Mailbag: How to trade returns against volatility? August 31, 2025

28:22I don't honestly, there's that many, there's no majors, a couple of minors maybe, who genuinely care about the long-term future. I wouldn't say care, they all say they do, but show me the policy and you won't find it. That's the biggest problem. I really want to go into a big tangent on sound money because I think that fixes it. But I will just say, we do plan to do a pre-record on that very topic as a deep dive one day. So I'll put a pin in it, as they say, and we'll circle back on that. Now, so he makes me do it. so now it's on the public. I said we do it, so now we have to do it, Scott. And I promise you the B word will not be mentioned.

28:55It is B adjacent, but it is actually, I think, it's one of those things. I know what it sounds like, but there is a, I'm a firm believer in fix the money, fix the world. And it's one of those, I think it's a lot of these issues that we talk about are downstream of the incentives that are there. I mean, you think you talk about the short term, like the high time preference kind of thing. It's like, well, we actually engineer our money to lose value each year. We incentivize that. Like that's we and we call it a good thing. And then we say, well, if we didn't do that, no one would buy anything in the economy.

29:32We're just complete BS. But anyway, it's sort of like we've set things up. It's literally done deliberately to. Well, I don't know if it is now. I think it's probably the co-orthodoxy because it is. But it was originally effectively to incentivize consumption. if we put inflation in place people want to spend money now if they do it they'll boost economic activity now and that'll be good right now all true by the way 100 % true just ignores the amorification yeah let's not do it can I just say one more thing on New Zealand while it came up here it's just interesting because I caught it the other day property was also mentioned here and I just do it only just to make the observation anyone do what you like with it I don't care but we've often been compared with Toronto Auckland in terms of property markets just like very high in terms of price to incomes and all of these things like, oh, something different.

30:18This time it's different. All of this kind of stuff. And I just make the observation that in both Toronto and Auckland prices, property, residential property prices are 20 % below their post-COVID peaks. 20%. Now imagine, imagine the, I'm trying not to swear. What's the clean way of saying this imagine people losing their collective poo stuff yes if australia was to suffer a 10 correction in residential property and this is we've had 20 in these and by the way just this is not like holy moly wow that's never happened before in history so yeah it has it happened all the time and again it's not it's it's i just make the mention of it for no other reason to say look look, these things do happen in the modern world, in economies and societies and cultures that are very, very, very similar to us.

31:10And also just on Mike's point here, it's just like when all of your economic energy is being put into these speculative arenas, you know, just be aware that, you know, sometimes prices move against you. It's true of the share market, true of anything, right? And it's just sort of like, there's one thing to sort of say, what does the long-term future look like? Like, well, maybe if property keeps doubling every seven years, then OK, it's all fine. But but if it gosh, I hope it does, because we put all our money on that horse. And if it doesn't, like we certainly don't have lots of factories and businesses and know how to sort of ensure that we will have a reasonable level of prosperity.

31:49Anyway, rant over. Nice, Mike. Thank you for the question. Let's get one from Henry. G'day fools. May all bow down before thee, he says. the rational fools of a sea of self-interest. Thank you. Nice. And then Henry says, I've got a non-personal question from a friend of a friend who heard the question from a goat herder he met who passed on the question that he overheard from a bartender talking about one of his customers who himself overheard while sitting on a public toilet. So you can be safe in knowing this is not personal advice. Thank you, Henry. Although if the customer is listening, then maybe it would be personal advice.

32:17You see my problem? Now that customer might recognise themselves in the story and we're in all sorts of trouble. And you also have a regulator that's capable of any kind of discretion and nuance as well. So we have to play that into account for that. Imagine, says Henry, you're an Australian expat living overseas. You look at the current exchange rate and think the AUD looks like a bargain on a long-term horizon. Knowing that at some stage you will likely want to live in Australia again, it seems like a good time to buy up some assets as a way of securing your future standard of living and your ability to own a home in Australia.

32:51And say you have perhaps$250 ,000 to put towards your Aussie fund and the expected horizon could be anywhere between three and 15 plus years. How do you go about it? Asked Henry. Would you include property, knowing that if you don't, you're effectively shorting the housing market? REITs, that's real estate investment trusts. What equity assets would you be looking at? What about alternatives? Does private credit make a small allocation? Do you keep some in cash? The podcast often talks about long-term investing, and rightly so. But it'll be interesting to hear you talk about how you would approach a shorter term and uncertain length horizon, Where you may need the money as a lump sum, as opposed to retirement, which is usually drawn down over a long period.

33:28How would you approach trading off some returns for lower volatility? Thanks, Henry. Oh, that's a great question. Well, in regard to the exchange rate and the domestic market that you happen to target, I wouldn't waste too much time thinking about that. If you have, I don't know where you are currently living, Henry, but if there are incredible investment opportunities there, even if you feel as, I mean, I know you're not meaning to, but you're speculating on FX here. And that is, gosh, we talk about how hard speculating is on stocks. Speculating on currency movements is just diabolically difficult.

34:08But you're doing it, right? But my point is that history would at least suggest that, at least relative to a basket of international currencies, the Aussie dollar has got a mean reverting quality to it. So to look at that and perhaps observe a current distortion and assume that there might be some reversion to the mean, I'm not suggesting for a second that it's silly. But I would say even if it did happen, it's probably not going to be to such an extent that would warrant you making a lower return investment here in Australia than hypothetically a higher one that you could get. In other words, I've not explained that well.

34:46Let's say that you're looking at something, you're in the US, you're looking at an opportunity that's right in front of you, you're super high conviction on it. And you think, gosh, this thing could be 20 % compound over the next five years. And you go, yeah, but I might want to go back to Australia in that time. And I have to think of the exchange rate. Well, if the Aussie dollar goes from like $0.65 to$0.70. It's like, is that enough of an offset to not make that investment? Now, if you're looking at two equivalent investments that both have the same risk-return sort of outlook, then, okay, sure, sure.

35:19But I'm just sort of saying don't put the cart before the horse here. Look at the full menu of investments available to you. And, gosh, there's a huge list that's available within all the major asset classes. go for the best one. And, and when you get to a point where it's like, it's marginal, absolutely favor, favor where you ultimately want to reside, because then you just remove the FX component to it. But don't, don't, don't invest here purely because you think that the Aussie dollar may move in a certain direction over a certain timeframe. It's not that I think your thinking is wrong on that.

35:56It's just that, well, you know, the Forex market is there to make everyone look like an idiot. It's really good at that, right? Like it's just so diabolically hard to sort of predict. So that would be the first point. What was the other? I've lost touch of the question. What was the main question? The time horizon, somewhere between three and 15 plus years. How do you think about short-term and volatility versus long-term and that sort of stuff? Oh, it's such a great question. Yes, yes, yes, yes. I mean, gosh, it's hard. there's no way to have your cake and eat it too with this conundrum is the thing to remember.

36:33You can absolutely get rid of every single last skerrick of volatility just by putting it all in cash. But, you know, even under, you know, that's probably still going to diminish your purchasing power by 8 % to 10 % over a three-year kind of period, right? Like, so that's a really, you know, I don't know.

36:55So, yeah, I do think about opportunity cost a lot. I would say you can kind of engineer it where it doesn't have to be all or nothing kind of thing. It's like, well, look, even if I do think I might need a reasonable chunk of the cash in three years time, I probably don't need all of it. So I can probably put some in some longer term investments. But just making sure I've got enough in cash that will fulfill my needs at a nearish enough point in time such that I don't have to worry about volatility. But I also acknowledge in taking that stance that I will get a very crappy return in real terms.

37:29And that's the trade-off. So I can't tell you what to do. It's a question of what trade-off do you want to make? In three years' time, and the market's gone up 400%, you'll be going, these idiots said that I needed a cash component to get rid of volatility. Or in another three years' time, the market's at 20 % of its current level and think, God, why didn't they tell me to go all in in cash? I mean, you'll know exactly what the right move was, but because we can't do that, you just have to try and you just have to probably strike an appropriate balance for you that balances off those trade-offs.

38:02Lack of volatility is great. It just means really ordinary returns. Volatility is scary, but it generally means really great returns. Over to you. Yeah.

38:17So the hard part, Henry, and again, we can't say you should do a gnaw your friend or your friend's bartender or customer or goat herder or the friend of that friend. The hardest part is three years is really, really, really, really short. And if you're telling me that you need, or anyone's telling me they need that money, the lump sum is required in whole, in full, in total, and no less than that in three years' time, there is no choice but cash for me. Because if you need it and you need it and you need it, and it could possibly lose value, it's taking a risk that you can't afford to take because you need that money.

38:51Again, your phrase need, right? So if now, if the, for example, you could wait out, you have to come back to Australia in three and a half years, but you can rent for a year and a half or something and choose the time which you sell the assets to then use the money for probably housing it from the sound of it, then it's a very different story. But honestly, if you're saying it could be less than five years, I'm saying cash, which is a really, really boring, unfulfilling answer. I won't say cash, but I don't mean dollar bills. You know, cash on a high-interest savings account is the best thing you can do.

39:22Similarly, by the way, to Ram's point, while I wouldn't speculate on currency, if you know you've got 250 ,000 equivalent Australian dollars and that's the Australian dollar amount you need and you're doing the maths now, I would transfer it now. not because you're trying to guess on the markets because again you've locked in that amount if the currency was to change in three years and you weren't Australian dollars and it goes against you then you haven't got the money so it kind of depends on the the necessity of the dollar value and the fixedness of the date as to what you can do if you can choose the price at which you convert your money if you can choose the date at which you do it and that date can be chosen and pushed out as far as you want whenever you want then things are very very different if you have to have a certain Australian dollar value on a certain date within five years, that's the easiest Australian dollars, high return savings account is the only option for me.

40:09Not saying you should do it, Henry, you do what you want to do. But that was me. Why? Because I need the money. I can't. If$240 ,000 is enough and I need$250 ,000, there's no point risking anything that might possibly go down over that period of time. I just wouldn't. By definition, you can't do it, right? If the standover man wants his money back, you know, Chopper Reed, you know, no money. Chopper, no money, no money, no money. I love that scene so much. But, yeah, if you've got to pay Chopper and you want the$250, you don't have$245, right? Chopper wants the$250. So, you know, now that sounds like I'm being overly deliberate and pretending.

40:40I'm not. Like I'm literally working on the basis of the question. If you have more than – if you can select your timeframe, if you'd like it in three, you can wait till five, you rent for a year, you can do whatever. Or you set up to 15, right? Right, exactly, exactly. So, now, anything over five, I'm in shares. I'm just in shares. I suspect unless if shares if property beats shares over the next 15 years either shares have been terrible or property is now so stupidly expensive the whole thing's a basket case and by the way we might be there if we're doing this podcast in 2040 hello back to the future and all that kind of good stuff maybe it is right I don't know but I suspect the odds are not good that property beats shares over the next 15 years just because of the the maths of what it would take in terms of proportions and multiples of income to rent or to buy so I don't think it's likely it's not impossible it's not likely do I think bonds beat shares over 15 years?

41:32No do I think REITs beat shares over 15 years? No so I would be in shares I'd be in diversified shares I'm not saying one share but I would be and again I'm a shares guy would I say that? well kind of but I do this job because I was a shares guy in the first place because I was convinced not the other way around I didn't pick a job and say right I shall spout the company's words I've said a million times I would buy invest property tomorrow if I got a good deal because I like money more than I like shares right I don't know. Property is a wonderful investment, right? Like at the right price, like anything, you know?

42:00Anyway, hopefully we've done it, Henry. That's what I would do. Pretty straightforward. More than five years' shares, less than five years' cash. And if you have the choice, then take the choice. I am a little bit different than you, Rem, on the foreign exchange. I would – we're talking about this on debt and other things. If today's exchange rate looks good to you, Henry, and you need – again, if the dollar value matters and you know what your trade dollar value is, and you're going to come back to Australia at some point, you might as well have Australian dollars now so you know what you've got and you can work from there.

42:28You're not relying on some future point saying, okay, it's now, the dollar is now 50 cents or a dollar, but it was 65 and I could have done that at that point. You'll always regret it if it goes the wrong way or that kind of stuff. But I think for me, if I was in America today and I knew I was coming back to Australia at some point, to Graham's point, invest in the best assets you could find. Don't just invest in Australia for the sake of it. But by the same token, if I knew I wanted my investments in Australian dollars and I wanted more than Australian dollars at some future point, There's no real reason not to do it now, although the other option is to dollar cost average at$250 over time.

42:56It's probably the best advice anyway. So if it's going to be somewhere between three or 15 years, dollar cost averaging in and over the next three years or something, take that opportunity. Anything more? No, I think we've covered it all. Just always, one thing I was kind of there in the question is that it was sort of framed from an asset class perspective, and I just feel I would be more agnostic, and I think you sort of touched on this, mate, but it would be who cares what the asset is? Yes, yes. Whatever's got the best risk return. And I think you're only being a bit negative on property, just not because you hate property, just because it's like we're already at a point where the government's going guarantor and half the deposit, you know, which we will talk about on Friday, I can guarantee you.

43:42Which we have talked about on Friday. Which we have already talked about on Friday. I can make that, I say that very confidently. There was no chance we'd record Friday's episode without everyone bringing it up, let's be honest. so you'll have heard of that by now but it's very possible Friday's episode was two and a half hours we don't know yet but what we did was talk about how dumb that policy was and we will but instead of like that's the point like you're getting the point now it's just like yeah it should be good as long as we can continue to sort of convince the electorate that these are good ideas and whoever's the PM is saying you know what don't even worry about deposits deposits we'll pay you to get a house we'll pay you to get a house like okay not only no money down we'll pay you stakeout at 105 % mortgage Where's that money come from?

44:22Oh, we'll just make it up. Oh, great. This is brilliant. Motley Fool Money. For more, subscribe to the free newsletter at fool.com.au forward slash listener. Got a question from Nam who says, G'day gentlemen. Thanks in advance for fielding this somewhat long question. It is, but it's really interesting. I've been a long-term listener and benefited greatly from sage words of advice and psychosocial nuances being a long-term investor. It's like I'm so sure I love it. It's awesome. I'm moving away from real estate investing for a variety of reasons, not being bothered being principally among the top reasons.

44:58But it did make me think at which point can real estate investing result in long-term growth whilst also providing a benefit for wider Australia? And therefore, would I consider going back into it? I've talked about that in a second, but here's Nam's question. Human me for a moment, says Nam. The year is 2028, and the Albanese government has been granted another term, but this time with an overwhelming sentiment of needing to tackle the residential housing problem. Treasurer Chalmers and other frontbenchers have announced the creation of the Construction of Residential Australian Property Authority, or CRAPPER.

45:30Their sole responsibility is to lead a whole-of-government effort across state and federal lines to tackle ballooning house prices, as well as the undersupply of dwellings in Australia. What types of bold policies and strategies would we see? Negative guarantee for new builds only? Tax-free thresholds for tradies' entire salary if they're in the residential sector. 100 % capital gains tax-free for new builds only, while removing any CGT discount for existing property. Reducing company tax for those businesses that move their headquarters away from the East Coast into regional Australia. The conditions are not only going to get worse, particularly once you factor in the skills demand for residential property, and need for everything from hospitals, Olympic stadiums, submarine yards, etc.

46:08This is not intended to be billed as tax breaks, but what can genuinely be done as an investment by government, even though they're not the ones laying the bricks themselves. And NAMM says, forgive the acronym, I'm a former media advisor and recovering management consultant who now lives and works in the real world but sometimes old habits die hard. Full on gents, best NAMM. That is awesome. Love it, NAMM. I like crap. I construction of retail of Australian Property Authority. It's right out of Utopia or something. We kind of covered a little bit before, mate, but let's do a quick laundry of this.

46:38How would you fix housing affordability? Oh gosh, you can do that quickly. I mean, I would just point to the fact, because often we get a lot of questions in and they sort of sit in the inbox for a while. So there's a very good chance you've actually heard our answer to this now, because I want to say we did this not too long ago. But so to your point, mate, we'll keep it blunt. I think the point that we made before is that we get all these silver bullet solutions put forward. It's like we just do this and it'll fix it. And I don't think that's right. I think there's, you need a concerted effort across a range of different things.

47:13And it's sort of like making incremental improvements across everything from tax policy to regulation to immigration. Immigration is huge, actually. To immigration, to a whole bunch of things. And that will help to slowly correct the issue. The one thing that won't correct the issue is directing ungodly amounts of money towards this thing, thinking that the only way to address it is to empower people to is to is to give more is to. Increase the spending capacity. Inflate the demand, essentially. It's sort of like they seem to have forgotten the year nine economics that there is demand and supply.

47:54but all we do is focus on the demand which nets itself out because everyone gets put onto a higher pedestal and we just you know it's it's absolute madness so we're probably coming to some of this on now on the Friday I'm gonna shut up at this point because otherwise I'll just keep going but you but you're right something needs to be done to your point though Nam you sort of say that oh that you know Treasurer Charm has come up with a long-term plan to fix the problem it's like right there i'm gonna stop you right there and this isn't able to go at gym or labor this is like both sides of the aisle they this has been a disaster that's been slow unfolding in slow motion for at least a decade now and probably two and to think in the next three years they're going to go actually they won't because the the the the harsh reality here is that all of the things that we're sort of talking about and we've only just briefly just touched on a whole bunch of things.

48:46All of them come with pain, like there is a compromise to be made. And don't forget that when you look around the electorate, two out of three people are on the, I hate this term, the property ladder. So there's only one third of people who are cheering this. And I'm not saying that doesn't mean we don't do it. I'm the first to argue for reforms that improve affordability. I just take it from the same way a 12-year-old would take it, which means, Does that mean prices go down? Yes. Yes, son, it does. That's what improved affordability means. Like either that or real wages go up dramatically, right?

49:20Yes. And yeah, so I'll shut up. There's a great John Howard quote, which is something along the lines of no one's ever complained about their house price going up. Yeah. Which is the political problem now. So the answer is until enough of, I'll say us, Rem, and I both are in the housing market. We don't own property. We're in the housing market. Are you looking to sell your house? No, no, no. I mean, because I own one. Is that what the market is? Oh, so that's – no. Just note to journalists, if you're not actively looking to buy or sell, you're not in the market, you idiots. Because I have a share portfolio, I'm not in the market for shares.

49:58I just have a share portfolio. There's not one – if there is not one thing to point out to sort of say, have we hyper-financialized shelter? Yes, because no one owns a home, but everyone's in the market. In the housing market. Bloody hell. so now the answer is it needs people like me and Ram and enough of us to say actually we care more about the national interest than our own house prices good luck well that's and that's that's your point about Jim and Angus is Angus the shadow treasurer still maybe I don't remember you know someone is yes that's the that's obviously being quiet the fact I'm a politics nerd and I can't remember who the shadow treasurer is that's how quiet that's how irrelevant the opposition has become I'm trying to distinguish themselves exactly yeah well Matt can't minutes to complain about.

50:39Anyway, net zero. Let's move on. So yes, we've got to give them the care. Now, very, very, very, very, very, very simple, easy solution. And I say that heartly, tongue in cheek, partly absolutely literally. We have a supply and demand imbalance. If you've got 11 people bidding for 10 houses, price goes through the roof. If there are nine people bidding for 10 houses, price is full. Demand and supply, 101. Economics 101. My 12-year-old can tell you that. A year eight commerce student can tell you that. It's how this works. Governor of the Reserve Bank couldn't tell you that, or leading economist couldn't tell you that but everyone else could don't choose not to sorry I'm fiery today mate I'm going to fire you four things I would do in rough order firstly we need to meaningfully significantly and quickly reduce the immigration intake to meaningfully put down pressure on population growth you're racist you're a racist I know it's awful I can't tell you Twitter is just and you know what's funny there are other groups who say yeah there's too many Chinese and Indians coming it's like how about you get staffed the other half are like oh no no you can't say anything about no no no god no don't say any immigrants because maybe they've got different skin colours or accents and if you say that, you're racist.

51:38It's like, can we not have a proper bloody conversation in the middle? No, we can't. So I don't care. Thank you for the opportunity. I don't care what colour, skin colour, religion, race, sexuality. I don't care what language you speak. We say it every time, but we have to. I know, right? It's stupid. But yes, I have to. I'm going to because I just can't afford not to. But we have household formation running ahead of dwelling completions. That's the economics labels. It's not popular. It's actually households because if you have four people come in and live in one house, same as one person can be living in one house.

52:06So it's not actually population, but household formation is growing faster than dwelling completions. You need to change that so that dwelling completions exceed household formation until we get to vacancy rates about 2 % or 3%. And nothing else you do, well, if you've got excess demand, well, if there's three people looking for two houses, nothing will happen on prices. So that's got to be the first thing we do. Second thing I would do is I would change, and you've talked about lending criteria before around me different ways, but I would change the APRA lending buffer and make it kind of cyclical.

52:35So as rates come down, borrowing custody doesn't increase. But if we do that, we can't blame the RBA for every mistake. What? Correct. Yeah. And prices mightn't go up, and so people mightn't vote for me. Why? That's not, no, no. That'd be too easy and straightforward. And no. So APRA and lending buffer sound wonky. The reality here is when rates go down, in theory, it's cheap. If I've got a mortgage, I pay less. That's great. But everyone else pays more for houses because they can all bid more for the same repayments. if you increase the buffer when rates go down lending capacity doesn't increase at all stays the same but mortgage payments come down making it cheaper for both the buyer and those who currently own homes and doesn't push prices up so use that second rule third one I would stop all negative gearing on residential property I'd grandfather the existing ones because I don't reckon we should rug pull people who've probably done the wrong thing but for the right reasons because the accountant said it's a good idea so I'd just stop it tomorrow no residential property is allowed to be claimed no matter the structure by the way some people say oh then companies will do it or corporates no no no Nobody can claim residential property losses on tax.

53:35You just can't. Gone. And the last one is return the capital gains tax to indexation away from the ridiculous 50 % arbitrary discount. Those four things aren't panaceas, but it's absolutely what I would do and it would have a meaningful and reasonably quick impact on the housing market and it would make the average Australian better off and make young Australians much, much better off given the capacity to actually buy the place they want. It's not a difficult conversation. well different conversation the thought process is easy it's exactly if I was a dictator tomorrow if our politicians were if Jim Chalmers was told you never ever have to face an election all you have to do is govern a national interest I guarantee you do those four things maybe I'll maybe three of the four it shows you how much of a coward they are and myopically self-interested like it's just I'm sorry and that's not a one partisan comment they're all the same universally exactly you've just like I mean we can argue small nuanced differences on that but you're 100 % right and it's just like but no what is the solution The solution is let's use taxpayer money to give everyone deposits and go guarantor for everyone.

54:37So now the federal government, the representative of the people, is now in the mortgage-broking game. Like, what? To be continued. Oh, not to be continued. Refer to Friday's podcast. Exactly. And next week as well. And next week and week after. Here's one from somebody who wants to remain anonymous, obviously. And as I've said before, if you tell our member services to normally take the names off it so I don't screw it up. and this one is exactly one of those. Our correspondent says, Dear Scott and Ram, great effort, gents. Consider the ring kissed and the knee bent. Now, you've been listening for a while.

55:10You know that's not enough. That's not good enough. That feels like you've just gone through the motions. Next question. Okay. We've got a question. No, I'm kidding. This is not a question, but a show of supports here. I had to keep reading. And a pat on the back. I'll allow it. Like a real difference in the maturity of our country's economic debate. Your re-ramp. That's a low bar to get over, by the way. It's not like we've climbed mountains here to do so. Anyway. Just stop being self-interested and wanting to push our barrows. Goes to show you, right? Chase votes. The greatest challenge for national interest is there's no constituency in trying to carve out a space where you don't get paid to say something for someone else.

55:49Yeah. That's why the debate is so rubbish, because the voices are the voices of people who are paid to try to lobby for someone else, or whose self-interest makes them lobby for themselves. There are very few. I should know one. The likes of ACOS are great, right? Because they're just out there saying, hey, I'm not getting paid here by people on welfare, but I'm going to stand up for them. I think that's great. And there's some fantastic independent economists. Chris Richardson, if I haven't said already, was at the productivity roundtable. He is excellent. And just went and said, hey, here's what we should do.

56:14Now, it didn't always get listened to. And good on the government for inviting some people who didn't have a dog in the fight, but most do, and so that's the problem. Good optics to get a diverse group of people you can later ignore. There is that too. Ken Henry, anybody? The tax report of, what, 15 years ago? Anyway, our correspondent says, your re-rant on the mining atrocities in a recent mailbag episode really hits home. It's outright disgusting. Let's be frank, it's corruption carried out in a developed country. What really gets my blood boiling is the little volume of simple-to-digest media coverage over the topic.

56:44The news likes a good story about woolies and coals for price gouging. Sure, it's front and centre of shoppers' minds, but so are structural impacts on tax revenues. Everybody's taxes are impacted. For every dollar we spend on groceries, we spend three times more than that in taxes. The media would also happily write and talk about Wayala and$3 million super balances for weeks on end, as to where the impact to all Australians are a fraction of how much the failures of mining royalties are and the need for a future sovereign fund to impact all of us. We need to be screaming and shouting about this.

57:13We need the media machine to overcome the political inertia. It's not in the too hard basket for everything you guys have said. We shouldn't just brush over it. It's not hard to understand. We are so stupid, says our correspondent, while the rest of the world laughs at us, they are envious of us. You both should be given gold medals for representing our voices. There needs to be a lot more of it for a change. Thank you, says our correspondent. I like that. Glad we allowed the comment. I was always going to. I knew what the question was. I mean, the trouble is just on that. It's a lot of the, particularly in the modern world, right?

57:45Things are just super complicated. A thousand years ago, there wasn't a lot to get your head around, right? You could be a citizen scientist and really be at the forefront of cutting edge of our knowledge and everything. It is so vastly complicated today. And the reality is that a lot of these problems, these structural systemic problems, just take a huge amount of work to get your head around and to reach any kind of reasonable conclusion on. And even then, if you get to that point where you feel as though you do, you probably can't ever be 100 % certain because it's that complex. I mean, I live in perpetual doubt and I'm just the poster child for imposter syndrome, really, because when the mics go off, I just put my head in my hands nine times out of ten and go, did that make any sense?

58:26um what did i just say yeah what did i just say so it's hard and then and then like so so it's super hard to get your head around and what and it's it's impossible to have a soundbite that will convey the message so not to make it about this but on a bitcoin pod recently and someone said well give us the pitch i can't i just you you want you want a five you want a five minute little rant that's just going to make every you can't do it right it's it's too it's too big a hurdle to overcome. Make the case for money. Make the case for money. It's like, okay. So, you know, so human rights important.

59:00Well, yeah. Okay. Where do you start with that? And there's no, there's no TikTok out there that's going to be able to do that when you sort of say, Hey, all of these things are a big problem. We need to get people behind it. People will absolutely get behind. If you could, and again, remembering that most people out there are just struggling to get by, right? or they're fortunate enough in life where it's just like, I don't really need to worry about that because I directly don't see much of the problems. Life is good for me, so it's not really something I need to spend much time on. For everyone else, I'm so busy doing my 10 jobs and struggling to pay them all.

59:34I don't have time to do it. Plus, I'm trying to just like be better at my job. And for you to now become a macroeconomic, you know, monetary expert and then be able to prosecute your view at the polling booth when there's no options out there that's going to represent your views anyway. It's just such a diabolically difficult question. So, I mean, all you can do is pick up a mic, put your Ugg boots on and rant into it, which is what we do, I suppose. But I feel like, you know, it's really nice to get that praise, but I just do feel like there are people out there actually doing stuff and we're in our armchairs just, you know, ranting and raving.

1:00:13And I don't know if we can convince a few people to at least not necessarily change their minds, but to consider, to be open to alternate perspectives and perhaps contemplate and think about this stuff a bit more deeply, then I'll take that as a win. Yeah.

1:00:32I don't know, mate. I've said it before. It might have been last week I said it. I think love or hate Donald Trump, and I'm firmly on one side of that. I fear that what used to happen was pollies. we used to believe that the electorate and the media kept politicians accountable. And maybe they did too. And what Trump realized in his first term was you don't have to be accountable. You can say anything you want as long as you appeal to the base aspects of enough people you'll get voted for. And you don't have to apologize for anything and you don't have to tell the truth. And if you do lie, someone will say you lie, but you just say, no, I didn't.

1:01:06You keep talking and people eventually move on because the media cycle is a media cycle. And that sounds like I'm being critical of Trump. I absolutely am. And if you're a Trump fan, I apologize in events. Actually, I don't really. I'm sorry you're offended, but the old fake apology. I'm sorry if I offended anybody. I'm sorry for what I said.

1:01:21Even if you think Don Trump's doing more things. No, you've got to rephrase that. I'm sorry you were offended. I'm sorry if you were offended. It's a subtle difference. Oh, that's right. I'm sorry if you were offended. That's right. You've got to put an if there too, because you can't actually acknowledge you were offended. If you were offended. Yeah, right. Sorry if you were mistakenly offended. Exactly. Sorry if you were more. No. Even if you love Don Trump's policies, and we can, rational people can argue about those. I don't think convincingly, but you can. the character of the man has got to be surely beyond question and that's what's happened.

1:01:51Yeah. He just pushed through, right? So what worries me about that, mate, is the problem is the answer to how do we get people to change. It's back to Mike's question that we've been, or Nam's question, and Mike's actually, both of them. Just the idea of kind of,

1:02:09it's easier to appeal to people's base instincts to get voted for and it's easier to appeal to people's base instincts to get them to hate your opponent and get them to vote against someone else or something else. There's less... The national interest was assumed to be important by politicians for years and I'm not convinced that's the case anymore. And that doesn't make me happy. I don't want to be the rose-coloured glass guy. There was Nixon back in the 70s and whatever else. They've said Nixon resigned, right? Barry O 'Farr resigned about a bottle of wine and now Trump lies through his teeth and just pushes on, wears his red hats and job done, right?

1:02:42And again, it's not anti-Trump, But my concern is it's invaded politics and affected politics right around the world such that you don't have to even bother pretending you care about the national legions anymore as long as you've appealed enough voters. So how do you change it? I don't know. It's also hard to radicalise people to the centre, right? Let's all be reasonable. It's not as good as three-word slogans, axe the tax, stop the votes, whatever, whatever, right? And so we're in this weird world. Let's be reasonable. I can see that as a political slogan. Things are going to get really bad.

1:03:11It's getting traction. It's just like, what's your platform? Yeah, just ruthless centrism and reasonableness. Yeah, I'm not a moron. Please vote for me, right? And at some point, that hopefully will work, by the way. And I have to say - I will when things get bad enough. Well, at the point of the last election, we didn't have more independents and minors voted to parliament. Most of them retained their seats. And that's most of them, regardless of your view, most of the independent MPs that were elected were reasonable people trying to do the right thing for the right reasons. They're not inside a party machine.

1:03:41Most of them are independently wealthy enough or at least don't need the money for its own sake. They're there because they want to represent their community and do the right thing for the country. Helen Haynes, Indi, fantastic example, now retired. David Pocock in Canberra, I think, is doing a great job. The Teals as a group, independently and as a group, I think are fantastic. I don't always agree with all their policies, by the way, but they're there for the right reasons trying to make a difference. So there is some hope. Let's not be too negative. There is some hope. And you're right about some people out there doing stuff and we're just sitting in a chair talking about it.

1:04:09But I think it's necessary. I think it's hopeful. I guess the best thing you do if you're listening is talk to your mates, don't bore them. But these are the conversations we need to have and putting things in some context. I don't know how you do it. I wish I knew how to do it in a more attractive, accessible way. I don't. So we do what we can and hope that other people do what they can. And it's all you can do, right? Start where you are and make a difference in your space. And collectively, maybe that gets us somewhere. It's not particularly optimistic. There's no banner to rally behind it.

1:04:36I would say it's being reasonable, right? It's like, well, can we just shout three-word slogans? We could, but that doesn't get us anywhere. Maybe if we, you know, hope more people are more so we get better outcomes. I think the internet is not entirely to blame, but it's a big part of it. And not in the way that most people will frame it. I mean, the internet has been a part of it because what it did was it undercut the viability of traditional media. So back in the day, when you had rivers of gold from all the classified, I mean, like, look at all the billionaires back in the day. They were all media moguls, right?

1:05:09Because it was an incredibly profitable business. And with great profitability, gave you extra resources to do long form journalism, deep dive research, investigative stuff, good stuff, the Woodward and whatever kind of stuff, right? Like the things that really mattered where you can actually put someone out on the trail to spend six months putting a story together. You can't do that now. You're 23 because they can't afford to pay the salaries for anyone any higher. And we need you to do a story. hey, I know you only just learned how to wipe your bottom, but can you now put forward a story that explains the current macroeconomic malaise that this country finds itself in?

1:05:50Oh, and I need it by 3 p.m. Which is why whenever you turn on the news, it's a cookie cutter template. Start with someone on Facebook who's having a problem, go talk to a cafe owner, get an opinion from one side, get an opinion from the other side and go, you know, and then sound off with a clever sounding conclusion and move on. It's like nothing gets investigated. So it's not the journos' fault. They're under-resourced. And they're under-resourced because they're all inside these business models that are no longer viable. I genuinely think people are going to hate this, but I genuinely think that the Joe Rogans of this world, hard to say it was a straight face, but I don't mean Joe Rogan in particular.

1:06:30but these guys have huge audiences and they're doing the long form podcast is becoming a, because some of them, some of them are getting huge audiences here. It's like with YouTubers as well. There's a lot of rubbish at the same time, but there is incredibly good content here. A lot of, I really enjoy a lot of the Lex Friedman podcasts and there's a million of them. But they're kind of, because the economics there are very different and they're able to bring on people from various backgrounds and they're able to have a seven-hour conversation. I listened to it halfway through it, a 10-hour. It's a 10-hour podcast on the military-industrial complex, right?

1:07:12It's sort of like it is a deep dive, but you can't get that on the 6 o 'clock Channel 7 News and you're never going to as well. So my one hope is that we will find people able and willing to do the work there. the downside of it is at least in that this is this is a plus end or minus in in the day there was like three networks and they all had to compete for it you know sort of like so we all were exposed to the same thing and they all had to sort of fight for the middle because you couldn't afford to be too too uh polarizing unfortunately now all the things i said i sort of believe but then you kind of get people who go oh my audience is this so i'm leaning into this kind of stuff which means that you own your every everyone's got the deep dive deep investigative stuff It's just all in their own echo chamber.

1:07:58And they get their slant and their version of the topics they want to think about and talk about. Yeah. Yeah. It's the same as newspapers, Matt. I mean, I always like a physical newspaper and it's fun to do the crossword and lots of stuff. Think of the physical newspapers, you've turned all the pages or most of the pages, right? So you flick through stuff. And you don't always read everything, but the headlines got you. These days you get a Google alert for a particular topic or a particular issue, or you see it on social media, you click on the story based on the feed you've been sent. you might get the front page if you scroll far enough on the Herald or the Age or the Courier Mail or something, you might get to a story you didn't think you were going to read.

1:08:30But the chances of getting to something that on the proverbial page 7 or 12 or the world section in the middle that no one actually reads but you kind of slip through it, oh, Jerusalem, that's interesting, I wonder what's going on there. You know, you don't get exposed to that stuff. And that's another, even on the mainstream sites, not even on social media, just on the main newspapers and that sort of stuff, you just don't get that. and that's probably, ironically, TV's the last sort of passion of TV news is you're getting the whole bulletin from end to end. As long as you don't turn the TV off, you're getting all that stuff, so there's something to that.

1:09:00But it's really, really bloody tough. I wish I could fix it. I don't know how to fix it. We're doing what we can, which is doing an investing podcast but also talking about some business and finance issues and policy issues that hopefully change some people's minds, get you thinking. As I said before, use your vote. It almost sounds lame, right? But the best we can do is talk to people listening to this and if you do the same, then it's how we have some bit more impact. And think for yourself. Reach your own conclusions. That's super important. In an echo chamber world, mate, that's also incredibly rare.

1:09:34And it's hard. I catch myself. Every now and again you go, oh, I rattled something off the other day. I don't want to say it's a bit embarrassing. Why is it like, what? And she was so right. I was like, yeah. Gosh, that was a bit of a scary face slap moment. not literally although she would have been well within her rights to do it whereas it's sort of like i just i knee-jerked into a comment yeah that i hadn't ever pondered but i'd heard from someone who in other ways i respect but in having pondered it actually think no you are fundamentally wrong here and it's you know anyway all i'm saying is it's hard it's really hard to do and like anyone who goes oh people are so easily influenced but i'm so well read and rounded and it's like no you're not and and not because i am and you aren't because none of us are it's something that is it takes huge amounts of effort and and forces you into very uncomfortable thoughts because there's no more uncomfortable thought for your ego to sort of say i was fundamentally wrong about this you know it's very hard exactly exactly um yeah hey last one to round us off okay one from patrick hi guys firstly love your work scott i've got a quick symmetry joke for your next car trip with your son.

1:10:46Oh, there's another one. Love it. When we're driving past the cemetery, you should calmly point out that people living on that side of the road can't be buried in the cemetery. Your audience will likely ask, oh, why is that? You simply say with a somewhat confused tone, because they're still alive. Keep up the good work. Cheers, Patrick. Thank you, Patrick. I will absolutely use that one next time I get a chance. Ticks all the dad joke things like, makes you sigh, you roll your eyes, not funny. Perfect. And every father secretly smiles and goes, I'm doing that. another another another arrow in the quiver exactly exactly on that salubrious note speaking of important issues and serious stuff to talk about thank you for spending some time with us hey I mentioned at the beginning of this podcast that we had some great feedback on twitter you can follow Andrew at sage underscore simian or at strawman invest you can follow me at tmf scott p on insta on twitter on blue sky or Scott Phillips Money on Facebook.

1:11:47If you've got a question for the mailbag, info at fool.com.au is the very, very best way to manage it because our member service team will do it for me and I won't have to remember to copy and paste from Instagram or Facebook or something else. So be warned. I've got some questions that way and occasionally I try and remember to ask them. But generally speaking, yeah, just send them the email. I know it's old school, but it's just one cue and it means it gets answered. And so, yeah, do yourself. Help me help you is what I would say here. And until next week, until next Friday, there'll be more rants, don't worry.

1:12:14Fool on. Guaranteed. Cheers.