House prices can’t grow faster than wages. September 18, 2026

24:47he did the wrong thing and rates should be lower and all the usual Donald Trump stuff. So Walsh doing, I think, whether you agree or not with the Fed being a thing, whether you agree or not with the rates being increased, he did his own thing and did what he thought was right in that context. That's admirable, particularly when you've got Trump as president who handpicked you and who reasonably would have expected you to do what he wanted, even if you never intended to. That's not nothing. And Jerome Powell's being investigated or was investigated for not doing what Trump wanted. So there's at least a degree of personal risk involved in the process.

25:16But let's move on from that, mate, because you mentioned something really interesting before we started, which was, yes, the Fed's doing their thing. And I said, yeah, does it really, you know, what have we got to talk about? We're talking about RBA rates and are Feds even further, you know, disconnected or kind of tangential to what we normally talk about? And you said, yeah, but we should talk about why it matters. And I thought that was just a really interesting kind of way to address what this is. Rather than any of the mechanics of it or the should they, shouldn't they is when the US funds rate increases, why does it matter for Australians in general and Australian investors in particular?

25:50So I'm going to set that up and just throw it to you and ask why does it matter when the US... Oh, gosh, it matters. It matters for a bunch of reasons and it's one of those seemingly simple questions that you just go, oh, because of this, but 12 hours in you're still sort of circling before you, you know. There's an international competition for capital, you know. As an investor in the modern age, I can buy Australian bonds, I can buy US bonds, I can borrow from Japan, I can do all kinds of things. I can try and raise money here or abroad and it's just sort of like when, I mean the very simple way of putting it is if we have a third friend and they both regard us as reasonably fiscally sound and you're saying, hey, I'll lend you money but I'll charge you 10 % and I'll say, yeah, actually you give me your money and I'll give you a 10 % return and I say, well, you give me your money and I'll give you a 5 % return.

26:45It's like where are they going to put their money, right? And so money will always rationally try and seek out the best kind of return. So that competitive dynamic matters. And when you have one of the world's largest economies and one that controls much of the economy, the old saying is when the US sneezes, the world catches the cold kind of thing, and they're having a certain cost of capital, it's sort of, you know, we're in competition with that. So even if the local economic conditions are rather different, that's going to play into it. And there's also particularly important for us where our banks are so outsized to what they should be.

27:28I won't go there, but, you know, they are a very, very, very major component of our hyper-financialised society, which, again, I won't go there either. I just drop that in there and let people make their own inferences. They themselves source funding from offshore markets. They'll issue bonds and people in Japan and America and Europe and all over the world will buy those bonds, which is a fancy way of saying they will lend NAB some money for a certain rate of return. And, again, it's back to that competition. And so if rates are higher in the US, if the Westpac wants to attract some additional funding, well, they're going to have to compete with that, you know?

28:09Now maybe some investors go, well, I think Westpac is on a firm of financial footing than the US empire, then okay, maybe. And maybe that will advocate for a difference in interest rates. But it's hard to get over. When things are sort of that close, I think it's just going to impact you, and it does. And, in fact, the banks come out every time. And this is what the media is so bad at explaining to people because we have these out-of-cycle hikes. People just lose their mind over it. I am the last person to defend the banks. Screw them all, right? But it's sort of like, guys, they've actually got a reasonable point here.

28:54Like that's just – if they don't make a margin on their cost of credit, then they're not in business and the whole thing falls in a heap. So it's kind of like, you know, if this is the system we've got, we kind of need them around and if they're going to be around, they need to – you know, and I'm not saying extortionate, hyper-robber-baron type profits, but they need to be vile, right? And in a competitive market. It's really important, yeah. You know, it's sort of, again, I'll steer clear of sort of the more foundational stuff, but within the framework that we have, it's super important. It's super important.

29:27And the other part of it as well is that, you know, there is already, in case anyone's been under a rock, there is already a Mount Everest of debt that's sort of out there. And this debt has certain tenor. Like it has expiry dates when it's due to be paid back, whether it's a five-year note or a 10-year, 30-year bond or whatever it happens to be. And when that happens, you've got to refinance whatever the rates are. Think about it from your house perspective. It's sort of like, you know, you had a fixed interest loan. It expires after three years. What happens? Well, unless you manage to pay it off in that time, you're refinancing it and you're refinancing it whatever the market rates happen to be at that time.

30:03And so, gosh, there's probably about six or seven other dynamics that I'm not touching on here, but maybe you can flesh it out. But they're the big ones that come to mind. Yeah, no, it's huge. And I think, I mean, so much, mate. And then for investors, you've got cost of capital implications. We talked a little bit about the risk-free rate before and that's kind of last week. That's kind of impacted by what's going on here. Bank wholesale funding is super, super important. The banks don't have, at least at the rates they would like, and we go back to the markets, there's not enough Australian deposits, enough Australian wholesale funding for our banks to fund what we want to borrow.

30:38at the current rate, at the rate they're offering. And so the simple reality is we are - We want to borrow or they want to lend? Oh, either or, right? You know, both, right? I'm not trying to be snarky, but it's like there's a dynamic there. But, you know, we go to the banks and they go, I'd like to buy a house, please. And they go, I'm sorry, we can't get the funding. You can't buy the house. So it's both, right? And, yes, they make money lending. But it's that reality of - And we can do fractional reserve banking. We won't do it. But, you know, the broad concept of the funding that they need to underpin their balance sheets comes from, yes, Yes, Australian depositors.

31:09Yes, Australian bondholders. But depending on the bank, I don't know the actual numbers, mate. I suspect in most cases it's a sizable minority, not quite a majority but not miles off. I think it's, I want to say somewhere around a third to a half of most major bank funding customers overseas. And so, again, is that just the US? No. But think about, again, the interplay of US rates versus global rates, other countries and their rates, and exchange rates too. We saw the Australian dollar fall against the US dollar, meaningfully and it's one of those, because these are both relative numbers, it's like did the Australian dollar fall or the US dollar rise?

31:43Yes, both. Which one was it? Well, it's both. But you can reasonably intuit which of those is actually driving the difference. When commodity prices fall, investors normally don't want the Australian dollar and they just buy something else instead. They sell the Australian dollars and buy something else. So the motivation there is the lower attractiveness of the Australian dollar. When US rates go up, it's an increased attractiveness of the US dollar. Why? Because you can get those higher rates. You don't need to. And I say don't need to. If you're American, you say, well, do I want to take the currency risk?

32:11I mean, no one – if you want to speculate on currencies, you can. If you're investing for a return for a yield in particular, you don't really want to take currency risk for the sake of it. And so you will if you think you can get a better return somewhere else. Okay, Australia's giving me more than America. I've got to take some currency risk, but it's worth it because I'm getting a higher return. As soon as you – the US is the world's largest capital market. As soon as you can say, so I get a higher return and take no currency risk? Okay, well, I'll do that instead. And so the relative attractiveness for that capital market of being able to invest in your own currency.

32:42Now, we can argue about the currency devaluation and some want to invest outside for other reasons. So I'm not, this is not a blanket answer. There's reasons for wanting other currencies, for diversification, if you're worried about the US dollar, all that sort of stuff. But we almost always find whenever there's a crisis, the Australian dollar plunges against the US. Why? Because American investors go, I'm just going to bring it home just in case. And so there is a home bias. There's a home bias for shares, there's a home bias for bonds, a home bias for currencies. And so, yeah, when the US rates go up.

33:09And for liquidity too. You're just like, get me out of the thing. I just want the cash. Despite all of the problems with it, I just, you know what, shoot first, ask questions later. That's exactly what happened in every major crisis. It's like, and people go, oh, it's irrational. I'm like, no, it's not. It's perfectly rational. I don't know what's going on. I'm just going to sell. I don't really care. And I'll wait for the dust to settle. and that's what it's going to be. So, yeah, yeah. To answer your question, it's 15 % to 20 % offshore wholesale debt. 15 % to 20%, okay, there you go. Yeah, yeah.

33:40It was much higher pre-2008. Oh, okay. I don't know if there was something that happened around that time, I can't remember. But it knocked it back a little bit. And just, you know, there's no better demonstration of what you were talking about just then than the so-called carry trade, which I know we've sort of mentioned in passing in the past, but it's exactly that. It's just like the whole idea with that was that you had the world's third largest economy. Japan's an absolute powerhouse, right? And they just had virtually zero interest rates for forever for a long, long time after their property bubble collapsed spectacularly in the 90s, I think.

34:20Early 80s, early 90s, I think, yeah. Yeah. Gosh, that's a whole other story. Anyway, what would happen is people would borrow from Japan because the interest rates are so low and I'd go and invest it overseas into a bond. It was like, it was real. Yes, it was currency risk, but not a lot for a reasonably stable currency pair. And it's just like I borrow at 0.25 % and I get a 4 % yield. It's like, okay, yep, that makes sense. I'll do that all day long, right? And people did. People have for a long, like lots of money. And not just, there's also a domestic factor there as well with Japanese actually going, well, there's nothing to invest in here that gives me a decent return.

35:03I guess I'll – and they're great savers, right? So I'll invest overseas. Why am I talking about that? One, just to highlight the dynamic that you're talking about in terms of international competition for capital and return. We are witnessing that unwind in real time right now because the Japanese have been, despite their best efforts to prevent it by printing ungodly sums of money, yields are going up in Japan. Now, why is that a big deal? Why should I in Australia give stuff about that? It's like, and not to get off on a tangent here, but hopefully highlights what we're sort of talking about, the importance of these kinds of things, is that a lot of capital is going to be repatriated.

35:45Because like, to your point, why am I taking the currency? Why am I going to take the currency risk and sovereign risk and a whole other bunch of stuff when I can invest at home and get a yield that's comparable to what I'm getting overseas? That, that, that will, good in theory. That's, I mean, again, I'm not going to go down the rabbit hole, but just to sort of mention it, it's like what you've got to, I don't know, the macro nodes would have been and have been sort of making the observation is like, why is percent so keen on opening up swap lines with the Bank of Japan and liquidating and helping those guys out?

36:20This is so nice. Isn't he so nice to do all of this stuff and help support the central bank of Japan's monetary efforts? He knows what the consequences of this kind of stuff are. And so, oh, man, the way that we sort of intertwine everything together, it's that classic butterfly effect, isn't it? It's sort of like some local interest rate moves in a country that you don't spend a lot of time thinking about. You know, a little bit of a change there five years later, it's like you're insolvent and you're selling your house as a forced seller. Like, what happened? How did that happen? You know, that was the lesson of 2008, 2009.

37:02Well, lesson number 4 ,387 ,000. It was just sort of like, you know, they're all kind of cool until it's not. And then you do have those factors that, again, I don't want to sort of overemphasise it too much, but I think that's why people, it's why it's worth talking about. It's why it's worth trying to at least get a handle on why are you guys talking about what happened on the other side of the world? Yeah, that's right. and what some policy decision is because it impacts the tradie who's working in Dubbo ultimately. And if you don't believe me, ask all the people who lost their pensions after the GFC.

37:40I will just drag it, speaking of the tradie in Dubbo, just back to a couple of things on the exchange rate just for fun and we'll move on. But when there is more demand for US dollars and less demand for Australian dollars, the price of Australian dollars falls. Right mathematically. It's a relative thing. So when I say price, it's an exchange rate So, you know, one price representing the price of another thing is a hard thing to do, right? But conceptually that's what's happening. Now, what does that mean? Well, here's the problem. If and when the price dollar falls, it's actually really bad for local inflation because it means that our imports cost more.

38:12Imports price in US dollars, to be clear. It depends on, you know, we're buying some things in yen and some in won and some in, you know, remember me and everything else. But mainly in dollars, mainly. Even when we're not dealing directly with the... Well, that's cross rates, I think. So that's the reserve currency. What's that gone blank on the name? Reserve currency? Yeah. In the sense that most countries that trade between each other trade in US dollars, even though the US is not part of the transaction. Yeah. It's kind of wild, right? Because that's just the nature of money, right? You need the most liquid, the most widely accepted, et cetera, et cetera, et cetera.

38:50So if you don't, your currencies are normally set relative to the US dollar anyway. Yep. So even if you're swapping dollars for yen, dollars are compared to US dollars, yen's compared to US dollars, so the dollar-yen is not entirely, but there is a more than two-way. They call it the basket or the cross rates, the idea that they're all interrelated. And it kind of makes sense when you think about it, right, because you do the arbitrage yourself. You could buy yen with Australian dollars, you could buy US dollars and buy yen with US dollars. And so you kind of, at some point, they need to flatten out to some reasonably understood mesh of prices.

39:26Anyway, so back to my point. I do want to get distracted with that one. Sorry, but you keep saying interesting things. No, no. Well, that's unlikely, but I appreciate you adding your interesting thoughts instead. The dollar is, when it falls, it makes imports more expensive in price than US dollars. And again, or relative to US dollars. So that's actually bad for local inflation. It's good, by the way, for exporters. And this is the other thing. When we talk about the dollar, there's that really, I've said this before, but not for a while, there's that tendency to kind of cheer on a higher dollar and to dismay about a lower dollar.

39:55And I don't want to get into the long-term stuff necessarily, but when we say, oh, dollar's up, that's good. It's like, well, is it? Depends. It's good if you want to travel overseas. It's good if you want to buy imports. If you're a primary producer or you're a manufacturer or you're trying to sell your stuff overseas, every time the dollar goes up, it's like, well, now I'm going to try to put my price up, but I probably can't because I'm in a competitive market. So all it means is I'm getting less Australian dollars for the stuff I'm sending over to the US or Japan or Canada or England or Vietnam or wherever you're sending it.

40:20and that's kind of, so it's just worth thinking about. So what does it do? Well, a lower, a higher US, again, think about the kind of connections and connections, higher US interest rates. I mean, a higher US dollar, I mean, a lower Australian dollar mean higher Australian inflation. Also means, of course, if you're travelling overseas, you're going to get less for your money. So there's really significant implications in that and that follows right through to, again, potential Australian interest rates. And so what is the trading in Dubbo care? Yeah, well, for all the reasons. By the way, I've also just quickly to finish off.

40:54When we say worry about it or what does it mean, most of them don't worry about it because not, you know, what do you do? Nothing. So understanding is one thing. You know, oh, I hear what you're saying, guys, what should I do? And our answer will almost always be the same as you always do. But it's worth just understanding why it matters. When we talk about it, who cares about the Fed? Why talk about it? Because there are global and therefore local implications when they have those policy changes. And not even policy changes. US bond rates broadly, as you were kind of mentioning before, mate, when the bond rate moves, whether it's official cash rate change in the US or they call it the cash rate target, I think, over there, it's, you know, the price of money.

41:33Well, yeah, it is, but my point is just as well as, you know, both those things matter because it sets the borrowing costs for Australian companies. Again, around and around all the things we just talked about, the carry trades, the exchange rates, all the things that happen, absolutely matter and absolutely makes a difference. The one thing that we didn't mention, which is also super important, is it impacts people becoming, I don't invest in bonds and I'm not doing a carry trade, bro. Like, why do I care? Beyond that, there's like, yeah, but a lot of Australians have property investments. A lot of Australians hold shares and the cost of capital, like whatever that, it's sort of called the risk-free rate, you know, and you want a premium on the risk-free rate if you're investing in something like shares or even property, right?

42:16It's sort of like, so the more attractive fixed interest becomes, the less attractive the alternatives sort of become. Why take the risk of investing in a listed company? You could have, you know, could go bankrupt tomorrow when I've got this person over here who literally owns a money printer. And it feels like one's just like, you know, there's different types of risk, but one feels a lot safer than the other. So what it means is that your super funds might go down in value. Your investment property might go down in value. It's because of what WASH decided to do indirectly and with a massive lag and with a thousand other things poking at it at the same time.

42:51But, you know, it absolutely will have an impact. And, in fact, we shouldn't focus too much on the, well, I've got to frame this correctly, the negative of interest rates going up. We've got to get away from just always assuming that higher interest rates are bad. I really hate that framing because there are, believe it or not, sit down are you sitting down some people save money and when you save money high interest rates are good right like you want savers retirees it's not a bad thing right so and and also if rates are artificially suppressed and kept too low well it's like that feels good but then well again I direct you your attention to your listener back to you know nearly 20 years ago and what when what happened when we did that or what happens every time when we do that kind of stuff.

43:43So it's sort of like the stakes, as I said at the start, the stakes are pretty high with this kind of stuff as well. But to your point, though, in terms of what you actually do about it, I wrestle with this a lot because I 100 % agree, like you kind of don't really do anything too different, I think, as an equity investor because it just comes back to, I don't know, I just want a really good business at a really sensible price, you know, And that's the kind of scenario that regardless of which way the macro winds are blowing up, relatively, I'll do better. Like, you know. And even if the share prices come down and you perform worse, it's funny, mate.

44:19It fell 10%, but everything else fell 40%. That's it, right? It's a pretty good return. We talk about discount rates. We talk about, you know, expected returns or required returns. And that makes a whole lot of sense, right? But realistically, as investors, my honest view is we are in the job of opportunity cost allocation. That's exactly what we are, yes. And so I've got 15 options. I'm going to go with the most attractive one. If that most attractive one gives me a 15 % return or a 12 % return or an 8 % return, what else am I going to do? I mean, at some point you go bonds instead, to your point.

44:48I don't want to make it too narrow because at some point you say, well, stuff it, I'm going to sell my shares and buy bonds. And that's – I don't expect I'll do that anytime soon. But at some point that is a rational decision. I'll add a point. Because there's an insufficient risk premium. I'll give you a one-year treasury. You give me 20 % on that. I was like, I can factor in some pretty decent inflation and still be pretty happy with that. Exactly, exactly. Mind you, the chance to default at 20 % is pretty high too. That's a whole other conversation. Well, again, Argentina will offer you those kinds of rates if you're interested.

45:16Anyway, let's move on because we've spent a bit of time on this one. I don't want to cover a couple of things. It's just super interesting. I feel as though we're probably just confused. I said to you off air as well, you know, if you're going, what the hell, guys? I said to you off air, it's like I do find it a bit like soap. but sort of like the tighter I feel I can grip it, the more it's just going to slip out of your hand because it's very, very nebulous and it's very interconnected and there's 12 degrees of, you know. It just, it's super hot. Before we move on, just the one point, just to finish off that final thought was you're right, it doesn't matter but one of the things that I do keep in mind with these sort of macro machinations is that they don't matter 90 % of the time, or 95, maybe 99 % of the time, but the time that they do matter, it's kind of like, oh, crap, like that's the GFC, right?

46:08Like that's the Great Depression. It's sort of like doesn't matter, doesn't matter, doesn't matter, doesn't matter, doesn't matter. It's everything. And it feels like I'm sort of hinting that that's what's coming and rah, rah, rah. I'm not really trying to make any other observation than, two things can be true at once, right? You know, it's just like, yes, it's not something that you want to overly concern yourself and focus on as an investor. But that broader climate, the broader environment that you are investing in is something to at least be, I think, mindful of in the same way that you might as a farmer want to be mindful of the climate in which you're trying to grow sort of crops.

46:45You won't predict the weather every day. But, you know, if there's like a, I know, an encroaching salinity sort of issue or Rari's like, well, maybe that sort of, I'm still going to, I'm still going to grow the wheat. I'm still going to do this, but it's going to change a little bit. And, and I think that you want to, you want to be, um, you want to be aware of the fat tail risks or the long tail risks, I should say in the sense that where it's kind of like, don't invest in anything, whether it's shares, bonds, whatever, if there is a chance that it completely blows up on you. And I'm saying there's always a chance of that to some degree, but, but, But, you know, today that risk is much greater than it was in 2005.

47:32Now, that doesn't mean it's imminent. It could be 20 years away. But it's sort of like there does come a point when the maths is so massive, I suppose. I don't know how you wrestle with that because the problem is there's been the Bond bros who have been calling for disaster forever and it's just like, yeah, you know, how's that worked out for you? So I wrestle with that a lot. You're right, mate. I think it's a very, very good question, 50 minutes in. I think the answer for me is I try not to time the market and I try not to get too clever and too cute about short-term movements. Yeah. So my general pro, like investing in general, I know there will be years where I have negative returns.

48:22I know there will be years when I lag the market. I know there will be years when in hindsight you look back and go, turns out I should have been in copper, right? Am I trying to do that? No, because in hindsight we know exactly. You know, there's a great chart, and I'm not going to describe well on audio, but you've seen them on with the years across the top and the asset classes down the side on the two axes. And you see the best-performing second, best-third, best-performing asset class in any given year, and they're always different. It's gold one year and it's Bitcoin one year and it's shares one year and it's property one year and it's something else.

48:50And bonds. And you kind of go through it and go, well, yeah, okay, if you give me a time machine, I'll pick that like a dirty nose, as you like to say. But, you know, really in advance? Am I going to work that out? Am I likely to be there? And if I'm not, then it's almost negligent. It's like, well, okay, if I can't do that, what do I have a decently high degree of confidence in doing that is going to achieve my investing or my wealth goals, my life goals with money in the best possible way? And so honestly, you know, could I try and pick when the right time to buy copper is or bonds or gold or art or cars.

49:24Yeah. Am I going to get that right? Probably not. Okay, so what else do you do? Well, you do the thing that you think will work over time. Not even more often than not, though, I suspect it will. And just I have a high degree of confidence that if I invest in quality companies for an extended period of time and keep adding money regularly, I will do well. Yeah. It's pretty exciting to put that. Right. Well, it sounds negligent. Surely if you try harder, you can do the same. Well, we started by talking about humility. You know, could I do well if I tried harder? I don't think so. I mean, why would I think I could out-trade someone else on working out when to buy and sell copper or when to buy and sell bonds or when to buy and sell, you know, muscle cars?

50:01I mean, you know, what are the odds I get it right? Not particularly great. So you've kind of got to say, well, wouldn't it be good if I could yes? Pick the game you want to play. Pick the game you want to play. And choose the game based on the right approach, which is for me long-term results. So over 40 years, do I think I'll do well with shares? Yes. Do I have the same confidence with muscle cars or art or copper or just trading between them all? No. I'm not saying it can't happen. I'm just saying I don't know if it will. Not for you, yeah. Right? Least worst outcome. For me, it's a bit of the Charlie Munger, tell me where I'm going to die sort of philosophy.

50:35It's more about like I'm the same. I've got no chance of predicting it and I'm very mindful of the fact that although sort of there is a sort of mathematical gravity that at some point we will have to reckon with, It's just like it could take a long, long time. And it could deflate slowly. It could fall off a cliff. Even the way it happens is. Yeah, yeah. Yeah, that could 100%. So it's not about trying to time it or anything. It's just like, as I've said repeatedly on the pod, it's just like I just don't buy bonds. You could not make me buy bonds, right? And it's like that's not because of anything imminent, any imminent prediction.

51:08It's just like I feel like I'm playing a game of chicken and the other car might be a long way away or it might be closer. I don't know. It's raining really heavily. I just know I'm on the wrong side of the road and I'm going really fast. And it's like probably I've been okay for the last 10 kilometres and chances are I'll be okay, but I might just go into the left lane again, you know, because it feels... Totally. It feels like this is a game of chicken. I just don't want to play, right? And so that's about as cute as I get with it all. And I suppose the other dimension is it's almost, it's a consideration of, yes, the good business at the good price, but trying to have an awareness of, well, should monetary and fiscal affairs evolve in a certain way?

51:51Is this the kind of business that actually has some potential to weather that particular storm better than others? Which means I'm probably not going to get into a hyper-leveraged private equity kind of property-focused fund. Now, again, it's just sort of like, oh, so you think it's all going to go, well, no, but I just think it's highly precarious and the returns on offer relative to the risks are very ordinary so I'm just not going to do it. And I might look back in five years' time and go, to your point, maybe that was the copper trade. Maybe that was the thing that could have done really well.

52:22But, you know, you want to be right for the right reasons or you want to be right where I'm not just dependent on luck. Like, it's just like, yeah, it turned out I did really well. But just for dumb luck that, like, things, you know, I've been dancing under the crumbling arch, you know, all day. And every day I get out there and I dance and I dance and they were like, that thing looks like it's going to fall, Andrew. It was like, no, it doesn't fall, never fall. And it probably won't fall. It stood for 100 years. It's just like those cracks just make me nervous. I'm just going to dance over here underneath that thing.

52:55And that's probably the level of sophistication that I get to. I don't know what else you can do except be like some Ray Dalio, George Soros type C-round corner macro guru. And even those guys blow up all the time. You know, don't do well with it either. We don't know what else you could do. Anyway, the answer is lots of things. Well, you could do this, you could do that, you could do this, you could do that. It's like, okay, what do you think has the highest probability of giving you the outcome you're looking for? And that's a different question. I know that's what you mean in your question, but I just want to flesh it out.

53:24It's like, what could you do? I could do everything. You're right. I could try and study copper and work out where it's going next. Then I could do it with gold. Then I could do it with Bitcoin. Then I could do it with muscle cars. Then I could do it with yen. And then I could do it with wheat futures. Or I could say, well, I don't know. when you're trading in short terms, it's a zero-sum game. Am I likely? So is anyone likely to win overall on average? Probably not. Am I more or less likely than average? Well, I'm less likely because I don't know anything about it. I'm dealing with supercomputers and hyper traders and massive, massive, massive pools of capital.

53:55People can move markets. So do I want to play that game? Is that the game? Do I want to line up on that one? You know, I can go and play NFL and I can stand there and go, oh, I'm in trouble here. You know, first down, I'm getting smashed. You have made a terrible mistake. Yeah, exactly. Which is just your point of saying choose the game and that's the key. Yeah, choose the game. Keep it simple. That's the thing. I think it is one of the biggest and easiest mistakes to kind of make in investing is that complexity equals outperformance. Simplicity is, yes, okay, there's something nice about being simplistic, but there is a cost to that and the cost is underperformance.

54:31And it's like, well, actually, the funny thing is, is that often the simpler, the better, not just because it's easier to apply, but because you actually get better returns. Like, yeah. And that's the key. That's the key. Motley Fool Money. For more, subscribe to the free newsletter at fool.com.au forward slash listener. Mate, let's change tack a little bit. He says, no, we're about to talk about, know what you're going to respond with. I did see numbers this week, and you've seen those numbers, and if you follow me on Twitter, you've seen them. I think I put them on Facebook as well. And it was, you and I have talked for a long time about, at some point, house prices can't continue to grow it faster than wages because at some point, mathematically, if that was to be true, you don't have 100 % of your wage going to repay the house.

55:26or as a renter. Even if that was somehow made to, even if you somehow made it to that point because you don't need to eat or medical attention or anything else. Pay tax, yeah, yeah. Then what? Yes, correct. The lines cross. The lines cross. It's just like, no, it's not a matter of do I want to, I just can't anymore. So you just hit a limit. And mathematically it must be true. Now, the other people say, well, hang on, you could just rent instead and that's true. You wouldn't have to buy, you could rent. And rental yields I think probably still are, have traditionally been, what's traditionally, last 20 years while the property boom's been on, have actually been pretty attractive ways to access property.

56:01The price of the shelter, the price of a week's worth of shelter is cheaper if you're renting it than if you're buying it in most capital cities for most of the last 20 years. So, yes, that could be true for a period of time. But, again, the landlord is going to want a return and that return is going to be a function of your income because that's going to drive your rents. And at some point, rent becomes 100 % of income. And then, to your point, mate, and then what? So, I did that. So that's conceptually true. All I did was take that idea that you and I have talked about a lot of times and put it into a spreadsheet.

56:31Just literally go, so what would this actually look like? And here's a couple of things I came out of, mate, and you know this stuff anyway, and this is not news for you or anyone else, but it's worth pointing out because I did the numbers over the past 30 years. So I just did 30 years for the fun of it. I don't know why I chose 30 years. I just did. House prices. What do you reckon the average annual increase in house prices has been over the last 30 years? Do you want to have a guess? 7 %? 6.5%. Well done. Yeah. You know what, just very quickly as I decided, it kind of almost perfectly matches the amount of empty money creation, but I'll just let that hang there and then please continue.

57:05The average wage, household, sorry, this is household income, so this is not individual wages, household income, gone up by 4 % a year over the past 30 years. That literally, those two numbers side by side, explain the worsening affordability by definition, right? So you've been getting more money every year on average, and again, average, average, average, average, average. Yeah, yeah, yeah. You've been getting more money every year, but the housing has become more expensive by a greater degree than the money you've been getting, and so it's been getting further away. It's becoming more expensive as a proportion of your income.

57:35I wouldn't even say purchasing power. It doesn't really matter. In this context, it's the same thing. You're paying more for housing than you're getting in the door. So more and more of your income has been devoted to housing mathematically. If you don't understand that, maths, feel free to do it yourself. But that's the idea. Six and a half percent. So just your lived experience over the recent years. It's like right in front of your face. So 6.5 % for housing, 4 % for wages, right? So just keep that in your head. So I said, okay, well, let's assume and let's take the numbers. And by the way, here's the other scary number.

58:07According to the ANZ Indeed survey, I'm pulling the scrolling numbers now because I've got it from here. ANZ CoreLogic, I should say, my apologies. ANZ CoreLogic. Last year, the percentage of household income required to service alone was 53.8 % on average. Okay, so keep that in your head as well. Now, I put all that in a graph, and yes, it's a really chunky, lumpy one because rates go up and down and prices go up and down and things happen, right? So I've extrapolated a straight line and people complained about that even though it was not a prediction. It was just, sure, what would happen if, right?

58:41So over the past 30 years, that's what's happened. If you simply say, let's assume wages keep going at 4 % and houses keep growing at 6.5%, what happens? The answer is by 2050, which frankly is not that far away, people. Just keep that in mind. By 2050, housing would be, that's my dog, he doesn't like it either, housing would be 77.5 % of gross household income. Now, for most people, the average tax rate is more than 23%. So you're already spending effectively, to your point before, mate, 100 % of your take-home pay on housing by 2050. And that's just worth, just leave that in your head because I'm not saying it's going to happen.

59:24It's the thing. I said in the tweet and the bloody, I'll leave the post on LinkedIn too, I said in the tweet and the post and all the different things, this is not a prediction. This is simply saying if this was to continue. And the point was it can't continue. The very point was it's not possible to be true. Just logical reasoning. There's nothing about it. It's just like there's a line, here's another line. If I extrapolate them, that's what the lines look like. At a certain point, it doesn't work. Correct. Correct. It's incontrovertible in the same sense that 2 plus 2 is incontrovertible. Now, you might say that you're extrapolating at the wrong rate.

59:54Different conversation. Correct. 100%. But if. And the reason that you pointed it out is because it has become a sort of a issue of religious faith that it will. That it will. And it's just like, no, it always goes at 7%. I don't tell you how many times I've had that conversation. And you go, what do you mean? Because it always has. It's like, A, that's not true. It hasn't. It has in recent history, but no, it has not absolutely done that. But if you were to take it as true and that it always will, then you've just laid it out beautifully. It's like, well, that's what happens. Now, at some point you can go, yes, but wages will start growing at 9 % and those lines will come closer.

1:00:37Okay, cool. But they can't diverge forever. That's just fact. And so you then have to say, well, either price growth is going to slow or go backwards or wages are going to increase or some combination of the two. Yeah, that's right, that's right. It just has to happen because at the end of the day, for you to sell your house, someone has to buy it. And for someone to buy it, they have to have the money to buy it. And then the banks have to have the credit or at least enough capital to fractionally create new credit to be able to do all of that kind of stuff. Meanwhile, because there's no extra income out there, no one's investing in businesses, no one's buying stuff at JB Hi-Fi because all the money's going on to the house.

1:01:19So what's happening to the rest of the economy? It just doesn't... Every now and again you get into debates. Like we have some really good chats around the economic side of things and they're great because it's like actually that's a good point and you can reasonably disagree between reasonable different perspectives. They're a really good conversation. there are some conversations that you have in this field there's like there is no other way to it is impossible right and yet it's sort of like you find that it's like you sent me a message like check out this tweet the first thing I did was look at the comments and it was like not one or two tinfoil hat wearing just like one after the other You're wrong.

1:02:06You're wrong. You're wrong. And it's like, my brain just broke. It's just sort of like I have no words. Yes, yes, yes. I mean, maybe it is wrong, but then explain why it's wrong. And it's just sort of like I'm going to wipe my hands and go because. Yes, yes. God, we deserve a recession. Like that sounds a really cruel thing to say, but like sometimes you've got to think, man, I'm really not. I'm really not hoping for it. But there is like I think in hindsight, if something was like a big house price crash or a recession. I think in the sober, cold light of day, we might be able to go, yeah, we kind of asked for that.

1:02:43Like we really did just like set that one up for ourselves. Like we stepped on the rake, right? Yeah. And look, this was the thing. It was, and you're right, people say, well, house price won't grow at that rate. I was like, that was literally the point. That's the point. That's the point. Yeah. Well, that won't happen. I know. That's what I'm saying. and it's funny how people read it and it's just, you read and it goes back to what we were saying before you've got that open mind, right? Yeah, exactly and you've got an existing view and you can't conceive anything that breaks that worldview otherwise you have to change your mind and humans generally speaking unless you really, really work at it we don't like changing our minds even though we say we're open to it we don't really want to we'll begrudgingly do it if the evidence is there and that's better than nothing but very few people are like hey, this is what I think I hope I'm wrong our egos don't let us do that, right?

1:03:29All the best we can do is I might be wrong and if I am I guess I'll be open to you convincing me and I'll have to progressively accept it and then I'll move on. That's as good as you can get as humans, right? And I'm no better than anyone else. Actually, I hope I am a little bit better than most other people because I try really hard and maybe I fail miserably. But what I mean is I have the same instinct as everybody else, right? It's that same idea of, you know, I'm hoping that I can be aware enough and thoughtful enough and open enough to say, yeah, that's a – I mean, you banged on about Bitcoin for years before I bought something.

1:03:56I'm not claiming credit for that. I'm just saying maybe I was beating the submission. But that idea of I don't think so, don't think so. So, okay, now I kind of feel like there is something there. And that's not to be myself a wrap other than to use as an example for other people to say, try and be open to that, try and keep that as a possibility because that's an important way to start. Look, by the way, if you are not flexible in your thinking, regardless of whether you're talking about investing, I don't know what to say. That's true. The world is way too complex for you and your little monkey brain to have it all figured out by the age of 30.

1:04:28It's just not. Like I think it's actually just a sign of intelligence. If you are in my observation tends to be that very highly intelligent people are very, very able to change their minds quickly when presented with the evidence. It's, you know. And the other thing of that interaction on social media was that my comment to you was that there's a lot of definitions for bubbles, you know, and it's actually something that's very, very hard to pin down. It's like everyone kind of recognises it in hindsight, but at the time it's really hard. Which is kind of the bottom of a bubble. You can't know at the time almost by definition.

1:05:12Yeah, you can't know. And you can't define it. Like, oh, you know, it's a threshold that crosses once yields drop below this and whatever it happens to be. It's like, no, it's not. But the best definition I've ever heard is like a bubble is best defined is when a strong majority of people believe that prices can never go down again. Like this is only a one-way train. And I feel like, man, if the glove fits, right, like that, if that is a good definition, I think it is. It's kind of like, and again, that doesn't mean anything's imminent. Yeah, true, true, true. God knows how many years I've been making this point.

1:05:46But, you know, and actually the reason that I've always made that point, and this is why you don't time because example A is right here talking to you right now, is because you might be right directionally but completely wrong on the timing. But the whole view was predicated in that chart that you tweeted out. That was it. That's the beginning, middle and end of the thesis. One line cannot diverge from the other indefinitely. That's it. That's the thesis. And I think it's a pretty good thesis. I wouldn't try and short the market based on that, but it's just sort of like I can't predict the future, but I am pretty confident that two plus two will never equal 17, right?

1:06:28Like I will bet against anyone who thinks that. Or not bet against, that comes back to the time. I will refuse to play in the same pond as people who believe that because that feels precarious. It feels hyper-precarious to me. I mean, we've gotten to it. The other great tell is as well as when you take an asset that, well, like all productive sort of assets really should be underpinned by cash flows, right? And we've gotten to a stage where it's like there are negative, not only are there negative cash flows, but we engineer for negative cash flows. And the whole thing is predicated on a greater full three.

1:07:04That likewise sort of seems like how. Now it's just a question of who's happy to eat the most negative yield? That's right. That's right. I was like, yeah, I'm taking a negative 2 % real yield after costs, but someone will probably be happy to take negative 3%. It's like, well, that's true. You'll actually do well on the capital gain. It'll all work brilliantly. But then that next person's going, well, I'm happy to take a negative 3 % real yield after costs, but someone will take a negative 4 % yield. It's like, okay, again, we can get, it's the same argument. We're like, well, just push that line out into the future.

1:07:34It was like at a point, even those who might feel that they want to subscribe to that view, it's like, well, what point does it become silly? At negative 1 ,000 %? Is that, oh, that's obviously ridiculous. Well, if that's ridiculous, logically and rationally, there is a point between then and now at which it doesn't make difference. The math don't math. And if that is true, then we're back to the game of chicken. and it just feels like a very precarious thing. And again, it's just people miss, again, people hear what they want to hear, people misunderstand all of that kind of stuff. Nothing's imminent.

1:08:11I've got a house. I just recently bought a house and took on a mountain of debt to do it, right? So it's just that I don't want to play that game. I certainly don't want to leverage up 10 to 1 on a hyperliquid asset that's costing me real, like negative cash flows and that like a 10 % correction is going to wipe out any equities. It's just like, that just feels, but, but I might be okay if insanity, you know, continues for a little bit longer. No, not for me. No, I think that's right. I think that's right. And again, it's even, I think, I don't know, man. I suspect you don't have different views, but I think we all agree that there is a possibility where simply the lines just do converge and that's fine too.

1:08:54Yeah, yeah. Or maybe a newer normal of higher servicing costs forever. Correct. But at some point the price growth, the maximum the price growth can converge to at some point, whether that's next year and 20 years and 80 years and 158 years, at some point they must converge because there's no additional money to come out of it. Well, to your analysis, at 2050 roughly. Well, no, it should be before that, frankly, mate. I mean, honestly, because that's 77.5 % of gross income, which is effectively just everything you earn after pay tax. So it's got to be sooner than that. Now, I mean, I said in the tweet, governments can throw more money at it, first-time buyers.

1:09:32Inter rates can fall. Mortgage rates, mortgage terms can get longer. Yeah. There are things that can be done to prolong this. And all of that will probably happen too. Right. And it has happened. That's why, that's, that's... Yeah. I was going to say, that's why I've been wrong. I would have been right. Except everyone... But I mean, that's true, right? Like that... Without that, I would suspect that we never got to the level that we did. Totally true. Yeah. And that's, you know... We have. You know what's crazy, mate, is I don't... I'm a bit annoyed at myself and maybe I wasn't old enough because I can't remember when it actually happened but we went from 25 year mortgages to 30 year mortgages without anyone blinking an eye yeah when I took out my first home loan it was a 25 year mortgage and it was standard and at some point it became 30 and I don't remember it happening and not that it needed to be told it happened but that just that alone the increase in borrowing capacity that that engineered could 35 year 40 year 50 year 70 year 100 year mortgages they could happen.

1:10:25Now, at some point, the principal repayment has to be repaid and the interest just compounds on itself. So as each five years you add, adds proportionally less buying power each time just because of the way the exponential interest costs work, but it could happen. And we've seen banks offering 40-year loans now, right? And so this is where we've got to be really careful as a society we don't push ourselves too far down that path. And again, back to regulation, your point of what we regulate, what we don't. But if that becomes the norm, we are so much worse off as a country. Whether or not something should be done about it is a different question.

1:10:56But just objectively as a country we are worse off if we end up spending more and more of our working lives, more and more of our income, paying interest on the same shelter we would have bought 5, 10, 15, 20 years earlier for a much lower price. Oh, gosh, yeah. It makes no sense. It's so much wider than all of that. It's so fundamentally important it is. I spoke to, well, we were discussing a company recently. I won't mention the name because it doesn't matter. It's beside the point. But they're increasingly moving more of their facilities to Thailand. Well, that makes sense. Cheap labour. It's like, yeah, no, it's actually cheap land.

1:11:34Or at least a big part of it. It's sort of like the land costs in Melbourne are so ridiculous. Our warehouse costs are insane. You know, we just need a shed to store the stuff, right? Yeah, yeah. Let's do it there. And think about that. When you go down your main street and you look at the cafe, the hairdresser, the pharmacist and all that, You go in, ask them, what's your biggest expense? Rent. Rent's the biggest expense. Not even spend three milliseconds thinking about it. And so it actually makes the fixed cost of doing business that much harder, right? It ripples through in such a perverse kind of way as to just to cripple everything.

1:12:11So it's sort of like, I mean, look, one way or the other, it'll fix itself. But the more that we try and prevent any sort of natural corrective sort of mechanisms, the more nasty that inevitable reckoning will be, which is another great lesson from history. And that's why it's so politically toxic is because a lot of these things do work. These interventions, these manipulations, they work for a very short period of time. Exactly. At the cost of making an already fragile system far more fragile and less robust. and it's like that is a hell of a devil's bargain. It's like, hey, would you like a little bit of a sugar hit now that won't last very long but puts you in a far more precarious and damaging situation longer term?

1:12:59Apparently the electorate's answer is yes. That seems to be what we go for but I don't know. It feels like, I don't know. Again, not calling for anything. I have no idea when or how but I just, I come back to your two lines and I just go, not for me. I'm going to drive on the left. Thank you. Nice. Mate, let's finish off very quickly with just an observation. We get asked regularly in the mailbag about regulations and about how we go about doing some of this stuff. And I got lazy. Here's the obligatory AI I mentioned. And I thought it was a chat to your BT because I'm mindful that, you know, it's always easy to look at spending is easy to identify, generally speaking, because it's itemised and it's more obvious and taxes are easy to identify and that sort of stuff.

1:13:44When you think about regulations, well, it depends what you're doing. You mentioned to me some runnings you've had with regulations and the costs of those in the past. Can I say it very, very clear that I have not, I've been on the right side of all regulation. It's more just a rant against the nature of the... I don't want you to suggest that I'm... No, no, no. Any regulators listening, I am absolutely within the lanes. There is nothing to see here. You are absolutely, you are doing the right thing. The cost of the regulation is my point, not the fact you were being, you're doing the wrong thing.

1:14:13Thank you for clarifying for me. Thank you. Not what I meant to infer if I did, I'm sorry. What are you saying? The cost of following those regulations, environmental regulations in New York, for anyone who's wondering, not about the business. But it's harder, right, because they're the ones you've come across. So you're like, oh, I saw this thing. And I say, oh, look, and it's like, well, where else are they? So I thought, well, do what everyone does. Let's try to chat to you and find out. Yeah. And I've got to say, it was a funny exercise because you kind of see the way the prompter word. It's like, well, you've got to be careful with regulation because it's like, I know, I know, just give me the detail.

1:14:48Anyway, and it kind of went back and forth and around in circles. And I kind of then got to the point of saying, well, okay, what would the best approach be? And, again, some people are saying about, of course, you're idiot, Scott, of course, we knew this. So I'm only saying I don't have all the answers and this one was chat TPT. And it was an approach to passing you regulation. That was its suggestion, which I thought was just brilliant. It won't happen because pollies are pollies. But when we're asked about it, you know, what would you do and how would you do it and all that kind of stuff, I've talked about the efficiency dividend from government departments, where I still would do.

1:15:17I've talked about the Council of Elders, where I still would do. But the other, or the new suggestion, was a sunset period for regulation unless or until the objectives of the regulation were met. And so the idea would be, take a, this is a particularly, the problem with regulations, everyone can justify the regulation from their perspective. This is what we started by talking about, right, which is that regulation thing. But I'll start with safety. I've said to you before, we should have gone into the safety barrier in which has had business, mate, because there are so many of the bloody things all over the place right now.

1:15:50Now, do I want to expose anyone to the risk of dying on a work site? No, I don't. You know, I sit at a keyboard and bang away. If I die at my desk, it'll be inactivity, not from some of the hazards of work. Deep vein thrombosis. Right, exactly. So, you know, other people do much riskier and more dangerous work than I do. I'm not for a second making a moral judgment or saying their lives aren't important. This is what I'm saying. regulation is just, it's such a fraud area. But the idea would be, right, let's make a rule that says that you have to have a dozen which has every worksite, every time you use it, everywhere, and that's the new rule.

1:16:21Okay. And so the suggestion, which I think is a brilliant one, is have a five-year period, right? What are we expecting? We're expecting to see fewer worksite deaths or fewer lost time injuries or whatever those things are. Great. Okay, good. So you put the regulation in place. What a worthy, noble goal. Fantastic. Put the regulation in place. And then five years later you say, well, did it help? And if the answer is yes, it helped, you go, great, tick the box, great, worth doing, put in place. I mean, you should still measure the cost of it. Maybe we should do more of it. Right, exactly. Let's make it two dozen witches' hats.

1:16:47Or you say at the end of five years, we did it, nothing changed. It's an unnecessary and unreasonable burden. Let's get rid of it. Yeah. And that's the thing we are just not doing, and it's so easy, particularly in a political sense and particularly for safety, but other things as well. There's a problem over here, I'll regulate it, and we say thank you, government, for doing it. The idea of doing something, the base for me is inaction is inaction, right? but for most people it's not. You didn't do anything about it. Yeah, I did. I chose not to do anything because that was, I made an active choice to do nothing because that was the least worst outcome.

1:17:17It's just never enough. And think about our political climate and not just the government of the day or any government of the day but the opposition of the day will say, you didn't fix that. How many royal commissions and inquiries and bloody committees and God knows are we having so they can say we're doing something about a thing? Rather than just, yeah, we looked at it, we don't think it passes and that's not worth doing this and do it. And so if we're going to have to have the dog and pony show of doing something, because that's what the pollers need to be showing us because we're idiots as voters, then at least sunset, every pollers get to sunset, five years.

1:17:46And at five years, either it passes muster, it has the impact it's aimed to achieve, and if it does, great. As you say, mate, leave it in place, put more in. If it doesn't, then get rid of it. It's fundamentally not helping. And if the regulation, almost by definition, the regulation is only required because people don't do things without it. So you are imposing some obligation, some cost, some lack of productivity, some inefficiency on someone, otherwise they would do it anyway. So you're making them do a thing they wouldn't have done. And so if that thing is not doing what it's supposed to do, take it away.

1:18:16It was a really obvious one, mate. I don't know what to say. Like, how do you argue against that? I know, right? You're not saying, people go, yeah, but you want people to die. Like, no, I'm just saying if we were trying to prevent people from dying and it's not moving the dial, then why do it? That's all it is. It's not, you know, it's, there is a difference. People really struggle to understand the difference between the intent and the outcome. Yes. The intent's fantastic. Rent control, brilliant intent. Yes, it is. Brilliant intent. No arguments. It would be great if housing was more affordable.

1:18:48Outcome, disastrous. Like, oh, okay, here we are. Here we are still having the debate. I mean, there's no clear example when it comes to drug policy. I get misunderstood on this all the time. People think I'm just advocating for, like, let's just do everyone do drugs. It's like, no. But it's sort of like, has all of this war on drugs diminished drug usage? No. Has it stimulated massive crime in black market? Yes, it has. What happens when you take it away? I don't know. Actually, Portugal did it. Oh, what happened there? Oh, they redirected resources. They treated it more of a health issue and less as a criminal activity.

1:19:20Drug usage plummeted. Drug harm plummeted. The black market tried. I don't want to paint it as like just absolutely perfect in every way. Of course it's not. But putting one next to the other, It was sort of like, wow, it was cheaper and more effective. We had better outcomes. Yeah. Why don't we do that? Because, oh, drugs are bad. Like, yeah, I agree. But you're missing the point here. What are we trying to do? If you don't care about outcomes, what do we care about? Right. It's where ideology is like, I don't think it should be the case, so I'm going to pretend it's not the case. Yeah, but it is the case.

1:19:50I don't care what it wants to be. I know. Injunction rooms are the other great one, right? It's just like, wow. So at least we somehow managed to like, well, let's just do a test. We're not going to do anything. I can get behind that. That's a very sensible thing to do. It's like I feel as though it would be very worthwhile, but let's run the experiment. Correct. Holy crap, this is fantastic. Gets needles off the street and blah, blah, blah, and there's a thousand different reasons why it's great. And we know that. I think it's incontrovertible at this stage. We just don't do it. We just don't do it, right?

1:20:20And he's like, but whoa, I don't want to go. And it comes back to the, you know, the talkback radio. It does, it really does. Ted calling in. It's like, I have absolutely no insight and experience in this, but I feel as though it's wrong, so we shouldn't do it. I'm like, yeah, that's what's interesting about it. It's really counterintuitive, but look at the data, and the data says it's actually really effective. Do you get the outcomes or not? Yeah, but I just reckon. I just reckon that it's like, oh, Lord in heaven, give me strength. But, yeah, that's a good idea, mate, but let's put that into the bin of never going to happen.

1:20:51Exactly. I raise it on because we've been asked about it before, and I said my true ideas, I still think are the right ideas directionally. But this was just an extra one. I thought, no, it makes perfect sense. And I'm sure other people have thought about it a million times. I hadn't. And I just think it's a really nice, sensible, smart approach to making sure that the regulators have to pay their own way. And if they're worthwhile, as you say, do more of it. If they're not, get rid of them. If we took that approach across the board, we'd have a far – speaking of productivity, mate, I mean, that's literally it, right?

1:21:18How many regulations are good ideas but actually aren't making a difference? And the answer is we don't know. But if we did the work and actually it was like, well, that's not helping, okay, good, stop doing that thing. You may not have to keep that record, fill in that form. No, because there's no benefit from it. I'll go, well, okay, one last thing I'm going to do, I'll go and serve a customer. I'll go and grow my business. I'll go and invent a new product. I'll go and do this stuff rather than doing the make work that doesn't actually, again, I'm awful, I'm awful regulation to help, to your point, mate, do more of it, right?

1:21:42This is not anti-regulation. It's just let's get rid of the bad ones. It shouldn't be a hard thing. And I thought the sunset idea was just a really smart way to do it. Yep, yep. And whatever regulations you do put in place, don't make compliance a Herculean task. I mean, that, as I said right at the beginning, it has done more to damage the consumer than anything else, which is just so ironic. It's so ironic. And it's just the fact that it's got a name. I mean, you can Google. It's not even like some weird dude wrote a treatise about it in 1740. I was like, no, it's just full of the literature.

1:22:22It's just such a known thing. We didn't talk about it today and we won't do it, but it's just sort of like I would argue it's a very big part of the reason why all the AI labs have come out and said, can you please regulate us? Oh, you need regulation. In America, the land of the free, you know, these titans of industry are all like, please, government, regulate. He's like, I feel as though there's something else going on here, right? Correct, correct, correct. That's a whole other thing. I shouldn't have opened up that can of worms. No, we'll slam the lid down on that one. We'll talk about that one maybe next time.

1:22:53But in the meantime, mate, will you have a breather and then come back on Sunday morning? Mate, I'll charge up the coffee cup. Ready to go again. Fuel the rants on a bit more caffeine and, yeah, ready to go. All right. In that case, make sure you tune in Sunday morning for Ram's caffeinated rants. I'm not sure if they're better or worse than the normal ones, but I suspect they might be a little more vociferous. We'll find out. If there's some good... If nothing else, we will find out. Until then, you have to wait with bated breath and fool on. Cheers. The Motley Fool and people appearing in this program may have positions in the companies mentioned.

1:23:27General 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.