Mailbag: incl. Can I buy milk with Bitcoin? December 29, 2024

23:57But even then, it's sort of like from a personal standpoint, I've spent a lot of time thinking about the companies that I own. I've invested a lot in them. I've built conviction over time. I'm kind of more or less happy with it. Yeah, when new information comes out, I'll have a look at it. But I don't have to start from square one every time I just incorporate it into the body of knowledge that I've already built on this thing. And I can keep track of it. So I don't feel as though I have to do all of this to keep on top of my portfolio and make sure I'm constantly scouring the financial markets for the next opportunity.

24:32I know it's what the pros are doing every day. That's why they get paid to sit in the shiny office and try and find the next big thing. and don't get me wrong i'm i'm open to it if it comes across but across my desk but i'm more i guess these days i'm more happy to let things come to me you know it's like things will come up on your radar once you might not pay attention twice you know three and after a while it's like okay and or you'll hear something and i'm trying not to show straw man here but i spend a lot of my time on straw man it's like people oh yeah that sounds interesting or not or you know and it just it it you you find that you know every now and again something does pique your interest enough to go, yeah, I will look into that because I want to look into that.

25:12But I don't, I just trying to push back on the idea. I know you're not specifically saying this, David, but that feeling of obligation that I must be across everything and that I must be on the hunt and how do I fit in all of this stuff? And one step you can sort of do between your portfolio and that is just have a watch list. So you've sort of got, your players are on the field and you've got a bench of other potential players that look interesting as well. Got my eye on them. And that's going to keep you, what do you say? Seven to 10 stocks plus some ETFs? That's a lot to keep you busy already, I would argue.

25:47But it also not so much that if one or two interesting things, just for whatever reason, come onto your radar and pique your interest, then you can dive into that a little bit as well. So I try to be, does that make me sound a bit cavalier, or not cavalier, or just like lackadaisical about it all. It's good words. Lackadaisical. It's a good word, right? But it's how I tend to approach it. It's just, it's better for your mental health. And the thing is with investing is that it is a long-term game, as everyone says, right? We all wave our hands and sort of say that. But one of the consequences of that is like, you know, you can be scarred along the way.

26:23It's a journey. Like it's easier to say, I'm going to say, invest it for 10 years and it seems like it can be a rough 10 years. And chances are it will be a rough 10 years of watching your net wealth rise and fall by scarily large percentage amounts. But, you know, it's also very good, I think, to step back. And, in fact, it's why Buffett – you've often raised this point. It's why Buffett moved back from New York back to Omaha. Yeah. To get away from it all. It's too much. Can't do it. I can't have CNBC on in the background constantly. The only thing is this was before CNBC and it was before the internet.

26:55It was before Twitter and it was before the mobile phones. I mean, Buffett was feeling like this is too much. Yeah. When he'd have lunch with someone and read the paper. Yeah. Like that was too much. Man, think about 2024. Yeah, get some distance. Get some distance. Yeah, it'll mean that, you know, someone who's got like a 4 ,000 alert set off and has done 100 million hours of study on every single company and has got a view on it, they'll probably pick up on things, you know, before others in the market. But also anyone who thinks that they're going to do that probably won't stick at it because it's so brutally taxing, like, you know, physically, emotionally, you know, time-wise.

27:30So, yeah, don't overthink it. Focus very heavily on the 7 to 10 stocks that you've got. Presumably, you already know a bit about them because you buy them. Once a half, once a quarter, whenever they release any news, like, yeah, okay, things are on track or they're not on track, and then pivot or adjust if you need to and take it easy. So this is really tough for me. A couple of things. Firstly, Andrew and I have the benefit of having done this. I mean, look, David, you said we've been doing it for 10 years, right? So you're not miles away from our situation. And I've been doing this for longer than we should admit.

28:04And the great thing about that is, you know, it's just cumulative. And so the hard yards are always done early, right? Whenever you try and put the effort into something, yes, the bloke who plays guitar has played for 25 years, keeps his fingers in tune and whatever, but he's not trying to play Mary Had a Little Lamb from scratch, looking at each chord change and changing it as he goes. He's like, I recognise that progression. I'm not a guitar player, so I'm out of a depth already. But, you know, I know where to put my fingers here. I was talking about tuning fingers a second ago. Right. Yeah, I've heard you.

28:32It's all those things. I'm with you. I'm with you. Thank you. After you threw me under the bus. So, look, the benefit we have is it's cumulative. And that's going to be true for anyone who does it, by the way. So, it gets easier is probably the first thing to say. But you kind of – you don't have to do any work. The only work is the hardest work, which it is. That being said, I'm with Ram. And I've said this before. I don't know if it's a past episode or maybe one coming up. But I'm an 80-20-year-old kind of guy. and if you really think about, even you say, as a AGM CEO meetings, ready, market up as announcements.

29:03I mean, honestly, I scan most of those and it's not because I don't care, not because I'm being negligent because if you think about the things that really drive an investment thesis, it's going to be one or two or three things playing out and that's it, right? Whether your gross margins go from 36 to 35.5 % are interesting and, or 36 to 36.5%, interesting and kind of important in the short term. But frankly, over the long term, if the business is more – I've said this many times, this is kind of a quick catch-all, but if it's more relevant to more people more often, that's most of the job. I mean, look at our competitors, look at your cost base, make sure you've got pricing power.

29:40Yes, there's things that can bring the – so I'm not saying it'd be like it as good to Andrew's term or be negligent or whatever, but just the things that are going to matter are going to matter. and the other stuff is probably detail. And so once you build your mental models, you kind of, frankly, you quickly discard stuff. So you ask about how much time. I spend my time looking for new ideas, to be fair, because I've got the portfolio. I know the businesses that I own or recommended for our services. But once I've done that, I kind of, I'm just building. And what I'm looking for is just those.

30:08I'm looking for variants. So it's literally, hey, what's changed and why? And does the change matter? So it is easy once you get there. I'm with Ram though. Seven to 10 plus ETFs is perfectly fine. And I wouldn't give up any family life to investing unless you are doing it for hobby and for fun. So just rank your life, right? And this is the other thing, by the way. And if I pick socks for a living, we think you should. We think it could be worthwhile. We've said this a million times before. If you find yourself saying, well, I keep fit and I sleep and I work and I play with my kid. I haven't got time to invest.

30:39Buy ETFs. Just do it, right? or conversely, if you say, I've got a couple hours a week for hobby time and I'd rather invest than make paddle pop fruit bowls, then invest. So use the time. And the other thing probably, I know you're asking in advance, it's a great question to ask. You'll adjust as you go. You'll get to a point where you're like, oh man, I haven't enough time to keep tackled with all this stuff. I feel like I'm drowning here. That's a sign to say, I own fewer individual companies, more ETFs. And then when you get the time back, then branch out again. Or if you find yourself saying, oh my goodness, she's finally gone to sleep.

31:13I sit down and have a bit of fun and just look at, you know, Willie's latest results, then great. Again, you know, it's follow your interest, follow your passion. If it's hard work, then do less of it because you won't do it well. You won't bother. You won't care enough. It'll be stressful rather than enjoyable, all that kind of stuff. And ETFs are a perfect solution for that. Yeah, nice. Hey, second question from David. He says, after listening to your recent episode regarding productivity and offers for content for pre-records, I thought I'd put my potential idea to you both for consideration for a pre-recorded show.

31:43Now, I'll get a full show on it, David, but we'll do it as a question. As someone with parents nearing retirement age, I am perplexed by the Centrelink operational model and the continual requirement to keep going back into their offices regularly to re-qualify for payments. Job seeker, parental leave, pension, etc. I have a radical idea to overhaul the system, says David. We're big fans of those. And introduce a fortnightly universal basic income for all Australians. with a payment equivalent to the minimum tax rate and similar to that of the weekly pension. For individuals who choose to better their circumstances by higher paid work, you'd effectively pay the UBI back to the government by increased taxes on your weekly and fortnightly pay from your employer.

32:24The way I see it, a UBI would remove the requirements, says David, to constantly go back to the government asking for money when circumstances change and would help smooth out some of the recession and pandemic impacts where the mass population are displaced from work. As I'm not well versed in economics, I thought it'd be great to hear your opinions about the potential first and second order impacts, Lovett, that implementing this approach would achieve before I consider lobbying my local MP. Keep up the great work and full on regards, David. Now, what I love, I'll get you to go first round. What I love about this, mate, is firstly, David, you're going to go to the MP.

32:58Secondly, you want to know more about it before you do. Thirdly, you're thinking really thoughtfully about both first and second order impacts some great, great tells in that question. You're on the right track, mate, conceptually. Whether it's about UBI or not, I'll ask Ram first. What do you reckon, mate? Oh, man, you can't have thrown a bigger topic, you know. I'm struggling to think where to go with it because there's so much to sort of say. I mean, it is a very appealing idea, and it might even be a necessary idea when robots and computers are doing everything for us. The unintended concept – I'm not saying this because it's my perspective, I'm really trying to wrestle with the idea of it.

33:36But one of the areas of pushback would be, it's where you sort of set that basic minimum. Yeah. Because at a point, now I don't know, we can argue where that point lies, but at a point, it's just like, well, I'm not going to work because it's just like, okay, I'm not going to have a Ferrari. You're probably not going to bother. Yeah. Right. Yeah. It's like, okay, I could work harder and have a nicer car and do, but it's still, for a lot of people, not because they're lazy, but because we all should really maximize. leisure time. That's kind of the goal of improving our lot in life, right? Is that a lot of us will go, yes, good enough for me.

34:09Honestly, if you were to pay me a hundred grand a year, I didn't have to do anything. I wouldn't work less. I will say that at the very least, right? And - Now, 10 grand a year though. 10 grand a year, okay. Okay. Now, that's not nearly enough. I'm going to have to kind of work to do that. But at the same time, why aren't we trying to solve for people who can't work or, You know, and at a point, you've got to figure out where's that perfect sweet spot. And I don't know how you do that. And it might be fine. It's not a big deal as it turns out, or it could be because we just don't progress nearly as much as we could or even arguably should.

34:52Do you have thoughts on it? I have big thoughts on you, Leo. I thought you might. So I don't want to mumble around about it too much. I know that I've often found it appealing in the past, but I'm aware of what I don't know. I don't know what I don't know, but I know there's something that I don't know. The highlights you've identified are absolutely the highlights. The highlights David's identified are the highlights. And I've got to say, David, this gets really ideological real fast because it really comes down to what does a society think is appropriate for members of those society in terms of redistribution.

35:26And every tax question, every spend question is about how much do you take from me and how much do you give back to me in whatever form, directly in cash, in services, in amenity, in whatever. What do I pay? What does Andrew pay? What does Andrew get? And they won't be the same. Andrew will pay a bit more. I'll get a bit more in services. Or he'll pay more and get more in services. I'll pay less and get more. The combinations are random. So it's kind of like where's the communal responsibility and where's the individual responsibility or freedom? and it gets very, you know, heads up, I've suggested we should trial UBI.

36:00We should trial it. We're mad not to give this a go somewhere in some state or region for some period of time and just see if it works. This is the other thing as well. And I'll get people to say, no, we can't do that because it's terrible. But we could trial it. No, it can't work because of this. Why don't we trial it? No, because I just don't like it. Okay, well, then you've told me what you're telling me. And that's, you know, there is a lot of ideology. So I think we should trial UBI. the ideology bit is how much do you how much do I get paid for not working and the extra wrinkle here is a lot of people say and I have some sympathy with this, you fund a UBI with resource royalties so the country as a group the common wealth of Australia, it's in the name we own the assets the oils and coals and everything else on the ground right and so when it's dug up I don't see any good ideological reason why we shouldn't share proportionally in those gains for example right I don't own any more of them you don't know more than I do we're all citizens of Australia some Australian minerals are dug up or Australian oil is drilled there should be some meek will sharing of that so that's kind of the starting point and then you say well how do we think about people who do unpaid work versus paid work does a stay-at-home dad get nothing while his wife goes to work for 50 grand a year.

37:17How much work do you do? What's paid work? What's not? What's justified and what's not? Some people will say family choice, life choice. I should have to pay because you want to stay home out of a kid. That's fine. Others will say stay at home work is just as valuable as paid work. It's our economic system that says it's not because we don't physically have a paymaster who gives us the money. So let's do that. The big one for me though, David, is what you've talked about, which is the friction of changing circumstance and the administration of doing the same. If we had a system around, to your point, the dollar value absolutely matters.

37:47But if we started with somewhere around the current level of probably the aged pension, I would suspect, is about the right level. Dollars lower, by the way, and I think that's kind of unconscionable. It's stupidly low, and I get the incentive thing, but having people starve all on the dollar is not an objective of a good country. So I would start with the aged pension. Here's my proposal. We trial. It may not work, by the way. I'm the first to say, let's try it. If it doesn't work, let's kill it off and move on. I would pay everybody the age pension or the equivalent level. No qualification. So Centrelink goes away.

38:18Why? Because the ATO administers it. So firstly, you take off the entire Centrelink infrastructure completely. There's no qualification for unemployment. There's no qualification for carer's pension. There's no qualification for single parent pension. You don't have to go through a work test. The administration disappears. It takes off a whole lot of stress, takes off a whole lot of cost. And frankly, by the way, paying people a little bit more money had massive health benefits during COVID. So we know that our most disadvantaged and vulnerable were healthier and better off when paid a little bit more money.

38:47It wasn't a little bit more money, but they were better off. So you say, all right, here's the age pension as a UBI. When you go to work, you lose or you pay tax on 100 % of everything you earn from your employer up to that level. So effectively, the pay you're getting from the employer is still at market rates. So if I went to work at a factory for 70 grand a year, and I'm just going to make some numbers that makes it easier. The pension was set at 20 grand a year. For the first 20 grand of income, I pay 100%. And thereafter, I pay something akin to, similar to, the current marginal tax rates.

39:18So if I work, the government's no worse. People say, it's inflationary, everyone's going to spend more money. It's not, because there's no extra money in it. We're just replacing the pensions and the welfare payments with a UBI. And if I'm already working, I simply pay in tax the full value back when I get my PAYG tax done of the full value of the UBI. There's no extra money going into the economy. with the exception of money for people who are currently outside the workforce, in quotes, which is a stay-at-home parent, for example, or a carer who's not getting a carer's allowance or someone who's volunteering but not actually working, you take a lot away.

39:53And it's much, much, much simpler. It's fairer. There's no friction. There's no issue for those people who are moving between work and are not working for whatever reason. Different payments have justified. I've got a broken arm, so I deserve this much disability pension or I haven't worked for six weeks, so I finally get the dole. It just all goes away. I see absolutely zero reason not to do it, not to trial it. Again, it could suck. It could not work, but it makes perfect sense to remove the administration, remove the hassle, simplifies the tax system, simplifies the benefit system entirely, doesn't cost us anything meaningfully more than it would now.

40:25We end up with people who are happier, healthier, and better off. Now, to round your point, it has to be said at a level where people actually do value working. And the reason for that is pretty simple, right? There's only so many taxpayers. as if half of us decide to chuck it all in. The ones that are left have got to pay twice as much to pay our benefits. So there was a natural maths there. But I am very, very, very sure we should trial it. I think it's mad not to. We may well find government's cheaper. If you're a small government, you should be in favour of UBI. If you care about people who are vulnerable, you should care about a UBI.

40:53If you want a more efficient program, you should care about a UBI. If you believe that the common resources of the country are equally owned by all of us, you should be supportive of a UBI. Again, the trial of these things. It is only those who say there's no incentive enough to work if I don't have a UBI who object to this. And I think that's honestly a bit more ideological than it is practical or pragmatic. Because as I said, when you push them, they won't even consider a trial. It's like, well, if you don't even want a trial, what you really say is I don't like the idea of it rather than I don't think it would work.

41:23And that's okay. You can choose that. But then most people should stop pretending they actually really do think it's an incentive issue. And it's ideologically you don't like the idea of someone being paid for doing nothing, which is what their issue really is at the end of the day. Yeah. Yeah. Any thoughts? I'll mention again the Nirvana fallacy here, which I think is relevant to the point, is that, yeah, there are any system that you try and devise, there'll be someone who's going to try and take advantage of it. Humans are humans. And you might say, well, not me, but, well, someone will, right?

41:56Like it's just going to. So if your bar for success is it's absolutely impossible to wrought, then - You don't do anything. Well, you don't do anything, right? So I think that's an important point to make. That's a good point. Yeah, thank you. What really appeals to me the most with it is the, given that it can't be perfect. Yes. And that it's far from perfect now. And that I just tried to look it up there, according to Perplexity, another AI model, there's the services, Centrelink comes under Services Australia, which has a nearly$3 billion budget, right? Right. There's a huge administrative cost.

42:34That builds a lot of hospitals and pays for a lot of payments. If you're a low-tax person, it puts tax money back in your own pocket. Whichever way you want to use this, there is more money available for those things. I just also asked how many people are on welfare as well. And it says, including pensioners and everything, about$4.3 million. So maybe you can do the math while I'm talking. What do I say? Call it$2.9 billion divided by$4.3 million. And again, this is simplistic because there still needs to be some administrative and bureaucratic layer to even administer a more simplistic system.

43:10But that kind of approach resonates with me a lot because it's sort of like, what value are we really providing if the cost of the provision is really inefficient? In a modern world, yeah. And so it means a few, maybe we go from 3 % outright rorts to 4%. Like it's like, yeah, but it's still, but everyone's still better off. Right. And it's fair and it's easier. So I do like that. The question I had for you and not as a gotcha, but just cause I don't, I haven't thought it through is that it's a part of my mind goes to the idea of like the first time owners grant. It's like, well, we should help people.

43:47So let's give everyone this. Yep. When you give everyone a UBI, does it not just push prices up? Cause like all of a sudden it just lowers the floor. Like, I love that. And I don't know if that's true, because I will say this, but what really resonated with me, because maybe you preempted me on this one, but the fact that you mentioned that it wasn't reliant on more debt monetization and monetary injection into the system, because that is a bad idea. Correct. I will push back on that very strongly. But if it's not, and it's monetarily neutral, I'm far more receptive. And you know I am too, Matt.

44:21Monetarily, fiscally neutral, same thing. Yep.

44:26So, let's do the trial, right? I'm not saying it will absolutely work. We should definitely do it. There's no downsides, no drawbacks, no risks. Let's just do it. I'm saying, you know what? Let's give it a... Like, why would you not? If that's not a good idea, see if the new idea works. It's like science saying, I just think of gravity. We could test it. Nah, it's not going to work. We could see if it will work. No, it can't be both. No, that's a terrible idea. So, in terms of the money, the way I would fund it is that, as I said, with the tax thing, every worker pays taxed 100 % for the first X dollars of the UBI.

45:00So if you make the UBI 20 grand a year, I get taxed at 100 % for the first 20 grand I earn from my employer and then marginally taxed onto the current regime thereafter. What does it do? It means if you're working, you don't get the UBI on top of your income. You get it instead of the first 20 grand of your income. By 100 % tax, you're effectively paying back the UBI to the government in that dollar value. Why do it that way? Doesn't that seem more complex? It's not really complex. The answer is because that way you don't have to worry about eligibility. I don't lose the UBI when I start working.

45:26I don't get it on top of my – if I get my current salary plus 20 grand, that's madness, right? I don't need the money. I don't like it. I can find someone to spend it on. I don't need the money. Some other people do. So I'd get 20 grand from the government and pay 20 grand more tax. Right, right. And so that's how it works. UBI actually pays itself back through the PAYG system. There are some wrinkles around those who aren't in the workforce and aren't working currently. So think about the stay-at-home parent is the easiest one, right? Stay-at-home parent, get some family tax benefit. and stuff, but they would get more under this than not because there's no other income we're replacing.

45:58The pensioner wouldn't get more. The carer wouldn't get more. The dole-bloodger wouldn't get more. I sound being pejorative, by the way. Well, they get a bit more because you increase the welfare payments, but they're not getting paid double or they're not getting paid twice. And so the only people who would get paid extra are those who volunteer for a quid.

46:17I'm trying to find an example without sounding like I'm being rude about anybody. The CEO of Megacorp Incorporated, whose wife doesn't work, would get the UBI. And so some people say, well, that's not reasonable. Or the husband of the CEO who doesn't work gets the same thing. There's not going to be exactly revenue neutral. But it would be close enough to revenue neutral. By the way, where's the revenue neutrality come from? In part, the fact we're not paying a massive bureaucratic system. And by the way, more people will work because there's no penalty for going to work at the moment. It's like you lose your pension or you lose your welfare payment when you do a 14-hour work or whatever the number is.

46:50Talk about disincentives. I mean, that's the disincentive. Or the effective tax rate, 66 % on some of those things because, you know, you pick up$1 in income, but you lose two-thirds of$1 in pension payments. That's madness, right? So once you take all that away and say no income test, no work test, no whatever, no garnishing of marginal retention, you get the money. You simply pay 100 % on the tax when you earn it. So it's a no-brainer. So it's not perfect. There are drawbacks. There are benefits. That's life. We're going to stop, by the way, as a society, trying to find the solution that has no losers or no drawbacks.

47:22But to your point, mate, I'm 100 % in favour of this would need to be revenue neutral, not necessarily in and of itself, but offset by other savings or spending if required to make sure it's revenue neutral. That would be absolutely rule number one. And just finding that sweet spot of enough to not starve, but not lose any motivation to work. Correct. The other thing is you've got to remember too is it's like people want to work, right? Yeah, exactly. We'll do something productive, right? Volunteer or - All of us want meaningful, productive experience, however we can express that economically.

47:55I think we all very much sort of do. Gosh, it's a big - Was it David who raised that? Yeah, I was a Christian. We could do multiple episodes on that. So I want to do one more for you, mate. And this is just, again, a devil's advocate back at you, not even directly at you, but about those people. We currently mine coal and gold and iron ore and drill gas and oil. And that money, again, unless you have a different view, my view very clearly is the resource owner of all of us proportionally because how else could it be true? If it's not the landowners, then it's all of ours. And so the person who gets nothing because they're a stay-at-home parent, someone else is therefore benefiting from the extraction and the tax of that resource.

48:34And so you're not wrong when you say, as long as you don't disincentivise working. But on the other hand, there is something of like, well, hang on, if I don't work, am I not still eligible for a portion of the natural resources that, in theory, I co-own with you and everybody else. And not that I'm saying people should be paid to not work or we want to disincentivise working. We talk about productivity a lot on the pod, right? So I'm a big fan of it. But there is part of me which is kind of like that structure just says the person who works deserves more of the resources than the person who doesn't.

49:02And I think on a pure fairness basis, if you just simply said, here is the fund of all resources extracted, as a single example, everyone gets one 27 millionth of the dollar value of that. you know now a lot of people don't work actually get more in benefits because they get parks and police and stuff so i'm not saying they get nothing already i'm just i'm just kind of flagging that whole idea of we kind of say if you don't work you deserve x whatever it is and you're not saying that some people say nothing some people say less some people say more but whatever the number is i'm just i guess i'm just making the point there are things that we it's a bit like the the lucky a very lottery of being born with the right skills in the right place right um if we the the share of our national proceeds that no one has, you know, I didn't put the coal on the ground, you didn't put the oil on the ground.

49:44When it comes back out, everyone deserves a fair share of it as a starting point. That's where I kind of, you know, there's something about that I don't think you should say, well, sorry, we've got some coal out of the ground. You don't get any of that because you didn't work. But I'm a citizen. I'm a co-owner of the country. And you say I can't have any because you don't think I should. There's value judgment and there's structure in that, which presupposes a certain worldview as well. yeah i guess i'd step back and sort of say well i mean really what we're talking about here is sort of like what services and roles do we want government to provide and how we're going to fund it exactly yeah and then you know and part of that service might be a ubi or instruction in a particular way or not yes so that's a good question so am i in favor of a resources rent tax absolutely you've read my manifesto you know i'm big on land tax and consumption taxes and i'd scrap income tax.

50:36I'm really radical, right? I'd go way out there. So I think, yeah, as part of the revenue mix, yeah, above a real reasonable return of investment to make it worthwhile for people to want to dig it up in the first place, right? Just to not to make it too punitive, I suppose. Yes, yes. If we're going to benefit from it, someone needs to do the actual work. So you need to set a threshold there. And absolutely, but it's not about, I hear what you're saying, although UBI complicates it, doesn't it? It does. It's not so much about sort of saying, should we all get a check in the mail? But that stay-at-home dad, for example, is still driving on nice roads and the police will come if there's a home invasion and the fireys will put out my fire.

51:21And if I break my leg, I think I've got... So I am benefiting from it. And collectively, maybe my partner doesn't have to pay as much tax because the government is now raising more money through this resource. So I'm very much with you on the resource thing. It's more complicated when it's about, well, is the return that each of us get a dollar return or is it an in-kind return? I would actually say, I guess all of us bias towards the cash in the bank, but if you could say to me that, no, this is actually a service the government could buy very efficiently, very capably. In fact, because of whatever it is we're talking about, it is a natural sort of monopoly that government probably should control.

52:03But yeah, absolutely. I'm happy to, if that's, if I live in a world where, you know, there aren't people breaking into my house with baseball bats and if something bad happens to me or my family, I can just drive for half an hour down the road and be looked after. Like that's, I'm kind of happy to pay a lot of that kind of stuff. Now when that money is like very badly spent and, you know, I'm angry about it, but yeah, in principle, So I think those service in-kind deliveries, if can be funded, as you say, then yeah, I'm all for it. Sign me up. Yeah. And as I've said, Matt, I'm very, very, very sure we should trial it.

52:40I'm not very, very sure it'll work. I see no reason not to. And I think for all of the potential benefits to rule it out arbitrarily because we might – no, you're saying this, by the way. People who say, no, we shouldn't trial it. Well, why would you not? What good reason could we have not to do it? I mean, time is a flat circle in podcast land. I can't remember what conversations we've had and when we had it. But I feel recently we were sort of talking about, you know, when we had a sort of a chat about land tax and all that kind of stuff, is that I love these conversations because they are deep, impactful, potential, maybe not, but potential sort of solutions or let's call it, not a solution, improvements to what we have.

53:19The frustrating thing is that the dialogue is always at the fringes. Like we're tinkering here and there. We've got this ridiculously complex thing. I'm just, I'm happy for any, this is why I love the question, right? I'm happy for anyone who's going to come forward with a bold vision because we're at the point where it's like fiddling ain't going to fix it at this point, right? We need some big ideas, people with foresight here. And it's like, what do we want here? We want a richer, more, you know, a society that has equitable opportunity. You know, we want to get the best bang for our buck as a society.

53:53We want to share in the wealth of our land. You know, that means, oh, so let's change the rate of negative gearing from four, you know, whatever it happens. There's such little things that just make it more inefficient and more complicated and more bureaucratic, you know. And it's just a shame that the conversations you and I are just having now, not to say that we're right or whatever. It's like no one else in positions of authority are talking about this. And I don't think ever will because it's way too radical to get through. But not that crazy. It's not that crazy. You can imagine a different way and big changes have happened in the past.

54:30Someone nailed a list to a church door one day and look what that led to. So you've got to dream big. You do. I like it. I'm looking forward to seeing your tree ties nailed to the front door of the RBA. or the Bob Parliament or something. Don't give me ideas. I don't know how a nail will go in their glass sliding door, but I'll give it a try. Also, just maybe they'll take a hammer because you may end up spending some time with the Majesty's Pleasure instead. That would be bad. Well, His Majesty's Pleasure, I have to keep saying that. Motley Fool Money. For more, subscribe to the free newsletter at fool.com.au forward slash listener.

55:06Hey, questions from Colin. I actually sent us some podcast ideas, Colin. Thank you for those. I won't go through those now, but I will ask your questions. he says as you have said over the years we all live in our own bubbles and the current media system only helps to strengthen the barriers of that bubble. We are prodded to read topics based on past search results and so we rarely hear or see the bear case for anything we support I am seriously considering going back to buying a physical newspaper so I can come across differing opinions to my own how do you How do you find a reasonable, non-ranting, differing opinion on a stock or topic you support?

55:49And how do you process those differing opinions? I'm going to show straw man again. It's just the honest answer. Like, I'm on the thing. That's the point of it. Just for listeners who are wondering, Andrew doesn't have a contract a number of times he can mention it. He's not catching up on this episode. It just happens to be coming out. Well, yeah, I mean, sometimes, especially, it depends. Look, for a lot of the companies I'm looking at, there aren't that many opinions that are out there. It might be some rando on YouTube or Twitter or something, but that's about it. So sometimes you have to put that different hat on and be the counterpoint yourself, right?

56:27I think that's the best way. Definitely, I mean, I hear the point. Go out and seek it because Echo Chamber is dangerous. I'm just saying it's a good sentiment. It absolutely is, but it's not an easy one to implement. And not just emotionally, but practically, it's sometimes a very hard thing to implement as well. So I think that's why it's just a good part of any thinking, whether you're thinking about investment or just decisions in life in general. Just play devil's advocate. Say, well, I think this, but how could I be wrong? I might be wrong. People who never think they're wrong make big mistakes.

57:01Arrogance is a one way. Arrogance is just, sometimes people will get lucky, But it is very good to sort of, if I can mention it for a third podcast in a row, to check yourself before you wreck yourself. That may well be the motto of the Motley Fool Money podcast. It's catching on. You also check yourself. You can't say you're. Sorry, you're right. Check yourself before you wreck yourself. Yeah, I don't know. How do you do it? So I, this sounds horribly, horribly arrogant and hubristic. but i am but but here's the thing um like uh tim mentioned is my favorite modern philosopher and um he says even the things that you say you know i wasn't lucky i worked hard he said well you're lucky to have the genes that make you work hard right so this is not anything to do with my innate ability other than things i was born with which i can claim no credit for but i'm fortunate enough that uh maybe because i'm not very smart and not very successful but i i'm i'm i'm i'm humble enough to not believe I always have the answers.

58:04And I don't know how I get to that point. I don't know how to tell other people to get to that point. I don't know what it is in my genes or experience or makeup that get me to that point. Well, having worked in the industry probably helps because you do have your nose rubbed in it from time to time, which kind of keeps you grounded a bit, hopefully. Which doesn't mean I'm not an arrogant SOB who has views on everything, because I absolutely do. But there are very few things where I would say this view is unequivocal and unchangeable. I have some views about some of those things, right? human rights democracy there are a lot of things where i would say you you will you'll do very very well to change my mind on those things but everything else you know we've talked about the phrase strong convictions loosely held that's kind of how i try to live my life investing and some of the policy conversation we have i spent a lot of time on twitter probably too much and the i try i try genuinely to discuss issues with people as if i think i'm right but i'm open to feedback.

58:59And so I try not to be dismissive. I try not to be rude. And I try not to assume I know the answer. I try to allow for other people's answers being valid or possibly right. And I don't know how. The hard part of the question, Colin, is I don't know why I'm that way. And it might just be pure genetics and luck and experience and whatever. I don't know if I could make myself that way if I wasn't that way. And by the way, the fact you're asking the question means you're already that way yourself. Because if you're not that way, you don't ask the question. Very few people ask, how could I try and be a bit more wrong?

59:31How could I find someone to disprove what I'm talking about? That is a really, really unusual skill slash attribute to have because we're born with egos. We don't want to be. The other thing, you mentioned being the industry ram. I reckon, again, because I'm speaking of contractually obligated, I mentioned behavioral psychology for the 85th time this month, let alone this year. the little book of behavioral investing it's called by James Montier I will highly recommend that is the best way you know the best way to drop to be less arrogant less hubristic is to realize that you use the phrase shave down apes Ram to realize that's what we honestly once you have it once you look at it and go huh so if I'm like that how could I then be arrogant enough to believe I had all the answers and no one else could be right you know what and my brain's playing tricks on me all the time and I'm a victim of my own experiences and I'm a victim of the endowment effects.

1:00:24I'm a victim of availability bias. I'm a victim of recency bias. Why? Because I'm human. Not because I'm not smart or too smart. Not because I'm, you know, not capable. I am because I'm human. Because my evolved brain is the same as your evolved brain, the same as everyone else's evolved brain, which has these shortcuts that actually have become, you know, in modern world, short circuits. They are the things that actually stop us from being as rational and reasonable as we want to be. And I suspect that that combination of experiences of like, gee, maybe I'm not that smart and capable or whatever.

1:00:54If everyone else has got issues, why would I assume I don't? And you've got to put the ego aside. Again, when someone says, I'm very humble, and someone says, you're proud of that? Yeah, you're damn right I'm proud of that. But if there's anything I am proud of is being able to kind of stay humble or stay, I don't know, I'm deliberately saying the same thing. I'm staying, really trying really, really hard to allow for, When stocks go well, my starting approach is they've gone well so far. I hope they continue to go well, but maybe they don't, so I'm not going to take that for granted. Once your ego takes over and you want to claim all the credit, you're in trouble.

1:01:30Sorry, long answer, Colin. So how do you do it? You start by saying, I want it. And once you do want it, then you're okay because that's how you do it. Really simple things, by the way. This sounds silly, but on Twitter, there is the following feed and there is the for you feed. Never, ever, ever use for you. For you is the algorithm. with them. Following is just the reasonably chronological history of people you follow. So do that. Engage objectively and openly with people with a different opinion. Ask why rather than disagree. Make the point respectfully so that people who are engaged with you can continue to engage.

1:02:02I am really, really, really lucky on Twitter. I've got a great group of followers who people tell me all the time, I don't always agree with you, but I kind of appreciate the way you communicate. Now, I'm not saying that to wrap myself. I'm saying I've got people would follow me who disagree. It's not about me. It's about the followers, right? So people will then say, hey, but what about that? What about that? Or why do you think that? So that's kind of the starting point. Fear is the other one on stocks. How do I find differing opinions? Because I'm scared of losing money. And so the best way - The best way to be wrong is that there's also the ego component to it.

1:02:34It's like, do I really want to say what I think? Because what if I'm wrong? Yes, yes. You know? So there's that. Any more for you, Matt? No, I think we've said it. But just, as you said, if you're aware of it, that's the most important step. And be your own worst critic. Can you do a Bitcoin question in five minutes for me? I can try. All right. His second question says, oh, sorry, actually, I missed Colin's intro because I was skipping over the suggestions, but he started with, to Jacob Marley and Ebenezer Scrooge, bar humbug. I will leave it to you to decide who is who. He said, One stuck in the chains of tunnel vision focus on money and profit, the other accepting the chance for redemption through the happiness of others.

1:03:19First, the obligatory groveling at the feet of my saviors. As the clock ticks over to a new year, I look ahead to the probability of a self-funded retirement later this year. Well done. I feel my own chains dropping away as I type, and this is mainly due to your magnificent advice, humor, wit, and guidance along a volatile path to history. To victory, sorry. That might be one of the best intros I've got. That's why I had to go back to it. Here's your Bitcoin question, mate. My second question, Ted Colin, may lead to the longest pod machine episode in history. Especially you're launching it at this point of the pod.

1:03:48Yeah, it's ambitious. Well, I don't think it's... Again, this is... No, Andrew, not why is it the best thing since smashed avocados. Assuming Bitcoin eventually becomes a widely accepted currency. My question is, what infrastructure and what regulations need to be created and by whom to allow us to use Bitcoin for daily transactions such as supermarket shopping. How would I pay for milk in Bitcoin? Now, I don't know if that's a long question or not. No, it's not. Structurally, I thought it was, yeah. There's a really good article, old one, by a guy called Andreas Antonopoulos. He's one of the OG sort of preachers of Bitcoin.

1:04:23A super smart guy. But he makes the comparison between the phone network as it was back in the day versus now. And he's trying to get to this idea of decentralization. And when you have a centralized system, whether it's for telephone messages or internet messages or whatever, all the innovation has to happen at the core. And it's hard because these networks tend to sort of be monopolistic. It's hard to run on a series of all these different things. So change is very slow. And we eventually move to a dumb system in the middle, which just does one thing, but it does it very, very, very well. And that's what Bitcoin does very well.

1:05:04Without getting into the technicals of it, what Bitcoin does is say, this is the truth. I think that's the simplest way I can say it, right? This is the truth. The transaction speed won't be the fastest in the world. Settlement speed won't be, well, actually, it's pretty damn fast. You know, the fee structure is not going to be the best in the world for buying a cup of coffee. but we will be able to offer you confirmation of settlement and knowledge that this is the true ledger of everything. And that's kind of a big deal because at the moment we rely on that happening at the core. But when you do that, you then find that you push innovation to the edges so people can now build on top of that.

1:05:46The perfect analogy being TCP IP, right? It just sends packets of data around the internet. It doesn't know if it's a music file or it's a sound file whether it's an email, it doesn't know what it is. It just says, I do this. I will guarantee you send these packets of data or they will arrive at the other end. That's all it does. Super simple, you know. And imagine an internet where it's like, no, we have to have a centralised network. We're sending which packets to who and they were going to confirm it. It doesn't work. And ironically, the phone network is now voice over internet protocol. It is run on top of the internet.

1:06:21And what has happened since then? We've had Skype. We've had, you know, Facebook. You've had an explosion in innovation in terms of communication that you could. It was just getting like answering machines and call waiting and stuff on these other phones was actually a big deal. Oh, yeah. Not because the phone companies were inept, but they just had, they were trying to do too much at the base layer here. And this is why altcoins will never work too good. But we do this and we do that. It's like you're trying to do too much. And that's not where that needs to happen. You need to make sure that this thing just does that one thing.

1:06:53That's what it does. And so we already have solutions. There's things like Liquid. There's things like Lightning. These are just other networks which are like Bitcoin in the sense that they're open source, that they're not controlled by anyone. They actually peg into them. It gets technical. But what they are is they're innovations that solve for certain problems. So it's super, super fast and super, super cheap. It doesn't have the same level of assurance, but it's still 20 times better than any bank, but on a relative basis. And then you find that, oh, okay, that's pretty cool. And so the reason I'm saying this is because the question is what infrastructure needs to be built.

1:07:29The beauty is no infrastructure needs to be built. I'm a kid in my mom's basement in Zimbabwe. I can build an application that runs on top of Bitcoin. I can now participate in a value transfer protocol that is global, open, permissionless, and I can build an app on that. And if someone finds it valuable, they'll do it. and they can have Bitcoin that they got through any other means and now we can all interact with each other rather than some center council of elders of Bitcoin that decide what you can and can't do on that network. So banks can plug into it. Multinationals can plug into it. Kids in their basement can plug into it.

1:07:59You and I can create an app on it. We can integrate it into our other app that does this. We've got a marketplace thing. Maybe we've got a social media thing where now we're just streaming zaps instead of likes or I'm giving microtransactions for things. It just opens up the world. in terms of financial innovation just explodes. And ComBank can choose to opt into this and they will. And ANZ will too, because it's like, think about the plumbing that they now embark on. Like you transfer some money to your mate in New York. There's like 12 billion steps in between that, right? And it's super clunky.

1:08:31And even then the bank itself between its counterparties and other countries and as their intermediaries takes months to kind of settle before. And we just, it works because it's the best system we've had until now. but it's very clumsy and it means that there's very little innovation. Why is it that it's used to – do you remember when we were a kid, making an overseas phone call was the most expensive, ridiculous thing in the world. I remember you had to call the operator first. Can you please call this number in America? I had an aunt in America. You'd call the operator. Could you please connect me to this phone number?

1:08:59Yep,$30 a minute. What? It was insane. Now I can FaceTime anyone anywhere on the planet for virtually nothing, for virtually the cost of electricity, whatever my monthly internet plan is. So imagine that, except not just voice, not just data. We're now doing value. And then people go, oh, yes, but the banks will never use Bitcoin. So you're thinking about it too narrowly. There is Bitcoin, the currency that operates on that network, but there is also just the ledger that can be made use of it. So banks might just sort of say, listen, I'm just going to use it as a payments rail. So I get my Aussie dollars.

1:09:34I flick it into Bitcoin at the exchange. I send it over to New York. They flip it back again. I just got rid of 12 middlemen and its final settlement's super, super instant. And I don't even give a stuff about the price of Bitcoin. Who cares? Because I'm buying and selling it virtually instantly in two different jurisdictions. Yeah, yeah. It is such a – sorry, you got me excited. But it is such a profound thing that people miss. And it's just like, oh, well, so no one's going to use the dollar anymore. It's like you're thinking about it in way too shallow a dimension here. If this is nothing other than just a payments infrastructure, public infrastructure that is available to everyone on the planet in real time and boasts like 100x in terms of orders of magnitude, more security and settlement finality, you can't stop me from spending.

1:10:23You can't knock me out of this network. It's huge. So quickly, the last question is like, so what about the regulatory stuff? That's a wave of a pen. That's a wave of a pen. And it seems impossible, but I would look where we were a year ago today with the environment in the United States, what the SEC was doing in terms of crypto, to use that horrible term. And today, it's gone 180 because it's law and legislators can and will never inevitably have to sort of change it. The banks will fight it because it's not, but they will be forced to accept it at some point. And then they'll realize that, oh, yes, it's a thousand times better.

1:11:02So just back to Colin's question, because it was a nice round the kitchen, but I just want to come back to Colin's specific question. It sounds probable that we won't ever buy milk at scale using Bitcoin directly. No, no. Look, again, this is the other one where people go to, it's like, I can't do this thing that I can do right now, so therefore it's useful. You don't have to jump to 100 years in the future, but let's go to that point where it's world reserve currency, every country is adopted, just for fun, right? I don't want to get into that kind of debate. absolutely absolutely you can buy milk on it we are already but not directly with bitcoin for what you're saying on the basis of it'd need to be some other network on top of that because the world couldn't all be buying milk using bitcoin we don't have time to get into the technicalities of it but bitcoin is what's being transacted on lightning, liquid, there's others of them that are out there there's still no middleman there's still a lot of the assurances that are there So I've done it just yesterday, actually.

1:11:59We got a gift card. Boop, boop, boop, press the button, arrived. It cost me one cent in transaction fees and it happened instantly. So the world can do it. Will, Willis and I have to agree on which app or protocol. No, no. That's the brilliant thing. So I use, for the sake of argument, I use ProtonMail and you use Gmail. Yep. You can send me an email. I can send you an email. Right. Why? Because both of those sit on the SMTP protocol, short message transfer protocol. That's what email is written on. It's one of the very early protocols of the internet. So anyone, any email server, any email client will always be able to interrupt.

1:12:39And that's the mind blow is because now, no, you can download Wallet of Satoshi. I'll use the Moon Wallet. Someone else will use a Phoenix. You go onto the App Store and search Bitcoin Lightning Wallets. There's like a thousand of them will come up and they're all interoperable. So again, to my original point, you push innovation to the edge. And now all of these different things, and it's like, what do I want to use my Bitcoin on? I can think about doing that with a bank account. Like, how long is it going to take me to open up 18 different bank accounts, right? And I can download an app, and I'm there.

1:13:13And it's like, I don't like this one. This one's a bit too slow, or it's a bit too close. I don't like the user interface. I don't want to use that one. Transfer it over there. So I know this is an impossibly, well, maybe it's not. I assume it's an impossible answer question because it requires too much futurism. But to Colin's presumption or Colin's kind of setup is we are in a future where Bitcoin is a widely accepted currency, either replacing the dollar or as acceptable as the dollar with some sort of real-time translation or a mature Bitcoin price which doesn't move, whatever we assume here.

1:13:41And I grab the milk off the shelf and I walk to the counter and I say, I'd like to pay with Bitcoin, please. Yep. Tap here. Right. So it's a, so you, and it would be the app you've downloaded. And Woolies would have their own preferred lightning wallet set up structure. I know it's bigger on a corporate level. It'll just be whatever their FPOS machine is. I'm sure they'll integrate it at some point because they have to. Right. And so my choice of lightning wallet would be the same as whether I'm choosing, I'll use, I know it's not the same, but let's assume it's any, any card on the Visa network.

1:14:14Yeah. I might have a Combank Visa card. You might have a MasterCard. I'm going to have American Express. We're both going to Coles. I'm on American Express. You're on MasterCard. Our friend's on Visa. Completely different providers, but they all interrupt. Now, incredibly centralized oligopoly that you've got there, by the way, which is interesting given that a lot of talk at the moment with transaction fees and the like. But yeah, that's the beauty of it, right? Right. I don't care. It's an open product. Woolies will know if it's real Bitcoin or not because if it's not, it'll be rejected. It just won't be accepted.

1:14:44And I don't need you to do it. So here's the thing that I like to remind people of. You're already living on a digital currency right now. Who carries cash around? We might have 50 bucks an hour wall of it. We are all tapping all the time. It's exactly what's happening now. And under the hood, there are different card providers. There are different banks. There are different counterparties within that. This is just a different architecture and infrastructure that is just super, super more flexible and open. And you know what will win? Whatever the market chooses. Whatever provides the best service.

1:15:21You know, I've gone through a dozen wallets since I started mucking around this. I really like Strike. I think Strike's a really cool wallet, you know. It's got compromises that you make here and there if you really want to get into it. But it's just super easy wallet to use, you know. And it doesn't matter. And your day-to-day life is going to be exactly the same. You pull out your phone and you'll tap. There you go, Colin. There is your answer. Not in five minutes, but not too bad for you, Ram. That was pretty good. It's so exciting, this stuff. I think all the listeners can tell. The biggest frustration in my life is that it's still – I think people are tired of it because they've lived through these bubbles and cycles.

1:16:00So before, it's like, oh, it's this bloody crypto thing again. And all the same talking points come up and it's like, there's something really big that's happening here, right? It's actually a really big deal that's beyond comparison to tulips. And the question from Colin there really gets it to a big part of why it's a global infrastructure for the world that's going to actually unleash, I think, a lot more fairness and productivity. Anyway, short version rant. Colin, you have my eternal dislike for making me make the last question of 2024 about Bitcoin. Of all the things we could have talked about, we had to talk about bloody Bitcoin.

1:16:42Bookending nicely, by the way, the last couple of years, because we started last year's very first episode was the Bitcoin episode, as Ram has mentioned. Well, hopefully people listen, because 2024 was a hell of a year for Bitcoin. There you go. There's that pride before fall moment. Yeah, that's right. Time stamp it. Bing, bing. There's the bell. There's the bell. We're at the top, people. Listen to the episode until you know. Look out below. Exactly, exactly. Fools, thank you for spending an hour and 17 minutes I've got on my clock so far with us. Most importantly, thank you for spending 2024 with us.

1:17:14As I said at the top, this is our very last episode for the year. Please party safely, party responsibly. One of my most favourite, I can say that, former colleagues, Chris Hill, used to host Motley for Money US, where we stole our name from. and he said his old man used to give him advice. He said, always be careful driving on New Year's Eve. He said, because that's the year. Whenever you're driving, it's the professional drunks that are out there. On New Year's Eve, it's the amateur drunks. So please be careful on the roads. Please party carefully. Please come back next year. We don't have that many lessons we want to lose any of you.

1:17:48We also love you and we'd like you to be around. So do have a wonderful New Year's Eve. Enjoy bringing the year in with style and safety. We look forward to speaking to you next year. That's right. That's it for the year. I've given up. I'm not going to do any more podcasts this year. I'm out. Insert dad joke. I'll see you next year. Thanks for listening. Full on. Yeah, thanks for listening. See you next year. 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.

1:18:20Subscribe to the free newsletter at fool.com.au forward slash listener. The Motley Fool operates under Financial Services Licence 400691.