Buffett, Bitcoin, booms and bankers. November 21, 2025

25:18Is anybody just sorry, Scott? Could we just do that and move on? That would be easy. I will say this. I will take full responsibility on this if I can also take full credit if in five years' time you're in a profit. No, no, that's not how that works. No, it doesn't work that way. No, it doesn't. You told me that. It's funny that. You can't gamble with my money, mate. If you tell me it's going to go up, if you tell me it's going to be worth more in 10 years' time, that's what I'm waiting for. I love it too. Like the other, the other thing that's really interesting is like how context specific it is.

25:48Like it's, it's funny because like having gone through an incredible face melting rally over, you know, the last few years, absolute silence from the bed, like crickets, crickets, you know, it dips 25 % and all of a sudden, Oh, I told you so. I told you at$3 ,000 that this thing was crazy. It was like, I was right. I was finally right. I was right. So I'll give you some stats here. And I think I actually don't even want to make this about Bitcoin. I would actually make this about the ASX. I would make this about the NVIDIA. I'd make it about Amazon. I'd make it about Technology One or CSL or any asset that has delivered incredible long-term performance.

26:27I always make this point. And I'm really not trying to make it about Bitcoin. It's just entirely relevant here is that they always have these brutal drawdowns along the way. It's the journey. It is why very, very, very few people capture the full upside of these multi-year runs is because two things. One, it goes up 30%, 40 % people lock in a profit because you never go broke taking a profit, as the traders like to say, which is the most stupid thing ever. It's either that. So, instead of like you feel like a genius because it pops up 20 % you sell and then 10 years later you look back and cry into your Wheaties because it's like, oh, I made a terrible mistake.

27:06And the other one is it dips a little bit and you go, oh, this wasn't the plan. And then you panic and you panic sell. So, why very, very few people who bought Fortescue Metals at 10 cents a share don't hold those shares anymore. So, since, I don't know, we could go back to 2009, but it becomes silly then because you start dealing with compound annual growth rates that are just ridiculous, like insane. But if you go back to 2017, we've had 12 corrections of 25 % or more. So, it was about$3 ,000 at the start of the year. Yeah, yeah, yeah. We've had six 50 % corrections and we've had three 75 % corrections.

27:44Like, this is normal. So it's not to, and again, it's not to try and rationalize this, but just to make the point that be it Bitcoin, be it. And that's why I wanted to sort of throw that Berkshire quote in there as well, because Berkshire is the poster child of long-term sensible capital allocation and, you know, the most fortress-like balance sheet on the planet run by the world's best investor that's ever kind of lived. And it's like, and here he is going, yeah, it's dropped in half multiple times. And like, and everything, you remember this, right? Because we've been around for some of those.

28:21And it's like, you know, Buffett's lost it. It's all over. Oh, yeah. Sucked in, you know. It's like, no, everything's fine. And in fact, one of the things that you get, the vantage point you have with a little bit of, you know, stepping back and getting some context is that not that anyone rings a bell at the bottom. And who knows, Bitcoin could drop another 50 % from here. It would not surprise me at all. Yeah, totally. What? Prepare for it, my friend. You won't tell me that. Why Bitcoin? I tell you this, though. Historically, every single time it has been a phenomenal buying opportunity, right?

28:56Not because you pick the bottom. It's just sort of like, you know, something that is now just shy of$2 trillion US asset that's gone from zero. And then people go, yeah, but it's dipped a little bit lately. It's like, and your point is? Like that happened with the share market. The other thing I did on Twitter as well, which was to say, I think we could probably agree that Commonwealth Bank is probably one of the best poster childs for a blue chip stock that's out there. And you know my view on it. I've been calling it a bubble for a long time, right? Well, Commonwealth Bank, bluest of the blue, has dropped 22 % since its June all-time high this year.

29:42This year, right? So if in, I forget the exact date, but mid to late June, you put money in Bitcoin and you put it in Commonwealth Bank, even now with that drop that we've had, you'd be down 10 % on your Bitcoin investment and you're down 22 % on your Commonwealth Bank investment. Now, Andrew, you're being very selective with your time frame there. June's not long. Yeah. And it's like, I am being selective with my time frame. because that's the point. Because anyone who looks at Bitcoin and goes, oh, look at the last month. It's like, well, are you, I mean, all I need to say is, well, zoom out.

30:20Tell me what it looks like over any meaningful timeframes. Oh, you don't want to do that. Oh, you don't want to selectively use that timeframe. You just want to, you only want to pick the very tippity top and then measure from there in a blink of an eye. Like not even talking about a year or six months. We're talking about what, four or five weeks it's done that. And if I did that with CBA, when I just did it with CBA, everyone would go, dude, it's been four months. That doesn't mean anything. Volatility does not equal risk. Volatility does not equal risk. And most people cannot tease those two apart.

30:59And most people are terrible investors. Most good investors, and Buffett has said this repeatedly. there's this great quote he says like the best time to buy an asset is when it's on the operating table right like it's just sort of like quality know what you own know why you own it if you do that i haven't lost a second sleep my only the only thing i'm angry about is that i've got no cash to deploy that's what i'm angry about right um but it's not my it's not my first rodeo dude like it says like and you know i know you're being facetious here like you you've been through this before a million times.

31:33Yeah. You know, you've been through it with individual stocks, with your entire portfolio and you have slept as soundly as a baby, right? And it's the same thing here, right? So anyway, I... So you've lost me money on Bitcoin. All you want to do is then tell people why they should buy more Bitcoin. Is that what I'm hearing? I'm actually not telling anyone to do anything. What I actually said to... I got up with a friend the other day and he was moaning and speaking He was doing one of those. And I was like, so I don't understand what's changed. He goes, well, the price is down. I said, yeah, okay, but what else has changed?

32:08He goes, well, I don't know. If you're telling me the only reason you bought this was for FOMO and because some idiot mate of yours was banging on about it, that is not a reason to invest. And that's why I think we really lean into this. You know I say it all the time. You can borrow an idea. You can't borrow the conviction. Someone talks passionately and confidently about a particular security or asset or whatever it happens to be, and it's going up, it's very easy to get on board. The second it dips, like, oh, what's gone wrong? It's like, if you have to ask that question, you never should have bought it in the first place.

32:44Whether it's a magic internet bean or whether it's the world's largest, most profitable conglomerate, like either case, all it says to me is that you never should have bought it because you don't understand what it is that you own. And so I am certainly not advocating anyone to buy it. I am very strongly advocating, learn about it, right? And we had a bit of a chat about this last week. This is why I bristle so much when people go, it's unfair and you got lucky. And it's like, does this feel like luck to you? Does this feel like luck? When you look retrospectively back at something and it's gone, you know, like I'm, it sounds like a brag with stuff and I'm going to put it in there.

33:24I'm up 4X on my investment, right? And the largest investment I've ever made, right? Even despite all of this. And you're going to tell me that that was easy or I was lucky or that I didn't deserve it? It's like, well, obviously it looks easy. But as I've just said, like, you know, over that timeframe, I mean, there's been more like quarter, like 24, like I've lost a quarter of the value of that investment and more times I've changed underwear. underwear. And then someone goes, oh, you don't deserve that. It makes me angry. And it's the same with some of the shares I've held as well. Oh, you got lucky.

34:01And it's like, it always looks like luck in hindsight. And this is why people who bought Amazon and Apple early deserve their success because they went through the same journey. And it's just so easy with the benefit of hindsight to sort of dismiss it. And I think, you know, the pain is real. The struggle is real. And this is why people who do the work, build the conviction, and endure the pain, the suffering, the volatility, I think are deserving of the rewards that will eventually come to them because they did the hard thing. And the easy thing was just to follow every lemming out there and panic.

34:43and it's like, well, good luck to you, but that generally doesn't work, whether it's, again, Bitcoin or whatever. It generally is not a good strategy. Mate, it's even the whole stock market. I've said before, I've used this example of when I published an article about the Vanguard 30U index chart, and I saw all you had to do was buy and hold. But who would do that? Yes. That's the point. Right? And it just drives me bananas or something. Me too. Who would do that? It's like, well, I mean, you don't have to, but the point of the article is that's all you had to do. And so I'm telling you - Easy for you to say.

35:12You just bought and sat on it. Easy for you to say. Like, well, it wasn't easy. I tell you what, 2009, it wasn't easy. Tell you what, 2012 was pretty hard. Oh, COVID. Yeah, watching 35 % of my wealth eviscerated in the space of four weeks, that was easy? Like, screw. I find it offensive, right? I get that sense. You get that sense? And I just like, I just mark this in your diaries, right? So in years to come, when we're at a million dollars a coin, right? I just want people to remember this, okay? I want you to remember this. And we'll, yeah. Anyway, we'll see. History will unfold in the way it's going to unfold.

35:54In the meantime, apology accepted, Andrew. Thank you. Yes. And thanks will be accepted, I'm sure, in the years to come. Mate, you know that until I get back to par, I'm blaming you. And after that, it's all me. So the problem is, right, I don't have any spare capital. Me either. Well, you can sell those Kogan shares. I'm sure you can sell some things as well, Mr. Pitch. I could sell the Kogan shares. This is too much fun. But yes. Opportunity cost is a thing. Opportunity cost is a thing. I mean. Let's not put Kogan and Bitcoin in a graph is all I'm asking. Let's not do that for the last five years.

36:28No. No. No, I don't think I win that one. Mate, speaking of winning companies, my God, NVIDIA. Wow. This is fresh off, hot off the press too. Right? This is the world's largest listed company worth$4.5 trillion US dollars. So call that the current exchange rate, 6 point something. That's stupid money. Just remarkable, remarkable rise, remarkable value. the company announced so we're recording this on Thursday morning as we always do so the company announced first thing on early Thursday morning the numbers for its financial half financial quarter I should say the numbers are just extraordinary they did in the last quarter $57 billion in revenue $57 billion in three months $20 billion a month Yeah, and the forecast for next quarter is$66 billion.

37:33And it's sold out. Which takes them to a quarter of a trillion US dollars in sales in a year, if they manage to repeat that for four quarters. And to your point, they've sold out the chips they're trying to sell. They can't make them fast enough. It's not a quarter of a trillion, is it? It's 44 plus 66. Quarterly, 6-6 a quarter. Oh, sorry, yes. Yeah, a quarter of a trillion dollars in revenue in a year. By the way, that revenue was up 22%, not year on year, quarter over quarter. That is the last quarter was 22 % higher than the previous quarter and 62 % increase year on year. When a company can do that$57 billion, which is up by two thirds on the same quarter the year ago, these are stupid numbers.

38:20These are stupid numbers. Go on. Yep. So our shares are up 5 % after hours. Yep. And 5 % for a company of that size is, I mean, the amount of market cap it added is bigger than almost every company on the ISX, just to put that into context, right? That is how big. I wonder if the IFR is talking about how many billions is wiped on to the share price, or do we only wipe off value? You know better than that, we only wipe off, Andrew. There are no clicks in share prices going up. That's right. I often forget that. so let's imagine that it is mid-November which it kind of is but it's mid-November 2025 I just have to hammer this the horse is dead but it's not dead enough let's do it anyway just from the last point let's do it anyway so you thought I like Nvidia I think it's got a good future and you bought it right you would have paid 141 US per share and by April of this year you would have been down 37%.

39:23How many people who bought a year ago do you think are upset today? This is exactly my point. This is the best performing equity that any... No, you just can't talk about shares without talking about NVIDIA, right? It is propping up the entire US S &P 500, right? Yeah. I'm not having to go back. It's driving higher, but either way you put it, it's phenomenal. Here's another stat I heard during the week. Like the Russell 2000, which is a not often talked about index, that tracks small caps in the US. It's the same value as it was four years ago. Actually, it's down about 5 % on where it was four years ago.

39:59That's interesting. So, like, what? But I thought the US stock market was on fire. I was like, well, the MAG7's on fire. Is there survivorship bias in that? Well, it's 2 ,000 stocks. I think once companies are up into the larger capitalizations, do you lose the kind of ability? Like the real company of Nvidia, for example, It would have been the Russell 2000 at some point. They would have dropped out and gone to the moon. I don't know. Well, it's interesting, right? Maybe you just bought the Russell 2000 ETF. There's one on the ASX. They're everywhere, right? This is sort of like, I think the US is a dynamic economy with a future.

40:30I think when I say small, the mid-cap, you know, we're still talking about companies that are, you know, worth a billion dollars or more. These aren't tiny, tiny. These aren't your local mom and pop sort of corner store kind of things. But anyway, my point being is just like, I don't even have to go back 10 years and then cherry pick things. I'm just going to take NVIDIA and I'm going to go back one year. And I'm going to talk about a 35 % plus drawdown in that period. All right. Case in point. Case in point, right? And like Bitcoin hasn't fallen that much. Anyway. The thing about NVIDIA too, mate, is it's only trading on WhatsApp only, but still only 50 times earnings.

41:04Yes. And I think it's worth. Yes. And there's lots wrapped up. We'll talk about AI a little bit in a bit, but there's lots wrapped up in this, right? Is the AI, is AI in a bubble? Maybe, who knows, whatever. The reality is NVIDIA is not making money on use of AI. It's making money on the picks and shovels. It's making the chips that people are buying from it to create AI services. And it's putting them in data centers and it is just going bananas. Now, it doesn't mean – so here's the thing. I'm not saying you should buy NVIDIA shares, right? For all I know, this gross margin is 75 % too, if you're wondering.

41:42That's just stupid large. So basically they're able to sell – It's not software. And this is kind of the point, right? So how can you make 75 % margins? You only make them if there's no real competition. Yeah. Because no one lets you sell. Pick a, as you say, pick a business-to-business widget. Whatever you – so speaking of hardware, let's look at PCs, right? You're not going to make a PC if you and I get together and create a Page Phillips Co. laptop. We're not selling that for 75 % gross margin. No way. Why? Because someone is going to come and undercut and say, we can put the same sort of memory in it, the same sort of graphics chip, the same sort of screen.

42:18And if you're making a 75 % margin, by the way, what does that mean? It means you're selling it for four times your cost, which is phenomenal. So it's going to cost you thousands bucks to put a computer together and you're going to sell it for four grand. And you're going, no, no, you're not. Because there's similar computers out there. And even if yours is better, it's not that much better. Now, NVIDIA for now has a spectacular monopoly, a near monopoly on chips for the going AI, right? Partly because they're in shortage, so you can set your own price, supply and demand. So good luck to them.

42:45Partly because others haven't got, can't create, and there's patents and stuff, similar chips that other people are prepared to use instead for a cheaper price. And that's part of NVIDIA's magic. Now, moving forward, the question for any NVIDIA investor is, can they keep growing? Probably. Will AI demand flatten or peter off or reduce? Dunno. Will someone else come up with a chip that is almost as good for half the price? Dunno. Well, I came up with a chip that's exactly as good for 80 % of the price. Don't know. But when the tide is all the way in, all the way in, on margins, on sales growth, on market share and all those things, you've got to believe none of those go backwards and the business keeps going forwards.

43:30And maybe it does because, frankly, we just talked about a year ago, it was doing whatever level of sales it was, now growing by two-thirds. I'm going to say that was about$30 billion roughly, it would have been doing. now doing 50 billion. So a year ago, I would have said, can they keep doing it? The answer this year is absolutely. You bet they can. If you're going to buy the shares, though, you have to believe that the current share price will be justified by future sales and profitability for an extended period of time and that no one else will move on its market. Now, I say that because it's worth thinking about Intel.

44:01Remember when we used to buy laptops and little Intel inside, little logo on it? Intel was the only game in town. There you go. Intel was the only game in town. So what did you do? Well, of course, Intel's the best chip. I buy those. Now, at some point, it'd be a blue straight past Intel. And maybe this is it. Maybe this is the best chip forever and a day. Maybe no one ever beats it. Maybe in 25 years' time, people look back and go, you mean you didn't buy NVIDIA shares in 2025? They're now a gazillion, bazillion times as big as they were. So easy in hindsight. It's unfair. No one ever beat them.

44:30Their graphics processing unit chips were always the best in breed. No one ever got close because they had patented technology, and they were just 2075. we're still using them and they're 95 % of the market, you're making a fortune. Or one other version is, remember in 2028 when the new Intel chip came out and it was the ZPU rather than the GPU or the CPU and the new ZPU chip did it three times as fast for a third of the price and everyone switched from NVIDIA and NVIDIA lost 90 % of its market cap? Oh, okay, yeah, that's true too. I'm not saying you shouldn't buy because of the risk. It's all about TPUs now, did you hear that?

45:04Oh, no. So Google's, Gemini's Google's apparently the scoring best on all the AI platforms. I own Google Shares, the record. Yeah, yeah, yeah, yeah. So they actually use Tensor processing chips. Right, there you go. Which of those, I don't know, I'm going to pretend I know what that means. All I'm going to know is they didn't use GPUs. There you go. I'm just highlighting your point, right? And I'm not saying that means anything other than the future, things can move fast in this space, right? I'm allergic of mentioning Bitcoin in this podcast, but I will bring up only to say that NVIDIA's big jump, They got three big jumps.

45:39The first was multiplayer online gaming. GPUs for graphics. So graphics, processing games. Then Bitcoin was mined for the longest time. I say the longest, relatively speaking. Using those GPUs because they were the best chips for Bitcoin mining until someone invented a better mining chip. Now, you don't use GPUs to mine Bitcoin. They still use them for some, apparently, some coins somewhere. But I don't want to get into it. My point is that moved on. The fact that they're using those things just shows you how much of a failure they are. But anyway, let's not go there. Let's not go there. The ASIC chip is designed specifically for Bitcoin.

46:13It is most best placed for Bitcoin mining in a way that NVIDIA had, had AI not come along, the NVIDIA Bitcoin mining boom would have come and gone. And again, I'm not, I'm not making no prediction about NVIDIA at all. My point is simply to ask you to think to yourself, if I'm, as an investor, here's what you should do, right? You should have a range of potential outcomes in your head for any company. And with Wallis, it's easy. Maybe sales will grow 3%, maybe 4%, maybe 5%. Okay? Maybe there's a 10 % chance of growing 6%. Maybe there's a 10 % chance they'll grow 2%. But realistically, tell me between 3 % and 5%.

46:45That's probably reasonable, right? Well, look, in any particular year, maybe the error bars are a bit wider. But if you annualize and average it over, it's like a 3%, 5%, 10-year period, then yeah, it's like no way. I would bet my left arm it's like within 10 % of 3%. Right, right. And so, you know, as an investor, you should because you should allow for those ranges. and that helps you then frame up a price you're prepared to pay. Well, if it's 5%, okay, I can pay a bit more. If it's 3%, I should pay a bit less. How much am I going to pay? Well, the odds of more than 3 % are pretty good. So whatever maths you do, whatever probabilities you apply, that's how you should do it.

47:19With NVIDIA, you've got everything from the gross margins will increase, sales will double, and it'll happen for 10 straight years because AI, right? And the maths on that mean these shares are stupid cheap. Stupid. I can't see how cheap the share. If that was to happen. Long end of the century, yeah. Right. And I've already said the other end. The other end is that another player turns up. Maybe Nvidia doesn't drop sales. Maybe it's to halve its margins just to stay in the business. Okay, well, same sales, half the margin. By the way, much less than half the profit because the way that operating leverage works in reverse.

47:54So maybe all of a sudden the P of 50 comes to P of 200. Well, damn, that's a lot. Maybe the shares fall by 50, 25, 75%. Okay, so then you've got... Now, they're probably your outlying, anything, it could be smaller. And then you've got lots in between. And so your job as an investor is to say, probabilistically, where am I going to put my dice? Where am I going to, you know, with some sort of margin of safety, Ben Graham's famous phrase, how much will I pay for NVIDIA based on those range of outcomes? And you've got to make a decision. And I'm telling you what decision you should make. You might have absolute confidence NVIDIA is the king of AI in 10 years.

48:29You might have absolute confidence that this thing is going to zero and I'm going to short it. in all probability it's somewhere in between and that's the hard part of investing in this stuff and if you don't know don't do it but i just want to we want to talk about it because the numbers are just big and it bears talking about because it's just a remarkable remarkable remarkable business the size of the iib is huge the ability of these biggest companies this is what i've said a million times about the nasdaq right i invested in nasdaq etf because these are the companies that are inventing the future and it sounds like a wanky tagline and i don't kind of care because i'm not selling anything, but if I was, it would.

49:02Like, if I sold an ETF without taking it, oh, okay, Philip, sorry. Inventing the future. Right. Except that, think about every innovation, almost every innovation in the last X number of years, and go through the list, right? Social media. Think about online streaming. Think about, by the way, I'm talking about both Google and Netflix, by the way. Think about - Online retail. Yeah, yeah. Online retail. the boom in you know there's little you know a few square inches of real estate we hold in our hands that we call phones that have the world's knowledge at our fingertips for relative pennies I mean the phones are expensive but man what do you get for them like madness inflation adjusted I'm probably paying the same price for my Google Pixel that I paid for my Nokia 121 way back in the day right and yet actually inflation adjusted to the very early phones I mean they were fortunate they were terrible they didn't even do phone calls very well.

49:56Right. And they probably grew a tumour on the side of your head when you use them, right? So I just make the case that I don't have a view on NVIDIA other than it's massive, other than I think, and that's why I'm also mindful when we talk about, I don't have a strong view on the value of the market as a whole, but you've got the world's largest company growing sales at 60 % a year. Maybe it falls, maybe it doesn't. And I'm not just saying, throw in Amazon, throw in Apple, throw in Google Alphabet, Throw in Facebook. Throw in Netflix. Throw in whatever the other Mag7 I've missed. Apple. These things are just, you know, maybe they're horribly overvalued.

50:32But if in three years' time, collectively, they've grown profits at 20 % or 30%, I would not be slightly surprised. And today's valuation will look much cheaper. And I'm not saying you should buy or not buy. I'm just saying I would be very careful about using the PEs of saying, well, the PEs are higher than they've ever been. It's like, yeah, but we've never had the seven largest companies on the US market with this much potential growing at this sort of rate. So just, again, I'm saying buy at all. I'm just saying be careful of listening to historians, I'll use that word deliberately, who people who say, look back and go, it's higher than they've been, therefore it's X.

51:04No, you can't do that. There's no therefore here. The question is, okay, what else has changed now? Now handicap the odds. Tell me how fast, 1984, how fast were the top 10 companies in the US growing? 3%, 4%, 5 %? Back to Woolies. Maybe they'll grow faster for all I know. 25, 45 years later, how fast are they growing now? 66%. Some of the other guys are growing double-digit percentages. Not that 10%, 12%, 15%, 17%. That is not your father's market. It's a very different story. Oh, look. I mean, again, if successful investing was just trying to, like, bet on PE mean reversions, then we'd all be Warren Buffett.

51:40It's hard. And I would say - I'm going to say it won't either, by the way. I'm just making the case that don't just look at the numbers and go, here's a chart. It's higher than it used to be. Mean reversion is a thing, generally speaking. Yeah, yeah. But don't miss out on the fact there are some really seismic changes to the business world happening right now at the very top end. Unusually, you mentioned the Russell 2000. Part of the thing is these guys have just exploded so fast. Yeah. They've gone from Russell 2000 to top seven in literal years, like single-digit years, more double-digit, like massive growth, huge.

52:10And don't forget, if we just want to focus on PEs, they can revert in two ways, right? Yes. The PE can drop by the price dropping, but it also, like, if the earnings triple, then that's going to lower the PE very quickly. PE of 60 goes to PE of 20 if earnings triple. Absolutely. Absolutely. Okay. So, world's biggest company, certainly one of the most successful over the last sort of 5, 10 years, PE of, what did you say, 50? Yep. Let's go to the ASX. technology one absolutely smashed the other great company by the way you know i i own them another lesson talking about buffett buffett and his lessons i can't even i don't even want to look up what i bought them for let's just say a very very small fraction of what they're worth now and i was so clever i locked in i think i got a 40 profit oh god i was clever so i'm just you know god's gift to investing there's a lesson there there's a lesson there anyway um and i'm not I'm not even trying to rain on the parade here with Technology Wong because I think it's actually a fantastic company.

53:21But I just want to put the contrast out there. It's trading at a P of 70 or maybe 68. It wasn't 90 about two months ago. Yeah, it dropped a lot. Right. So back to the Bitcoin thing. It's like, oh, it's all over. It's a Ponzi. No, volatility is not equal risk. WiseTech, 67. Zero, 94. Right. Prometicus, you ready? 205 right I don't think that might be a blended PE too not even a historical one right which just means that they're incorporating forecast future growth I'm going to maybe look it up while you chat just to blow myself out and again I'm just want to I just want to lean into the point that you're making here you're the easy the easy so what from what I just said there is like also Australian tech shares are even stupid like the Nvidia is stupid and they're even stupid well not necessarily because they're a lot smaller than Nvidia And maybe, I mean, that clearly, I don't, you know, there are some things we can say, which kind of guesses and, you know, assertions and the rest of it.

54:22One thing you can say objectively true is that for right or wrong, the market thinks that they are worth that because that's what people are paying for, right? And they're paying for it because they think that in time, the earnings are going to grow to such an extent that even as the PEs can press back to more or mean revert back to more, quote unquote, normal levels, you're still going to get an incredible return. and and but it is it is very much a sign of the times though that we are looking at at very very elevated sort of multiples here and just to hammer on to your point there nothing wrong with any of that they're all great guys actually regard every single company i mentioned it's fantastic yes they are all brilliant australian success stories um and well done to those very few people who actually bought them 10 years ago and still hold them because you've been highlighting my earlier point because there's probably like three people who have done it and they're probably in comas and that's why they haven't sold.

55:12But you are really, I often come across investors who'll say, yeah, but they're growing really well. Like, okay, but that's not the bet, is it? The bet is that they're going to grow better than everyone's kind of expecting. Because even let's say that everyone, everyone's, there's an average here, there's a consensus here. So you're actually talking about distribution and there'll be a very widespread of expectations. But from the perspective of consensus, well, I'll just pick on technology one, they are saying that earnings are going to go very rapidly for a very long period of time. Let's say they do.

55:52It's like, to the degree that the market expects, well, without getting too much into the theory of it, that would suppose that the current price is fair, which probably means that you'll get a 10 % return, which is pretty much bang on what the average ETF, broad-based passive index ETF has delivered over very long periods of time. So it's kind of like, even if it's true, it's kind of like, okay, I get an average return. I'm not going to throw shade at that. There's nothing wrong with 10%, but it's kind of like for you to get an outsized return, for you to get a better, a market beating return, And one that you also have to risk adjust that as well, not in the wonkish break out a spreadsheet and do some complicated statistics, but just in the fact that it's going out on a limb to say that a passive ETF is much, much less risky than any individual security, no matter how good that security is.

56:45By definition. By definition. So one, very, very low risk, probably on average over the long term 10%. one, a specific company full of all kinds of specific company risks that will also give you that. Everything has to go right. If everything goes as positively as the market expects. If you want to do better than that, it's like, well, you have to think that the growth is even stronger. And again, it sounds like I'm trying to very strongly hint that it's not going to. I don't know. I don't have a position. Well, actually, that probably tells you what my view is. It's actually, it's not that I don't think that they can, but I don't have enough confidence that they can, that I'm happy just to go, well, it's too hard basket.

57:2599.999 % of every investment I look at is in the too hard basket for me. And I look at these companies with great admiration, but I just can't handicap those odds. That is very, very, very hard to do. But it is noteworthy that we are trading at such multiples here because gosh, it's not about things going well to justify it. Things have to go even better than our already lofty expectations for us to get a return that's probably better than a market average anyway. Yep. Does that make sense? Did I say that right? Totally, mate. ProMedica is 227 times trading earnings. Now, here's the thing with that, right?

58:05227 times trading earnings. If profits go up 10x, it's trading on 22.7 times earnings. Yeah, market average is about 16 over the long term. And maybe it deserves something more than that to your point before because maybe it is a growth company. 10x just to get a PE of 22.7 and if it did it right now you could then start from this point moving forward and hopefully grow at the rate of the market to keep that PE at that level and maybe you'd get a market average return if it took you 10 years to 10x profits that'd be a remarkable again you made the really good point I've made this before and I love it the company's brilliant the list of companies you read out are some of the very best businesses on the ASX bar none they are very very good companies Objectively so, just historically looking at what – it's not even talking about revenues, it's talking about cash flows, right?

58:52They're like, yeah. The whole point of a business is to generate a positive return for its investors, right? They have done so. Pretty job. If you own these companies, you'd be stoked with their financial performance. Stoat. But if you're paying a price that requires a lot more, that's a difference. Very simple example, right? Let's say Berkshire. let's say it was trading on five times the return. It was five times the PE it was trading on in 1965 when Buffett took over. The returns are very good, but nowhere near as good, right? Because the returns, they're limited by the price you pay. They must be by definition.

59:30And I'm not, by the way, NRI aren't saying buy, only buy things with PE's in single digits. No. Because they're generally terrible companies that are woeful, right? There are some, I bought Amazon when it was a thousand times earnings, probably. I can't remember the exact PE at the time. Stupid number, right? Why? Because the long term, I thought was attractive because they were actually not trying to make any money. They were throwing all the money back into growing the business. Zero is the same story. Zero's track record is largely, I don't want to make any money yet. I'm buying customers. I'm investing in exactly what they should be doing.

59:57It's perfect. The business were run perfectly by their management teams. And you can pay a big multiple and make money. You can pay a small multiple and make money, but you can't pay a multiple that exceeds the business's potential at any point, at any price, no matter what the business is, because you can't get the return you're looking for. And that's the key. Got to pay a decent price, not a cheap price, a decent price based on that future earnings. Can I use an example here? Speaking of wonderful companies, speaking of incredible best in breed companies, bluest of the blue chip companies. God becomes a big coin at this point, so I'm just excited to listen to what you're going to say.

1:00:31CSL. Right. It's great. It's a brilliant business. It created immense wealth for its shareholders, right? It's not had a good run. And for Saudi, by the way, which is also nice. Yeah. I mean, yes, right? Now it's down, you could have bought it five years. Let's not use short timeframes here because you can sort of like, as an earlier point, right? It's like you've got to have some kind of relevant kind of context here. One, two, three, four, five. Let's go back. So in that time, so five years ago, again, I get in my DeLorean, I travel back, I visit Scott in the year 2020. and I go, mate, let me tell you, I have come from the future.

1:01:10CSL, I think you agree, is a great company. It's a big company, but I still think, and I don't think, I know because I'm from the future, they're going to grow their earnings on a per share basis by almost 50 % over the next five years. Beauty. Love it. Brilliant. I'll buy some shares. All right, you're down 40%. Oh, but it grew. And what was - It grew 50%. How can I lose money? How do you reconcile that? Well, five years ago, I'm just looking at ComSec, the average annual PE for the year 2020 was 40 times. That seems tame. Doesn't it seem quaint and tame? Wow, 40 actually sounds cheap. Well, kids, you know, gather around.

1:01:51There was a time when that was considered rather high. But it's actually, it's compressed to a great degree. So they've had incredible earnings growth. In fact, if you bring up the earnings per share chart, but it looks like they had a bit of a dip in 2023, but it's a pretty good staircase there. Big multi-billion dollar company growing consistently, virtually recession-proof, best in breed. And it's not like, oh, you've underperformed the index, which you have. It's like, oh, you've lost five or 6%, which, you know, it would almost be desirable. You have lost 40 % over a five-year period in one of the best companies on the ASX.

1:02:30whose earnings grew at a very significant degree. And it's not as if it's slowed down. In the year just ended, in 2025, also financial year 2025, they grew their per share earnings by double digit rates, like 11, 12%, something like that. And again, it's just, and people always go, but why? But why? And it's just highlighting the point once again, because people paid up for a rosy consensus. And in hindsight, too rosy a consensus. Motley Fool Money. For more, subscribe to the free newsletter at fool.com.au forward slash listener. Now, can I tell you too, mate, back in 2000... Okay, I've got the way back.

1:03:15Back in 1996, these things changed hands for$1.56 per share. So it's both up 100-fold and down 40 % over that journey. Yes. And this... Why? Because price matters. The business was every bit as impressive for almost all. I don't remember 1996 business, but I'm pretty sure it's been an impressive growing business for most of that time. But investors got carried away. The price got, usually one of your favorite things, investors got a hit over their skis. You go from a, well, hang on, this is a very, very good business. I'm paying a high price, but it's worth it, to I'm paying a stupidly high price.

1:03:54And so at some point, even though the business continues to deliver wonderful results over that period, it's never been a bad business. It's always been a wonderful business. What changed? Only, well, the returns. Why did the returns change? Because you paid a different price at a different time. So the story is, right? Has CSO been a wonderful company? Absolutely. Has it been a wonderful investment? For most of its life, yes. Has it always been a wonderful investment? No. What, because the business sucked at some point? No. The business was great the whole time. Investors got carried away. They paid too much.

1:04:23and now they've got to pay the piper. Now, for all we know, the price goes back up again, right? I'm always mindful of saying at a point in time, see, therefore the price down, therefore they paid too much. If the price goes for$170, it is now to$400 by this time next year, we might have to recast this particular episode. We might delete this episode. No, I'm kidding. It'd be fairly consistent, actually, if that happened, right? The point just is the price you pay matters and the change in sentiment matters. I'm not only a DCF guy, right? I don't actually do them most of the time. but conceptually it's the way I invest because if you've got a company trading at a PE of 40 that's growing nicely, just not fast enough your thesis must be by definition well I hope people keep paying a stupid multiple now frankly, I will say of the list you gave Prometicus, Zero, WiseTech, and what was the other one?

1:05:12Technology, One on average I'm going to say that group only beats the market as a total group if people keep paying stupid PEs Not individually, they could do fine. But when you start with those sort of levels, and technology one's already come down massively since, you know, as a P, 99, as a P of whatever it was, you said 70, I think. The fall is exactly what we're talking about. The business is actually perfectly good. It's done really well. Why did the fall happen? I think it grew at 70 % a year earnings the last year. And Mark went, well, that's not enough. I don't like that at all. No, no, yeah.

1:05:43So it was huge. Actually, their annual recurring revenue, which is a good metric for a company like this, is up 18 % for the year just ended. This is no problem. Doing nothing wrong. But investors expected more. Let me flip it around and make the same point but in a different direction and also sneak in a victory lap. Because I'm... It's not about Bitcoin, is it? No, I'm not. That'd be too easy. I'm really patting myself on the back. You know, by the way, top signal for the market. I've done too many victory laps this episode for this not to all come crumbling down. And Scott bought Bitcoin. The whole thing we do.

1:06:19We are what we do. It's 2026. Yeah, it's a disaster. So what I like, I often talk about why I like small cap stocks. There's a whole bunch of reasons why I like small cap stocks. But one of the reasons I like it is that you often get to buy pretty decent companies that are just completely unloved. So there's a little company. It was not so little. It's still tiny, actually. But it was less tiny than it was called Stealth Group. And they basically, I won't get into it. You look it up. Anyway, don't buy it because I'm talking about it. Because, again, this is the top signal, right? But I was able to buy it a few years ago at a PE of 12.

1:06:52Actually, it might have even been 10, something like that, right? So there was a PE. There's plenty of companies I buy that don't even have a PE because there's no earnings. There's revenue. A PE of 12 says, in theory, that's roughly fairly valued for a business that's absolutely stagnant, maybe declining very slightly. If you're listening at home, don't do the DCF yourself. Just for what it's worth, about 12 is about flat, roughly speaking. Lots of differences in terms of returns on capital. but roughly about$12 for a flat business. And what's nice about, so, you know, shares are around$0.10 or$0.12 at the time, and, you know, they're over$1 or something now.

1:07:28The earnings haven't grown that much. Right. But the multiples expanded. Yeah. And so it's the same dynamic we've just talked about, but in reverse. And one of the things I really like about these sort of under-the-radar little companies, because they're too tiny and illiquid for fund managers and big, serious money to sort of touch. So you get to buy these companies. And a couple of things, if it goes right, and more often than not, it won't go right. Like, let me lean into that. Like, this is, you know, because people love to go, oh, didn't you like such and such? And I went down. I was like, yeah, it did.

1:08:00It's actually part of the plan. Like, I'm fully expecting that at least half of the companies I buy not to do well. But the ones that do well will do so well that it makes the average pretty decent. Again, it's a bit of a head screw, but it's very much part of how I invest. Anyway, so what happens is, what you hope to happen is, is that actually this is a decent company. Actually, they are growing. Actually, they are delivering on their potential and on their promise. And so a few things happen. The earnings grow. They gain more attention. They gain more liquidity. They gain more size. Bigger money can come into them.

1:08:40And so, yeah, the business grew. That's nice. But the multiple expands. It's the opposite phenomena of what we're talking about before. And that's when you get these leverage return, which is such a thing of beauty when it manages to happen. It's sort of like now it's on a PE of 40, right? Now, again, I don't want to talk about the individual thesis for this company. This is not relevant. But it's more just to try and illustrate the point. when you're buying a company with a PE of 12. And if you were like me, and we were expecting you actually get some pretty decent earnings growth here, actually some pretty okay sort of revenue growth, but some really decent earnings growth as they sort of scaled in and unlock some operating leverage.

1:09:19I'm going to get some really nice earnings growth out of this. And if that's all I get out of it, hooray, happy days. But what I might also get is I might get a PE that goes from 12 to 15 or 12 to 24. In other words, I'm going to get a doubling just on the multiple expansion alone. You can use this phenomenon to your advantage. And I guess it's more just to sort of make it consistent across all the examples that we're using here is that you can be right on the business, but wrong on the valuation here. And what you want is you want a business where the growth potential is not properly accounted for because not only do you get the benefit of that earnings growth when is realized, but also the market re-rate that happens as a consequence of that.

1:10:08And that's when they turns a pretty decent earnings growth into a spectacular share price growth. I don't think I've explained it well. No, you have my perfect answer on this. No, it's why, and there's a real nice multiplier there, the earnings grow and the multiple of those earnings grow. So you get this double Leveraged. Not in a debt way, but there's a leveraged return in that. Well, let's make it very simple. You're earning$100 a year and you're on a PE of 10. Yep. Okay, pretty straightforward. If you're also earning$150 a year where you're on a PE of 20, then you can understand the math there.

1:10:41So your profit's increased by 50 % and your PE doubles, and it's double on that extra 50 % worth of earnings. That's the sort of multiplier effect we're talking about. I can't do the maths in my head because I don't get it wrong. But think about those two things at the same time. Think about how they play together. That's what's important. Yeah. Mate, I've got a multiple choice option for you here. Okay. So we've gone for an hour and ten. We have three items left on the agenda. And as much as we love a long podcast, even I am not going to go down that path. Okay. Would you like to talk about the first home buyer scheme?

1:11:11Would you like to talk about AI coming for travel bookings? Or would you like to have a swing at the bankers when they spoke to parliament this week? Oh, man. I have so much to say on all of those things. So you can choose one. because I'm a nice bloke even though you lost your money on Bitcoin this week um let's let's let's this is real existential angst right here people I'm watching Andrew he's pulling his hair he's like but I want to run on all the things I'm definitely leaning towards the property and the bank let's get the bank one let's get the bank one because that's that's an interesting one you knew I was going to go just quite that knew I was going to go to the bank one we had the big four bankers in parliament this week can I say was that a B or a W sorry I didn't hear that come through properly Whilement?

1:11:51No, no, Parliament. Oh, okay, sorry. Parliament. I thought it was bankers or something else. Anyway. Yeah, no, no, no. Definitely bankers. Bankers brought us things. They are big bankers, aren't they? So far, by the way. They're the biggest bankers you'll ever meet. I've got Buffett's letter, bloody Bitcoin, Nvidia booms and bankers in Parliament. I told you I was brought to you by the letter B. I'm delivering. I likely didn't choose the other ones because I don't know what I would have done for the summary otherwise. I hate can I say I hate the stupidness of the whole idea what a farce the Australian parliamentarians who we have so many cultural cringes in Australia and just stupid leanings and stealings from other countries they've looked overseas and they've seen parliamentarians with poor I was going to say poor hapless both those things but also they probably deserve it you know people in front of them with the cameras they sit on the big chairs up nice and high power position they're higher right right stupid bit and they basically so the cameras are on both of them well mr so-and-so aren't you a horrible person and shouldn't my constituents vote for me for bringing you to task is what they actually don't say what they absolutely mean so that every night on the tv they get a photo of andrew page the member for uh bitcoin sitting up on the bench saying so mr banker aren't you a horrible person aren't you ripping off australians shouldn't i fix you yes headlines usually cares bankers grilled Yes, exactly.

1:13:12By Senator. Grilled. Like, they came in, they said some pre-prepared lines, they went off and they all had lunch together and they dipped some money into the party fund. Maybe that's gone a bit too far. Yeah, but, you know, it's all about the bloody 15 seconds of fame on the news at night or the headlines and all that kind of rubbish. The whole thing is stupid. Fine for the little man. Yeah. They drag Woolies and Coles in for the same thing. What do you do? You're fine. Public enemy number one. You bring him in, you say naughty things, Matt means things to them. And everyone goes, oh, he's nice.

1:13:41I'll vote for him. He stuck it to the guy. My enemy's enemy is my friend. That'll do. He hates Woolies as much as I do. I'll vote for him. It's just stupidity. Absolute stupidity. Anyway, it happened, right? So it happened. Some interesting comments, mate. So Matt Common talked about regulation and about population, which I really appreciated. Thank you. Throughout a number on population, which frankly, for a bloke who makes more money, if there's more people in the country, who pay more for housing, I thought it was, frankly, pretty happy that you said something. You don't protest too much, but yes.

1:14:12Possibly, possibly. Also a complaint about regulation, which I know you're going to jump on. We had the Westpac mob who'd come out on Monday, the day before it started, with a couple of, oh, we're going to keep some branches open, so please don't be mean to us when we see you tomorrow. And that was kind of, you know, that was that. I don't think Westpac said anything meaningful. ANZ, Nuno Matos, the new CEO, kind of talked about, again, no one's going to thank the bankers for anything, except that Matt Combin said something about population that was useful. Nuno Maddox actually went, can we have some energy consensus, please?

1:14:42Because we'd really like to invest and if you knuckleheads keep making energy a political football, then you're going to screw things up, which again, we all know, but good on him for saying it. Can we not talk about our balance sheet and our massive exposure to residential property? There is that too. He did apologise for all the things that they got wrong. I'm sorry. It reminds me of that South Park episode with the Exxon. Is it Exxon Mobile? They're filming the CEOs and they go, I'm sorry. What's even better than that is he's the new CEO, right? So he gets to say, on behalf of ANZ, I'm really sorry, knowing he wasn't there.

1:15:14I wasn't there. He gets to throw the other bloke under the bus and be like, we're really sorry we've done it. We know we've made it. We'll improve. And what do you do? You're like, you should have, I wasn't there. And also, is there any implication, any ramification? Right, right. No, but he said, sorry, guys. Hey, listen, he's really sorry. He's the new guy. Yeah, he's pretty, and he's sorry. Oh, that's totally cool. Hey, why don't you rig the FX market for the 12th time in eight years? maybe charge some dead people while you're at it but they're sorry they're really sorry they promise they will try very hard maybe a little bit maybe not to maybe not do it again or at least not get caught they're doing their best and Andrew Irvine the NAB CEO actually talked about the demonisation of gas so on one hand we had I like Shane Wright the journo he did have a go at Matt Common for talking about population oh you're saying you're laying common and I kind of thought it's kind of funny for a journo kind of bag of poly for having an opinion.

1:16:08It's like, sorry, business person having opinions. Like that's what you guys do. You know what you're saying? Hey, let me throw random opinions out there. Not you, sir. You know, I'm the guy who does the random opinions. Speaking of podcast hosts, people in glass houses. Right. Yeah. So I did, I, I, there's lots, lots went on. I said, lots went on and yet nothing went on. Well, that's the other thing. So what changes as a result of this? Probably nothing. Cause again, it was never meant to, it was meant for the pollies to do a bit of a set piece to camera. So on camera they say, oh, banking chaired, Husic said this thing about this man or this company.

1:16:44Yeah, you get to him, Ed, you do it. Sight, your thoughts. Let's just go there. Well, the one that really captured the headlines with Matt from CBA was he said something, I forget the exact wording of the question, but it's sort of like, hey, a lot of people are doing it really tough. how about refunding some of the fees to the people who are really struggling out there? And he sort of – he's going to shock you, right? I'm actually going to go on his side with this one. He actually said, well, it's not my money and it's not the bank's money. It's shareholders' money and my actual job – I'm paraphrasing him, but my actual job is to custody that for them.

1:17:19Now – Money for shareholders, yeah. I know how that sounds, but it's kind of like that's – that's just literally true. Yeah, yeah, yeah. You know, I'm not saying he's a nice guy. shouldn't you just give some money away to people because they're doing it tough? Well, maybe, but it's kind of not my job to get money away. Yeah, and I think it's wrong to expect. That's government's role. And this was the point. This was the point about the parliamentarians, right? Some, I don't know who it was, so I shouldn't lambast them because someone said it and it'll be quoted, so whatever. But if someone says, shouldn't you help poor people, big bad CEO man?

1:17:53Well, maybe it's not my job. Yes, see, I told you you're a bastard. I'm going to get people to vote for me. That's why the media picked it up, right? Of course they did. Well, I don't want to get in court, so I won't make any character assessments, but any more character assessments. But what I picked up on, which is no surprise to anyone, was he went, hey, big tech is competing with us and it's not fair and can you please do something about that? Would you mind stopping them, please? Did we mention we're strategically important and too big to fail? Oh, I saw red. I only had read the AFR headline.

1:18:35It was just like, that's all I needed. I don't need to read the article. Matt Common demands government, you know, stop Google from introducing... For offering ordinary Australians more choice, better products and cheaper services, because that's outrageous. Why would we want more competition in an oligopoly? That just sounds crazy. But Matt wasn't a fan of that. And rather than competing on the open field of the capitalistic, you know, soccer field here, he would like his mates in government to help him out. It's like, listen, I'm taking Google's threatening to take some of our lunch here. and uh and by the way how do they how would think that through for a second how would it's not just google but let's just pick on them um not even picking on them how would they steal lunch by consumers voluntarily opting into their service why would consumers voluntarily opt into a competing service i presume it's because they care only about google shareholders No, absolutely not.

1:19:47It's because, oh, that's a really good product. It's cheaper and better in some way, some combination of better and cheaper that I'm going to switch to your product and I'm going to use your fintech services. Again, who's the victim here? If that were to happen, the victim would be Commonwealth Bank and its shareholders and the other banks, because you've got an overseas player who's now coming in and stealing market share. And that was sort of, Matt's sort of, oh, it's unfair. And I'm like, well, I'll come back to whether it's unfair or not. But it's like, let's think about it from our perspective, not the bank's perspective.

1:20:23Our perspective, again, we've got more choice, potentially better products and potentially cheaper products. I fail to see the problem, frankly. And if big bad tech comes in and offers something that's really crappy, no one's going to use it. In case, what's the problem, right? So they only win if we as consumers get a better deal. And I'm pretty much in favor of consumers getting a better deal. And for Matt to turn around and go to go, yeah, but you've got to stop them because it's not fair. It just feels like to me is like the height of, what it is, it strikes me as potentially regulatory capture here as well.

1:21:01It's like we can't compete on our own merits. So we need the regulator to impose some conditions on our competitors that give us a bit of an advantage. and it is the story, frankly, of modern quote-unquote capitalism, I think, which I'm so angry about. Sorry, mate, I will let you cut in a moment, but I'll just say this. I don't want to preempt your point because it's a good one. But I think what the difference – I mean, the argument would be it's sort of like, well, shouldn't everyone play on the same level field? It's playing field. Absolutely. Whatever field we choose to play on, everyone should be playing on the same field.

1:21:39More regulation, less regulation, whatever it is. If a thing has a regulation, anyone doing the thing should be regulated equally. Totally agree. I would point to the difference being that banks, and I often make this point, they're special. They are special. And they can do what Google can't do without a banking license. Banking license is like a ticket, literally, to print money. Like, literally, I'm not being metaphorical here. A banking license gives you a - Printing money would be absolutely right. Yeah, that's right. Like adding zeros to databases, which we act as, which we treat as money.

1:22:16And so if Google was to come in and use its balance sheet, its existing money, to lend that out to people or to facilitate various financial transactions or services, well, they're not competing directly with Commonwealth Bank who can just like magic it out of thin air. And yes, I know that they need certain capital requirements and there's liquidity conditions and all the appropriate things that are in place to make systemically important institutions not threaten the entire viability of the wider economy. But I only think that the regulations – I'm tying myself up in knots. Banks have very, very unique regulations because of that very special power that they have.

1:23:03So if Google is going to come in and say, yeah, but we don't want that special power and we're just going to compete anyway, I kind of think, well, that's cool. If Google is going to come in and apply for a banking license, then absolutely. Actually, by definition, they're already under the same rules. But if somehow the banking cartel – sorry, did I say cartel? The banking industry was to – Banking pillar of responsibility. Which do only good and only foster prosperity for all of us. If they were to somehow get their mates in government to handicap potential new entrants to the market and competitors in an unfair way for the explicit purpose of, well, maybe it wouldn't be explicit, but for the implicit purpose of protecting their cartels, I said it again, their business, that strikes me as really, really wrong.

1:23:54And again, I get it. Matt Common's not being wrong from his perspective. Hey, you've got that card up your sleeve. Play it. I would play it too. But let's not pretend it's for the good of the Australian citizen, right? Or am I wrong? I think there's the theory and there's the reality. I have no doubt that any bank will argue to Liz Blue in the face for preferential treatment compared to international arrivals. And to the extent you're railing at that, you're a million percent right. That's exactly what's happening.

1:24:30I don't think we're necessarily disagreeing when it comes to the detail. You're starting with a whole, they're probably trying to screw everything over. You're probably exactly right. So I'm not even disagreeing with you there. In terms of the results. I mean, he's doing his job. I'm actually like, it's the same with like arguing against paying out, you know, disadvantage. Like it's kind of like, I don't like it. And I'm going to hasten to add that. But he is paid the big bucks, and I mean big bucks, to do exactly that. So he's going to do that, right? Sure. My simple point would be I have no issue with him.

1:25:04Whatever comments – I'm going to separate what comments said to what I think should happen. So to whatever his angle to try and advantage his bank and his shareholds over other banks or other potential would be competitors in the financial space. Actually, he's decided to do that. And that's – we've said a million times, you know, just because lobbyists lobby doesn't mean you should listen to them. So, you know, like choose your own. But if we're talking about competition policy, which you have had this lots of times, at the end of the day, government's main job, other than security and safety and lots of other stuff, but in the economic realm, is just to allow things to happen properly, right?

1:25:36Competition to function. Consumers to be protected where they need protection and no more than that. Product standards and safety standards, I think that's kind of worthwhile, right? We shouldn't have kids... Consumers to be protected, not incumbents to be protected. Correct, correct. The point to emphasise. There's rules for government in business and economics and finance and all those things. So I think that's true. My argument would simply be, and I'm not saying this is even Commons, my argument would simply be that whatever you choose to do, however that is regulated, even if Commonwealth Bank has a banking license and Google doesn't, if they're both providing deposit accounts, right, they should be regulated the same way.

1:26:12Banks get to create money and that should be regulated differently. but I don't think competition benefits from saying, well, Google gets a leg up on you because you get to create money. If the service being provided or the product being provided is not in that realm. So yes, if you're creating money, Google's not creating money and we're saying you both have to have the same loan rules, that's different, right? Because there's capital adequacy requirements that matter because you're creating money out of thin air. So I'd like you to make sure you've got enough, you know, kind of put aside just in case things go badly.

1:26:41Which is very different from a one-for-one backing. I've given you a loan, but from money that already exists. That I have. That I have. And also, if you deposit money with me, it is there. Again, that should come down to - Just to make the point, just because most people miss this, is that if everyone, every Commonwealth Bank customer tried to withdraw their money, it's not there. It's just not there. So there is a structural and important difference in that. And my argument would be that if Commonwealth Bank wanted to make loans backed with physical capital, the same rule should apply to them as Google for that loan product.

1:27:17Oh, yeah, absolutely. And some deposits should be the same. So I think Google should absolutely – I'm a Google shareholder. Google should be – I'm not a Commonwealth Bank's general. Google should be regulated, in my opinion, on a product-by-product basis and some sort of total organisational basis based on level of risk. But, you know, it gets this took at some point. Just regulate them based on the products they're offering and have equal playing fields so that if I were to offer a deposit product, whether I'm Andrew Page whether I'm Google whether I'm Commonwealth Bank here are the rules that apply to you all because you're offering deposit products yes if I want to magic money into existence and I'm Andrew Page or Commonwealth Bank or Google firstly you need a banking licence secondly you must do these things yep if I want to make a loan from cash capital I have it's not at call it's literally over there until you give it back to me I can't have it yep then a third set of rules apply but again apply to everybody equally I agree I think Common is right we're on the same page I think right so Common is right conceptually even if that's not what he meant so in terms of interpreting his maybe I'm saying We see what we want to see, don't we?

1:28:10Well, none of that. I'm sure you're right. That's what I'm saying. But the response should be, in my opinion, not just CBA can magic money, therefore the rules should be different for CBA to Google. I would go one level deeper, which is just when you magic money, there's a set of rules. If you don't magic money, there's different rules. And a Commonwealth Bank should be allowed to offer products where it has lower touch regulation, where it's not magic money. Now, it's not going to want to because it likes magic money. We wouldn't. Right? but Google and Andrew Page and CBA should be on the same regulatory playing field based on the product they're offering and that's probably not what I'm meant to your point it's almost certainly just please make the bad tech guys go away because I might hurt so I'm not saying he's saying this and they'll play the card as well which is usually what BHP did and the big miners did with the resource rent tax it's always oh but the you know so much of our super balances are tied up in this thing again it's not about us it's not about us right It's about the average Aussie that is out there.

1:29:08Man, they care, don't they? They care so much. They just care. And again, I honestly, despite my rage, I don't fault them. They're acting in their self-interest and the interest of their shareholders because that's what they're paid to do. So I don't like them as individuals. I don't think that they're doing God's work. I'm sure they're nice people. to me. Look, next time I run into him at the - Matt Combin's wife loves him as well. Yes. I don't know. Don't tempt me into any litigation. I like you need temptation. I know. What angers me though is that it works. Is that the politicians go - Listen.

1:29:51We talk about this all the time with like, you know, whether it's a steel mill or something. It's like, what? Jobs? Yep, we'll help you. What? Sharehold? Yep, we'll help you. And like, no, you hold all the power. You don't understand the dynamic here. You are the one who's in control. They understand. They don't care. That's worse. Yeah. And again, they exist to serve us. We elect them to serve us. And so, yes, some craven, self-interested, greedy CEO makes a case. I mean, of course, CEOs are always greedy. I'm a CEO. I'm greedy too. Every single human being on the face of the planet is greedy to something.

1:30:28So that's fine. That's just human nature. it's that we are it's that we pander to that and we and we bend the rules in a way the disadvantages the very people that you're meant to be representing to help a very narrow group of self-interested people at the expense of the rest of us that's what's egregious and that the fact that it's just like so transparent and that it just works and i was getting riled up the other day i read my wife's like oh here we go again i was just like i don't think it worked up because No one seems to care. It's like you're perpetrating a great injustice, not in the shadows, in the full light of day.

1:31:09And people go, oh, why do you get so worked up about it? It's like, yeah.

1:31:16Anyway, I do feel a little bit better after getting that. I'm glad. By the way, we're now at hour 30 and you want another two topics. Yeah, no. That was never going to happen. That was never going to happen. I hope you've enjoyed this particular podcast. of rants and occasional things coming to you from the letter B. Andrew's apology notwithstanding. I will see you because I'm a nice bloke. I'm not going to hold a grudge on Sunday. Will you come and join me, Andrew? If there's more Bs to talk about than 100%, hopefully the B that we're talking about by then will be bull market. That'd be a nice B.

1:31:47Well, I don't know if you've checked, mate, but while we've been recording, the Australian stock market is up 1.17%. We have, frankly, created a bull market. It wasn't happening until we started the podcast. Do you know what the crazy thing is? Tell me. It's Nvidia. Yeah. Bitcoin's up too, since we've been talking. No, it's not. Bitcoin never goes up. Dude, it's gone from... I shouldn't even... It sort of shows my hand here that I'm watching it. Why are you watching it? Why are you doing it? Why is it on your screen, Andrew? Well, more importantly, how can you rant that well and still watch the price of Bitcoin?

1:32:20It's because we talked. I had to bring it up and so I left it open on the screen. But I would wager very strongly. And just think about it. If ever anyone out there in podcast land is thinking that the market is hyper-rational, a very big tech company on the other side of the planet had a very good quarter. Yeah. And now the Australian share market. Woolies and BHB. Which has zero to do with NVIDIA. You go, what? Oh, woo. Yeah. Yeah. And then we're all going up. Even the magic internet beans are going up. I mean, we are all lemmings. And again, I don't lament it. This is wonderful for us. Can I tell you?

1:32:58Sorry, mate, just quickly. The 1.14 % were up. The information technology sector is up 4.67%. See, it's all in video. Now, if you can rationally and logically lay out how its quarterly performance has anything to do with Objective Corp Technology 1-0, whatever, I was just like, I'm all ears. But, I mean, the answer is sentiment. People feel better about things after that result. And when people feel good and confident, they buy. That's it. That's the explanation. There is no smart money. Come back on Sunday. Please listen to our podcast on Sunday because I was going to say because I thought we wouldn't do it, but we do it anyway.

1:33:36So, dude, come back, don't come back. Yeah, you know. If you're still here by now, make your own bed. Fool on. Cheers. The Motley Fool and people appearing in this program may have positions in the companies mentioned. General advice only. Please speak to your financial professional to understand how it may pertain to your situation. Subscribe to the free newsletter at fool.com.au forward slash listener. The Motley Fool operates under Financial Services Licence 400691.