Chart crimes and other misdemeanours. August 15, 2025

24:13Yes, you have to make that determination yourself. And what happens if we get it right? They make a lot of money. Oh, brilliant. And if we get it wrong, you cease to exist. Oh, I reckon you would find less credit, easy credit, and artificially suppressed price of credit flowing to the household sector, which would in turn mean that we stop pumping this thing to the moon. That's what I reckon. You know, I've discussed it before, and I slightly disagree, only because of the principal agent problem. I think if banks were private, if you made banks private or other public companies, I'm absolutely sure you're right.

24:47While ever the CEO is incentivized to pump things, and most of the people in the CEOs here are fund managers with short-term share price targets, and most of the poor individual shareholders are mum and dads who really don't understand the risks a bank would take in that circumstance, I actually don't think things would change at all. Maybe after the first one collapsed. Well, then there'd be a collapse. Everyone would go, oh, wait a sec. And you watch the social pushback and people like protesting out the front of banks. It's not even something I have to imagine. This happens all the time around the world.

25:20We're going to pop our head out of our little privileged Western bubble. This happens all of the time, right? And it would be like, yeah, there would be a disaster. And then it was like, I want my money back. I don't trust you. Well, we can't give you money back because we don't have it. And then someone would emerge from that. And this is the beautiful thing of the market is that we go, well, we will have far higher capital requirements. We'll be far more judicious. And you know what would happen to that business? A flood of capital would flow into their vaults because of the consumer demand.

25:55It's like, I want, what's the value prop here? I need someone to look. You actually don't anymore, but that's a whole separate conversation. but prior to a certain invention I actually needed someone to hold my money so I could facilitate my transfers and all the rest of it and I can be confident that you're not going to do anything silly. I want to put it with the bank of Scott Phillips and not the bank of Andrew Page who just keeps doing stupid things with it and runs on a razor thin margin. You know what I mean? That's what would happen. It was just a small tangent. Yeah, yeah, yeah. If you remember the principal agent problem, I think you're a million percent right.

26:32Yeah. How you do that, when you do that, whether it becomes a consequence or a decision is an open question. Well, we can't. Here's what I say. Not can't, but we have so painted ourselves into a corner that such a pivot would be almost impossible to engineer. Well, there's very few organizations or individuals that could buy Commonwealth Bank outright and take it private so it must remain a public company while they're supposed to speak. Yeah, yeah, yeah. So it's really painted into a corner here. Should we talk about the bank? I was going to tell you, let's move to the banks. Yeah, yeah. Commonwealth Bank this week,$10.25 billion in profit, if you don't mind.

27:03Cue the moral outrage. 4 % growth in profits. Big number. Decent, not spectacular profit lift. Shares down 5%. And as Deb Knight asked me on Channel 9 News during the week, riddle me that one. Now, I hope our listeners know the answer to that one, which is it's a function not of actual earnings, but of expectations. And the market thought CBA would do even better than that. and when they didn't, people decided, actually, maybe we're paying a little bit too much for Commonwealth Bank shares. And that's largely, almost certainly, and by the way, when people talk about why share prices move, no one knows.

27:36What we can best do is intuit what probably happened based on knowledge of companies and markets and investor behavior and stuff and half guess at what might have been the reasons. But I think it's unreasonable one to look at that and go, big number, profit up, why do shares fall? There's a certain number of possible scenarios there and the most likely one is because the market wanted more and didn't get it. So still a really big number, mate. A pretty good set of results. By the way, CBA, I'm going to start you off on a rant. I don't intend to. You sure are. CBA is so big. There's one queued up coming.

28:08You couldn't stop it if you tried. Well, I was going to say, CBA is so big. And, you know, no, not unexpectedly. You know, it's the largest company in the country, at least on the ASX. Its profit was not as impressive as the market wanted. its share price fell. That dragged down the other three of the big four banks. And the financial sector was down 2%, which meant almost no matter what else happened on the ASX, and we're doing this on Thursday, so it was Wednesday our time, yesterday, the market was at 0.5 % yesterday, almost entirely on the back of Commonwealth Bank, which is just a hell of a thing to be able to say.

28:42Oh, I mean, the significance it has, not only in our economy, because one in four home loans is something like that. They're the biggest player by far. so it's not only that they literally create the credit for the economy and when i say create like click their fingers and create the whole other thing um uh yeah but but but virtually uh steer the entire market gosh it's important i mean and then people say oh yeah but should we regulate them well i don't know they seem like they have an godly amount of power and influence it's like something that we might want to make sure that that is being operated prudently but anyway Anyway, let's talk about those results and that share price reaction.

29:30We've talked about this not just in the bank's context and not just in this reporting season's context, but actually I want to say for at least two years now where we've been in this really weird world where markets are just continually sort of pushing up against record highs, but it hasn't been underpinned by a concurrent rise in per share earnings across the market. In other words, reported earnings. In other words, you would sort of say that I'm just kind of like trying to look at it through the lens of a PE ratio, a price to earnings ratio, but for the market sort of writ large. And so we've seen share prices rise and rise and rise, the market rise and rise and rise, and the profits in aggregate of the market rise, but not to the same extent.

30:14So what's called the better metric here, or at least the more popular one is called the CAPE, the cyclically adjusted price earnings ratio for the market. It's just one that sort of takes a broader view, smooths things out, looks over time. And it's just like at record levels, right? And where I'm getting to here, it means that when you do have a miss to expectations, there's a long way to go down because we're not only priced for perfection, we're priced for perfection and then some. And it's been long commented, not just by you and I, but by everyone. I even mentioned I interviewed Alan Kohler at the start of the year, and he said CBA is a bubble in those exact words.

30:53And so what I'm saying is, was the results terrible? No. I mean, any of us would kill our grandmother to get those kinds of profits in a year. But it's not good enough relative to the way that we've decided to price it. Let me put some numbers on this. Banks are funny. Banks deserve a whole category of their own in terms of analyzing it because they're just different to every other business. Their product is money. And the money that they provide to the market is really, I've heard it described as what's called fiduciary media, which is just effectively money that they blink into existence, right?

31:31So it's a different thing. And so while PE ratios are pretty good, when it comes to banks, people tend to use price to book ratios, which is they compare the share price to the net assets or the equity of the business because the equity is what determines how much money they can blink into existence. That's what APRES kind of sets, these capital adequacy sort of ratios, which we can come back to. But the Commonwealth Bank trades at three and a half times book value. So if you take its net asset value, times it by three and a half, that's the current market cap of CBA. Is that high, Andrew, or is that low?

32:10Well, the market is pretty efficient. So the market's paying what the market's paying. Maybe it's wrong to be too objective with it. But if you look at history and the Commonwealth Bank's own history, it tends to go between one and a half and two. Two and a half at periods of exuberance. We're at three and a half. If you look at the major US banks, JP Morgan, Bank of America, these are banks that, except for market cap and, sorry, except for book multiples, are the biggest in the world. They're trading between one and one and a half book value. And CBA's at three and a half times, three and a half times.

32:49Not only that, if you take its balance sheet out and look at its assets, Well, 70 % of its assets are just home loans, right? So you've got this institution that is highly, highly leveraged to one particular asset class, highly leveraged, and isn't growing to the end. Despite all of that leverage, despite the ability to create your own money, they're not growing as much as the market expected. So what did the market do? Well, I was going to say the only rational thing. If it was rational, it never would have pushed to that level in the first place. But it's done a rational thing and go, oh, that's just not worth that amount.

33:28And it's not a question of saying, oh, is it the best bank in the country and it's the most prudently run and rah, rah, rah, and it's still good profit and they're still growing and they've still got a bright future. All of that may be true. All of that may be true. But as Munger was very fond of saying, no business, no matter how wonderful, is worth an infinite amount. And we can argue the toss. You might go, well, three and a half times seems perfectly reasonable to me. I know you wouldn't say that, but you could. But then it's like, well, is it four too high? Yep. No. Oh, I mean, well, five.

33:57Like, just where do you draw the line? My point is there is a line somewhere. And I would suggest that we're sort of well beyond that line now. So the only way you're going to do well as a CBA shareholder, and when I say well, I mean get the kind of returns that the past few decades may sort of suggest that you would desire if you were just to extrapolate it forward. you're going to have to see even more growth in credit at even more attractive margins. And that will probably just get you to an average return. If you want an outsized market beating return, well, it's got to be even more beyond that.

34:38The market's already expecting incredible things and you've got to not only deliver that, but then deliver that end sum. And so, yeah, they fell short of expectations and the market went, oh, oh, wait a second. but I was expecting this to happen. Well, I don't know why you thought that, but clearly, no, it's not happening. And the only thing that can be left to correct is the share price. Sorry, I'll take a beat there and pause for breath. But insane, right? It's insane. Yep, yep. Where do you go with that? And I think this is where also, too, it's worth separating the company from the share price.

35:16As I said before, the company absolutely can influence the share price or at least investors' expectations. So I'm not saying they are completely off the hook. But it's also true that it's not the job of a CEO to try and do it. We say regularly, don't talk up your share price, just get on with running the business. It's also not necessarily the job of a CEO to talk down a share price on the same basis, just get on with running the business. So when we say the Commonwealth Bank has to do this to justify the share price, you're right. That's logically what would have to happen for the share price to be justified.

35:46And I'm not even disagreeing with you. You know I'm on the same page. I know you're on the same page, but just to say, CB doesn't have to do anything, right? Shareholders have assumed, imputed, that that would be the case. And so for the shareholders to be right, the bank's somehow going to have to do that to make them right. Not the bank should have to do it for any other reason. It's not the job of a business to say, well, you've given me a high PE, so I guess I've got to throw all the risk books out and just go and charge after income at whatever ethical, moral, legal cost because the share price is X.

36:14It's like, no, that's on the shareholders, right? If you're stupid enough to pay a price, I'm not saying CBA shells are stupid necessarily but if you're going to pay a price that assumes that you have to believe it's going to happen if it doesn't happen that's on you that's not on the company you made a decision based on your bet in this case I'd like to say investment but you know paying that sort of price is probably a bet about the future so I think that's worth saying on the book value thing I think it's also worth there's an old maximum in investing that for financial companies you buy at one and sell at two pretty good rule of thumb look it doesn't mean it can't go higher In the CBA's case, you would have lost a massive upside, right?

36:48But whether that upside was logical, likely, forecastable, that's an open question. And by the way, the banks are... This is going to sound weird. It depends on what metrics you use, right? But the CBA's net interest margin is 2.08%. And while that's... They make a lot of money in total because they're massive and they have a massive share of the market. They make a very good return on equity. It's not as good as it used to be with the new capital adequacy rules that require them to keep more cash on hand, but they make a pretty good return on equity. So if you want to look at return on equity, you say, this is stupidly high.

37:22It's much, much higher than the rest of the world. They're amazing. True, absolutely true. But you're also only keeping two cents in the dollar effectively. It's not quite that way. The interest of the margins are calculated differently. It's not a net margin the way we think about for an operating company. But their margins are really, really, really small. And so it's kind of worth as an investor thinking, well, hang on. The margins here are pretty small. They're pretty flat. They're making more money because they did a bit more volume, and that's fine because lending went up because asset values went up and lending capability.

37:47You've mentioned that before, Ram went up. So it's all fine. It all is what it is. The question for investors is, if you were to start a bank, if I want to lend some money out and I put$100 worth of equity into this business, that would be its book value, right? So you put$100 of equity in and have a book value of$100. How much would you pay for that? As an operating business, if I was Scott Bank, would you pay$350 to own the business I put$100 into? Probably not. Because you could then start your own business with$100 and you make a lot more money. Would you pay me three and a half times the asset value?

38:24Some businesses, absolutely. Microsoft has bugger all assets, at least physical assets. It's got a brand and an operating system and network effects. That's worth more than the assets. But a financial company that takes the money in, lends that money out, and that's where I'm supposed to create some, so it's worth more than that. No, no, that's not true. They don't lend out deposits. No, I'm sorry. Okay, sure. Sorry. Different conversation. It's such a common misconception. It's my life's mission to really dissuade people of that misapprehension. It is. Anyway, all I'm saying is at some point, a three and a half, even on a purely, I don't go for relative valuations necessarily.

38:59I don't think just because company X is worth one, company Y must be worth something close to that because they're different businesses for good reason. But you're paying a lot more for CBA than to start up a bank from scratch or by, frankly, any of the other three big four banks or by most of the international banks. So you have to believe this is going to be much better for a lot longer. Now, here's the crux for me. You can believe that. And then I'm going to tell you that last year they grew profit at 4%. So how much better? Now, maybe the other banks go backwards, which would make CBA better.

39:30But three and a half times book value, 20-something times earnings for a business growing at 4%. The math doesn't math. It's not the way. So you can believe. By the way, it is by far the dominant bank in Australia. So where's the growth? I mean, it'd be different if you were Scott Bank with$100. It's like, well, you're tiny, but you've got incredible, you've got 99.99 % market share potential to steal. Commonwealth Bank, it's got all the market share it can reasonably, pragmatically achieve, right? So where does the growth come from? Sorry to interrupt, but that's your point. That's your point.

40:06Exactly, exactly. And that's why I wanted to, you know, so how does TBA justify its price? Only if investors forever pay three and a half times book value and 20 times earnings. And maybe they do. And here's the thing about investing, right? You can choose your own basis for choosing to invest. You can say, I'm going to use price to shekels. I'm going to use price to good ideas. I'm going to use price to company logo color. You can do whatever metric you want. But any fundamental basis that allows for both the likely return you're going to get on your money and the alternative investment options that are out there.

40:40Paying that much for CBA, yeah, you might pay a safety premium, you might pay a customer loyalty premium, you might pay a so-called blue chip premium. You can come up with a range of - Cozy up to government premium. Right? Well, except that CBA is not more cozy than the other three banks. You're still paying all the price for it, right? No, sorry, it's an oligopoly, not a monopoly. You're right. Correct. Sorry. But my point is, at some point, as an investor, my preference is to say, I think this company will grow profits at a rate that of themselves give me a reasonable return on my money, given the sort of annual return I want to get.

41:11That's kind of investing 101. CBA, you're saying there is no financial way this makes sense. The only way it makes sense is if other people keep paying more for this bank. And maybe they do. It's a greater full theory. Right. And just know if you own or buy, that's the only basis on which you are. Or you think something else is going to grow up 30 % next year. Which maybe it does. Maybe it does. And you're proven right. But if you're not. But you're not betting on that. No, I'm not betting on that. I'm not going to bet on that. I mean, and here's, let me just, I'll make this point before someone else makes it for me.

41:40Rightly so. Which is, I'm just salty because I've been calling this thing overvalued for a long time. And it just keeps making - CBS shows up 30 % this year, by the way. Yeah, right? So I was like, but Andrew, a year ago, you said it was overvalued. I was like, yep, well. It was. It was. Well, I can't even say that objective. What I can say objectively is for me, it was and is. Now, you might have a different view and that's fine. That's what makes a market, right? But I refuse to build an investment philosophy purely on capitulation towards the consensus. Well, everyone else thinks it's good.

42:17So I guess I will too. I could try that as an investment approach, but generally it's speaking, you're going to get really, I mean, good luck trying to outperform the market. If you're just going to agree with the consensus with everything, just buy an ETF, right? That's what you're going to do. And that'll probably work out okay for you. But I'm a stock picker. So it's my job to take, or to at least try and form an independent view. And I'm pretty firm on that view. It's like, it was crazy last year. It's wildly insane now, but you know. Can I take your example? Sorry, did you finish your point?

42:50I interrupted. I suspect so. I'm sorry. No, don't go for it. I can't remember what was that. That's what I was saying. I suspect so. I've got nothing else to say, so go for it. So it's really interesting with your example. Scott Bank lands on the scene. Somehow you get a license. Good luck with that, by the way. Yes. Regulatory capture is a beautiful thing if you manage to pull it off. So anyway, you start Scott Bank somehow and you've got$100 in equity. How much money do you think you could lend out?

43:23I don't know. I wouldn't know off the top of my head. I only know because I've looked it up, right? But when you start digging into this stuff, There's all things called like the common equity tier one capital ratios and this, and it's all very obscure. Some might conspiratorially say by design, but it's a bit hard to work out. But it basically says, look, APRA says you just can't create as much money as you want. There is a restriction to it. You can only, you must always maintain, I think at this point, it's about 10 and a half percent of what we regard as tier one equities. So they'll strip out from the balance sheet, they'll strip out some of the more riskier assets.

44:04So I looked it up. For Commonwealth Bank, they've got about$80 billion in book value. They've got, in terms of what's called their set one capital, it's about$60 billion, right? So that must, they can lend out roughly 10 times that amount. That's what sets the limit. You go, okay. So under Bank of Scott, let's just say that your equity, because it's just cash, you've only just been capitalized, right? So it's all tier one capital. You could lend out$1 ,000. You go, okay, that's reasonable, I suppose. Agree to disagree. That's a whole other thing. But it gets worse than that because when you look at the amount that you can lend out, it's actually there is these risk adjustment factors.

44:48What? What's that mean? Well, the amount of money that you need to hold in reserve for a home loan is a fraction of what it is for a business loan. What do you mean? We only count 25 % of home loans towards that calculation. So what it means is that with your$100, that can allow you to lend out$400 once you risk adjust it. And then once you account for the capital adequacy ratio, 10 times on top of that. So 40 times your amount. So you can lend out, I've been capitalized with$100 and I can lend out$4 ,000. Now, you don't have that money, right? You're in an incredibly privileged position that you just blink that into existence.

45:34And again, let's not get into that as a whole other separate debate. There's just facts. Hashtag facts. Always don't trust Verify. Look it up for yourself. I only make the point because it is so shocking, right? It is so shocking. I guarantee 99.9 % of people wouldn't realize that. But it also shows you the degree of leverage. And so I've made this point before. Because 70 % of their loan book is in residential mortgages, and because they've only got$80 billion in actual revenue. In other words, if you sold all of their assets, so they sold their mortgages to another bank, they paid off all their liabilities, they'd have$80 billion left over.

46:13So when you do the math, what it says, now this isn't likely to happen. This is what they call very tail risk kind of stuff. But students of history and recent history might say that, yeah, that stuff still happens. It happened in America, Ireland, Spain, Portugal, and most places around the world a little over a decade ago. But it means that if their asset, if the value of their total loan book dropped by 7%, they'd be technically insolvent. Now, again, I'm not saying that to say the sky is falling, but just to emphasize the degree of leverage that these institutions just inherently have. A bank is a leveraged institution.

46:52It is no other way of sort of saying it. And so after all of that tomfoolery of the GFC, you know, the regulators came in too late, obviously. So obvious that this thing was going to go bad. And it came in too late. And they said, well, no, we're going to increase the capital adequacy ratio. But over time, as we've discussed many times in this podcast, it keeps getting watered down, watered down, watered down. And it's gotten to the point now where not only is this thing incredibly fragile, And it'd be one thing if it was just like, well, it would suck if that business went out for the people who work there and the individual shareholders.

47:25But it would be a disaster for the entire country because they're so structurally important to the whole damn thing. And because all of the only competition who belong in this cozy oil monopoly are all exactly structured the same. So it's effectively a one big monopoly that if one of them gets into trouble, they all get into trouble. There's no scenario in the world where West Bank gets its equity wiped out, but CBAA and Zed and the others are okay. Which just means the central bank comes in and backstops a lot and just prints up a bunch of money and saves them all, and we all go, phew. So the only point I want to make is that is a pretty big risk that we in Australia have, I don't think we adequately understand.

48:03And I'm not saying this risk is going to come to bear, but when you're looking at valuations, this is a long run-up to just come back to the valuation comment. When you're looking at such an extreme valuation relative to what potential earnings growth you might get, it doesn't make any sense. You've articulated that point well. To do what we might call in the trade a risk-adjusted return potential on that, it's insane. It's 50 times more insane. I'm getting barely any growth. and it means that if there's any impairments to my capital in the single digits, not in the double digits, there is a single digit impairment to my asset, I'm gone.

48:46And it just strikes me as like I don't think we recognise how risky all of this kind of stuff is, which is only to sort of say I really do get concerned when we do water down these things, when we gloss over this, when all anyone can do when a bank releases results is go, oh, it's got a billion after it, so they're big and therefore they're bad. They are bad. They're evil buggers. There's a whole bunch of reasons to hate them. But not for that. You're missing the point. You're missing the entire point. You can fly any big number bad with how and why and where and why. And it just, I mean, mate, if I knew what I knew now as a younger man, honestly, I just think the banks were just that once in a lifetime opportunity where they were deregulated and they were, and they had the layup that they had, is it any wonder that they became the best performing assets on the ASX for decades, right?

49:40We know the last decade's been pretty ordinary for them, but geez, since sort of the mid to late 90s through to sort of 2015 or so, it was just sort of like no bank on the planet has ever grown that strongly that consistently. And a big part of it has been we grant them incredible powers. And I guess, sorry, I'll shut up after this. my only point is well one of the points I will make here is that what what is unfortunate about it is you at Scott buys shares in Kogan drink we'll just go with that as a fun example Kogan goes bankrupt and is like well it sucks for Scott when this goes bad actually no I think there should be a bailout but it should be a bailout if Kogan goes anything else is fine but if Kogan goes bad I don't want to bail out well you need to you need to invest in a steelworks or an airline yes exactly if that's what sorry no keep going I interrupted you keep going So I made the point that it's structurally difficult for everyone, but there might be, I'm sure there's a lot of people out there listening and go, well, yeah, you're right.

50:37Thank God I don't have any exposure to that. Well, not only is it the exposure you have as being a member of the Australian society, I reckon a good chunk of your super is in this. I reckon that the insurance policy that you have that protects your house and your life or covers your life has a very significant part of the money that you have given them in bank shares. So you're involved in this party, whether you like it or not, not through the very significant indirect effects that you will feel, but by the very direct impacts that you would potentially feel. And it just feels like as a society, for us to structurally lever up on these one set of institutions to such a massive degree, so that everyone's house, everyone's livelihood, everyone's savings are piled into this thing.

51:25am I wrong or does that just seem reckless to you you know what's funny we may not have time to get to it we're going to possibly get some road user charges for EVs and I raise it now only because the linkage to me is the status quo effect and I won't give the EV stuff necessarily but effectively fuel excise is going to fall if we increase the uptake of EVs government revenue is going to fall so government says we've got to replace fuel excise with some other charge on road users and my first principles question, not because I disagree, but literally just at the very first, why? Why would we tax road use?

52:02Now, there's very, very good reasons to do it, right? But that's not the reason we're going to replace fuel access with a road user charge. We're doing it because it's easy, simple and it replaces one tax with a similar type of tax as if that's the aim. And maybe we could increase the GST by 1 % or we could increase income tax by half a percent or we could put tariffs on things. Not that I think we should. My point is - Or we can stop ridiculously spending and splashing money around like drunken sailors on stupid crap that Australia doesn't need. Put that out there as another option. If there's$17 billion of tax revenue at risk, how would you choose to make it up?

52:37Now, I guess we are effectively going to go into the EV thing. My point is just to highlight that part of what captures us all, and there's nothing deliberate or sinister about it, it's just the status quo effect. We start with a, this is what I'm used to. Yes. So this is what I think we need, which to answer your point, which is, would you, and I was going to say, you're right. Would you, if banks didn't exist, right? Or somehow someone pressed control or delete on the entire banking system, you had to reinvent it tomorrow. Yep. And you didn't know anything about the one that would already come in.

53:07So an alien comes to earth, we make them the head of the Australian Prudential Regulatory Authority and say, right, we've all forgotten how to make banks, but we need a mechanism to kind of make loans and transfer money and grease the wheels of commerce and have a, you would say the answer is Bitcoin, of course, Andrew, so I will happily acknowledge that and then move on. But if you said create a banking system, would we create it the way it exists currently? And that probably not is the answer, right? But yeah, but my point is that - In the same way that we wouldn't, my dad always said if motorbikes were invented today, they wouldn't be allowed on the road.

53:39There's a path dependence to these things, right? Imagine inventing chainsaws. No, you're not getting that. You want to use what? No. Yeah, maybe that's a different question. That's the point, right? So what we're used to, we kind of embrace or accept. It's normal. Yeah, you don't see the potential downsides or risk, or if you do, you don't weight them enough. It's the old story of people get freaked out about getting on a plane, but don't worry about brushing their teeth. More people get killed with toothbrush accidents and plane crashes, right? It's all of that. It's just that it's pure psychology.

54:04So long way to answer your question, which is no, you would not create a banking system that looked like this, except we're so used to it. We can't imagine anything different and we are blind, blind is the wrong word. We are not as aware of the risks as we would be if they were newly introduced today and we had to grapple with the whole idea. A hundred percent. Well said. And I'll make one more point. We'll move on from the banks. And ask yourself this, why is it that 70 % of the largest bank's assets are all home loans? You know, if you look at lending as a business, you actually can get higher interest rates on businesses, personal loans, credit cards, right?

54:3820 % interest, right? Speaking of lack of competition, but they go. Right? So you kind of think, in a way, home loans are the worst products because they're the lowest, they're the lowest interest rate that you can get. But like a lot of businesses, it's a, it's a volume game. So look at it from the CBA standpoint. Okay. So one, these lines are backed by collateral. So putting systemic risk aside, because that never happens, GFC, but that never happens. But putting systemic risk aside, if Scott stops paying his mortgage, we just sell your house and we've got a buffer on that. So, So we've got really good collateral that supports it.

55:17The regulator only requires me to hold$1 every$4 that I lend. I'm going to make it up on volume. This is the best game in town. And relative to the tier one capital that I've got, I could lend out a squillion dollars. There is nothing stopping the bank other than whatever semblance of risk management that they have left, right, just for them to go to town. And they've kind of done that over the last few decades. It's like, well, let's include mum's paycheck. Let's reduce serviceability buffers. Let's do this. Let's do that. Let's do every single thing that we can. And this is virtually, well, no, not virtually, completely 100 % risk-free, not from society's point of view, but from the bank's point of view, it is 100 % risk-free because we're going to have decades of just, you know, living like kings.

56:14And when or if, let's be fair, if things sort of don't go to plan, we get bailed out anyway. It's the best game in town. And look, I'm not suggesting, I don't know what I'm suggesting. You can get pretty hardcore on all of these kinds of things. But the only thing I'm trying to appeal to here is just for a recognition more broadly amongst us as Australians, just to recognise, A, the privileged position that they hold, the incredible power that they wield, and how whether we like it or not, inadvertently, all of our fortunes are wrapped up in their success. And they get to make a squillion dollars in profit, which normally I'd sort of say, listen, if you've created incredible value for society, you deserve great profits.

56:59But the trouble is, it's like you get capitalism on the way up and it's socialism on the way down right and it's sort of like i just just a recognition of that i think would go a long long long long way other than what's my super fun doing how come my house price is going down you know like just like these stupid short-term myopic things which are just uh it's so depressing i don't think you're wrong i don't think you're wrong at all motley fool money for more subscribe to the free newsletter at fool.com.au forward slash listener

57:33I feel like you've done the road user charge thing. Did you have any other thoughts? So my point of raising it was just to, again, this useless, endless Pollyanna world I live in where I would like to think that we could actually have some sensible policy decisions. And again, I want to separate this from the actual charge. One of the hardest things on social media is to say, here's an example of a thing, and here's the thing I want to talk about, which is this is the example of it. Everyone gets so caught up with the example, it loses its potency, right? I don't want to talk about the EV road user charge for its own sake.

58:01I don't really care that much. If it happens, I'm fine with it. If it doesn't happen, I'm fine with it. I don't really care. I mean, I have a modest view, but not a big one. It comes down to, is it a public good or is it something should be user pays? I don't really have a strong view on that one. I kind of think roads are probably a public good more often than not. I think congestion charging is a good idea. Anyway, that's separate. What I want to, the reason I want to raise it, just the point I've already made, Mark, I want to get your thoughts, which is if we're having, by the way, having a productivity round table soon.

58:28Talk fast. Yeah, well, if we're having those policy decisions, It's just replacing... Let me be cynical for a second. Jim Chalmers says, I've got a$17 billion hole that's getting up to, right? Zero now, but every EV that gets replaced with a... Sorry, every ISA gets replaced with an EV vehicle. That's a larger hole in that$17 billion. So what do I do? Well, Australians are used to paying a road user charge through fuel excise, so that's easy. Plus, I don't really have to announce it. People are going to really feel it up front. Plus, not many people drive EVs yet. So by the time they do, it'll already be in place, so they won't really complain about it when they get there.

59:00Plus, a whole lot of ICE vehicle drivers actually hate EVs for ideological reasons I will never understand. But you've got to go check on Twitter and, you know, the people that hate EVs are EV drivers for - Ruin the weekend, mate. Right. Yeah, exactly. So this is a really, really, really, really, really easy way to replace a dwindling fuel excise bill. So politically, I get it. It's the easiest thing Jim Chalmers, if you've got to purchase a new tax, this is the easiest new tax I'll ever introduce. So I get politically why you do it. But the question should be, hey, Treasury, I'm the treasurer now.

59:31Hey, treasury, you guys are really smart. There's a lot of you down there and you've got lots of calculators and adding machines and you've been around for a while. Here's my problem. I've got a$17 billion hole in revenue that's kind of happened at some point over the next 10, 15 years. I'm going to have to start replacing that. Don't worry about how the hole's made. Just give me the best solution as to how I would most efficiently, effectively raise$17 billion. Fairly. Fairly, right? Yeah, with the least possible impact on the economy. Go. Yeah. That's the only question that we should be talking about.

1:00:02Nah, let's get a whole bunch of stakeholders in a room and talk at each other. And then let's just release a press release that we've already pre-written before the damn thing even started. Not joking. That's serious. To be fair, that's the productivity roundtable thing as opposed to the EV charge. But the same kind of thing, it's exactly the same thing. It's like, I could ask you guys all that, or I could just say, hey, if I put a road user charging now and only 5 % of road users drive EVs, and they're already the dyed-in-the-wool greenies who want to make a difference, so they're probably not going to complain too much because they love their EVs and they're, you know, they'll just cop it sweet.

1:00:32And by the time it impacted any reasonable number of people, it's already in place. So no one's going to really vote me out for it. Can I just do this? And there's no one in Treasury who's like, Treasury, you know, you're right. You absolutely should replace one reason you charge with another arbitrarily without thinking, without considering other options. And yet that's exactly what we're, we're literally, it was in the Finn review this morning. That's literally what Jim Chalmers is going to do. And it's not because he's Jim Chalmers, not because he's a Labor Party, get off your, take off your coloured team ties.

1:00:56it's just because politicians are gutless and policy creation is so myopic and so narrow and you're right the productivity around time but this we're in the same we're in the same situation so again it's not about evs not about road user charges not about productivity it's just about a plea in the dark a lone cry from someone who should know better but insists on being optimistic and pollyanna that maybe one day we could actually have a policy conversation that It wasn't just what's the politically easiest way to do this, but rather how would we raise revenue appropriately from who, by how much, and where should the money go?

1:01:28That should be a really easy conversation to have, but in Australia these days, it's not. No, it's a very hard conversation to have because everyone's self-interested and short and very low, very high time preference, you know, very much focused on the immediate future. So, yeah, it's 5 % of new cars sold EVs, as I understand it, But it's only like 1.1 % of the existing. So one in 100 cars are EVs. So again, it's like, let's blow this way out of proportion. You know, like, yeah, it's totally depressing. On one hand, I kind of think bunch of idiots. And then I actually go, nah, they're just being rational and smart.

1:02:06Yeah. Like, and they are. They are. Like, if I was - As long as I agree with you. Yeah. Like, if I was Jim Chalmers, I'd do something similar. I was like, you say that we should have a mature, you know, conversation about this. But yeah, but that just, I'm just going to annoy a lot of people. I'm going to give a whole bunch of fodder for the opposition to throw at me and we're going to lose the next election. So how about I just do something much, much more shallow and ineffective and keep my job, you know? And again, it sounds cynical, but we all do that. We're all self-interested to some degree or another, right?

1:02:39So it's not like I'm some pure, I'm pure as the driven snow and that I would, I would be above all of this. I didn't, I didn't, those humans are extraordinarily rare. So he's just being rational, which is, which is frankly why I tend to be pretty pessimistic on the state of the budget and the debt and all of that. Because it's the, yeah, there's ways out of it, but all of them are involved doing the right mature thing. And so, and so therefore, oh, so it's not going to happen. And maybe like, right. And it's very easy to kind of go, oh, it's so cynical. It's like, yeah, it is. But yet every single piece of evidence we have from us and every other country around the world said, actually, that's exactly what's going to happen, right?

1:03:22Yeah. So, yeah, we're in trouble. We're in trouble, man. Can I keep on that? I wasn't going to talk about, so you don't know this yet. But you're talking about being cynical and rational and what you shouldn't do and all that kind of stuff. We're in the middle of earnings season. so it's a really nice time to bring it up I've been a bit cranky this week and not cranky as in like really ranty cranky just like he's persistently kind of irritated default mode for me not at your level there's only so much I can hope to do there's another way of living your life no I don't believe it how could that possibly be satisfied no that's not right but I've been a little bit maybe a shorter fuse and all I'm not sure I'm not in a really cranky way just in one of those I'm noticing the things that are annoying me at the moment and uh so speaking of earnings season this week two things i got one company i own shares in treasury wine estates and other temple and website that i don't and i tweeted about both of these during the weeks if you follow me on twitter you know what i'm about to say if you don't why the hell aren't you i said i was going to share their social i'll do that in a second um so this week treasury wine estates right um they had their net profit after tax statutory in other words without making any adjustments without 341 if i'm not mistaken oh yep so they know they in the press release, the headline says EBITs, which is Earnings for Interest Tax and CIGARA, which for the record stands for Self-Generating Regenerating Assets.

1:04:42I'm not going to get into that. It was up 17%. So that was the headline. The first bullet point, statutory NPAT up 341%. Okay, so those two numbers sound pretty good. About another six or seven bullet points. Then a table. And you've got to read to the very, very bottom of the table to realise that NPAT, net profit after tax, after adjustments taken out, because last year was rubbish because they did some some, what's I'm looking for? Bloody hell. Restructure? Yeah, write-downs. Write-downs, thank you. Non-cash though, right? Right. Well, it's not that much that. It's more the point that profit tripled because you didn't do any write-downs this year, so it looks better.

1:05:18And so underlying profit was up 14.8 % or something. Okay. But you had to read not only past all the bullet points, but right through the table it was presented to get to that number. Not in the bullet points, not on the headline, just the statutory 341%. because you know, so you can decide for yourself. I'm a shareholder, right? You can decide for yourself whether that's the most appropriate and reasonable way to present the information. I would say no. Today, Temple and Webster, or Thursday, Temple and Webster report their earnings. One of the really important ones for a growing retailer is the cost of doing business or costs as a percentage of revenue.

1:05:51So Temple and Webster, very, look, again, great numbers, right? 2023, fixed costs of percentage of revenue were 12%. 24th, 11.3%. FY25, 10.6%. That's some pretty nice sequential reductions, right? In other words, they're growing sales faster than fixed costs, which is what you want to see. That's operating leverage. We've talked about that before. Great. Except they put it in a chart, and they have those little bar charts. You've got a bar for 23, a bar for 24, and a bar for 25. And the bar size, so remember the numbers go from 12 to 10.6. For those who are playing at home and haven't got a calculator handy, That's a reduction of 11.7%, right, from 12 to 10.6%, except they don't base the graph to zero.

1:06:32So it looks like fixed, if you only saw the chart, fixed costs have more than halved as a percentage of revenue based on the size of the bars on the press release, except the reaction was only 11.7%. Chart crime. Hashtag chart crime. And that's exactly the hashtag I did use in Twitter when I posted it. Oh, good, I know. It's exactly chart crime. Is it accurate? Yes, a million percent. The numbers are 100 % accurate. Yes, they are. Is it though clear? Is it helping people develop an appropriate and reasonable expectation? Or is the chart done that way? Now, I'm sure Templar, no, no, just the people at Templar website, they would say, well, if we just put full height charts, say with a zero base, you wouldn't see much of a decline.

1:07:13And we just want to show people that it's actually a decline. We're trying to help, we're trying to educate, we're trying to show them clearly what's happening. You can argue, I'm not going to besmirch the good people at Templar website because I don't want to get sued. All I would say is if you were trying to be absolutely clear with shareholders and let them know you would use zero as your base you'd still see a decline but you see a proportional decline the bar would be 11.7 percent smaller rather than more than half the size why again they would say to make it clear i would say it's giving a an impression that is not the most clear most it's accurate how does it accurate is it accurate yes is it clear is it thoughtful is it insightful is it trying to help people understand is it trying to put it in the most appropriate light like you'd want to know if If you were a shareholder, absolutely not.

1:07:55So there you go. A whack for Temple Webster, a whack for Treasury. Would they do it if the direction was the other way? Exactly. They wouldn't. Well, it wouldn't include it at all. It's the same argument. Yeah, exactly. It's the same argument. And yet it's so cynical. Here's my issue with it as well. It's like there'd be a certain sense to it if it's like, well, it worked. We pulled the wool over the market. It never works. It never, ever, ever works. The analysts go, wait, but you're just, okay. So you've got to dig a little bit deeper. It's not as obvious. And sometimes when they do quote unquote work like these misdirections, they work for a little bit, but they never sustainably work.

1:08:36So it's kind of like, at least get something out of it if you're going to be disingenuous. But you're disingenuous and it's still, you don't really hide what you're trying to hide. And now everyone thinks you're a disingenuous so-and-so. So I just, you know, I've got nothing but contempt for management teams that insult your intelligence, frankly, is what it is. And it's just like, these aren't the discussions you're having in the boardroom. You are our employees. Just to make the point, right? And I kind of expect that a frank, fearless, honest interpretation of what it is, right? But no, you treat me like a child.

1:09:21You treat me like an idiot. You try and, you know, change things. It's just like they're all playing the same game. They've all got the same IR idiots in their heads, you know, whispering this stuff. And it's just, it's so depressing. But by the way, I go on these little tangents and then I think, what are you asking for, Andrew? A perfectly rational market? I don't have a livelihood in that world. So thank you, I suppose, that things are so like messed up like that because there lies the opportunity for spotting value, right? Like if you can sort of form an independent view and get it closer to the truth, not for a second suggesting that that always happens for me.

1:10:04God knows I get it wrong all the time. But at least that potential exists. And so in that self-interested way, maybe it's a good thing. But yeah, pox on both their houses. It's as rational as you mentioned about Jim Chalmers, right? Yes. If no one's going to call you on it, And your incentive is based on share price or something else, or you've got fundings in your ear saying, what are you doing to get the share price up? It's totally rational. If you don't, like our politicians, actually put some sort of principle first. Warren Buffett will say regularly, and I'll keep mentioning Buffett, he will say regularly with every press release he puts out, the numbers here are required by law.

1:10:37We happily comply with the law. They're just not representative of reality. And he could happily not do that. And when he talks about reality, he talks about it in a consistent fashion. Year after year, good or bad, here's how we report. Yep. sometimes that'll be better than the statutory requirements and sometimes it'll be worse so what you get with with most asx most companies full stop listed is it is this sort of like well we report what we have to report legally but each year we'll change what we focus on whatever presents us in the best light so i would i'd have no problem with with temple and webster sort of saying no we always do these chart crimes but we do it in both directions you know that's that's That's where it gets really, you know, just ugly, annoying.

1:11:20I don't know what the proper adjective is. Well, it's all the above and plenty more besides. But yes, it's – and look, what do you do? To your point, Matt, as an investor, you say, well, actually, how about being aware of that? The best thing you can do is be vigilant, be aware of it. Also, too, by the way, use it as a tell. We need companies who do what Berkshire does. Solpats is pretty good, too. they report i think they call it they call it normal normal profit i think they call it if i remember um i own both those shares berkshire and solpats um they you know the companies that make the effort take the time try to present the information correctly it's a massive tell think about the credibility of your management team the candidate of your management team now i'm not saying everyone who doesn't do it's a crook um they're all susceptible to the same pressures and dramas everyone else and they convince themselves it's okay and it's not a tell as in don't trust anyone who doesn't do it because almost no one does it um and there are companies worth investing and that still do silly things with charts to try and look impressive, right?

1:12:14That's just ego and hubris and pressure and all sorts of other stuff and IR, investor relations, people getting to OTT. But yeah, if you find a company that does the right thing, really stick to it. It doesn't mean they're going to be perfect. It doesn't even mean they're going to be market beating, by the way, but just value the candle when you get it because it's so incredibly rare. That's a very precious commodity when you find it. It's so precious. I mean, you could pretty much build an investment strategy just on that. I've not crunched the numbers. I don't know how you would because it's too subjective.

1:12:42So it's not something you could just get an AI or a, you know, a scan to sort of find, you can't do it. Well, yeah. Give it six months. But, but yeah, like, and it's also why when you, when you do ever come across, because they are rarer than hen's teeth, but when you do come across a really honest, forthright kind of management team, it's sort of like stick with them in good times and bad. They're going to make mistakes because they're human. And to err is to be human. To be human is to it or whatever way it goes.

1:13:13But they're being genuine, right? And they will learn from that mistake. They'll own up to it. They'll correct it. And they'll probably also make some really good decisions as well. The fact that they're in this position in the first place has been by being a little bit sort of savvy. So, again, no guarantee. If you want a guarantee, buy a toaster. But it comes pretty close for my mind. And you can count on one hand the number of companies on the ISX that probably fit that ideal. Yeah. What are you? Someone's going to write into the mailbag now and say, can you name those five companies? I don't want to open up another box of worms other than Kenilwombs, other than to say that you and I talked before we started recording about incentives to do the right thing.

1:13:56And they are really, really limited slash non-existent. And so someone who wrote – speaking of AI, mate, and it's not far away or whatever – but someone who wrote an AI who could create – because charts are useful. If they're done legitimately and correctly and accurately with good intentions and effort, charts are really useful because they visually show you what's happening with big data. It's super useful. Picture is a thousand watts. Right. Yep. So someone at some point will design an AI program. You can throw a Treasury Wine Estate or a Templar Webster. And by the way, they're just two I found this week.

1:14:30Every other company does it, right? So I don't mean to even single those guys out. They're just examples I saw. Someone who's in an AI program that takes all that information, recasts all those graphs using, you know, X chart crime and X selective reporting. And that'll be a massive benefit, right? In the meantime, as you say, the opportunity to do it yourself and really look at that stuff again. What am I really being told? What's really underlying it? And the hardest part, as I say, is there are great companies who still do it because they just feel like they should or have to or don't see it or are so shot blind because they've been doing it for years.

1:14:58they don't realize. So don't ignore companies. Great companies still present selective numbers because they can't help themselves. Don't ignore those companies because of that. But as you say, doubly value those who choose not to because they're at least going to tell you the truth. And you know, no promise the business will do well, no promise the share price will do well, but very good chance you'll hear it clearly, plainly, forthrightly with candor from those management teams. I'll expand. I agree. And I'll expand on that point a little bit, which is I know some investors who hold their companies to such a high standard that they virtually never have a holding for more than a year or two because someone will do something that they don't like and they're out.

1:15:40Ah, they're all crooks. And the trouble with that is that it's like I often say, perfect is the enemy of the good. So you're right. There are some really good companies that still play this silly, silly buggers game and like do you want to not invest in that? And then there are companies that do it deliberately but otherwise has still got a degree of success in front of them. So you, you, unfortunately, as with politics, investing is a game of compromise. You, you, you know, you just, they're going to be, I pick my favorite company and I can tell you 10 things. I don't like about it. Right. And it's just like, but I'm not going to sell because well, what else am I going to do?

1:16:14Right. Like you have to, you have to have,

1:16:20all you're trying to do is it's a balance of probabilities. It's just sort of like, I want enough stuff on the positive side of the ledger to compensate me for the negatives. Yeah, I just want to double down on that point because you start looking for reasons not to invest. You'll always find something and you'll never invest in anything. You know, so it's kind of like, you do have to be, as an investor, you don't want to be an idealist. You want to be a realist. I'll give you a point here without trying to throw anyone under the bus. but there was a really great discussion on straw man recently about a company that did a capital raise and they did an institutional raise, which means that they didn't allow the retail shareholders to participate, which sucks.

1:17:01And, and, and one of the members made this really good point. I agree with it, which is either it's an absolute dead set emergency that you just have to do it now or it's not. And in which case, even though it's costlier and it takes longer, you should always give all of your shareholders equal opportunity to, to tip in some more money because all it does is advantage. the institutions, the insiders who are just fair where the friends are going to dump the stock anyway. It's a real snub. And one of the other members was saying, yeah, I actually agree, but at the same time, I like everything else about it.

1:17:33I'm not even trying to say one was right, one was wrong. I mean, they're really both valid points, but it kind of gets what we're - It's complex, right? It is complex. Well, the other thing about capital raising is, if I own an exchange company, they've got a really good idea and they can do a deal and buy a business for half its value, but they've got to close by Friday. Yeah. I can say, no, don't do it because on principle, I think I should get a chance. Like, well, okay, does it suck? Yes. Is it still in the interest of all shareholders? If the answer is still yes, then less good is better than bad or no good at all, right?

1:18:03And so it's all I think. There's a point between those two people, which is I like the company. The capital raising sucks. But the other thing is if the investors commit to it, a shareholder purchase plan doesn't have any commitment to it. So you don't know how much you're going to raise in that circumstance. Now, it doesn't mean they shouldn't put a shareholder purchase plan on the back of it anyway and take as much as they need and then more if that's what it comes to. But if you know you've got to have$100 million to buy this business and you think, well, maybe shareholder will give me$50 or$70 or$110 or to get the$110, I've got to discount the price by 40%, but I can get a 10 % discount with instos.

1:18:35Again, always think about the counterfactual. What would the alternative have been? Would it be better or worse? There's no perfect. As you say, perfect. Send me the good. Am I better off? Yes. Could they have done it better? Yes, well, they bloody well should have. No, zero defense of any company who takes the easy, cheap, lazy, non-share-friendly option. They deserve every bit of criticism they get. You just can't take out one-size-fits-all. You can't. Another point this person made, which is good, which is either like, well, if it's not an emergency, but they still had to do it, they sort of made the point that there was some urgency.

1:19:05It's like, well, how did you let your cash balance get? How were you not aware that your cash balance was in such dire need of being topped up, that it became the only viable alternative was to do a quick, dirty institutional capital raise. And the longer you wait, the bigger discount you've got to give by definition. Because if you don't have plenty of cash, no one's going to throw money at you. You're not desperate. You can raise it slowly and at a good price. If you run out of cash, like, whoops, now we're in trouble. Now we're a forced buyer of money in this case, of that equity, or a forced solid equity, if you want to look at it that way.

1:19:31Either way, we're forced into it, so someone else is getting a better deal. Oh, man. They do it for the same reason banks do, central banks do QE. It's invisible, right? So it's sort of like for most shareholders, they don't recognise that you're being diluted here and it's not really a problem. Speaking of being cynical, yeah. Yeah, right, but it kind of is. It's just like when it's not obvious, it's surprising what you can get away with. And again, maybe you look at the CEOs, it's perfectly rational to do it this way. By the way, I'm only here for another year. I'm putting my golden parachute on and I'm out.

1:20:01And the people who knock on my door are the fund managers who are going to take part in this. And Andrew, the retail investor, which I know you're like I'm just using that for fun Andrew the retail investor is not going to call me up who cares he's only got 100 or 1 ,000 or 2 ,000 shares the fundee over there has got a million shares and he's saying get the share price up or I'm selling and the board's going to be annoyed if that happens so who am I listening to it's all of that stuff again it's why I will praise Warren Buffett until the day he dies and then probably until the day I die he doesn't talk to analysts he just doesn't I have no interest in hearing from you and again that's its own superpower because no one knocks on his door and so he does what he wants to do the way he wants to do it I had a friend the other day saying, oh God, you go on so much about Buddy Buffett.

1:20:41You know, he's like, whoop-dee-doo, he made a bunch of money. And my response was, I don't like him because he's rich. Correct. Right? There's plenty of people richer than him. Well, not plenty. There are some people. There's two or three, yeah. There's a few people richer than him. But what's so remarkable about the guy is that he did it, like he's either the biggest fraudster in history or he just did it legitimately. The right way, yep. The right way without lying or cheating or doing all of the crony capitalistic BS that so many others have had to rely on to sort of get ahead. It's just sort of like, you know, it's just like that's what makes it remarkable.

1:21:19And with such a desire to share those insights. I mean, there's a whole generation, our entire cohort of professional, quote unquote, professional investors in this space, were all brought up on Buffett, right? Like he shaped, well, people selectively apply those lessons. So let's not give the rest of the industry too much credit. But I mean, that's what, I'll just make that point. It's like, oh, God, give it a break with all the idol worship. And it's like, yeah, but it's not the money that I worship. I mean, that's impressive. Don't get me wrong. but the fact that you could do it in the manner in which you've done it that's what's really cool as far as I'm concerned and honestly it's also true that nothing Buffett said would be untrue if he wasn't rich but the fact he's rich means at least he has the gravitas that people actually listen there's someone out there you know Jimmy Smith who's saying exactly the same things and I was listening because he's not Buffett right hasn't made the money Buffett has been earned the right and maybe shouldn't frankly in a very materialistic world, but the reality is the reality.

1:22:24He's earned the right to have a platform. It's not the fact that he's made the money. It's the fact that what he says is true and real and right, objectively, plus he's rich. And so it's proof of that actually having been done, which is also really important. You can be a force for good and you can make a bit of money. You know, it's a good thing. Exactly. Or you can be an Australian mining magnate. Okay, let's finish there. We have to edit the rest of this episode. Mate, assuming we're not sued by them, Will you come back on Sunday? Yeah, bring your lawyers on. You've got nothing on that. No, actually, please don't.

1:22:57And yes, I will come back. Please don't. That was Andrew. That was totally me. And I fully retract that statement. I overstepped my bounds and things were said in the heat of the moment and I fully retract them. Tune in Sunday to hear me to the podcast by myself because Andrew has been given a gag order. Until then, cross your fingers and 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.

1:23:35The Motley Fool operates under financial services license 400691.