Mailbag, incl: I didn’t beat the S&P500. Should I give up? September 27, 2026

23:29You can always have fewer laws. Oh, we move towards anarchy if we remove that law. Oh, totalitarian if we add another law. It's like, yeah, that's where we live. You know, just kind of grow up a little bit and go, right, we have to set the appropriate laws. You also mentioned the market, mate. There's perfectly good market mechanisms. There are some really smart economists for years who've gone, we can create mechanisms. You mentioned how much. Yeah, what do you do? You say, we've got this field. It's in Bass Strait. It's an oil field. But it's probably oil and gas. We've done the research. We've done the exploration for the most part.

23:54Maybe we haven't. But there's some land there. Who wants it? You guys do. How much do you want to pay me for? We'll do a Dutch auction. Let's start at a gazillion dollars and we'll work down. As soon as someone says yes, you get it. It's easy. The Dutch auction system exists perfectly. And they take all the risk, right? Don't they get it? Yeah, of course. Oh, crap. We spent all that money and it didn't work. Competition prices the risk. Yeah. There's an oil food here. how much do you guys want it? There's three of you in the room. The one who's going to pay me most gets the oil field because of course you would.

24:21What we do now is say everyone can have any oil field you want and you'll pay us two bucks a barrel. In what world is that? It's just my mind. Anyway, should we move on? There's one other factor I remembered as well. Go on. Just back to the question.

24:38Most refineries on the coast, right, and shale oil is not and you've got to get one to the other. Now, one of the things that's really interesting about Seaborn shipping is that it's just super cheap, super cheap. That is so poorly understood. It's a really good point. It's so insanely cheap because you're burning the worst of the worst fossil fuels that's like abundant and just it's awful stuff. It's absolutely terrible stuff. But that's what most big shipping things sort of run on. So what is weird about it was just the US situation, it's actually cheaper to get a tanker from halfway around the world than it is to get it from three states away.

25:18Yeah. Because seaborn shipping is so cheap and the refinery is on the thing. So it's sort of, yeah, so they're all the reasons as to why it is. Now, if there was a dictate from above that said, we are going to only do it ourselves, the market would adjust. It absolutely would. But at the end of the day, you'd come out and go, hey, you know that thing that we use to try and solve high prices? Actually, we're left with higher prices permanently and structurally. There's the irony in all of it, right? Totally. Not that it's perfect. It's not perfect as it is. Only a couple of tidbits on freight just for fun.

25:53I was reading the book Girt, the series Girt by David Hunt. Oh, yeah, you mentioned it. It's half funny. Yeah, it's obviously okay because I mentioned it before. He talks about, I can't remember the numbers now, but it's something stupid like it was cheaper in the early days of Australia to ship wheat from Sydney to London than to get it from tens of kilometres away to the harbour. Yeah, yeah. Like tens of kilometres just because it was, you know, horses and carts and small vehicles and you just couldn't move scale. Right, right, right. And I did just a modern example, Gage Roads Brewing, which I used to own shares and we talked about it for those who've been listening for a while.

26:26I used to own shares in it too. Good Drinks Australia now called. It was cheaper for them to ship empty glass bottles via sea than via train or road because they're in WA. from the East Coast. So the supply chain was literally loaded on a ship, you'd go around the bottom of the country, around the bottom I assume, to Fremantle or Perth, offload it, get it that way, then send a train or a truck across the country. For exactly the reason you said. So just to add another data point to that one. Economics is really the answer to so many perplexing questions. Why do we do it like that? It's like it's cheaper.

27:00That's why. And competition means that the cheapest options win and the cheapest options winning means that we have the best prosperity because our beer and our wheat and our whatever just cost less because it just doesn't. We want things that are cheaper. You can rail against it. But just, and that's fine. And there are, sometimes there are trade, well, there are always trade-offs and the compromises. But just, I think too many people make, sort of put forward these solutions thinking it's only upside. And it's like, well, maybe we want to do it. Maybe we want to cop it on the chin for this particular one.

27:30But just be aware of what you're really advocating here because it's not the slam dunk that you think it is. If it was a slam dunk, by the way, we'd do it. And we wouldn't do it because someone told you, just like people would naturally do it because it makes more sense for them to do it. And they've given more value to their potential customers. And so they'll take, like, as I said, the whole thing is emergent. The whole thing bubbles up itself. It really doesn't need a couple of idiots in some suits to make some decisions for this kind of stuff to happen. For the record, we're not wearing a suit, so he's not referring to us, just in case anyone was wondering.

28:07No. All right. Let's move to a few questions from Juan, who sends an email that starts with, Dear Scott and Andrew, first, I must bend the knee, pay homage. Should I say homage? What's the appropriate Australian English pronunciation? I always say homage. I'm not that much of a wanker. Pay homage and kiss the ring. Maybe I am, but different ways. To the two financial wizards, speak to which, who somehow managed to dispense sensible BS-free market wisdom while operating as Australia's premier pair of 50-somethings. I salute you. May your portfolio is forever, Green Arrow, your dividends outpace inflation and your partners never fully audit what you spend on your hobbies.

28:47And to wear that, we say one, amen. Amen to that. Oh, don't listen. All right, I've got three Marbag questions for you, running from macro to micro. Let's go big to small. One, this may strap in, people. This may take the rest of the podcast. One, housing affordability. Why do politicians constantly confuse housing affordability with borrowing capacity? Every single measure they've rolled out, supposedly in the name of housing affordability, does nothing to actually make homes cheaper, says Juan. Instead, there is hand buyers more leverage, which, as you've rightly pointed out, only jacks up prices.

29:29The bigger question, he says, is why do we keep falling for it? I don't know, Juan. I don't know. I do think that it's harder, that not as many people are buying it before, just through nothing other than just lived experience. Like there's a great deal of wisdom amongst the, I struggle to sort of say it this way, but the quote-unquote the ordinary person, you know. The man in the street. The man in the street, you know. It's just like people are pretty smart on average, you know, and I think after a while you can only be gaslit for so long before you go, you know what, the first three or four times it kind of made sense, I didn't really think about it, I just liked the fact that someone was allowing me to buy the house or, you know, at least feared that it was allowing me to buy the house that I wanted to.

30:23But I think people have sort of experienced this, the opposite effect and it's being talked about more. So, yeah, hopefully that trick stops working. But I don't, I certainly, I think the, I see a lot of commentary which is, ah, because people are dumb. And I think we like that explanation because it makes us feel, you know, when you have that explanation and you feel as though you get it. It's like there's something satisfying about that because it makes, one, it feels like it explains it and, two, it makes you feel special because you're not part of that, you're not part of the people who vote for it.

31:04But I don't think it's anything to do with intelligence whatsoever. I think it's more to do with the fact that particularly in the modern world we are bombarded with, you know, every single particular industry or field that you choose to point at is very, very deep and specialised and it's just none None of us have the capacity, the mental bandwidth, all the spare time to become macroeconomic analysts, to figure it out. Like you just don't, right? And so we're all just trying to get by. And I think that's why people sort of fall for it. And because it also, let's be real, there is a great flawed, sure, but first level appeal to these things.

31:43I'm having trouble. This person's saying it's going to solve it. They give me more money. It's like, yeah, it kind of lines up in a lot of ways. So, but, yeah, but, you know, eventually the con runs thin and I think, hope, hope probably that we are getting towards the end of the wider population being so, again, gullible is not the right word, but easily deceived. Snowed. I agree with you, mate. The only thing I'd add, one, is honestly, so you sent this in before the most recent bloody stupid policy we had. Paul and Hanson and One Nation saying we could divert some super contributions. We had the Libs then come out and say, oh, maybe we can use the super as an offset for your housing.

32:28It is more stupidity. Here's the thing, I know. This is, I, I pox on all their houses, mate, because not only are they relying on people's ignorance, they're relying on people's desperation in my view. I think there is a really significant amount of cognitive dissonance on behalf of the voters and, frankly, desperation. And I've said this before, but I honestly, my sense from, I tweet about this regularly and the feedback I kind of get, yes, there's some ideological rubbish from people who don't like super or who just want to barrack for their party, but there's a decent minority of people who are like, well, at least they're doing something.

32:59And it's that idea of like even if deep down they know it's probably not going to help, they kind of have to believe it so they can have some hope of getting into housing. And it's kind of like, well, you're doing nothing else. At least this thing is being done. Maybe possibly this might help, so I guess it's better than nothing. Now, it's often worse than nothing, Juan, which is exactly the point you make, but I think honestly a lot A lot of the time people just, they make themselves believe it. They want to believe there might be a solution which helps because the current scenario is so bleak.

33:25And so I think that's the honest answer other answer made is, I don't want to say it. One of my favourite things, the land of the blind, the one-eyed man is king. I think once everyone's given up, it's like what's left. And I think honestly the answer for a lot of people is just, I hear what you're saying, Scott, but at least it's worth a go. Maybe possibly this might help. I feel so helpless anyway. I'm prepared to give it a go. and that is really cynical and really atrociously, you know, they deserve every bit of criticism we can give them, the polly's this is, for preying on people's desperation but I honestly think that's what it is and I think they're getting away with it because people want to believe because they feel they have no other choice than to believe because the alternative is nothing changes in which case I'm completely screwed and maybe I'm screwed more but can I be screwed more than I've already been totally screwed?

34:09Probably not so hey, let's give it a go, which is miserable but I think that's where we're at. Yep, yep. here's one second question ram to the immigration and inflation paradox i'm liking it already you've often called out how immigration gets left out of the housing affordability conversation to me it makes sense he says less immigration means less demand less demand means house prices fall but one thing i've learned from you two second order thinking less immigration also means less workers Less workers, now I have to, one, because I'm a pedantic son of a gun, I'm going to say fewer workers because I can't do less, I have to do fewer.

34:46Fewer workers means wages increase, supply and demand again. Wages increase, upward pressure on inflation. One has to assume extra income will not all be saved. There's an argument that if current immigration levels were genuinely too high for the broader economy, we would have seen considerable increase in unemployment by now. It was near 6 % pre-COVID, he says, and now 4.5%. The big question then is where is the economic sweet spot? Right? No one. Again, no one knows. I mean, this is the great deception of much of modern economics to feel as though that, A, there is a precise answer and, B, that it can be arrived at through deduction.

35:26It can't. You don't know what it is. Yeah. I mean, actually, I think in this case we've got to be, I actually was more one aligned with the first order thinking in this particular instance. It's just like you add more demand without adding more supply prices go up, right? And yes, it's true that more people, more workers is more stuff, but there's also more people consuming that stuff as well. Yes, correct, correct. There's two sides of the ledger that you've got to look at here. Economists are great at picking the side, or commentators, I should say, are great at picking the side that they want, but there's two sides to that kind of dimension.

36:08More people in the country are more people consuming stuff as well as producing stuff. What's the net saving rate there and where do those extra savings go? These are big questions. It's almost impossible to answer. Not actually almost. It is literally impossible to answer. In fact, that's why we do surveys and we extrapolate and we apply some clever statistics, but we're guessing and we're retrospectively guessing well after the fact. And I'm not trying to denigrate the whole process. We do it because what else do you do? You've kind of got to do it that way. But I think partly you said at the start, why don't we talk about it?

36:45I think it's definitely being talked about more, but I think for the longest time too it sort of had a tinge of xenophobia to it and so people would sort of censor themselves for fear of being labelled a racist or something. And it's awfully, I don't blame them, at least early on. Oh, because there's a lot of buffheads who are making that exact point for that exact reason. And the others who then say, well, hang on, the racist xenophobe is saying, I hate brown people, therefore immigration is bad, and you say, I think immigration is bad, or not immigration is bad, immigration is too high. Not only do you find yourself uncomfortably talking about the same things those people are, but the anti-racist will say, well, you're saying what they're saying, you're giving them room and giving them oxygen.

37:24And it's a really lazy argument. But, yeah, I've been lumped many, many times, oh, that's what they're saying. You're saying the same things as pick your favourite neo-Nazi idiot, ignorant group, intolerant group. You're saying the same as them, so you shouldn't say that. It's like, well, I mean, if Hitler's favourite colour is blue and mine's blue, we're not getting rid of a colour, right? We've got to be smarter, we've got to be more thoughtful because if you don't, it creates those very circumstances for those groups ironically to rise because things that can't be mentioned are only going to then be mentioned by people who we don't like, who are intolerant and ignorant and horrible, horrible people.

37:59And you end up with, well, I guess they're proposing a solution and you guys aren't, so I guess I'm going to be listening to those guys. Like, really? Is that what we want? It's mad. Absolutely mad. But, I mean, it's such a shame because it's obviously a factor. Maybe it's not the main factor, but it's a factor. For goodness sake, of course it's a factor. I mean, how can it not be a factor? Exactly. So we're only going to allow Aryan, blonde-haired, blue-eyed, white people in the... It's still a factor. It's still a factor. It's got nothing to do with race whatsoever. Correct. You know? But I think, anyway, that's part of the issue.

38:32And I think all you can really do is just say, well, I'm basing it on this and not on that, and people are going to hear what they want to hear. So I think that's another factor. But, you know, I'm on the record saying I think inflation... Inflation is definitely too high. Immigration is too high as well. It must be. It must be. You know? There is no... We're forming households faster than we're building dwellings. At some point, it's just maths, right? Well, the stat I like is we bring in a city the size of Canberra each year. Right. And where's the next? Yeah, right. We didn't just build a new city the size of Canberra.

39:06No. Now, that was a little bit elevated following a slow period from whatever. Call it half a Canberra. But it doesn't even matter, mate. It doesn't even matter whether it's elevated or not because the reality is we don't have an empty Canberra for those people to go. The elevator thing really, sorry, I know you're not saying this, but gets up my nose. People say, oh, this is a catch-up. It's like it's a catch-up if we've been building houses at those rates all of a sudden. We went, hey, guys, there's 400 ,000 empty houses. Luckily, we've got to catch up with immigration to fill those empty houses.

39:33It's only a catch-up if you've got a gap to make up. It's only a catch-up if you've got an excess supply that you want demand for. It's not a catch-up if there's no supply there. It's just extra demand. It's a nonsense argument made by those who, frankly, for the most part, and I actually kind of half admire their approach, which is just I want to give the intolerant bigots no quarter whatsoever. I'm giving them no room. And I get it. I really, really do. But when you tie yourself in logical knots to the point of being, frankly, just silly so you can pretend you're more tolerant of them or you don't like the intolerant people, it's like you earn yourself more credit by saying, you're right, but also in a way that actually undermines your own argument because people look at you and go, well, no, you're an idiot.

40:15I'm not listening to you at all. I'm not a serious person. You've lost the opportunity to actually be better than the bigots and the intolerant people because you get listened to. As soon as people ignore you, why was it the bloody march for Australia? Because people went, well, no other bastard's listening. That fundamentally is the problem. Yeah. Look, I just come back. In terms of the thing, stop helping. I say it every week. Stop helping. Stop helping. All of this problem is from you trying to help. It's the unintended consequences, you know, the road to hell being paved with good intention.

40:44Yeah. You know, we would have had a correction 20 years ago if we just stopped helping and it would have sucked and it would have been painful, but housing would be much more affordable and be a much firmer footing and it's just how it is. But we denied reality, we interfered, we manipulated, and we continue to do it. And then it doesn't work, continues not to work, and then we go, let's do that, more of it. I don't know. You throw your hands up at a certain point. As I say, I think it's wearing thin, so hopefully the penny will drop more broadly, but I don't know. Just stop. Stop. Markets have a way of correcting.

41:17That's what they do. That's what they do, right? Yeah. Just to the point, the question about wages, so I just want to cover something that really quickly gets a bit boring in detail at some point. Not for you one, not for me, but for other people. You made the point about demand. And this is the other thing, right? If you remove supply of new workers, that's true. You also remove the demand of those workers and those families who come, and that's also true. And to Ram's point, we don't know exactly where that line is. Maybe it's slightly inflationary in general price terms. Maybe it's slightly deflationary in general price terms.

41:47I would happily take either of those scenarios, as much as I hate inflation, if we can deal with house prices. If I'm going to pay 2 % more for everything else, but young people can buy a house for the first time in 30 years, I'll do that. I'll take that trade any day. Now, I don't want that to be the case, obviously, and for all, et cetera, et cetera. But if we're – you mentioned before, mate, everything's trade-offs. If we're doing trade-offs, if I don't know where exactly that net result of prices is going to be, consumer prices, general prices, but I know or believe that it's going to have a really significant impact on housing, then you bet.

42:17I will do that every day of the week because it's a much, much better or less worse outcome for our kids than pretending that we're going to – who's all the time? We can't do that because, you know, we might have fewer workers. Prices might go. So what you're saying is you want to trade off your cheaper bread for their house. Sorry, young people, you can't have a house because I'm worried about the bread prices going up. So is that what you're saying? No, no, no. Well, that's kind of what – that's the only inference, right? So, yes, if you've got to make a decision, that's where it is. Can I push back on the inflation?

42:43Not what you're saying but just the general idea that it's like there's more people chasing the same goods and therefore prices go up. It's true. It's absolutely true. It's hard to deny that. But there are two types of, there are prices going up because demand is running ahead of supply. But let's think, let's unpack that. What do you do? Let's go with a bread example. As a baker, what do you do? I'm like, fantastic. I'm just going to be taking these extra profits. Or do you go, or does someone go, I'm going to bake some more bread? And there's a supply side response. But one happens before the other.

43:17But you let that run its course and the cure for high prices, I always say, is high prices, right? It fixes itself. Actually, it fixes itself in two ways. Being more expensive means that it reduces the incremental demand because it's more expensive and it signals more production. I'm a pedant on this and I know not everyone agrees, but I don't call that inflation. That is a price signal rippling its way through the economy and doing what it does. I would class inflation more as broad-based and systemic and never going back again. And so let's say that we invite a whole bunch of people into the country and that all of a sudden pushes the demand for bread up because, you know, the bakeries around the country are only geared up for a certain amount.

44:02Yes, it pushes prices up, but not permanently and structurally. And we can label it whatever words we want to use, but that's not a problem. That's not a problem. That's the economy doing what the economy does. That's markets meeting supply and demand and finding where demand lies and making sure. That's very, very, very, very different to pumping ungodly sums of money into the banking sector and then into housing, which is just a one-way street. Do you know what I mean? Like both eventuate a rise in prices, but one is self-corrective and healthy and natural and one is a perversion and a one-way street and bad.

44:44And so it's a subtle point, but it's sort of like that's another reason why we have to, Michelle, if you're listening, Michelle B, like there's differences between those two increases in prices, but we treat them all the same. So we just had inflation come out recently, right? And it's just sort of like, oh, consumers are spending too much. That's the only narrative that's going around there. It's like there was some study out the other day. It was like actually about 30 % of it is oil prices, which got nothing to do with demand changing, right? So it's a war in the middle. It's got nothing to do with consumers and too much money whatsoever.

45:20The other 30 % to 40 % is increased government spending through deficits. So at best you've got 25%, 30 % of this price to blame greedy consumers from wanting too much. Yeah. And yet we look at it and go, oh, prices are up. I guess we've got to increase in interest rates. Like, whoa, whoa, whoa. You're misunderstanding prices changing with structural inflation. I feel like I tie myself up trying to make this point. But do you get where I'm coming from? I get where you're coming from. It's hard, mate. Yeah, I'm less semantic around the definition of the word inflation. I know that mantras and Austrians are particularly keen on the differences and I think it's...

46:00Matters. I think we've passed that point of words change meanings over time. We can go back to what used to be known as that. I don't want to prosecute the argument other than to say, I think... Well, then we can call it inflation, but we can call it different kinds of inflation. I think that's what I was going to say. I think your underlying point is absolutely right. There are two types and two sources of price increases. Let's avoid the word inflation in total, right? And so you're 100 % right. You're a million percent right. I still... And the only reason I have sympathy for Michelle Bullock, again, I know you don't like the RBA as a concept, as a structure, but given the job, she can't control oil prices, she can't control government debt, and she's told to control inflation.

46:34It's like, well, I guess I put rates up. And I don't... I also don't... I don't love the... Yeah, I mean, I get it. I think anyone ever blames the consumer. But it's that idea of, you know, that the solution, the air-quote solution is imperfect for all the reasons you've just talked about. We've talked about GST or superannuation as alternatives, as ways of trying to reduce demand, given the constraints that she's got. But we've also said very clearly and very frequently and very loudly, government spending is a massive chunk of the problem. And Michelle Block's been very clear. The international has been on top of domestic issues, and now she's either wrong or she's right, but let's assume she's right, at least in her evaluation, even if we disagree with the tool and the structure.

47:11And that is until you change the local circumstances, well, here's the thing. If local inflation was under control, the oil price spike would be uncomfortable and unwelcome, but not a big deal. And so it's the on top of problem. And if you can't control that, then you're left with, do you change consumer activity or do you change government spending? It's like, you know, again, to your point, mate, which I'm 100 % with you on. It's like when we're saying, well, government's been like drunken sailors, I guess it's up to you mortgage holders, you're going to get whacked again. It's like, but those guys over there with the blank checkbook are still, I know.

47:41Yeah, they're doing all the damage. Right? But the thing is, Bullitt can't change it. So back to the question, I was going to make this last point. One, you talked about unemployment. The honest answer, mate, why there's no increase in unemployment is something like 80 % of the jobs that have been created in the past few years are government jobs. So we're not, and I'm not going to get to the market, you know, stay out of it, suffer from RAM necessarily, other than to say, market-facing jobs, private industry jobs, they're not gaining in the way that government jobs are. Most unemployment gains has been government.

48:13So, yes, honestly, unemployment would be higher now without the government money, not direct public sector jobs, that's part of it, but indirect government spending, things like NDIS, for example, and let's not get back into the NDIS as a concept, but the jobs that have been created in the NDIS and to run the NDIS for, yes, government workers, but also the contractors and service providers, That has been massive. And so the government spending has absolutely not only made the inflation problem worse but also masked unemployment growth, which is great for those people with jobs, by the way. And this is the other thing.

48:41I'm not saying it's bad necessarily only bad because those people have got jobs. You want to say there's 1.5 % of people, yeah, you should be out of work because government shouldn't have spent the money. It's like, well, that feels a bit rough too. Now, I don't think the government should have spent the money, but I'm just making the point that none of these are costless decisions. People say, oh, government should spend less. It's like, okay, how many more people are unemployed? How many more businesses will fail because of that? Businesses would be fine if government didn't spend. It's like, well, maybe they would.

49:06And long-term, to Ram's point, maybe it resolves itself. But let's not pretend that cutting government spending is victimless. Those people that earn incomes, they go and spend at the fish and chip shop and the dress shop and on Netflix and the local gym, they're not doing that when they lose their jobs. So, you know, these things do absolutely roll through the economy. But to answer one, the unemployment numbers, almost certainly, in fact, almost entirely, are government propped up. It is, and again, probably kicked the head of the roll. I'm not saying government jobs are bad. I'm just saying we're not seeing the market responding.

49:36Statement of fact. Yeah. We don't even need to wrap it in a moral judgment. It's just, these aren't, hey, I cherry-picked some data to make an ideological point. This is from the ABS, the government service. And they're doing their job. And this is where all the jobs have come from. And I've had this, I've found myself many times in this sort of thing where people, oh, you know, I don't know about that. And it's like, well, this is the, I would understand it because particularly these days it is easy to sort of cherry pick and find, I will just find the boffin that has the chart that proves the point that I want to make.

50:15Or characterize someone who makes a different point as somehow being evil or horrible because they want this to happen or that to happen, yeah. So I'm just using mainstream data collection. It's used to inform the government. of these wonderful institutions that go and, you know, give us information on which to base the decisions. And yet you feel as though when you quote some of these numbers that you need to, oh, but, and this and that, and no, no, I'm really a nice person. It's like, no, it's a statement of facts, right? We're allowed to say facts. And sometimes you don't even need a, there's not even a moral dimension to it at all.

50:48It just is, you know. The sky is blue. I'm sorry if that triggers you. It just is. I didn't mean to cause offence. But it's also why we have to, Matt, because we're back to the immigration thing, it's why we feel like we have to, it's for exactly that reason. And that's kind of why it's such a big deal because we're all saying, well, hang on, if this doesn't work, then, you know, I'm being tarred with that brush. I don't want to be tarred with that brush. That's not a very nice feeling. And it's all that stuff, which is just so annoyingly shouldn't be necessary, but that's why we tie ourselves in knots because otherwise you do get misquoted or tarred with those brushes and that's just a crappy place to be.

51:19Motley Fool Money. For more, subscribe to the free newsletter at fool.com.au forward slash listener.

51:29All right, let's move on. Last question from Juan. Am I any good or should I just go fishing? Says Juan. Now, I'm going to say, Juan, you have asked us to give you a compliment here. So I just know that I know, Juan, before I ask the question. I've been investing for five years, he says. The first two were an absolute disaster. We've all been there. Riddled with every mistake in the book. But I managed to break even through pure luck. Three years ago, my investing life was reborn thanks to U2, countless books and podcasts. Since then, and I say this with a massive not-meant-to-be-a-humble brag, warning, sure, sorry, not sorry, he says in brackets, my portfolio has put up a 50 % return.

52:09That feels fantastic against the ASX, plus 26 % over the same period, but it leaves me trailing the S &P 500 up about 75%. So, should I hang out my stock picker's hat, buy an ETF and go fishing? Or is a three-year track record simply too short to judge, especially when benchmarking against an S &P 500 that has experienced an extraordinarily tech-heavy run that won't happen every year? Keep up the stellar work, gents. Long live the podcast. Cheers, Juan. Yeah, probably too short to know, for sure. Yeah. Yeah. Yeah. It also, it depends on how you got those returns. And I think this is where the honest self-reflection.

52:55Now, you said in there, I got lucky. So if that was underpinned because you bought something for a particular reason and for a completely unrelated reason it just went to the moon and saved you, it's like, well, that's great. But you've got to ask yourself, well, the question is, should I keep doing that? Yeah. And if the answer is yes, then it's just like, well, well, it must be something I am doing that is repeatable to a certain degree. But if you're starting out with the premise of, oh, is this complete dumb luck? Well, then you're saying I can keep getting good returns and I can keep getting dumb luck.

53:25And it's like luck has a, it has a habit of changing direction, you know. I can tell you personally that the moment before I step on the rake, I'm feeling pretty good about my returns. and I've done it enough where when I'm in a purple patch, hey, celebrate the win, right? It's why we're here, that you've got to celebrate the victories when they come. But I'm also increasingly hypervigilant of not letting, not getting over my skis as I like to sort of say because it's that point of arrogance when you go, I'm going to start making bigger bets and maybe I'll do a little bit leverage and maybe I'll do this and that.

54:11And it's just like, you know, the number one rule in investing is survival. Because if you get that part right, like just the market itself is going to drag you higher, maybe to a lesser degree than what would have happened in an index fund. But it's very hard not to do okay if you're still there. It's impossible to do okay if you get wiped out after three years. So the first and foremost is always survive. Second is the sort of that honest appraisal of, okay, well, here's the returns I've got. How much of that is noise versus signal? And how much of that could I hand on heart claim was the result of a clearly articulated investment thesis playing out more or less as I expected?

54:55That's fair, yeah. You know? And that just takes honest self-reflection. So only you will know that. If you feel as... Here's the other thing as well. I would say that five-year track record, you said yourself the first two years was really just tuition fees. And that's true for everyone. I put myself like, oh, my God, the decisions I used to make. Probably I'm still making now in a lot of different sort of ways. But it's sort of like just you said yourself going through that journey, you are a different investor in 2026 than you were in 2021. Dare I say you're a much better investor. I mean, it's almost hard not to be a better investor because of A, the experience, and B, all of the education that you've undertaken in the way with the reading and the podcasting and all of that kind of stuff.

55:40So I dare say that the decisions and the way that you make decisions today are very different than you were then. And yet we're using potentially some of the decisions that you made previously as a basis as to where I keep going. So it's very, very, very, very hard. It's very, you know, there's no definitive answer. And, again, one of the things I like to offer as a suggestion for people in this quandary because it comes up a reasonable degree of frequency on the pod is maybe a little bit of both. You don't have to be all in. I'm a 100 % stock picker. I'm 100 % ETFs. I feel as though 100 % ETF is a great starting position because you're in the game.

56:18You're going to go okay. You're going to do better than most professionals, as we like to say, as history and facts tend to suggest. That's right. Well, not making it up, exactly. Not making it up, right? Yeah, yeah, yeah. Net of fees, it's a pretty good approach. And then you just wait for that fat pitch we were talking about before, not necessarily even a fat pitch, it's something that you feel reasonably confident about. I've got a reason to feel as though I'm confident in this investment. Yeah, I think the 3 % position is okay, so I'll sell down some of the ETF and I'll buy it there. And you can wait that direct exposure as a function of what opportunities are in front of you that you feel you are confident about and you do have something that's beyond just hope, hopium, that's going to drive that forward.

56:58And if you can't find those opportunities after an honest, you know, self-reflection and investigation, then it's like, cool, just keep doing what you're doing with the ETF. It's not, gosh, I'm at a fork in the road and it's that way or it's that way and once I head down that path, there's no going back. It's like, nah, nah, mix and match. Mix and match to your heart's content as is appropriate to how you're feeling and the level of confidence and conviction that you have. I think that's right. I think the other thing I would say, well, it depends on what you're investing in because you talk about beating the S &P ASX 200 but failing to beat the S &P 500 in the US.

57:34And it kind of depends on what you're trying to do and where you are trying to do it. There will be some market somewhere in the world that does better than yours for reasons that... I've used the example before. I'm sure we've talked about it before, Ram, and if I haven't, well, if I have, tell me. We talk about tech and oil over the past five years. And any given year, and almost every single year it flips, tech has a great year, energy has a terrible year. And the next year it's the reverse. The year after that it's the reverse. And occasionally there's two in a row where the same trend holds.

58:02And there's nothing magic about the year, and I'm not saying for a second try and swing trade this stuff. Please don't do that. My point is if you own a whole lot of tech, in some years you look like an absolute chump, other years you look like an absolute genius. Why? Because the rising tide in that sector lifts all boats. The problem is the falling tide also lowers all boats sector by sector. Why? Because market sentiment does market sentiment things. So here's the other thing is comparing yourself, if you're playing ASX stocks, comparing yourself against the US S &P 500, it's not it. Now, I'm not trying to say keep investing either, by the way.

58:34I'm just saying it's not. I don't know about RAM. I've lost the S &P 500 as well. I have because it's gone up massively. And, you know, 75 % in three years. I mean, honestly, that's not normal, okay? Just so we're really clear, that's not a normal result. And could you have expected it? I doubt it. Could you have originally picked a portfolio of Australian stocks that had an average of 20 % per year for three years? No. Buffett can't do that. I mean, is it possible? Yeah, someone's done it because they're lucky and maybe they're really smart, but they're probably just lucky. And will the next three years be the same?

59:05Probably not. So you've got to be a little bit careful what you're comparing against and the unusualness of those returns, Juan. I would personally – so firstly, as Ram said, three years are not enough. Let's be real. That's straight up, not enough. Second thing, though, I think the – you see yourself a bogey which is a reasonable return over a reasonable length of time because – I've given the example a lot of times. Tesla went nowhere for five years and then like 10X within a couple of years or something stupid. Like the numbers are mad, right? And so if you own Tesla for that whole – if you own it for seven years, you're a genius.

59:37Hold it for the first five and sold, you've kicked yourself forever. And if you bought it in year six and then it skyrocketed, you're like, oh, I'm such a great stock picker. I picked it and sales went up 100 % or 1 ,000 % in two years. I picked it. I'm so good at this game. And no one could have known when the move was going to start going up or that it would keep going up or that it would go up that far. So, yes, Rams, right, three is not enough. But also I would be inclined, I mean, yes, you've got to compare against the market at some point, but for shorter periods in particular, I'd be comparing myself against an average expectation of the return I thought I would get.

1:00:06So, you know, I'm aiming for hopefully 10 % or 11 % a year. If I get more than that, great. The market's going to do roughly nine. If I can beat it by a couple of percentage points a year for the very long term, I'd be very happy with that. Now, of course I want more, and if I can get more, I will. But if I can't get more than the market over a long period of time, then I'm probably going to say I'm giving it up. Now, over a short period of time with the market, it's really volatile, as you've just highlighted. Is it a good idea to compare myself against three-year runs in – I mean, imagine it was just in – let's go even deeper than that.

1:00:32You did the S &P 500. What if you did the energy sector and it was up 100 %? Is the S &P a bad investment because the oil was up 100 %? If the Kazakhstan stock market was up 300%, is the S &P 500 a bad investment and you should have always bought Kazakh stocks instead, you can really tie yourself in knots comparatively. I know you're not saying this one and I'm not having a go at you at all, mate, but just it's really important to step back and kind of go, let's allow for statistical noise. Let's work out the signal. Am I – are things going well? And the other last thing I'll say, mate, and I'll throw you again, Ram, is when you're evaluating it, evaluate yourself not against the return only but against the expectations you had, right?

1:01:10I was – I dumped my money on Woolworths because they went into pot stocks, but I bought it because I thought they'd sell more baked beans. I'm not a good stock picker. I just got lucky, right? Or conversely, Woolies are down 50%. Even though they are selling more baked beans, I thought they would sell more baked beans. I still think they will but the market doesn't like baked bean businesses right now. Am I a bad investor? No, unless I had a 12-month, unless I was trying to trade Woolies and had a 12-month price target and said I'd make money within 12 months because people would buy baked beans.

1:01:36It's just, so I would say firstly, three years are too long, five years at least. Secondly, measure your investing against a reasonable benchmark and eventually the index is that benchmark over enough time. But just be careful of that. I would use kind of an average return, particularly over those shorter periods, rather than an arbitrary benchmark that happens to have done better than another one. And then measure yourself against your thesis. What did I think would happen? Did it happen? That's really your – we call it stock picking, how it is, but it's really business analysis plus valuation.

1:02:11And so ask yourself, did I get the business analysis right? Is that bit working? Am I good at that? If I'm not getting that right and I happen to make money, I got lucky. If I get that right and I lose money, I'm just unlucky. If I get that right and I make money over time because I'm right, which is most likely to happen, then you probably should keep doing this investing thing. That's probably how I'd frame it up. Well said, mate. Let me just double down on that other point you make. It's choosing what to compare yourself with. For me, it's always the business, you know. I'll give you a really neat example because a lot of people will be familiar with it.

1:02:44Let's go back two years. I'm being selective with my dates here, but just to illustrate the point. Two years ago, you remember all these GLP-1 diet drugs were sort of like really coming into vogue. Anyway, ResMed just ate it, you know. No one was going to use sleep apnea anymore before, but there's plenty of investors I knew that were like, you know, It's kind of still a good business and maybe that's too simplistic a thesis. And I actually think revenue is going to go up over the next couple of years. And I think profit's going to go up. So, well, let's have a look what happened. Well, revenue went from$7.07 billion in 2024 to$8.2 billion in 2026.

1:03:25Pre-tax, pre-interest profit went from about$2 billion to$2.7 billion. Nailed it. Oh, wait a sec. Prices didn't go anywhere. Like, the share price is actually down a little bit in two years. Now, the person who was myopically measuring themselves just against the share price going, I made a mistake. It's like, well, was the bet that the share price was going to go? I mean, ultimately it is. I get that. But actually what the bet was, more sensibly framed, was I think the business will be a bigger, more profitable business in the future and I think eventually the market will recognise that. Now, maybe you could argue the market had too much growth priced in two years ago and just returned.

1:04:00But there's a real palpable difference in what you are saying I expect to happen, right? And I think there's lots of examples of that as well. I can actually say, at least anecdotally, personally, that a lot of my best investments have been that. Where it's like, I actually think, I think it's a good business. Well, it's certainly not as bad as the market things. I think they're going to grow. And you do it and you buy it and they do. The share price doesn't go anywhere. and it's like, well, no, but the profits are going up. What's going wrong? And I'm not happy about that scenario when it's like it's been years I've been in this bloody dog of a stock.

1:04:38It's going nowhere or it's going down and yet the business is doing exactly what I thought it would do. It's a very frustrating experience. But I've got the right benchmark here and not what the NASDAQ has done for God's sake or what the index itself has done or not even what the share price has done. It's like, no, I thought this, it's working, it's actually still working. and I say they've been my best investments because the end part of that story is that it's that Tesla kind of example. It's like nothing, nothing, nothing, nothing, nothing, face melts off. And, you know, it's kind of like, yes, obviously there's a degree of luck when those kinds of things happen, but it's more about just staying the course as long as facts and reasoning remain on your side to stay the course.

1:05:20Even if the share price is telling, no, you've made a mistake. No, nothing's going. Everyone's made a fortune in a video stock. you're holding this like sleep apnea company? Like shares are flat. And they're like, yeah, but the story's not changed. In fact, the story's strengthened because now it's even at a better multiple and that thesis is changed. And again, I'm not pleased. Actually, I'm going to stop saying it. If you're the kind of person who allocates capital on the basis of a thought bubble from a podcast host, you deserve to be separated from your money. So I'm going to be a little bit of tough love here.

1:05:51But hopefully it illustrates the point that share prices alone shouldn't be your benchmark. And it feels as though two, three years, gosh, that's a long time. It's like, it is. Not really. It's really not that long at all. Yeah, exactly. Yeah, I don't think I have much more to add. So hopefully that helps. Hey, let's go to a question from James. Maybe we'll finish with this one. Hello, Scott and Rampage. Jay here. A big thank you for the metaphor madness you give us each week. It's always good to listen front to back and it's helped me a lot with learning about investing. And once I get my ego to listen to my brain, I'll buy ETFs and go fishing.

1:06:31Fair enough. Hey, look, James, work out whether your brain, your ego is writing checks your investing can't cash. Maybe you can and maybe that's okay. If not, yeah, maybe go fishing. Here's the question. I know you're very New South Wales focused. Oh, hush. So you'll have to dig deep here and understand not everyone has an endless housing boom and pokies on every corner. I've got a state versus state question. As a Melburnian, I am concerned. I was going to guess. Totally going to guess Melbourne. It was really funny. This is random. Melburnian is spelt without the O in the word Melbourne. And it's because apparently way back in the day, some Latin scholars, when they were first used Melbourne, decided that if it was Latin, Melburnian would actually not have an O in it.

1:07:14And so they went with a Latin derivation of Melbourne to Melburnian, which is why it doesn't have an O in it. There you go. There you go. You can draw your conclusions about Victorians. There you go. You're welcome, Victorians. They've just sold some stuff. All right. As a Melbournian, I'm concerned of the Victorian state government debt binge, which has no end in sight. Something like approaching$200 billion in debt and financing costs of$24 million per day in interest. Maybe I'm wrong here, but I found those stats in the papers. How on earth does Victoria get themselves out of this mess with limited ability to tax at state government level?

1:07:51It seems impossible. I'm wondering if Victoria becomes an austerity-style backwater at some stage when we finally have to realise our debts. Any ideas of what may occur or recommendations on what could occur? On the flip side, why don't we hear you ranting about WA and how they haven't set up a sovereign wealth fund for their people? Can they even do this? I feel like they should have the best universities, best roads, best paid people on the land with all their mineral wealth. Thanks heaps. Fool on James. There's a lot of Ferraris on those Perth streets. The last time I was there, they were doing okay.

1:08:27I've never seen more 25-year-olds in sports cars in high-vis vests. Like, I think they're doing okay.

1:08:38Yeah, Victoria. Well, here's the thing. It's different to the national debt because they don't have the money printer, so it's a bit more pointed. and the same thing, I mean, look, it's the same set of calculus, really, that you always have to go through here. It's like they grow their way out of it, tax their way out of it, they save their way out of it, you know. I mean, there's only one phenomenon. It's only the growth path that's the nice one and everyone else is like someone's got to eat it. And it's the taxpayer that will eat it, either through, I shouldn't even say taxpayer, more generally, it's just the Victorians will eat it.

1:09:15They'll have less services and they'll pay more tax. I mean, the investments, money was spent that they didn't have, they borrowed, that they need to pay back, and the money that they borrowed was put to uses that aren't providing a return to a loss. It was made. Yep, yep. Someone has to wear the loss. I mean, this is something I'm getting a little high horse here as well. Again, people seem to fail to recognise, politicians more than anyone, that like, you know, once a loss has been made, it's been made. It's made. It's gone. It's happened. Like I like to say with Chopper, you know, no money here.

1:09:52Money gone. There's no, there is no law or regulation or thought bubble or press conference that is going to change that fact. You can stop it from happening again. You can put things in place that try and mitigate, but you can't, you can't waive it away. And so ungodly sums of money have been, and I'm not trying to be partisan here at all. Both, as you like to say, a pox on both their houses. Both stripes of government over many, many, many, many years and election cycles have been spending well above their means and that wouldn't even necessarily be a problem if that was just on incredible investments that had all kinds of dividends, cash and societal and non-cash kind of benefits as well.

1:10:34But any of the, you know, Melbournians I speak to, that certainly seems to be not what people are saying. so things are going to get harder or things that have to get really turned around to such an extent that they'll just grow their way out of it if possible or things are just going to get harder. That's the depressing conclusion. Now, that doesn't mean, again, once you sort of say that, I think we very quickly sort of go to Great Depression era kind of vibes. No, no, no. I'm not saying that everyone's in poverty but they're certainly less wealthy and prosperous than they otherwise would have been.

1:11:11And it is an incredible tragedy and outrageous kind of thing because it was self-inflicted. It was 100 % self-inflicted. Oh, totally. Through imprudent fiscal management. Yep. You know, I was going to say the politicians, you know, deserve what they get. But you can't avoid it. The pain's here. The pain needs to be felt. And that, again, puts people's nose out of joint, but it's just I don't know what else to say to you other than, I mean, I'm going to lend you 50 bucks, you're going to blow it all on booze, and then you're going to never work again. Now, I can jump up and down, so you've got to make me whole and do whatever.

1:11:52I can't, you can't, there's nothing that can be done about that situation other than recognise the reality of it and maybe think twice about lending that guy some money again. Which, by the way, the bond market is kind of doing that exactly right now. It's like, wait a second, my rates are going up. I mentioned Howard Marks later, Missy of Five. It's exactly what he's talking about, right? So anyway, anyway, it sucks and it's outrageous and hopefully future leaders will be more sensible. You'd hope so. I mean, look, for most of our history, we've run fiscal deficits and debt and that's not been a tragedy as much as I wouldn't have done it personally because they've been kept at a reasonable level and growth has been able to keep the impost in check.

1:12:43And so you made the point, mate, of the third option of, you know, maybe Victoria grows its way out of this. And I wouldn't rule it out. It's possible. Possible, yeah. Because economies grow and productivity hopefully comes back at some point. Here's the other problem is, you know, assuming that will happen is the great conceit. You know, it's always happened, so therefore it always must happen, so therefore we should just do it. There is absolutely zero prudence in that and every bit of elevated risk because one day it won't and at that point then what do you do? And you say, well, we didn't expect it.

1:13:10We thought whatever excuse you give, the financial reality at that point is the financial reality. There's no version where you go, actually, no, we're just trying to change our minds and do it differently now. So that's simply the way it works. Now, think through that in terms of the Victorian economy. They could pay it all back now and have a massive increase in taxes. And you mentioned there's a limited amount of tax that they can raise. It's kind of true in absolute sense. In a relative sense, they can get away with raising some more taxes should they choose. I'm not saying they should. Victorians don't have me.

1:13:38But they could do that. Property taxes in particular, fees, licences, rego. There's ways they could do it if they chose to and, you know, that's fine. They could stop spending or they'll cut spending. Maybe some version of one or two. Terrible to Sydney house prices. We don't need that. We don't need all those southerners coming up here and bidding up our prices any more than they would. We could do that. They could stop spending as much, spend a little bit less, you know, put more of that towards paying off the debt, run some surpluses for a while, which is what they've got. Either of those two.

1:14:07would result in that. But that's the thing. If you're going to do it, you need to firstly stop running deficits, then start running surpluses and start paying it off. The third option of growth, you can keep the debt dollars the same way that the economy grows in an environment where the economy doubles in, I don't know, it was a double in 25 years, mate, something like that. At that point, maybe you get to that point and maybe that works. And so there are options. The third is the Goldilocks solution, which is not impossible. As I said, we've done it kind of as a country. The difference is it only works when debt is kept at a reasonable level.

1:14:37that can be outgrown. The Yanks are in a world of more trouble than Superman because they're not going to be outgrown or probably not going to be outgrown, right? And you get to a point where just option three comes off the table in any sort of reasonable way other than flights of fancy and imagination and science fiction novels. That's all that's left. And so that's okay, but that's kind of how you need to net that out. So they're the range of choices.

1:15:02Here's the other problem is they're very politically unpalatable, right? So, you know, we're going to cut spending, but I like you doing that thing for me. Or are we going to raise taxes? No, go to hell and not pay more tax. I'll vote for the other guys then. And this is the Danielle Wood productivity chair. We'll finish off for this, mate, but Danielle Wood, she's great. I'm a real fan. She was head of the Grant Institute. She was really good there. Jim Chalmers appointed her and she could have been excused for being a, not personally, I know she's got integrity, but people in those positions could be accused of being lackeys and doing what the boss says and you gave me the job, so I won't scare the horses.

1:15:36She's been fantastic. She's absolutely called a spade a bloody shovel. And she was out recently just saying, you guys, you know why we don't have nice things? We can't get reformed through because you guys are so untrustworthy. You spend so much time in what she calls grey corruption, the pork barrelling, the special deals for mates, all the stuff that goes with it. No one trusts you anymore. And so as a result, it's really easy for the other guys, the opposition or the opposition of the day, so whichever party, to paint you as the bad guys because look at all the bad things they've done and the general public go, yeah, that's a good point.

1:16:07No, stop them then. We're not going to believe them when they say they want to reform something. And so that's the – and by the way, why is Pauline Hanson rising? For exactly those reasons. So the majors are stupid if they don't listen. They probably won't because they don't care enough. But that's exactly the story. And so for me that's exactly what I think we need to deal with. Yeah. I don't know what I would do if I was treasurer. You don't know what you'd do? I don't know what I would do. Well, I would, look, rule one, when you find yourself in a hole, is stop digging. I mean, that's what I would do.

1:16:39Yes, yes, yes. Okay, I can't go back in time, but I've wasted$40 billion plus on these large-scale public transport initiatives that, you know, have just been so ridiculous. Every construction project is over budget, but it's ridiculous. Correct, correct. You know, so I'd probably stop announcing that, you know, that kind of stuff. You know, like stupid vanity projects. Like, I'm sorry, I'm going to put people off here, but like the Commonwealth Games, oh, my God. You know, we've spent something like 600, Victorians have spent something like$600 million or something, was it, on that? Like, there's no way you're getting a return on that.

1:17:16How many Olympics do we have to go through and we still go, it's wonderful for the economy? And it's like maybe if you've got a very narrow understanding of what the economy is and you look at very, very narrow measures of spending. But they're just completely, they are vanity projects. You know, anyway, I'm not getting on. My point is I would stop doing all of that kind of stuff and I would probably do what I could at the margins. As you said, it's not easy to take away services and increase taxes, but I'd probably at least tweak them. Right, because what else can I do? They're the options. What else can I do?

1:17:51Oh, actually, what I would do, what am I talking about? The final thing I would do is I would make it as easy as humanly possible for enterprises to start. I would give the power to the people, you know, go forth, create, multiply, do what you need to do because the more successful you are, the more tax revenue we have, the more jobs that are created. I mean, I would understand the very engine of prosperity that underpins the whole damn thing. And I would just, I would, and that doesn't mean that you just, like, tear up every piece of regulation and just lase. I'm not saying that, but it does like, I think everyone, all political stripes at this point recognise that the regulation has gone way too far.

1:18:31It's so difficult and onerous to start and run a business and lo and behold, fewer and fewer people are doing it. So I would absolutely do what I could. And all of that might have a chance of dragging us out after another decade or two. And that's the best I could come up with. And what you would do as productivity, by the way, when you say reduced regulation, what you're really saying is let businesses be more productive. And why? Because that means we can grow faster. If we can grow faster, that's how you retire or at least minimises a percentage of GDP some of that debt. I can have a million dollars of household debt now.

1:19:03And if my income goes from$100 ,000 to$10 million, that debt burden is still the same dollar amount, but it matters a whole lot less, right? It's much more payable. And that's what we're talking about when we say kind of grow the debt away. That's effectively what we're saying is that's how you do it. And frankly, here's the other thing. We didn't talk about the intergenerational report this week, mate. I said I was going to finish up, but just to throw that in quickly. And look, forecasts are forecasts. So I want to be really careful here because they made some forecasts in 2002 and that might just have been crap forecasts.

1:19:30So if you miss a forecast, like we say all the time, companies missed expectations. No, no, no, the expectations were wrong. The company would miss anything. It did its job. You guys got the guess wrong. So with that in mind, though, the intergenerational report back in 2002 had some assumptions. And it had assumptions on population, on participation rate, on the unemployment rate and on productivity. And it turns out that 24 years later, population is more than they thought it would be. The participation rate is higher than they thought it would be. So more of us and a greater proportion of us working, so double, double, you know, double modifier there, fewer unemployed.

1:20:07So you go, well, wow, the economy must be massive. That must have been great. Turns out GDP per capita is 13 and a half, no, 14 and a half, $14 ,500 below where they thought it would be. Now, the forecast was wrong. So it's a forecast problem, not an actual problem, except that what it says is we have done an extraordinarily bad job at delivering any sort of productivity even close to where Treasury thought it might be 24 years ago. So, yes, they got the forecast wrong and I'm not – we shouldn't, you know, if I think the economy is going to grow at 150 % in the next three years, that doesn't happen because, well, the economy sucks.

1:20:39Scott made a forecast that was wrong. But I think realistically, to your point, mate, of passing the sniff test, we know that's true. But the size of that is really – And all they did was take the midpoint and extrapolate, which is actually a very sensible approach. I'm not having a go at it. But they didn't pluck an unre... to defend them. They didn't... It wasn't a Herculean assumption. It was like, you know, productivity tends to grow at this amount, so let's just maybe knock it back a bit conservatively and push it forward. It's like, yep, I would have done the same if I had to make a guess.

1:21:08And you would have been right. And that's exactly the situation. So I raise that only because productivity is the answer. And it's, I've said a million times, and I don't want to get back into it in detail, but we can choose to be less productive. If we value healthcare or the environment or law and order, things that don't have economic outputs but make us happier, more prosperous, more satisfied with our lives, have higher wellbeing, we kind of should choose those things. You know, I've talked about before. I hope to be very, very, very unproductive sooner rather than later, right? I hope to retire and retire to the castle you're going to buy.

1:21:38I'll come and visit you. and I'll sip, you know, French champagne in your castle and I'll do absolutely nothing, be really, really unproductive and I'll love every minute of it. So there's nothing wrong with being unproductive or less productive if it's chosen and if it's done from a position of prosperity and stability and, you know. Resilience. Right, great, that's the word, thank you. And so that's perfectly fine and good. But the idea of just making sure we get that bit right, because if you don't, then you end up where we are, which is we've had population growth. We had participation. Those things should have by themselves grown massively, right?

1:22:13But why do we fall in a hole? Because we're not productive. We have too much in the way of businesses doing what they should do. And some of that regulation I'm happy with, more than you probably, mate, a lot of it I'm unhappy with, as you are. And that conversation is the right conversation. We're never having it. Jim Chalmers had a productivity roundtable last year. What came from that, mate? What was the last time you mentioned productivity? Oh, I mean, at the time we were laughing. We almost couldn't say with a straight face. And again, not Nostradamus here. It's like, I've seen this movie before.

1:22:40This is political theatre, writ large, nothing will come at it, fill a few headlines, productivity, productivity, and then we just go back to doing what we always do. I mean, call me cynical, but bloody hell. I mean, you are, to be fair, but you're not wrong. Yeah, that's true. And that matters as well. All right. That'll do us for today. Thank you for listening. We hope you've enjoyed it. Info at fool.com.au, by the way. I haven't said that for a couple of weeks. If you have any questions, comments, feedback, suggestions, if you want to just say nice things about us, yeah, you choose. I'm just saying, if you do.

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