um you know you don't want to invest directly in the shares you can buy the active ETF Yeah, for fun managers because you know for us the um you know uh we start from $10 and then you put the money with me and I go and find those picks and shovels and invest them. Um and um you know instead of the uh in you know individual you have to follow the company uh we spend this is what I do you know I wake up 2:00 in the morning look at the US market. I have >> Do you wake up at 2 a.m.?

[00:34:58]>> I do. Yeah. Yeah. So ever since I have my kids I always wake up at 2 and then I go back to sleep. Um so but what what's crazy is that because US market is open and generally you get a sense I always like to get a sense of what kind of um they call a color what sort of flow what is really happening on that market and then because generally there is some sort of flow through in our market and that's when we decide oh maybe this is opportunity you know that company we always want to buy is down a lot you know because of not because of fundamental but because of sentiment and this is our opportunity so I tend to do that so yeah so I wake up but then I go back to sleep then I wake up again >> then I wake up Yeah. And then I do the breakfast. Um yeah, I'll do the lunch boxes for my kids. They don't want me to do it anymore, but anyway, I'm still determined to do it for as long as I could. And then I get to work. So um so that's kind of um yeah, so you know, it it requires um there's so much information flow. Uh it requires to be on top of the information and then to be able to move fast. Um you know, what we I you know, what what I also love you know with my fund is that we can short as well. So short is a very unique thing that many investor can't do that. that's betting our share price fall. Um it's great when the market falls as well and also at the same time when um you know essentially you're you find a company that you think the earnings is not doing great most of the time people just ignore it but we can actually bet for the share price to to go lower.

[00:36:17]>> You have such a unique voice in this business. It's why we love you on the Today Show of course.

[00:36:22]>> Does that public profile ever come at a cost in your industry though?

[00:36:26]>> I think um that's actually a very good question for me. Um you know I uh a public profile doesn't really take too much of my time because that's I live and breathe what I do every single day.

[00:36:37]Um you know I get excited talking about the stock because I have met the management I have done all of that. So I don't feel that's uh you know that's um you know that's at a a cost in terms of my time and others. Um and I feel if anything a lot of time I learn so much from uh you know hearing the different perspective of different questions um retail investors and then institutional investor very different questions. Um but I do feel though sometimes it does get a little bit personal. This is when I do feel, you know, I I do what I do and um you know, I demonstrated with my very strong long track record. Um and um yeah, and I did it without, you know, um support of large businesses. Um you know, uh and and then we're independent um small business and we continue to track well as well as anyone else. Um so yeah, so I think that's on that part I kind of feel um you know, we Yeah. Just let me do what I love to do.

[00:37:31]>> Yeah. [laughter] Get out of my way.

[00:37:32]>> Yeah. Yeah. get out of my way.

[00:37:34]>> So, what is your advice then to someone who is just getting started with their investments? What are the first steps you would recommend they take?

[00:37:40]>> I recommend they start with a company they know. Uh if they Well, first of all, if they're going to invest directly in the actual companies, um start with something they know, like with my kids.

[00:37:49]So, if it's iPhone, then you look into Apple. Um you know, if it's JB Hi-Fi, you know, a lot of young kids love JB Hi-Fi. My son just go buy stuff from JB Hi-Fi. Um look into JB Hi-Fi, understand what drives them. And you know sometimes you can get an understanding is it super busy? Are they doing lots of deals?

[00:38:06]Maybe doing lots of deals is not a good thing. Um you know is it is the foot traffic is a very high you know all these things you can learn about a company and that's the first starting point. Then of course um you know you get on your financial press um you know your financial review the best. That's right. you're the best and you know read um just read lots and lots and over time you'll pick up little things and then essentially um you'll sit in your memory and it'll help you to triangulate information. Uh sometimes investing in stock is about you know um triangulate different information together understanding ah that's going to impact that business now let me look into it.

[00:38:43]Um remember the treasure hunt you know get a sense you got to follow it and then you you got to lift those little pebbles and then find them. Jun Bay. Um, what a treat to be able to chat. Thank you so much for sharing your story and your advice and and all of it. It's lovely to have you on the show.

[00:38:57]>> Thank you so much for having me. It's been a great chat. Thank you.

[00:39:00]>> Pleasure.