Mailbag: incl. All of the things about housing! January 21, 2024

30:10I would bet you a bottle of wine that in 20 years' time, nurses and teachers have higher real incomes than they do today. I would happily make that bet. Yeah? Why? Why? Because they traditionally have. I think that the chance that a union can't get a... Take the last two years out. That's what I'm saying from now. I'm not saying from 1980. From today, I would bet that teachers and nurses end up with higher real incomes in 20 years' time. Yeah. In any case, in any case. The question they've got really, I think, and this is where... I don't disagree with any of your points, with the exception that...

30:42We need to move on anyway, by the way, at some point. With any of your points, except that they have to either rent or buy, and they can't change the system. We'll talk about how the system could be changed, but they can't change the system. They either have to buy or not and they have to pay a price they're comfortable with or not. And they're really saying how much could or should we afford to pay towards that. You know, saying, well, don't wait till the system changes, I think it's probably unlikely to work out well for them. You've got to rent or buy from today. So what would you do, mate?

31:10Would you simply rent? Do you think that's a better option? No, renting sucks. Oh God, don't rent. But then you don't have a choice. something then well then they're buying if they can afford they're prepared to move away somewhere to a price that's what they're saying they're absolutely saying they're going to move an hour away so how much should they pay that's the premise of the question we're going to move an hour north or south to a place we can afford how much should we borrow they said relative to the house we're saying relative to the income I've gone way off but the answer stands there right so whatever you're comfortable bearing in mind those things I had to do a quick google nurses wages have declined in real terms by 20 over the last 10 years 20 decline so i don't know i might be tempted to take you off on that bottle of wine of it let's go for fun anyway let's go for fun in 2044 someone will remind us of this and i'll probably buy a bottle of wine so so i look it's it's it's it's just it's diabolical is what i'm saying and i just i really get sick of the you need to work harder kind of thing i It is maths and reality that you are arguing against.

32:17And for someone in a particular generation to have bought housing at three to four times average income, single incomes, and now expect people in Sydney to pay 13 times dual incomes and then say you're not working hard enough. It's just, it is. Did you see the Australia Day lamb ad, by the way? I did actually. Is that good? I thought it was pretty good actually. I thought it was pretty clever. Very clever. I love the bit where it was just like, here, have a free house to the boomers. I seemed like that bit. I loved it. I loved it so much. But it is a scenario where it is, we are so poor as a nation and as a society because all of our economic energy goes into servicing these monstrous debts.

33:10Think about the number of businesses that would have started in a different cost environment, the jobs that would have been created, the wealth that would have been created, the products and services that would have been created. Think about the level of household harmony, stress, all of that. Imagine all the people living life in peace. It's hard not to have a conversation almost about anything economically in this country. In fact, it's not a unique phenomenon to Australia. It was a great article in the Financial Times. I don't know if you saw last week talking about the situation in the UK and Australia.

33:44Back in the UK, the last time housing was this unaffordable, I think Queen Victoria was on the throne. Right. Right? And so it's a phenomenon that goes beyond Australia. It's Australia. We punch above our weight massively. Like we are king of the hill when it comes to sort of what we have sort of done. But my broader point here is that it has now become as a means to get ahead. And the way that you get ahead is not by producing anything or making anything of value, but by speculating on house prices. I mean, people laugh at Bitcoin, for God's sake. This is an entire country that has put everything it's got, and it's got a lot of stuff because of good luck with our geology into housing and it impacts every level of society.

34:33Whether or not you're a housing investor or anything, it's just like we all need a place to live and we don't have it. A massive failure of policy, massive opportunity costs, and it's just the most depressing thing ever. And I think one of the other things I'll say, because we're very dividing people with this conversation. I think you and I are a good example. You've got a house you bought relatively early. I didn't. So I'm too far on one part of the spectrum and you're probably too far on the other because we all inform ourselves with our own unique situation. And whenever I have conversations about this, and I have conversations about this a lot, as you can imagine, the person I'm talking to is a renter.

35:14They have a very different perspective than the person is buying. And it's hard to, you know, if you want to understand someone walk a mile in their shoes kind of thing. And I think both of us need to perhaps come a little bit closer together to to understand that these conversations shouldn't be and i'm saying this to myself more than anyone because it's i know what i do but to frame it in a situation that's beyond my immediate self in my particular situation and shaking the fist at the sky i think if i was given if i win power ball tonight and win 100 million dollars i still think it's a an argument to be made here that something is is is so fundamentally broken and that the the the while there is a um begrudging and slow recognition of that by the powers that be.

35:57There is still nothing to be done about it. And even if there was something that was effective, and I'm keen to hear your thoughts, that could be done about it and is done about it, there's still like five, ten years away before that starts to sort of move the needle because of the lag effects that are at play. So it's just, it's so depressing. I'm only laughing because Brendan asked how much you should pay and you've got to solve the whole hour crisis. He said rant. He said to rant. He did. He did. The answer, by the way, the rant lasted 36 minutes. Yes. Motley Fool Money. For more, subscribe to the free newsletter at fool.com.au forward slash listener.

36:37So Brendan's second question, speaking of rant, was if you have time, another question is, are we losing sight of the Australian dream? Yes. People immigrate here for a better life from which they come. However, I'm a skilled member of society born here and cannot afford to rent or buy in my own city's surrounding areas the places where my family and friends are i thought we were the lucky country says brendan um thanks a lot legends he finishes with brendan um mate i i want to be really careful being a man with a hammer um i think but i but i we've added seven odd million eight odd million people to australia since the olympics in 2000 and we're not building enough houses i think i'm not convinced that any of the culturally we've taken on as a group this idea that as you say housing goes up and so we financialize housing that's all true has gone up i'm sorry what did i say you said housing goes up well no so we've got this idea that it does oh sorry okay right yes you got the idea that housing goes up.

37:52So we financialized it. But if I really try and strip back the reasons, I genuinely strip back the reasons, I think a lot of the historical increase has been second incomes, lower interest rates, higher LVRs, things you've already talked about, lower buffers. Those things are true. But if I think about the more recent changes and the changes from here, i'm not sure how much of the things that we think are a problem are policy issues and i'm frankly not sure how many of those things if removed would make a massive difference to the outcomes for for buyers other than and you and i talk a lot about government and and markets and other things other than going straight back to just fundamental bottom line supply and demand yeah if there was if there was a four percent five percent vacancy rate in australia then people would be able to pick and choose and say australia as a whole obviously matters by state by city by region by suburb but but people would pick and choose based on based on that and i and i think you know i would i would stop negative gearing i would grandfather it for those who have it because i don't think blowing up the economy or those people is smart um but i would get rid of negative gearing i would re-index capital gains and take away the 50 discount account that would have a moderate effect on the growth of prices because it'd be slightly less attractive to own an investment property right so that i i think i agree just very quickly i think people people advocate for that and i i'm i've got a lot of sympathy for that i don't think it's a silver and you're saying this i'm agreeing with you it's not the silver bullet that people think it is like if only we got rid of that everything would be right and so i kind of come down to my i again i i've you know i've talked about um you know i've talked about um you know immigration before population growth before and that's why i'm aware of the man with the hammer thing um because you never talk about property at all so you know um but i i kind of i kind of just think it's straight out supply and demand and so you either say we need a shitload more houses or we need population to grow this quickly i just i really honestly don't think fundamentally we could we can and should change those rules because those policies because it matters first home owners grant should be killed see capital gains tax re-index negative gearing stopped those things those things would make a small difference and and a worthwhile difference and a worthy difference and we should do them i don't think we in the context of and again we talked this before the environment the infrastructure the social cohesion you talked about household happiness frankly all those things i don't think an australia with 35 45 50 million people anytime soon maybe ever but it certainly anytime soon is even slightly smart while if we've got a vacancy rate below a certain amount i i i think the more i think about it i think if we if we believe that housing policy not even that sorry housing outcomes are a meaningful determinant of quality of life and they are and you've talked about exactly very passionately why they are because it's a proportion of income and it's a piece of shelter and those things are very different but also exactly the same thing i.e i should be able to live somewhere and afford to pay for it because that kind of makes it's fundamental to everything else right yeah and so i i honestly can we build some more probably um if we can build some more high density train stations some people might want to live there but if people don't want to live there but they're forced to because it's all they can afford they don't really want to live there you're not really solving a problem you're just you're just changing some numbers on a spreadsheet if you said to australia writ large hey guys where do you want to live okay cool well for that to happen this is what we would have to do that's the real conversation rather than i'm okay adding supply by the way but sprawling into more farms and bushland i think it's a reasonably crap environmental outcome building more high density if people live there by the way great if we have five percent vacancy rates and all the all the train station you know adjacent units are chockers then great what we've what we've worked out is people really want that that's fantastic i love it i'm not telling people where to live but that's exactly the point nor does anyone else you know building more high density just because we think that's where people need to go because it makes some you know sense on a spreadsheet i i i really honestly i don't want to be that guy but i'm kind of turning into that guy because i don't see how it's not fundamentally just a question of population relative to dwelling stock and dwelling stock in the context of what we want can afford and frankly the places it should be i i just yeah like again i don't want to reduce no it's not it's not even a controversial take i mean i mean I don't know.

42:11There's probably only eight or nine big ideas in economics and supply and demand is one of them. Right? Yeah, yeah, yeah. So, I mean - It's literally how prices are set. Yeah, whether it's oil or cryptocurrencies or whatever, it's supply versus demand. That's what sets prices, right? That's what it is. And so when you have very, very small supply, it's not growing fast, and you add a huge amount of demand, whether that demand comes through tax incentives or whether it comes through immigration policy or whatever it is, whatever the demand comes from. I mean, that dynamic is the only way that clears is by prices going up, full stop.

42:46Like that's it. I say, I 100 % agree. The trouble is, is that we've painted ourselves into a corner that we've ranted on this before. I certainly have, which is like, everyone talks about affordability, but no one wants to talk about that in the context of prices coming down. You know, so how? How do you make things more affordable while prices continue to go up at the rate that we've become accustomed to and expect? Right, exactly, yes. How do you do that? Well, wages are the only answer that squares that circle. As you say, prices keep going up. Excellent. Excellent. So how do wages go up? Well, productivity has to go up.

43:21So you've got to remember these things just don't come out of a vacuum. The money that you earn is a reflection of, at least in a free and open and properly functioning market, a reflection of the value that you yourself create for society. That's what you get. and and let's say that we magically waved a wand and we gave everyone in australia a 20 pay rise yeah guess what it solves nothing like yeah i think a 13 year old would instantly recognize that that doesn't change anything right so so you're right i mean i'm not saying you're wrong but you're right in the sense that i'm gonna say it's a solution i was i was answering the algebra yes yeah exactly yeah there is a way it can happen or the way the way would have to happen if prices keep going up and it's more affordable wages have to go up faster than prices so let's That is the math.

44:07It's exactly right. And that's where I'm going with. So let's do the math of this, right? So we still want a cake and we want to eat it too. So let's think of that through. So I want a 10 % per annum increase in my house price. And I want that affordability to come down. So very basically, I need to see, and because wages should be a function of what is produced in the real economy, we need to, as a country, grow the economy by more than 10 % per year and make sure that's equitably shared. Now, historically, we tend to see - There's a bit of inflation there too, just quietly in both numbers, but yeah, other than that, you're absolutely right.

44:43Yeah, absolutely. We can let that out if you like, but basically the economy grows usually between two to 3 % per year. That's right, exactly. So - When I get to 10 any time, so China's only doing five and a bit. When I get to 10. China's doing, and that's completely cooked, right? So that is completely, that's a whole other conversation. But my point being, if someone out there, I've seen politicians do this, basically argue for that. It's just like, okay, Einstein, how do we grow the economy at double digit rates, right? For a sustained period of time for a developed, fairly mature economy. Like it's, I'll go as far as to say it's impossible.

45:23It is impossible. That that cannot be sustained. Maybe we'll have a really great year or two here and there. Even then, I feel as though if the Australian economy ever posts a 10 % GDP growth, I mean, something interesting has really gone on there. So, it's unsolvable. So, I guess what I'm saying is while you are right, it's not going to happen. Correct. It's not going to happen. So, here's my solution that no one talks about, right? And again, everything is framed within owning a house. And I would say, why does that have to be the goal? Let's be more broad here. Owning or not owning is not really what we're interested in here.

46:02What people want is security of shelter. I want somewhere where I can be sure I have security that I know that I can be there. I've got somewhere to live, to raise a family, and there's not going to be any nasty shocks. That's what I really want. It just turns out that in Australia, the only way to do that is to own. Because if you rent, you get kicked out every 12 months. You have to live with mold and you have to fight tooth and nail because there's a gaping hole in your roof with black mold growing everywhere. So I would say if you change the rental laws, you'll go a long way to fixing the problem.

46:37Now, everyone will go, oh, it's too hard. That means my investment's not going to be good. It's like, well, it's not a God-given right that you get to buy something which grows at 10 % per annum. When there's a family at play here. Again, we've financialized it so far. We've abstracted it so far away from what it actually is that I think people forget that. I actually think that property investing is a wonderful thing in concept, and I encourage it. But I think that that investment comes with obligations. Now, if I'm Macquarie Bank and I'm issuing financial products, thank goodness there's people like APRA and ASIC out there saying, well, go for it.

47:15Fill your boots. But there are certain rules with the products that you create. And even that, they probably get away with more than what they should. But there are rules. So I would say, fill your boots. I don't care. People say, oh, you should limit how many people, how many properties and investment properties people should have. Or you shouldn't be able to Airbnb. No, it's your property. You do what you like. I don't care. But if you do choose to rent it out, there is a very real obligation that there must be certain standards that are met. there are there i would i would say that you you um if you choose to make an investment in investment property that that you have no the only reason that you should kick someone out is if they destroy the place or damage it very badly or don't pay the rent barring those two situations i don't think that you should have the right to play with people's lives and just kick them out you can still sell the property and you'll sell it to another investor who is looking at that in any sane world a tenanted property that's been on the market that's that's had a reliable tenant in there for And he's like any sane investor will look at that as a very, very positive thing, not a negative thing, right?

48:15We're getting to the stage of like the Chinese where they just leave the properties vacant because they don't want it damaged. And so it doesn't even have an income capacity to it. In fact, that's what we have here is like 40 % of investment properties are negatively geared. So in other words, they bleed cash. So it's all Ponzi, right? So if you fix that, I know property investors will be falling off their chair and throwing stuff at the podcast machine right now. But it's like, I don't think it's too much to ask that if you, if you choose to have an investment in this space, then there are certain obligations that, that, that come with that.

48:45Right. Like, is that, is that, is that unreasonable? And if you turn around and go, that's, that, that makes it really unattractive. Well, do it and do it then. Buy some shares, buy some bonds, buy an emu farm, buy some Bitcoin. I don't know. Buy whatever the hell you want. But it's, it, it is, it is shelter first. And then if you're going to invest in it, then there are just rules. I can't have it where I'm allowed to cram 15 people in there and not worry about the fact that there's no running water or electric. I mean, that is slave-like conditions. And that is, I think, where we have lost our way.

49:16So you would find that if you pass some laws here, that it would make investment property less attractive, not unattractive, less attractive. That would add more supply to the market. It would also take demand out of the market because now it's not an untenable thing to rent. I would rent for the rest of my life and be perfectly happy doing that. In fact, the maths works out much more favorably when you use certain, I think, conservative assumptions based on long-term trends.

49:44But no one's talking about that. Everything is about throwing more money at it from the government. And no one seems to realize that government money is our money. They tax or borrow for. So it's just sort of like these Ponzi economics are not the solution. And the definition of madness is trying the same thing again and again and again, expecting a different outcome. It's 2024. We've been doing this for well over a decade now and it's just not working. So let's think a little bit outside of the box. Let's go to look at other places where it's had a lot of success. Like Germany's a great example, right, as well.

50:17It's like people lease for life and are very happy, very productive. You take away all of the negativities and all of a sudden a lot of these problems are resolved. And if the only way that this is a tenable investment is that you have to screw people over and just get them to tread water for a year or two while you help you service the mortgage before you kick them out and flip them. That is something, again, that is fundamentally broken with the system. I think that's a really good summary, mate. Yeah. I just don't know how we fix it without increasing the vacancy rates. I don't think there is a solution to that.

51:00And I think that's the fundamental problem. I think anything else is, we are, as individuals, we have outbid each other because we wanted to. And that's cultural. And we're not going to change that. The element of chose to rather than had to, because there's people yelling at the pod machine saying, well, hang on, what do you mean chose to? I have to buy a house. I have to live somewhere. That comes down to just straight out supply and demand. If there's an empty house at the end of the street, the rest of the street is going to go for less because you can change and go live in that house instead.

51:22If they're all full and there's five people wanting four houses, then you get prices going through the roof. I just don't think it's any more complex than that. again i would change other things because they are absolutely contributors but they they're pretty they're pretty you know they're pretty simple side contributors by the way um that approach would end up with lower house price and that's no bad thing um but and you know the renting thing becomes hopefully it's up for most people a few people it's a necessity for the rest of the people hopefully it's a choice because you can afford to choose the option of i could actually buy that house for this price rather than the price it currently is and which makes renting more attractive from a from a financial perspective and then you have that genuine choice i just i don't know i'm sure there are other ways to allow for and to take in more population and i'm open to that if we can do it in a way that is socially environmentally responsible and frankly economically responsible given the infrastructure costs of you know more dwellings in similar places or new dwellings in new places the whole infrastructure built for them there's a bloody new estate opening up i'm not near me 25 minutes away from me um but they're putting a new road overpass freeway overpass and all that kind of stuff and i kind of try to do the maths and kind of think i don't know how you put and there might be i don't know hundreds of houses going in but for a for a freeway that's going to cost or overpass going to cost i don't know what it costs hundred and something million dollars is that what a you know overpass with off ramps and stuff would cost oh i wouldn't be off a far off a billion potentially you can do the maths and say hang on so we're putting this many houses in and we're spending this much to do it remind me again where the where the roi is and i just again i'm not i'm not anti-development or anti-growth i'm not anti-population growth if you can make it work in a reasonable way i just honestly i i think if you if you say someone here's some empty land here's how much it's going to cost to put people there here's what they're going to get returned from it you or i would say you want me to do what with what no go to hell i'm not doing that yeah um and yet we do it because we kind of think the growth is what we have to have we're effectively cross subsidizing the the growth for reasons that we think are going to be incrementally valuable and again i'm i'm really not an anti-population person i don't want the right what's the right number i don't know but it's not a billion and it's not two so it's somewhere in between there and that's the conversation we need to have because at the moment all we're doing is pushing up house prices screwing the environment um putting massive pressure on infrastructure you wait till the next drought and warrigan big dam in sydney or the wyvernhoe dam in brisbane or whatever uh get to low levels again and we kind of ask ourselves hang on what you know do we build a bigger dam maybe but why so we have more people well why do we want more people because we want more money what so we build bigger dams yeah okay unscrramble that egg for me i don't know and i i'm really really struggling at the moment i just don't see how it's not that you know whatever the right number is two percent five percent ten percent vacancy whatever that right number is that surely is the starting point for housing policy and population policy and then we can work on more infrastructure or satellite cities or higher density or whatever else we want to do But in the meantime, it's just madness.

54:10It's absolutely madness. I actually don't think there is a solution that will come. Any solution that comes will come, will drag us kicking and screaming towards it. There'll be a reach a point where the sheer volume of debt and its unsustainability will just collapse on itself at some point. Because, I mean, it's the Charlie Munger, show me the incentive, I'll show you the outcome. I mean, what politician in their right mind is going to advocate for anything that sends prices down? Like, you are gone in an instant, right? You've got a third of the population that own a house outright, and you've got another third that are in the process of paying it off.

54:45So you've got two-thirds of the population who do not want to see the value of that as they go down and are not going to vote for it as well. So we have painted ourselves into a corner where it's kind of unsolvable. Except that, I still reckon there's a midpoint, mate. If you said, I can't have house prices go down, but I can have them not go up. There is a glide path for, and again, I'll juggle my hobby horse and flog it one last time. There was a glide path for population, which would say, throw three actuaries in a room, say, guys, do the maths. An economist and a mathematician and someone else and say, right, do the maths for me.

55:22If I want prices to stay level, but not grow. So no one loses out, right? Not variability, but you know what I mean. But effectively we say, right, the average house price in Australia doesn't go down. But over time we have inflation, we have economic growth, we have whatever, and we'll have population come in at a rate which allows for those prices to not go down but not go up because we're adding dwellings at a faster rate than population or at the same rate or whatever that like you know i mean and again i'm not saying it's perfect you can't do it to exactly the zero decimal place but there is a point somewhere there where you get to say we can you know again politically versus whatever and i don't think it's unreasonable mate if 60 percent of the population don't their asset values to go down we're not going to be able to force them to sort of a revolution and i'm not a fan of that no i'm not either i'm not either right so Here's the deal.

56:06Stuff's too unaffordable. We want to improve affordability, but we don't want you to lose any money. So what we do is a X-year glide path, which it's absolutely possible. It's even politically feasible with a bit of courage. We simply say, we're just going to moderate the rate of growth. That's the solution, right? And owner-occupiers say, yeah, cool, no worries. And the occasional investor might be a bit annoyed, but every renter and every potential home buyer says, thank God you're doing something for me. Surely it's not hard to find a majority there, is it? Maybe it is. Well, one, it's a very narrow...

56:33No, I mean, no, you're right. mathematically you're right but i i guess there'd be two areas that i would be concerned about one is it's a very narrow fine line to walk true you know so so getting that balance exactly right is going to be hard even though in theory that's it's possible the other one is i was trying to google it while while you were talking but i forget but the the well every single property investor out there has made an investment on the belief or expectation that property will grow at a certain rate. Now, if you explicitly come up with policy that says, no, we're going to engineer it so that there's no growth, you're out.

57:15So you're back to the first problem. You're gone. No, I'm going to vote. This guy's going to continue things going my way. So you're out there. And then even within those that might think, okay, that's all right. I'm happy with that because it's going to store my wealth. It's not going to grow my wealth, but it's going to store my wealth. What about the 40 % of property investors that are negatively geared? Now, the only way that makes sense is because there's an eventual capital gain that compensates you for the loss that you make along the way once you factor in tax and blah, blah, blah, and all the rest of it.

57:48So now you're saying, actually, these investments that you've made are guaranteed to lose because there's going to be no capital growth. So we're not even – for half of you, roughly speaking, we're saying all those capital gains you're banking on, they're not going to happen. For the other half, you're actually going to lose money. So that's why I say it's kind of impossible. It can't be solved without paying. At some point, to your point, because if house prices can increase at larger than wages levels. Yeah, it will. Then you – well, it can't eventually, right, because people can't pay the rent.

58:24Sorry, it will fix itself. Oh, sorry. Yes, yes. In a sense, and this isn't like I think because I think. This is, well, one, it's mass, and two, it's just like look at every, like without exception, every single example in the history of the world since the ancient Greeks, right? Like these things, it's called creative destruction. The economists even have a term for it, right? It's actually on a broad enough scale, a good thing. You actually want to clear out all of this kind of stuff, And generally speaking, it only happens when it has to happen, right? So when I was reading some history on China during the break as well, right?

59:01Like the communist revolution and all that kind of stuff. There was a big property bubble that sort of helped do that. Was there really? Deficit spending was out of control. Money printing was beyond, you know, and then, and guess what? All of the farmers and that were up in arms because it sucks. Because if I didn't own a property, I was getting poorer and poorer and poorer. those that own property were getting nominally, that's a key word there, nominally richer and richer and richer and richer. Massive gap occurred, revolution followed. It happened. It happened in Sri Lanka. It happened everywhere at every point.

59:30Like I'm talking about phenomena that play out over decades, right? So don't at me next year and say, oh, I thought you said that. No, but again, it kind of has to go that way because we're the person who has just been, we're on our fourth bottle of tequila. we're completely hammered uh hypothetically not you and i just we're not we're not yet drinking tequila there's you you and i and the greatest minds in the world can get together how are we going to avoid this hangover how is tomorrow going to be real it's not it's not going to be good the only thing we can do is kick the can down the road so we'll drink another bottle of tequila and that'll delay it and i'll be just like you know you're just delaying the inevitable at at a certain point and it kind of so what so what i would do is i would say i would certainly never short housing in this country i wouldn't be surprised we go up 13 this year because hey it's australia and those cans can always be kicked a little bit further and now there's various other levers that can be pulled you watch even costello's come out and said don't touch super because people are agitating to touch super and we've talked about it before i'll guarantee i'll bet my first born that they are they're going to raid that honeypot before too long right so there's all kinds of strings that will be pulled and i am absolutely convinced that property will continue to go up in the in the near term but i am saying at some point it is well it's really just a game of chicken and i for one uh don't want to play that game so i would be uh i would be very cautious with take with leveraging myself to fairly extreme degrees on an expectation that this is going to go for a long time.

1:01:06It might, but it might not. And if it doesn't, we're going to find out that leverage is a double-edged sword. And you saw what happened with Opal Towers recently. So that's been kicking around. I think that was discovered in 2018, maybe 2019. And horrible, horrible situation for these poor people who bought off the plant. And what happened? Government bailed them out. Right. Now, let's not get into the debate of whether they should or shouldn't have happened. but i often do think if you or i got up there and said oh i bought all these shares in i don't know lithium.com and they've gone down 60 percent can taxpayers bail me out of them like no get stuffed what the hell like and it just but but that's the kind of thing that that is that is going i i think is going to happen and we will have such political pressure to do that so there's all there's almost there's all there's a small part of me that thinks actually if you can't beat them join them i really should just go to the eyeballs and just and just and just because it's that it's that idea of if you owe the bank a bit of money it's your problem if you owe the bank a lot of money it's their problem and it's that point or it's just like we are all so screwed as a society i might as well just go because if go right to the very edge and beyond because if if it goes bad i'll be fine because everyone will get bailed out together right the person who loses in that scenario is the person who's quote unquote smart and conservative and sits there going i'm not going to take on a huge amount of debt and i can say even without going into the future just looking historically like i i everything i did was because of conservatism i didn't want to take on huge amounts of debt i did want to create a business i did want to do all you know it's like huh that was the exact opposite of what i should have done in hindsight with my benefit of of with the benefit of hindsight what should have i done i should have just put out everything into property as soon as I could have.

1:02:56Now, did I create any value for the country? No. Did I do anything productive whatsoever? No. Would have I been far better off? Yes. Was I at risk of being unwound and margin called, for want of a better term, along the way? Yes. Was I playing with fire? Yes. Did it go wrong? Well, not so far. So this is the other trouble with it. We're the children that have done the wrong thing but have been rewarded for it for so long that it's almost inconceivable that anything else could happen at this point. And that part of me, I do sometimes think of that. It's just like, you know, it's the George Costanza.

1:03:36If everything you have done is wrong, the opposite must be right. Right? You're the ultimate contrarian indicator. Is that what you're telling me? I think so. And I just, like, it doesn't make any sense from a first principles, a rational kind of perspective. But when there is a collective, the punishment will be collective. And let's say everything dropped 30, 40 % tomorrow. Don't think I'll be there going, ha, ha, ha, sucked in, you're all really dumb. No, I'm going to suffer too because the economy is going to go into a tailspin. All my shares are going to go down. I'll probably lose half of my customer.

1:04:16I mean, it's going to be really bad. I do not want that to happen. So it's kind of like I'm in a situation here. is like, I get all the downside and I've missed out on the upside. Yeah, that's right. I might as well just join the party at this point. Is this going to be a mailbag where we've just literally done one question? When you say we, I spoke for a little bit of that time. Sorry. We are, though, an hour and four minutes into the podcast, Ram. Well, to be fair, Brendan asked two questions. Okay. So we can claim it's a two-question mailbag. okay though the answer to the first question kind of led into the second so uh we may find people will take exception with that so so i was just gonna say the first two episodes of this year bitcoin came up in the friday one and then property came up in this one and it's just like you know you wonder why did you expect about bitcoin and property right oh that was a fun that was a fun chat i have absolutely no doubt that anyone still listening has thoroughly enjoyed it uh or you are just absolute masochist and you only have yourselves to blame but in any case thank you for spending an hour or so with us hopefully your sunday morning is off to a pretty good start or as andrew says your thursday or tuesday afternoon podcast we are in a we're in a global world of time shifting and all sorts of fun stuff and uh despite that property still keeps going up uh on that on that note thank you for listening until next friday when ram will rejoin me and i will probably embargo both bitcoin and property yeah Yeah, good call.

1:05:47Yeah, and I apologize. Cheers. The Motley Fool and people appearing in this program may have positions in the companies mentioned. General advice only. Please speak to your financial professional to understand how it may pertain to your situation. Subscribe to the free newsletter at fool.com.au forward slash listener. The Motley Fool operates under financial services license 400691.