Is Ram actually buying a house??? October 13, 2023

0:07Welcome to Motley Fool Money, the podcast that is happy to serve as chair of Qantas. I'm Scott Phillips from The Motley Fool. He is Andrew Page, Esquire, if you don't mind. The founder, the managing director, the chief cook and bottle washer, the man, the myth, the legend, Andrew Page. How are you, buddy? Very good, sir. I love the intro. How are you? I'm glad you do. I'm very, very well. Mate, the straw man thing. What is it? I'll help you out. It's a private online investment club. That's fascinating. That could catch on. You'd think so. Mate, how's your week, Ben? oh it's been pretty wow what a week i mean oh my gosh so much happening but yeah i'm just sort of sitting here depressed with the state of affairs in the world but other than that pretty good it's hard to uh so i'm an optimist as as our listeners well know uh and a pretty you know died in the war one some weeks are hard on others to uh to keep that perspective yeah i gotta say this is this is one of those weeks mate we will we will talk a little bit about what's been going on around the world uh we'll do that let's let's do that off the top um so look let's let's let's get this out of the way um we know that there has been uh unrest doesn't seem like a strong enough word for a terrorist attack a horrendous terrorist attack from hamas into israel uh and then israeli retaliation uh the death toll continues to climb mate um it's just an awful awful situation and there's been a lot of news coverage about the events themselves we are a finance and investing podcast sometimes when we we don't get distracted try to be uh we try to be and so we are going to talk about the impacts and we're doing doing it because markets are open and prices are moving and people are either you know directly or indirectly passively or actively taking positions as a result and so it behoves us to talk about those things and so we will uh we just wanted to i guess up front uh say that we understand that this feels a bit crappy to talk about from a financial perspective or people are unfortunately continuing to die in the middle east it feels a bit like how do we make money out of this situation which is just like the worst possible take that you can do and i don't i don't think that's what we're going to do at all but no we're not but what does it what does it mean uh perhaps you know and the oil price is moving i i mean the reality is whether we whether i said whether we're active or passive there are implications of this that are changing asset prices and so you know it's trying to explain what those things are um is is real by the way some people don't have any moral qualms about making money on the back of this stuff and you know uh that's not our view uh we try and be a bit more moral about it there is money to be potentially made uh you don't have to be gleeful about it i guess there's money made from uh weapons manufacturers every day and you know gun makers and cigarette companies.

3:00So there are things that people would rather not be true that are. So I just want to put that up front. I don't want to kind of bring the tone down, but I think it's appropriate that we start by saying the financial implications and reactions are so far down the priority scale in any reasonable way. We'd happily give any of the profits back to have peace restored in the Middle East. Unfortunately, life doesn't work that way. So I'm just going to put that out there. Yep, I love it. Yep. Mate. Can I just quickly add to that? The idea that there is profit to be made, I think even that is spurious in the sense that, oh, here's a set of circumstances.

3:38I do X and the money will flow. Yeah. I mean, if there is something, if there was anything that you could class as fast moving and uncertain, it's war. Yeah. And I would, even if I was somehow able to put all of my personal feelings and ethics and morals aside, I wouldn't know what to do. Like, you know, it feels like the first level thought is, oh, I'll buy a bunch of arms manufacturers or I'll do this or do that. I'm like, it's just not that easy. Markets are hyper efficient, as we know, on a lot of these things. And often very counterintuitive that the day that the news broke out, markets rose.

4:14Yes. Now, I reckon if you'd polled most experts the day before and said there's going to be a very serious escalation in the Middle East, they'd go, oh, markets will go down. So I guess what I'm saying is that even if you did want to look at it through that purely cynical lens, I don't think you could easily or confidently or reliably make a buck out of it. That's probably true, too. um so mate look let's let's talk about the the specifics and then we'll maybe talk about some general generalizations and generalities as well the first thing obviously is that while tensions in the middle east are always bubbling away and and these things are always unfortunately possible i don't think anyone had it on their bingo card for this year just as we didn't have russia invading ukraine on the bingo card uh and and other things besides and i think that's you know we talk about black swans black swans that the phrase came about because it's actually an australian origin which is nice um swans were only ever white until people came to australia realized that swans could actually be black no one had just envisaged the idea i guess someone probably had had to postulated hey there's no reason it couldn't be but swans were white that's what they were and the existence of a black swan was was genuinely you know uh now no particular implication but by by metaphor by analogy uh the idea that a thing that couldn't have been foreseen all of a sudden happened is a big deal this is not a black swan in in that sense um few things are genuine black swans because they are you know the the range of things that are possible is is massive uh so you have to draw a line and say you know how likely was it how how prepared for it could you be also too the other thing of if you'd spent 20 years preparing for it would it have made a difference would you have foregone gains uh and more gains than you risk if if the black swan does occur and so it's really important we think about these sort of events to really think through you know if you if you'd always stayed in cash you could have avoided every single market crash in history at the same time and we've talked about this a lot the inflation rate being what it is if you'd stayed in cash you would have literal cents on the dollar in terms of purchasing power compared to being invested and having ridden that volatile wave of asset prices in our particular case shares but whichever assets you prefer uh i don't know any asset that's underperformed as an asset class cash in the last 40 years.

6:29They might probably won somewhere. Maybe Beanie Babies or Yo-Yos or something. But realistically, most things tend to hold or add value in real terms. Cash, almost by definition, goes backwards. So that's kind of, you know, there's a reality about thinking about black swans. You know, was anyone genuinely surprised this happened? I suppose not. You know, if you ask someone, hey, you know, is it possible that Hamas might launch an attack on Israel? I think you'd probably say, well, yeah, it's probably pretty likely, a bit like the next recession these things are probably likely could you have should you have prepared for it i don't know i'll ask you that question in a second um so it's not a black swan it's it's it's understandable it's it's knowable i will say mate speaking of your point of literature just pulled up the chart we're recording this on thursday morning anything could happen between now and and publication date um the the price of west west texas intermediate crude oil so the american kind of um category if you like or or what do you call it uh the american style of oil anyway $82.79 a barrel now the numbers this is us numbers don't overly matter so don't worry about trying to commit it to memory on friday$82.79 as we record now$83.20 so the oil price got up by 41 cents a barrel uh now it jumped immediately after the attack but it's fallen back again and so that's exactly my point right exactly exactly now it might have been a hundred dollars for all we know.

7:52But that's kind of... Could be 100 tomorrow. Exactly. I just wanted to use that data to show your point out or prove your point out. And it could have been anything different. But trying to say, I think there will be a terrorist attack on Israel. Therefore, I will buy oil. Therefore, therefore, therefore. In fact, the oil price is down. It was$87 a 29 a barrel a month ago. So not only is it only 41 cents higher than it was before the attack, it's actually lower than it was a month ago. and it's just worth thinking about how the it's always it's always people always want to try to be smart clever ahead of the other guy do the active thing that's going to make a difference and it just you know very rarely works out that way as i said maybe the event happens maybe it doesn't maybe when it happens the the gains you've foregone waiting for that event uh are worse than the losses or maybe you know you do expect it the event happens and still nothing happens the person who had spent years and years and years preparing themselves for this event has gone home pretty unhappy right shares are up oil prices down over the month and up a touch over the last four or five days uh the x plus y equals z just doesn't it doesn't happen it just doesn't happen or when it does happen it's no no that's not even the exception of the rule just it's just there's no there's no way to follow this kind of idea because humans are weird and asset prices are weird and circumstances are just unpredictable yep yep actually so when you were talking i had to google the the black swan um uh theory just to just to get the specific definition thank you i read the book years ago and i actually really highly encourage others to do it taleb's an interesting character i don't agree with him on a lot of stuff but he's a great writer and his books are really good so i do recommend them so both things can be true um but anyway the definition here is the first is that there's three categories the first is it's an outlier it's outside of the realm of regular expectations and nothing in the past can convincingly point to its possibility so you're right this isn't technically a black swan yeah yeah um uh the second is it carries an extreme impact okay well it's pretty big impact here so that's that's probably uh true the third and this is the part i wanted to get to is that in spite of its outlier status human nature makes us concoct explanations for its occurrence after the fact making it explainable and predictable right and this is the point i want to hammer because this happens or even without outside of the realm of just uh black swans yeah yeah you see punditry all the time something happens and then you know uh old white man in suit appears explaining to you, well, it was all, this is why it happened.

10:42Well, is it? I don't know. It only has to be a convincing narrative. It doesn't necessarily have to be true. And there's someone else out there giving just as equally a convincing argument as to why something happened, but really giving different things. And it's sort of, we love this idea that you can draw a straight line between various events. And you just see it all the time on markets. And the thing I always think of is like, mate, if it was so bloody obvious, I mean, you must be like a billionaire by now because you obviously, and it's always words like clearly and obviously. And these adjectives get thrown around and it's like, it's clearly not, it's me using the word clearly.

11:26It's clearly not obvious and predictable because if it was, presumably you either did it or just decided that you don't like easy money, you know? So it's all a bit of a nonsense. It is. Can I jump in too quickly, mate? I just, the other thing about, you know, the old white man in suit telling you what happened. In, you know, I'm not, I don't know anything about parallel universes, right? But I like the kind of idea because in a different parallel universe after the attack, oil is now$120 a barrel. Yeah. And someone is now standing there, cue, you know, that particular old white man in the suit or someone else saying, so obviously oil was always going to get a hundred dollars a barrel because there was a terrorist attack and the world's now worried about so that's why it was obviously that it should have been obvious to everyone that would have happened yes and i guess you know that's the other thing is yes to your point about you know explaining after the fact well of course oil is not higher because it's only israel and palestine and those two if palestine's a country i don't want to get myself in geopolitical drama here but those two those two groups don't export any or much oil so of course it would have no impact on the oil price someone else is saying at 120 a barrel well obviously it is because we're worried about iran and and egypt and saudi arabia and getting drawn into this battle and so of course it's 120 or whatever whatever it is the the the the result the outcome because you i mean can you imagine how many articles there'd be in the fin and the and the australian business section right now with all 120 a barrel that how it was always possible and it was always this it was always that and yeah you know and the other thing yeah and this is one i was going to get the The other thing you would see amongst all those column inches would be the interview with the fund manager who called it.

13:04It's exactly right. And this happened after the GFC. It happens after every event. And these people look really smart. And they did. They did predict it. Right. So but you need to you need to pan out. And there's a thing called survivorship bias. and and you've got to remember that right now in the world there's a you know thousands and thousands of pundits and traders and analysts making calls publicly putting it out there whether it be on twitter or on their newsletter or whatever saying i think this is going to happen now at some point and there's a whole mix of opinions and forecasts now at some point i mean it's almost guaranteed that one of them are going to be right because all possibilities are covered and and you see these with fund managers too right so it's sort of like you know every year the league tables get published and go look at this young gun over here he outperformed the market by then they go wow how did he know gosh he he's the person i'm going to back and it's so easy to sort of go right who's dr doom um what's his name exactly right so he is he has been you know he's never bought a drink in years yeah he was right once yeah and he was a broken clock that is inevitably going to be right.

14:15I'm going to sit here and say, there's going to be a recession. I'll bet you my left arm that there will be a recession. I don't know when or what circumstances will initiate it or how severe it will be, but eventually I'll be right. And someone could go, oh, look, hey, Andrew called that. You know, like, well, did I, did I, and did I do it in a way that was sort of profitable? So I guess this is all just a means, and I'm sure, I'm sure if you search, you will find someone out there right now going, I knew that there was going to, there were signs, There were signs that things were going to get scary in the Middle East and I was calling it and they probably were.

14:48But you've just got to really take all of this stuff with a grain of salt. I think when it comes to yourself, you have to be especially careful because we all have opinions, right? And I catch myself doing it all the time. I know this is going to happen. This is going to happen. This is going to happen. And occasionally I'm right. I knew it. I knew it. But well, did I? you know i'm going to cling to the thing that that i was that i was right on was i really that confident i probably didn't position myself appropriately for the conviction that i now think that i did have and you are the you you are the easiest person to fool is yourself right um so i i think it's what's the point here i think that the point here is that when you're trying to judge the ability of a soothsayer um and we're all soothsayers to some extent in investing you've really got to look across a full cycle or two and you've really got to look i mean this is this is the peter lynch idea of if you're good you're right six times out of ten yeah you you need to be someone who's no one's going to be right all of the time and even the best and buffett's going to make and does and and puts them in every annual report this is what i stuffed up this year and so yeah you really only get to a point after a while where you sort of say ah this person has some kind of ability here um it's just it's just really it's really really important to understand that the probabilistic nature of things and to recognize that there's just a huge amount of luck and the best you can do is try and move in a direction where the odds are slightly in your favor which by the way an incredible edge if you can get that and sustain that you're going to make a lot of money but but too often you see i see it with friends all the time it's like it goes one of two ways they start investing and they have a terrible first year and they throw their arms in the air and go this is stupid it's all rigged i'm never doing it again it's like what's that's a bad mistake the other one is is like oh my gosh look how much money i made this is so easy i'm gonna i'm gonna double down you know and then that eventually becomes a bad mistake as well so just i don't know you get my point no you're dead right mate it's um um it's a funny it's a funny situation um i think it's you know so so to your point and here's the other thing by the way just back to back to the broad issues that we see with um with markets when we have geopolitical tensions it's also worth saying that the market actually went up over the period of world war ii that's just a simple example now that is a single example i'm not suggesting it will over every war or whatever just that um you know it's it's too easy to and the other thing is to talk about fooling yourself mate the other thing i would say about this is just go to check your own uh preconceptions and prejudices and biases because if you're someone who's expecting doom around every corner you will find every time you open a paper and you can make a case for it now the same is also true of optimists i can i can find a silver lining anywhere so you know i'm not but but i guess my point is that you know there are people who you know i hear from semi regularly given i have a slight public profile and and you know running the the investment team at the motley fool the kind of you know of course it's gonna be crash this time it's gonna crash that time this is gonna happen wrong that's gonna go wrong that's gonna go wrong that's gonna go wrong and it's one of those things that the simple realities over time things tend to improve despite this week which is just crap and and i don't say that to uh lighten or lessen the bad stuff that does happen the fact that the fact that uh you know things tend to improve over time does not excuse the stuff that's not great or getting worse or going wrong and and it's not to say we shouldn't address it and it's not to paint over it and say stop you whinging about the bad stuff things get better just wait but it is to remind people that over time things do tend to improve um you know some of the poorest people in australia live better than some of the richest people in 1800 um and that's not to say those poor people shouldn't we looked after and helped and we shouldn't improve everyone's lot again as i've just said um i hope it will get i kind of feel like you need to clarify these things all the time right and you gotta treat carefully well because the narcs will jump at you i mean people know me pretty well by now i think if you listen to the podcast for a while so i'll say it i'm not going to keep banging on about you get my you get my approach um it's it's let me rant for a sec the intellectual laziness to take one person's point and assume therefore they mean x y and z um i did i did advance a tweet during the week about the the conflict and i got the usual suspects of you know you're saying this you're saying that no i'm not saying that i'm just i said what i said that's all i said you know the the desire to take someone's statement and to extrapolate and extend and to assume and to whatever uh to go into outrage is frankly one of the biggest problems we've got in terms of communication at the moment around the world uh but you know the things do tend to improve so i just would also counsel people who are taking bearish bets the you can historically at least no promises about the future historically at least you can afford to be endlessly optimistic and not have to be right about time frames as long as you've got enough time if you're bearish or negative you really better get that time frame right yep because the markets tend to so shorting is so hard right and so if you think about you know oh this war might be terrible and this might happen are you probably going to be wrong in terms of again if financially i'm talking about not not the human impact b even if you're right you better work out when you're going to close this bed out because you know the market's higher than at the end of any other global or regional conflict in history you know well 120 years of the modern stock market uh gdp around the world has grown for 300 years uh you know something ever is probably too strong a word but you know it's just it's just you could afford to have been optimistic the whole way through blatantly polyandrally optimistic and and being completely fine as long as you had the time frame to to see through the occasional downtrends if you're always bearish you had to be really really really really careful and be very lucky and very right and get your timing spot on otherwise you were handed your backside and so i just i just want to make that point as we finish that not that's how i finish you can keep talking um we move on to something else but i think you know we can be we can be miserable about circumstances of of the world and some of the geopolitics right now we can be miserable about the impact on individual people and groups of people and you can absolutely do that i think it's absolutely justified uh be very careful about taking that lens keep keep your brain segmented right um the by all means find the bad stuff and try and fix it by all means be a voice for improving the stuff that doesn't work properly by all means you know shed a tear for for people who are doing it really really tough and and who've been injured and killed in this particular instance in the middle east but as an investor if you don't if you don't invest that's cool right um and i'm not trying to make these equivalent either there's not they're not at for the in the slightest but if you are going to be an investor most people listening to this probably are and certainly we all are through super and other things um just just keep that in mind as well just make sure that you understand the implications for the long-term investor as opposed to the the fear the sadness that whatever you might feel the frankly pessimism about what's happening right now in in different parts of the world in different circumstances yep uh only two quick things um i think the the natural instinct with a lot of these kind of things is you go people will often reach a very mature conclusion, which is I just don't know.

22:27And then make a jump to, well, I'm just going to wait until certainty returns. You go, okay, this is a very complicated situation. It's beyond my powers of prediction to know how it's going to go. So I'm just going to sit on the sidelines. And then once there's clarity, I'll get back into the market again. And again, it sounds difficult to criticize that. The trouble is that there is never – you'll always be waiting because, you know, we had COVID and then we had all the stuff in the bond market and then we had Ukraine. And then, you know, it's just like there is – whenever this resolves itself – resolves might not be the right word.

23:09But when there is a little bit more clarity around this horrible situation, any certainty that appears will be an illusion. There is no such thing. So I guess I just, I make that point that you will invest, you should invest in spite of uncertainty because uncertainty is ever present. It just is. And the other thing I would say too, I actually watched, it was on Twitter, I think. Someone posted an old speech that Buffett gave and he was talking about, here we are in this really weird situation with investing where we kind of have to predict the future. I mean, that's kind of what investing is.

23:45I'm making a bet on the future. And here we are saying is, well, it's largely unpredictable. And he really got at this point and he's sort of saying, well, it's always hard, but you can predict the easy things. And he was giving me, this is an old talk. He was giving me, this is back in the very early days of computers. And he's just like, I can't predict where it's going to go. It's very exciting. I think it's going to lead to big changes in the world. And this is Buffett, IQ of 180. so i just i can't do it i don't know yeah exactly but i guarantee that when people are sitting in front of their computers they're going to be chewing wrigley's gum right and then it's like so he he might have been wrong he wasn't he might have been wrong though on that maybe there was a new disrupting type of gum technology that came along that people were going to chew on so there's still there is always uncertainty there's there is no such thing as as as a guaranteed future.

24:39But it's a really interesting point that there are two things that you can kind of predict, the hyper-specific, very difficult, and the very general. So for example, bring it to an Australian context. I just use these examples because they come to mind, because I own shares in them and I don't, and all their recommendations, which they're definitely not, price matters. But, you know, technology one sells enterprise-grade software to government agencies. I don't know what's going to happen in the next few years, but I'm pretty sure that their existing customers are going to continue to use their software and they're going to continue to pay technology one.

25:13I mean, you can't operate these departments without it. Right. And even if they decide to go to a competing product, it's going to take five years to sort of switch. It's such a big job, right? I'm pretty sure that people who have cochlear implants in their head will continue to upgrade on the external componentry and software. I'm pretty sure that people will continue to shop at Coles and Woolies. You know, there's not guaranteed all of these predictions could be wrong, but it's much better a prediction than saying, I think the 10-year Australian Treasury yield will be at 3.85 % by September of 2024.

25:51That is a very hyper-specific prediction. And I think that's where I try to come at things with investing is that, look, I will fully acknowledge I don't know which way the world is going to unfold exactly. but there are some businesses that you can look at that you just feel is like well there's a better than even chance the two things you always start with is it around in 10 years time and are they you know more or less making more money then than they are now and i think if you get that part right a lot of it's just sort of backfilling in the details you can still go wrong but i guess and that's why you don't back up the truck and put everything in in one basket you diversify a bit But that is, hopefully that helps sort of square the circle so it doesn't seem like we're talking out of two sides of our mouth.

26:37One saying things are unpredictable, but, you know, and there will always be uncertainty. That is true. Some things are just easier to predict than others. And look for the one foot bars to step over, not the 10 foot bars that you have to sort of backflip over. I think that's right. I think that's right. Now, it's also true that the bigger gains are probably going to come from those businesses where an amazingly unlikely range of things have to happen for it to go well. Guaranteed, because they're not priced in. Yes. Exactly. Exactly. And so we're not saying that, you know, it can't happen. That's the other thing.

27:09People are – temperament matters so much. I talk about this all the time, and frankly, I don't even talk about it enough. That's how important this is, right? But if you heard Andrew just then and thought, hey, they're the boring stale business. Who wants to buy Technology One or Woolworths or Cochlear if I could go and make a fortune buying this lithium miner or something else? Then I don't think don't do it. Again, do you do you as Andrew likes to say and some lithium miners will do it. Maybe they all will do well. But just recognize the game you play and recognize that losses actually are real losses.

27:43And I know that sounds stupid to say because it's your money and people understand that if you lose money you lose money um i i am fascinated mate by the psychology of someone who wouldn't bet 10 bucks on the dogs on a saturday night or whenever they run but who would who would who would quote invest five thousand dollars in some techie specie startup miner or biotech or something else and feel okay about it because it's not really gambling it's investing and i don't really understand i don't and i it is a criticism by inference but i don't mean to be directly critical of anyone doing that particularly anyone listening doing that i just i just maybe it's maybe it's the point of fooling yourself maybe maybe maybe we just find it easier to justify to ourselves that you know betting on the dogs is gambling but you know quote investing on a on some hundred or one shot on the market is somehow investing and not gambling and so it's therefore okay i just find another saying gambling is bad either necessarily just people who wouldn't gamble on the dogs or lotto or whatever but do that i i don't know what it's it's it's a it's a thing yeah uh the other i guess always there's and another thing uh and another thing um you reminded me there there's a quote um by william gibson uh he's a he's a science fiction writer actually sort of behind the cyberpunk sort of genre and he he had this saying which i love which is the future is already here it's just not evenly distributed and i love that because Because a lot of the things we feel as though we have to predict the future, a lot of the time it's in front of you, but you're just not attuned to it, right?

29:16So there, again, sorry for being such a well-worn example, but you could, I think, anyone who was close to the action in the mid-90s with the internet and personal computing could very easily say, this is a big deal, right? Like, oh my gosh, I can do this? oh wow this this means this is going to enable businesses and people to do this this this this and this and probably a bunch of things i can't predict it was there but if you were to take a random sample of 10 000 global citizens and poll them on their view of it well most of them wouldn't actually be aware of it's just not in your daily life not because they're dumb or they're ill-informed it's just not in front of them i mean i don't know what's happening at the forefront the cutting edge of cross-stitching you know haberdasheries or i don't just it's not it's not in my my my field of view.

30:05But there are certain things I think you can, where you can get a bit of an edge as an investor is just being, being widely read and being aware of things that you kind of, you know, beyond, they're not science fiction. They're not, they are here. They're happening right now. And it's, you get to a point of, it's with some technologies and businesses and the rest, you need that quantum leap of zero to one. But once you've gone from zero to one, going from one to two, one to two to three is a much more – it's a very different proposition. It's why I'm reasonably confident of things like AI or robotics or that.

30:45It's like kind of, you know, we've had the zero to one moment. Now it's optimization. It's a very, very different kind of problem. And I think that that's a useful place to kind of – I mean, it's still very – I mean, the earlier you are, the more difficult it is going to be to know how that exactly unfolds. But I guess I'm just, I don't know, my point is, is that there is a difference between what is possible according to the rules of physics versus what is actually been demonstrated and proven and is seeing real-world traction. Can I give a very quick example? Actually, this has got an Israeli angle to it, and I don't own shares in it.

31:26I'm not likely to own shares and it's way too speculative for me. So let me say that. There's an Aussie company called Weebit Nano and they're doing these chips. And it's a different type of re-ram technology. It's looking to replace flash. It's a very old memory technology. It's really cool. And they've been on the ASX for a while. And it's just like they've had huge run-ups in prices and huge falls in prices. And people just get way, way, way, way carried away with this kind of stuff. It's like brain chip, you know, and other sort of technology. So it's like, you know, so it's like a lot of sensible investors roll their eyes at these companies.

32:00For good reason, right? For good reason. Because we've seen it all before. But I do have, I spoke to Kobe Hancock, the CEO recently. And, you know, again, it's not my bag. It's too speculative for me. It's still very early stage. But what's different, I think, with that is that they are commercializing. There's revenues there. That's a very different. you could have been investing in this company for the last, since it listed and all of the things that they were saying actually look like they're coming true, but you would have lost a fortune, more than a fortune. You would have lost a very significant amount, but you can kind of be, you can kind of, I think when you come across these things as an investor, there's nothing wrong with getting excited about it, pop it on a watch list.

32:43But I tend to sort of wait for things that show you that it's gone from, it's now at one, it's not at zero anymore. It's like, Oh, oh, if we only replaced 10 % of the global flash drive market, we're going to make a trillion dollars. Well, now it's a bit more interesting. And it'll be a bit more interesting again once Apple decides to incorporate ReRAM, WeBits ReRAM, if that happens. You know what I mean? So you will always feel as though you're late with these things, but you can always, you can still do incredibly well. Imagine investing in Apple after the iPhone 2 had come out, Not the iPhone 1.

33:21I mean, would you take that bet? Would you go back in time and have that opportunity? The iPhone 3. It feels as though, ah, it's out. We've already got the smartphone. It's done. I need to look for the next greatest kind of thing. Anyway, it all just comes back to that prediction of the future and the rest of it. There are the easier things and there are harder things and there are things that are backed up by evidence and that you're seeing traction on. And that when you're right and the opportunity is big enough, that runway can be huge. So you don't have to be early and you don't have to make big speculative bets to do well.

33:50there's a rambly rambly thought no i like thoughts there i'm gonna i'm gonna tangent because i can um i don't know we bit nano from adam uh i don't know the ceo i don't know the company i don't know the technology under the products i know nothing about this company at all other than the company's name and i had to look up the stock code that's how little i know about we bit nano right i would say to our listeners uh not great on audio podcast but uh the uh the share price share price chart of last year looks like a site of about a dozen mountain ranges uh and i would encourage anyone who's not driving and not out in the lawnmower or doing something else to to stop and actually uh have just google uh asxwbt as the code and i just want i you may have a different take on this mate i just wanted to i want to flag this for this is a couple of reasons one is this company in the last year alone started the year at two dollars sorry 12 months not start of the year 12 months ago two dollars got to four dollars a couple of months later then back down to three dollars 19 up to eight dollars 75 and then literally a month later down to four dollars 50 back to seven dollars 60 then to 5 30 back to 7 50 then down to four dollars 75 up to six dollars now is at three dollars and five cents now again hard to kind of keep those numbers in your head have a look at the chart um i am not going to tell you to do or not do anything on the basis of that other than to say that i would speculate with a degree of confidence but still allowing for the fact it's speculation there is a truckload of hot money chasing this thing and it just behoves any investor to be careful with that sort of stuff because it's so easy when you see a sharply rising share price to get excited or when you get a sharply falling share price you get despondent and pessimistic and abandon ship i don't know whether you should buy this or not i don't know whether it's going to do well or not i have no idea but i just wanted to make the point that if you'd have seen the shares go from two to eight and then bought them and gone oh beauty and then seen them trail away over the next nine months to three dollars and have lost literally five bucks your money um that's going to feel pretty awful and there's nothing good or bad about a company because it's a hot stock on an internet forum or or among the cool kids.

36:08It doesn't make it good, doesn't make it bad, doesn't make it right or wrong. Amazon, I'm sure, was a hot stock for a while and it's gone really well. Others have been hot stocks that have gone really, really badly and lots in between. I just wanted to make the point, if you see that sort of action, that sort of price action, just know what you're getting yourself in for as an investor. And just be careful about assuming, again, speaking of fooling yourself, rising share prices can make you a whole lot of stuff, either before or after you buy. you know and what you do is you get used to the share being you go from four to eight you think oh i've done my money and then we fall back you kind of you think the gains are your genius and you're taking for granted and the loss is someone else's fault you're looking for someone to kill right and it's and it's just one of those things so i know people know that this has just been super volatile probably in my my best guess because it's been a fun stock a hot stock for the the cool kids who are jumping in and out of this thing for real reasons or otherwise um but just be really careful.

37:03You can get used to a share price at or above a certain level and assume it must belong there because somehow the market's telling you that. Markets should never be listened to to give you advice on share prices. But even more, when you've got these smaller hot stocks that are all over the joint like this, just be really, really careful. Don't believe it's worth two or five or eight or back to$3. Don't believe it's worth those numbers just because that's what the share price is trading at. It's almost certainly not. I mean, here's the thing. Again, I'm not advising anyone to do anything here, but I think you could objectively say, again, pretend this is a private company, right?

37:38You don't have this wiggly line to look at. Today, things look a lot better than they did at the start of the year. They look a lot better than they did at the start of last year. I mean, the company has ticked off all these milestones. It's improving. The problem here was that market just got super carried away. And in fact, I mean, all else being equal, It's a far, far more attractive proposition at$3 than it is at$8, right? Because it's the same company and it's less than half the price that you could have bought it at. And again, I say all else being equal. There hasn't been a deterioration here if you look at it.

38:16This is the crazy thing. But all of those people who piled in at those higher prices are now looking at it going, oh, this is the worst thing ever. I was like, well, no, your speculative endeavors were the worst thing ever. and at that point in time, the market cap of this pre-revenue, not pre-profit, well, pre-profit as well, but pre-revenue business was like$1.4 something billion. Exactly, yeah. You know, and this was my argument. Isn't that, I don't know. It's madness, right? It is pure madness. And it's not because you see bulls go, oh, but they're going to do this and they're going to do this.

38:52Well, they might and it looks encouraging and I agree. But let's do some numbers. Let's assume that they are effective. And now, we always say the value of a business is the future sum of all of its cash flows appropriately discounted back. So you can be right on your very lofty expectations and still lose money because you front loaded all of that expectation there. Do you know? It's sort of like that was the mistake. And in fact, what's so hard about it is I think, in fact, a lot of people were sort of saying it's$6. That seems a bit encouraging, moving in the right direction, but geez, that's up there.

39:34And then you go, yep, too expensive. And what happens? It jumps up another 33%. And you're like, okay. And you can feel really dumb and have your nose rubbed into it. Now people are probably doing victory laps when maybe it's more interesting now than it's ever been. Again, I'm not making any advice here. But that is the edge that you have, I think, as an investor is to look at the market price, not as a arbiter of truth, is to tell you what this thing is worth, but as something that will give you opportunity here. And it's like, if you've got any understanding of RERAM technology and the market case for it and the rest of it, and you feel as though this company is moving in the right direction, you should be far more excited now than you were at March.

40:19Yeah, half less than half the price. How good is that? Yeah, absolutely. And know that even if you are right, it could still drop to$1.50 between now and then, right?

40:33Anyway, investing is hard is the bottom line. Investing is hard. Motley Fool Money. For more, subscribe to the free newsletter at fool.com.au forward slash listener.

40:48let's uh let's get back to the macro actually again before we blow back out into to some individual stories um one i'm sure you well i don't know i'm i'm going to assume there is part of you uh the schadenfrider uh is probably pretty high for you right now uh albeit i know you don't want to you don't want to dance on the financial graves of your fellow australians uh but the imf the international monetary fund uh which is speaking of making forecasts and projections no more uh possessive of a crystal ball than any of the rest of us uh but they're big and global so we listen to them have have said two things this week the first thing they said i'll get the i'll get the less controversial less uh ram baiting uh one other way first the first thing they said was australian economic growth uh is likely those originally had said well last forecast was 1.7 percent growth for australia next year 2024 they're now saying 1.2 percent So good news, I suppose.

41:44The IMF is not factoring in a recession. I guess in the current circumstance, we should take that. The other thing I think, but they are saying, growth is going to be more anemic, less impressive than they had previously hoped, assumed, thought, forecast it was. Now, by definition, by the way, if they've had to trim a third off their original forecast, you can take the current forecast with a weekly agreement. That's my point. So be mindful of that. That being said, they're closer to the next year. So maybe you can be a little less, a little more informed maybe about what that might look like.

42:16So that's possible. But look, separate or any of that, yeah, they're expecting things to get tougher. The point I want to make, I guess, on this one, mate, and we'll get to the other thing they said, is I think there's a degree of, again, I'm an optimist. I think we'll be fine over the long term. I think we should invest, work, open businesses as long as you're sensibly and carefully and with enough financial backing to get you through any short-term dramas. I think we'll be fine. But I think the media, capital M media, I don't mean, there's no conspiracy here, but we kind of focus on interest rates because that's the thing that hurts most people with a mortgage, right?

42:53And it does flow through to people who are renting. And obviously people with savings too. But we've talked a little bit about that. And there'll be some degree of celebration when the RBA's finished raising rates. Oh, we got there. Okay, now we've got the peak. The NBA at some point will say, we no longer see a need to increase rates, or we hope we don't need to, and then we'll see the first decline. And we'll kind of go, oh, good, we got through it. And I just want to make the point, I think the rate rising cycle is only the first half or so of the story. Because the second half of the story is the economy dealing with those higher rates.