Mailbag: incl. Is one business responsible for inflation? February 2, 2025

23:27Again, just to the size of the capital we're talking about here, the SMSF will, depending on who does it and rah, rah, rah, you know, two, three, maybe four grand to sort of set up. and the annual tax compliance and that. If you're dealing with a million dollars in super, it's a very, very small fee. Yes. And it gives you full control. Now, if you've got 50 grand, it makes no sense because those fees are just going to, percentage-wise, they're just going to make it completely worthwhile. So again, it does depend on that. But if it is, it depends. It really depends on the rate of return that you think you can get to justify the fees.

24:00But I think the usual figures that get kicked around are sort of like it starts to make sense at 3, 4, 500K. Yeah. With the proviso, you have to want to do the paperwork and choose your own stocks. And Brad's asking for his father who may or may not be particularly financially savvy. So make sure you align your strategy with whatever level of interest and expertise you bring to the table. Yeah. And if you are focused on income, just to come back to property for a second here, you know, and I'm really trying to be objective here. but when the average net yield of a property is two and a half percent and you're saying, actually, I just want the income.

24:38I mean, there are better options. I'm not just trying to be negative on property for the sake of it. There are better options out there than that, right? Again, once you account for all of the agent's fees, the rates, the maintenance and all the other kind of stuff that people like handily sort of forget when it comes to it, you will find that you would get a much, again, if income is the big focus here, you will find much better yields at, I would argue, comparable and probably even lower rates of risk if you look and you don't have to look too hard. Just don't do it because that's what everyone does.

25:14Yes, exactly. When something just becomes, I do that because that's what everyone else does, it's usually not a great sign. Yeah. And this last question from Bradley is one that really grinds my gears because of the complexity of financial advice and some of the advice is false, the stupid tax laws that mean, you know, I've ranted about this before. So the question is, would you recommend engaging with a professional financial advisor who specialises in retirement planning? If so, what's a ballpark figure for the fees they might charge for advice? The reality is, mate, they're going to charge you three or four grand.

25:43So they don't want - Just cut up your SMSF and buy an index fund. Right. Well, again, you've got to make sure that's the right strategy, right? Sure. We're kind of back in that. You don't pay twice. You don't pay for the advice, then pay for either your own SMSF or something else. So here's the... I don't know the answer, Bradley. He's my answer. And the reason I don't know is because the question for you is when you get more than that in benefit. And you kind of can't know until after the fact. To answer, if you're 50 grand, there's almost certainly not enough benefit to engage a financial advisor.

26:11If you're a million bucks, probably I would pay that for insurance. I would pay that to know that I knew that I had set myself up correctly. Not because I want to pay that amount, just because I figure, you know, gambling a million bucks, hoping the strategy is right, is probably, you know, I'd pay the insurance to make sure I'm doing the right things with the right structure in the right way. And it depends on the financial advisor. Right. Anyone between that gets tough. What I would say, and this is not going to make financial advisors happy, go to a financial advisor, tell them you want advice up front, structural advice, but you're not going to put your money with them.

26:46In other words, it's just a consultation. What should I do? Not what can you do for me? Because you don't want to pay, speaking of fees, The last thing you want to pay is advisor's fees on top of whatever superannuation fees you're paying. And you will. If you go with an advisor, they will say, right, I'll do this for you. You'll pay them fees. You'll pay fees. And again, not necessarily even meaningfully, unreasonably. Part of the problem for financial advisors is the law is so stupidly complex. The rules, the 60-page statement of advice, it's stupid. It's so dumb. Anyway, so that's why I can't tell you.

27:17Like it's not just a boilerplate template anyway with some blanks filled in, you know? Does anyone actually read the damn thing? No, and this is... Okay, quick side tangent. Governments are stupid and bureaucracies are stupid. And the reason we need a statement of advice is financial advisors have a best interest duty and they're obliged to, legally, otherwise they'll lose their licence, do certain things. And that's not... So they're following the law. The problem is that all the colleagues needed to say was, you may not receive any money from anybody else except the client. It's literally a one word.

27:50It's a one sentence. piece of legislation. And you don't need a best interest duty because who else are they going to be acting in the interest of? You don't say to doctors, look, I'm actually a doctor for a thing. I've got a sore foot. I'll provide you a 60-page statement of medical advice. Why? Because you don't need to worry about the conflicts. They're there to fix your foot. The lawyer, imagine going to a lawyer. Here's a 60-page statement of legal advice saying what issues and risks I've taken and what I considered when I did it. Why don't you need it? Because you're the only one paying them.

28:18And yet financial advisors don't get personally paid kickbacks and other things, but they get soft payments, you know, take for holidays here and there. The dealer groups get paid kickbacks based on what funds are recommended. So there's a whole lot of soft pressure there. Cool and normal. Totally cool and normal. Nothing wrong with that. No bad incentives whatsoever. I would say, I'll just double down on your point here, I think. Go on. And again, I'll say this at the beginning. I would say 90 % of the people who work in the industry and I work in are scumbags, right? So people in glass houses, right?

28:49Right. But, you know, the financial services industry and financial advisors, there's some brilliant ones out there. There's a lot of really, really, really, really bad ones out there as well. So I think if what you really want is what you said is I want advice on structure. What's the best thing that I can do to set up? Don't tell me what you are not a stock picker. Yeah. Right. You are not a hedge fund manager. You are not a what you know that your skill set is really focused around understanding the law, the legalities of the situation, the different structural options. That's really great advice, right?

29:22They will know the, they should know the ins and outs of all of that kind of stuff and set you up in a way that's really good. And then when they say, by the way, you should go with this fund or that's like, I'm not here for the specific asset advice, but I am here for the structural advice. Thanks for that. Yep, absolutely. So, brother, I wish I could give you an answer, mate. Try and work out for yourself whether you think paying three or four grand would cover, you know, is a reasonable price to pay based on the size of the super and the range of the outcomes. By the way, to Ram's point, just really round this off.

29:51Talk about SMSF. You can buy an SMSF, sorry, start an SMSF and just invest in ETFs anyway. So it doesn't need to be super complex if you don't want it to be. You can keep it as simple or as detailed as you want to. Plenty of people will say, oh, it's just too hard. So you can also, by the way, go with something like Australian Super and just choose one of their member options and choose ETFs yourself. So there's lots of ways to do it. It's stupidly complex. The law is an ass, as they say. In this case, it's the legislators of the ass and it's basically about financial advice should be on one page.

30:20Anything more than one page means the tax laws are screwy and that's exactly what happens. So the fact you can maybe make more than the financial advisor would cost you is the problem, but it's also why I can't give you a straight answer to whether you should or not because it depends. I mean, you asked the question about SMSF and not, right, or super and not. If you have invested, pick a number, a large number because it's easier. If you've got 100 grand a year in income inside super, you pay no tax. Outside super, you'll probably pay a marginal tax rate of 25 % or 28%, something like that. Average rate.

30:47I mean, that's 28 grand a year, right? Getting that decision right? Yeah. For 28 grand a year's worth of saving? Yeah. Yeah, you pay a financial advisor any day. And that's why, unfortunately, I can't say don't do it. I'd love to say don't spend the money. It's ridiculous. A quick anecdote to finish this off, Ram, actually. I've told this story before, but many, many, many years ago when I was living in Sydney. Oh, gee, how long was that? 10 years ago. I met with a financial advisor from one of the major banks. I don't know how we ended up, I think he was in the area or met on, wouldn't have been Twitter at the time.

31:18Anyway, whatever it was. He said, hey, can we have a coffee? Yeah, sure. Had a really lovely bloke, really guy. He basically, I won't quote him verbatim, but effectively said to me, you're right. The financial advice stuff is way too complex. Yes, it's conflicted. Yes, it's awful. But how else do I feed my family? And that's kind of, you know, unusual honesty from the industry. And it's that sort of stuff that is, you know, on one level it's human nature right well i'm not going to put myself out of a job unnecessarily speaking of phil lowe's we do on friday um you know am i gonna am i gonna say well sorry honey i'm gonna go work stacking shelves at woolies because i was a financial advisor earning six figures but i realized i was doing dodgy stuff now at a principled level you say well of course you should do that um i think you know the reality is nine out of ten people would say oh yeah i get it i'm not really causing you mentioned on friday about the politicians telling themselves the lies right that's what you do uh so this guy was at least self-aware enough to realize he was telling himself a lie, but kind of didn't see himself having another alternative.

32:13So anyway, that's just a, yeah, be very, very careful. I'm going to start selling methamphetamine on that basis then. Like that's just. Right? Right. Okay. Let's go to a question from Jay. The letter J. Not necessarily a J. It might be a Jason or a Jane or someone. Jay. Hushcott and Ram from the other side of the pod machine. Thank you, Jay. It's a must listen for me every week. You guys do an awesome job of breaking down investing in a way that's both smart and entertaining. Which one is which? Am I the answer to the smart one? We're, you know, polymaths in all of these domains, my friend. Don't restrict yourself to just one attribute.

32:50First question says Jay. Do you see any problem with owning two competitors in an industry? For example, Zero and Intuit or Polynovo and Integra? I suppose if the total addressable market is growing or large enough competition isn't a big issue, but in a winner-takes-all scenario, are you better off taking the chance on picking the right winner or just by buying both and increasing the chance of holding the eventual gorilla? Ram? Well, it depends. I have to throw that in there. I mean, I said no very quickly there because if that's the only consideration, then no, it's not enough. But, you know, what are the dynamics of the industry?

33:29Is one growing really rapidly and one stuck in the past? You know, are they both very entrenched and dominant in a virtual duopoly? Is it just not clear who's going to be the ultimate winner? And you're just trying to sort of hedge your bets until one emerges and then you're going to sort of sell down one and double up on the other as that story plays out. It depends. So as a principle, no. You know, so this is not me. You know this is not me. But if I liked the Australian banks, I wouldn't have any hesitation in owning two or three, right? Like if I thought they were just objectively cheap, competitively advantaged, a lot of potential for hanging around in the future and generating a lot of cash.

34:09And it's like, yeah. And Westpac's cheap and NAB's cheap. No, I'm not going to have a portfolio that's just a bank's. I need to be properly diversified, but I wouldn't restrict myself to just one if there was some really good options in there. Now, collectively, it might represent, I don't know, pick a number, 15 % of my portfolio. So I'm still diversified. but if I just can't, if they, if they all look good or a couple of them look good, then yeah. And here's the beauty, right? Like as the situation changes, I can change my mind. That's the beauty of it. This, this is too often. I think we as investors, we go, I have to make a decision.

34:44And once it's made, that's it. The die is cast. I said I was going to buy X, Y, Z, X, Y, Z is what I will buy. And it's like, no, you can go any moment go, yeah, I made it. I've changed my mind and press three buttons and you're out. I know there's tax considerations potentially, and there's other things as well, but it's so easy to do. And as I said at the start, if the situation changes, if the facts change, if your reasoning change, why wouldn't you change your mind? It's the only sane standpoint that you can take. So yeah, does that help? It does. I've got two thoughts in my head as always, and as always, they are the rational and the behavioral, which aren't always the same thing.

35:26Jay mentions gorilla, and the gorilla game is kind of the reference here, I think, that Jay's getting at. And the gorilla game, the authors actually suggest buying a bunch and then effectively selling off the losers and buying more of the winners as you go. And this isn't an industry that's rapidly evolving. Yes, it's not in all sectors, but yes. It's not about willows and coals. Yeah, throw all the banks. Yeah, yeah, that's right. But the gorilla game idea is exactly that of working who the next gorillas are going to be, which is kind of, I think what Jay's kind of mentioned, Zero and Intuit and Polynova and Integra, these are kind of, you know, they're kind of new growing businesses.

35:59Some are more expensive than others in that group, but, you know. So I, so, yeah, the idea of buying a basket and then selling off the losers and buying more of the winner makes a whole lot of behavioural sense because it means you're not missing out. You're getting some of the winner. You're making money as you go. You're kind of cleaving off the stuff that isn't working and adding the more stuff that is working. And, you know, winners tend to keep winning. So it kind of makes sense. Behaviourally, that's smart. Rationally, intellectually, you don't have to do any of that. You buy one and then you sell that one and buy another one and sell that one and buy another one as you see the winners start to come out.

36:30There's no need to have held it from day dot because on day two or day 12 or year four or year 12, you can buy more of or for the first time, the stock that's winning or likely to win. You don't need to hold them all. Now, do you forego some of the gains in the meantime? I mean, yeah, if you don't pay any attention, but you kind of can see the gains will come as the winning happens. So it's very rare you see one, not the other. You don't see gains in a company that's eventually going to win, but it's losing right now. It tends not to happen for, frankly, sentiment and fundamental reasons. So there's no reason you couldn't just buy one.

37:05Same with your banks, Matt. Like, could you buy CBA and Westpac? Yes. Could you buy the one you like better than the others? Yeah, you could do either. It would depend on how you evaluated the circumstances and how you wanted to be involved. I think, Jay, to your point, the difference here is you mentioned winner takes all. And I guess that's the question I would be asking. If it's not winner takes all, then – well, here's the problem, right? If it's not winner takes all, the upside is as much as you might imagine because they're going to be a stalemate at some point. Woolies and Coles are stalemate at a point where had Woolies got 90 % of the market, they'd have much higher margins.

37:37Now it would be a monopoly and government might do something about it. But, you know, if there are going to be multiple winners, the upside is generally not as big. Why is Microsoft so big? Why is Amazon so big? not because they're the only players in the market but they are the dominant players by miles in some of these markets. So just think a little bit about that. I would probably err on the side. Because human nature is human nature, I'd go back to the gorilla game, behavioural stuff, honestly. So what do I think is rationally best? Buy the one you like most at each point in time and change you when you like one better because why wouldn't you?

38:11That's one that's more likely to win. Behaviourally, for diversification and because the reality is we tend to kind of have this endowment effect of, Okay, well, the other one seems like it's winning, but the one I've got is pretty good. Maybe it'll eventually win. And then you kind of, you hold it and hold it and hold it and you miss and miss and miss the winner. And eventually you give up at the top and go, all right, fine, I'll buy this one instead. And then, you know, around it goes. So I would, you could have, we used to search engines on Friday as examples. You could have actually has an AltaVista, then Ask Jeeves, then Yahoo, then Google, and done really, really, really well.

38:39Could you have owned all four, of course, and you would have made more money on Google, but lost money on the others. Rationally is a different answer. So, behaviourally, I think owning a group, when you think they're all going to do well, one might do well. If the one does well, it is winner takes all. The gains you get on the winner will more than offset the losses on the loser in almost all those circumstances, as long as it's early enough. By the time it's Woolies and Coles, you're not going to make enough on Woolies to avoid a loss on Coles. But if you've bought cloud accounting early or, you know, I don't know, e-commerce retailers early, you're lost on pets.com, but you made a squid on Amazon.

39:14So, yeah, behaviorally, that probably makes sense. Yeah, you're always going to feel a bit too late too with some of that approaches. That's also true. Like it's, you know, but once the lead has been established and the moats are sort of deep enough and the category itself is rising, again, I know we've got to come up with some better examples, but Amazon is just such a good example. It's like the industry was much smaller in 2010 than it is today, right? So, yes, they had X percentage of that market and they sort of won in terms of that dominance. But then you've also got the growth of the industry itself.

39:52So when you have a couple of features, which is not necessarily a winner-take-all market, but close to a winner-take-all market in a category that is itself growing very, very rapidly, you can afford to be on the side. Look, yes, go back in time. I'll go and buy it as soon as I can. and I'll know with the benefit of hindsight that that was the horse to back. But, you know, you're betting on a horse here. There's only 100 metres left in the race. All the other horses are a million miles, you know, behind the lead horse. Like, put all your money on that one, right? That's definitely the one to sort of go for.

40:29But it does have to have those characteristics of a fast-growing category in a winner-take-all or a few-winners-take-all kind of market. that's where this kind of thinking applies the most. Yeah, I think that's right. Yeah, don't have much more. Second question from Jay. I said he might be a she. Also, I'm curious about your thoughts on Megaport. We don't get individual company questions very often. With cloud services booming, Megaport's business model sounds pretty interesting. But I'm curious if you have any insights into how the industry works and whether the numbers stack up given the price fall.

41:01You guys seem to have a knack for separating the real deals from the hype. Anyway, just throwing it out there. Thanks for all the great content. Keep doing what you're doing. Jay. Thanks, Jay. We appreciate it, mate. I'll kick off on this one, mate. For me, so a couple of things. Megaport is founded by Bevan Slattery, who has a track record of a serial entrepreneur ship and very successful. That's a big tick in the Megaport's column. He started Superloop and... What was that next DC? Am I right there? Is that his? Definitely Superloop. I can't remember. Anyway, great track record. So a guy well worth watching.

41:37And that's a big tick in a column. I'm a big fan of serial entrepreneurs. Someone who does well once, separating luck from skill is hard. Doing it three times, okay, there's something there. So just be mindful of that in a good way. That being said, I am not as keen a tech investor as some others. And the reasons largely are kind of – oh, here's an authority slash, you know, humble brag. I'm like Warren Buffett, I'm about to say. But Buffett avoids technology because he can't see the future well enough. and that's kind of the approach I take. Ram might be different, by the way, at least a little bit.

42:11I don't know a lot of tech. I own tech companies that use tech. So, you know, for example, I own Amazon. Amazon is not really a tech company. It's a retail company. It happens to be on the internet. It's not really a tech company in any meaningful way, although I guess web services might be. Anyway, so I don't know what the future is for Megaport. I don't know what the competitors look like. I don't know what the pricing dynamics look like. I don't know how the business changes over time. So I don't know. This is easily a too hard basket for me, Jay, which I know is an unsatisfying answer, but it's the most honest answer I can give you.

42:41People like it a lot. As I said, Bevan Slattery in charge is a really good thing, so I like that a lot. But I can't in all good conscience say that I think it's worth buying because I just can't look at the future. What does this business look like in two years, five years, seven years, ten years? Literally no idea. Maybe it's the next big thing. Maybe it falls by the wayside. Maybe it just kind of bumbles along and does okay. I just don't know how you know. I have said I've been wrong on Next DC. We talked about that in terms of data centres just because demand has outstripped supply. And that might be one of the stronger reasons for investing in Megaport.

43:15But otherwise, with limited capital, I'm going to use Ram's phrase before he gets to use it, opportunity cost. I don't know Megaport anywhere near well enough to have enough conviction for it to knock out one of the companies I already own. I just don't, I can't frame a market to use the betting terminology. so I can't work out the right price, so I've got to give it a miss. You, mate? I don't own shares, and for much the same reasons as you, I just – well, let me give it a go at describing the business because I can say the words. Yes, please do that. I can say the words. Thanks, please do that.

43:49I just should have done it, sorry. But then really grokking that is the hard part. So Megaport's like a network as a service is how they define it. So it's sort of on-demand, scalable, private – I'm reading from their website here. cloud connectivity. I did love it by the way, I'll get back to that, but yeah, keep going. So, right. So rather than having like these very big, expensive network setups that you've got to do yourself, it's just like, well, it's a network as a service, use our service, use as much as you need when you need it. And when you don't, you don't pay for it. So it's very, it's a very compelling sort of value proposition that they have there.

44:24Now, one thing you can look at that goes, you know, so it's like, okay, to a non, I'm just not their customer. I'll never be their customer, right? This is a business to business kind of operation. But what you can say quite definitively is that for whatever reason, they're getting more and more customers and the customers are spending more and more. You know, you go back to 2018, they did 20 million in revenue. Last year, they did 200 million in revenue, right? That looks pretty good. The interesting thing about it, what sort of stayed my hand as much as anything else is that over that same period of time until very recently, they were just bleeding cash and making a loss.

45:03So the revenue, the amount of money that they were making at the top line was growing and growing and growing, but the losses were about the same. In fact, on a per share basis, because this is a very capital intensive kind of work, not cheap to build these things. Back in 2018, they had 118 million shares outstanding. Now they've got 160 million shares outstanding. So I like the story. I like the idea. But it was just like, I've also, it's not my first rodeo. I've seen plenty of companies that have growing, growing, growing, growing at the top line. But there's like, show me the money. Revenue is vanity.

45:37Profit is sanity. Cash flow is king, is the old saying. And there was a time when that's all the market cared about was revenue, you know, sort of around the COVID kind of year. And they did very well. And if you look at the share price chart, they've really taken a hit. primarily because of that, because it's like, well, you keep growing, but where's the value? And in fact, so shares are actually down slightly on a five-year sort of basis. Yeah, yeah. Now, and that's what stayed my hand on it. Now, what's interesting and what the bulls will say is, yeah, but you build it and they will come. It's just we build capacity, then we fill capacity, right?

46:12So it's like an airline. I spend an obscene amount of money on a Boeing. and then I hope over the subsequent 20 years, I can sell enough air tickets to make it worthwhile. And if I can, it's a great return on investment. If no one shows up and no one flies with me, it's a terrible investment. So that's the question. They've built it. People are using it. Any money that they've made in from customers, they've plowed back into the business and then raised more money. Now, it may be in the fullness of time, that was absolutely the right move to make. You know, you've seen the demand and although the profit isn't there, it's only because you are reinvesting for future growth and growth that you're very confident in.

46:49And what's interesting and why it's probably a good reminder for me to go back and take another look at this is that in 2024, they made a statutory profit. And you look at the forecast for whatever they're worth from the sell side analysts that have published this stuff, they're expecting that to continue to go forward and to, in fact, to grow. And this is always the hope here. You spend all this money, you build out your infrastructure and you build it to a point where it's just like you can now not only continue to grow your revenue, but to grow it at a point where your cost base is largely set or not going to grow as fast.

47:20And so you get what this is a beautiful thing, two most beautiful words in the English language, operating leverage, you know, not debt leverage, leverage in the sense that my costs aren't going up, but my revenue is going up, which means my net margins are going up, which means even though my revenue is growing, my profits are growing even faster. And if my revenue is growing at 20 % and my bottom line is going at 80 % and can grow at that rate for a few years before things sort of start to, you know, we start to sort of need to invest again, it can be a wonderful thing. And so you do look at it and go, well, PE is 72.

47:52We were saying on Friday how NVIDIA looks pretty full at 48. It's like, well, this is almost twice as expensive as that. But again, if they can unlock that operating leverage, if the sales, and the sales have grown, as I've just said, 10x since 2017, And they continue to do that. And without having to continually reinvest, you'll find that that PE ratio could come down very quickly. So I've sort of given a bull case there. But at the same time, let me be abundantly clear, I do not own shares. And to be even more clear, I do not own shares because I'm negative on the business. But as with you, it's just like, I just don't have, I don't know.

48:31Could be good, could be bad. And I haven't done the work recently. but what from what i know now it's like i just not in a position to make an informed decision and because of that i'm not doing anything um so take take what so what let me let me make it more practical for the listeners that's the big story is maybe you can you can add some more meat to those bones but you have that's the question you have to answer yeah can they can they can they continue to grow without that same bulk up in the cost space and if the answer is yes it's probably a screaming bargain. If the answer is no, stay a mile away from it.

49:07And that's as vague and as specific as I am allowed to be. I like it. I like it. So I'm glad you mentioned the business model because I did skip over that thinking about the broad kind of why I'm not investing in that question. What I love about the, well, if you can, there's a business that Buffett owns through Berkshire Hathaway called NetJets. And basically the idea is they buy a plane and they lease out access to that plane on a number of days or hours per year to a whole lot of people. And it means two things. Firstly, if you bought the plane outright and used it all year, using NetJets is stupidly expensive because you're paying a daily rate that doesn't go anywhere near capturing or it's much, much, much more than the average daily rate of owning the plane.

49:52The reality is though, you don't want to own a plane because you're not going to use it every single day of the year. And so what NetJets does is it says, well, hang on, we'll buy the plane, we'll use it 365 days a year, but we'll lease it out to other people. And NetJets makes the margin, right? So individually, the NetJets customers get a better deal because they want to use a private plane. I know, pick it up 10 days a year, right? So hoping it for the whole year in a hangar is stupidly expensive. It's much cheaper than to use it 10 days a year at a higher price so NetJets can say to them, well, look, we cost, pick a number, $10 ,000 a day to keep this plane.

50:20We're going to charge you 20 grand today. Now, again, for the customer, much cheaper than owning it. For NetJets, they make a margin because they fractionalise the cost. And that's exactly what Megaport do. They buy the computing power and access at a lump sum and just rent it out individually. It's what every building owner does. You buy an office block and then you rent that office block out to individual tenants. You're doing exactly the same thing. The tenant doesn't want the whole building, so they'll have to pay more on a per square meter base if they want the whole building because they don't want one floor.

50:53And so again, it's arbitrage, right? Now, that's a great model to do. A Vocus Communications, for those who knew the business years ago when it was first laying fiber, would lay the fiber, cost a fortune, but they could use that same fiber, rinse it out to multiple people, again, on the same basis. And so arbitrage is all over the place. I mean, it's what retailers do. What does Woolies do? It arbitrages the cost of providing to you the access to meat and butter and baked beans and toilet paper in the same place. You could buy it more cheaply if you bought it in bulk directly from the wholesaler.

51:25The whole side doesn't want that, and you don't want that, so it makes its margin, making life easier, fractionalising access to groceries. Literally, that's what they do. So it's a really well-known business model, a really cool one. The risk there, of course, is that even when other competitors do it, then how much genuine competitive advantage is left? Now, Megapod's probably got some cool tech. It's probably got a brand name. It probably does it better. It's probably got more scale. Maybe it's just on the other side of the CapEx. Right, exactly. Well, right? Yes, which is - Anyone can do it, but we've already done it, And you're going to have to spend five years doing what we've already just done.

51:57Are you sure you want to do that? I mean, massive tangent, this one. Starlink, right? Bezos is trying to compete with Starlink. But Starlink's already got, I don't know how many thousand satellites in the air. So Bezos has got to put all his money up front to try and hopefully get the sort of scale that Starlink's already got. I don't think there's any air in space just to be a patent, but anyway. Yeah, probably. So those things are happening. Yeah, so I love the fractionalisation model. But when someone else does it, there's hurdles to your point, Ram. On the flip side, if and when someone else does do it, what margins are left?

52:26We talked about NVIDIA on Friday. What margins are left to Megapod once someone else is doing it or three people are doing it, ten people are doing it? If there's enough opportunity, someone will try. So what is the genuine sustainable competitive advantage? I'm sure they've got an answer, by the way. If you ask them, they'll tell you. So I'm not saying there isn't one. I'm just saying I'm not sure that I know it or that I'm convinced to buy it at this point. And that's not – I might be wrong, but that's why I'm not buying the shares. I've just been scrolling through the recent present the last time they had a market sensitive announcement was August of last year which is after their full-year results and there's just you know by definition according to the law they just there's nothing they feel is nothing to say there's nothing to say since then but it very much paints again this is the you don't want to be too much like me you don't want to be a cynic on everything right that's just an unhealthy unproductive way to be but you do always need to take what companies say with a grain of salt not because they're evil liars, but because they're always going to put the positive spin on things because why wouldn't they?

53:25But if you take it at face value, scrolling through this, they have absolutely hit this pivot point of crash, crashed right through the break-even threshold, growing really fast. Even on slide 17, they've got a whole slide on operating leverage, as I was just talking about before. Growth is going really strong. Costs seem to be controlled. It's a really good story, you know? And the interesting thing here is, is that the story probably not that different from where it was a couple of years ago. But again, this is why price is what you pay value is what you get. You know, I could have bought this at the start of last year at 15 bucks.

54:00It's the same company further along its transformation and growth journey and now almost half price. So last time I looked at this was about a year ago, which is like, why don't I own it? And again, take everything I say, I'm really on the fly. And And next time I think about this, I might say, oh, I hate it because of this. So don't do anything based on what I am saying. But I am saying that they at least ostensibly look as though they have gone through that transition. And we may now be on a different phase, the next stage of evolution for the business, where before it was very much a cash flow negative situation as they built the business infrastructure out.

54:41Now you're in a situation of continuing growth, but profitable self-funded growth, which is always better from an investor's standpoint. And combined with the fact that now you've got a market that's a little bit less enthusiastic about it as well. So a better company, better positioned at a cheaper price. I'm not saying I'm going to buy it, but I'm just saying it's better. It's better, almost definitionally, better value than it was last year. Much better value than it was last year. Motley Fool Money. For more, subscribe to the free newsletter at fool.com.au forward slash listener.

55:13Let's move on to another question, an anonymous question. Not that it's particularly controversial. Let's go with it. Hi, Scott and Ram. I love listening to the pod machine every week. Of course you do. Thank you. What are your thoughts on the world's population decline? Do you think business profits will drop due to less people, fewer people buying their products, therefore impacting the stock market's long-term growth? Or will prices just increase to compensate? Or am I focusing on the wrong metrics? Am I simplifying it too much? Now, let's break it down a little bit. Population is still growing globally, but the boffins, the people who know these things, say that population will – I haven't seen the updated number, but something like 2050, 2075, the world's population is supposed to hit its peak and thereafter start to decline.

56:02The reasons are many and vary, but largely as people become more affluent, they're going to have fewer kids, and at some point there is an expectation that that will happen. Throw in China's one-child policy and the kind of multi-generational impact of that, just as a starting point, as that population starts to decline as well. Again, demographers, they say demography is destiny. Not necessarily wrong, but destiny might be too strong a view. So the first question is, we don't know whether it'll happen. But if the demographer's the right ram, what does it mean for the world stock market? It's a really good question.

56:34Well, look, forecasts, predictions, they're always a bit tricky. However. Especially about the future. especially about the future. The demographers are in a special kind of league of their own. Demographics are like nothing is perfect, but the crystal ball is a lot less foggy when it comes to demographics. So I think you can probably argue the finer points, but I think the general story is right, that, yeah, we will cap out and then we will probably steadily decline. So it's not like it's just going to – it's very dangerous to take the rate of population growth over the 20th century and just extrapolate that to the moon because it just won't happen.

57:15So two points. One, that's still a long way away. Two, if you're talking about I'm going to invest in planet Earth in an ETF that is so broad as to buy a little part of every single company in the world, yeah, you might have a problem in a few decades. But fortunately, we can be much more targeted. And I'm not saying just put everything in one stock and hope that it works out well. You could have 1 ,000 stocks and still be hyper-concentrated relative to the investment set that's out there. And so what you will find, in fact, let's forget about the future. Let's look at the past. If you want to look, and it's such a crude, horrible, flawed measure, but if you just want to take world GDP over the 20th and the start of the 21st century, what is it?

58:05Three-ish kind of percent? something like that, that the growth has been, somewhere around that. And yet the market's delivered 10 % total return basis on average, like in the US and in Australia, not in the Egyptian stock market, not all the stock markets around the world, but in the developed markets, it's kind of been the story of where it's been. So the aggregate hides what's happening below the surface. And I can say even if the population peaked tomorrow and started to decline and maybe even decline faster than what people thought, barring some horrible disaster that caused the decline, but I just mean slow demographic kind of decline, there will be industries that we don't even, they're not even on the radar yet that will be massive in the future, that will have incredible growth.

58:50And there'll be, and to take another side of that example, let's say that the world does keep growing very, very, very fast. There'll be industries that are still on their way to zero. So within that mix, you're always going to get those that are on the ascent and those that are on the descent. And that's what you've got to do as an investor, you know? And there are a million things to worry about as an investor. The eventual population decline in the year 2050s, 2060 is just so, like, not even, I was going to say at the bottom of the list, not even on the list as a considerate. Look, I get where you're coming from.

59:23It's interesting. It's an interesting sort of thought exercise but zero zero uh care or concern about that um i'm going to add to that to say that i've just don't have google what you're talking um the un reckons the population will peak at around 10.4 billion people but it's not until the mid-2080s i was wrong by about 25 years and then slowly decline to around 10.3 billion by 2100 yeah so not only is it is it probably not super impactful but it's a bloody long way away and I'll be dead by then. Or we've invented like perfect cloning technology. We've colonised half the planets in the solar system and the population.

1:00:03You know, who knows? It's so far off into the future as to not be. I've got to say, I am less confident than you as to the impact at that point. Yeah. Because once you have a shrinking pie, competition gets much more fierce. And so I would imagine the superior companies will still be superior. To what degree they can afford to continue to be superior when markets are declining. You know, we used to, you know my line of growth covers a multitude of sins. I think the valuation, I think the same is probably true of economics and business in general. I imagine if we had the Australian population shrinking at 2 % a year, there'd be more drummers.

1:00:42You know, Woolies is a fantastic company. Does it manage to survive and thrive with 2 % fewer customers every year? I don't know. That feels to me, you know, that's a tough, no, It's not 2 % a year population decline in all certain likelihood. But, you know, is it that good? Okay, if it's not that, is it something else? Now, the disruptors will always do well, but again, the market they're disrupting into is smaller. Do we pay as much for those? I would suspect there are some adjustments to the share market at that point. But again, I'll double down on your point, which is we have the choice still of buying individual businesses.

1:01:13There may be more people. There may be fewer competitors. Maybe less people are investing in that world, right? ETS probably don't do as well because the overall market it might even decline slowly over time, but the individual companies will still do well. So owning the disruptors will be more important, more competition for them, but maybe fewer people investing because they're all like, well, this sounds terrible. We don't want to do this anymore. It's a fascinating conversation because you think about the world resource. I mean, think about Australia as a country, all of our wealth, for example.

1:01:39If there's fewer people, we might not necessarily own formally the pieces, but think about the mineral wealth. If you share that mineral wealth among fewer people, that means we all get a larger share of it. On the same token, there's less tax revenue because it's a fascinating conversation. It's a relative game, though. This is the problem I have with, one, with GDP, but also a lot of this thinking as well. Growth, growth, growth, growth, growth. Growth is good, but there is a character of growth that we want. Again, if I was to put the pure Keynesian sort of lens on here, I would say it doesn't matter what I employ people to do as long as I'm employed, but that'll be growth.

1:02:15Let's go around. It's called the broken window fallacy. I'm going to walk down the main street with a bazooka and I'm going to blow up a bunch of buildings. You know, I'm going to smash every window. And it's just like, guess what? That is going to stimulate a whole bunch of economic activity because those buildings need to be repaired. The glaziers need to do their thing. You know, I need to restock on my grenades and all of that kind of stuff. It's good. There was growth in the economy, but was there, wait a second, when you say growth, do you mean the same thing as I mean when I say growth?

1:02:41Like there is, there is, look at Japan. Now, Japan's got a whole bunch of problems, but one of their big problems is demographics. And by the way, China, there's a glimpse of the future for you because that was a really dumb thing you guys did there with the one-child policy. But yeah, so you're going to face this thing. And yet, and yet, it is one of the highest standards of living in the world. They are still the second or third largest economy in the world. So what do we mean by when we say growth? And you really hit the nail on the head there as well. It's sort of like, well, what I guess colloquially or in common sense terms, what we would mean is like, I don't really care about growth per se.

1:03:27What I care about is that does each person enjoy a higher level of prosperity? And if that is your definition of success, then yeah, who cares if the world population shrinks a little bit and global GDP goes down? Right, right, right. I would rather – no, again, it depends on how this is achieved, of course. But I would much rather live in a world where population caps out at 8 billion people, but all individually we get far, far richer than one where global GDP grows at 10 % per annum. We hit, you know, 400 billion people and we're all like, you know, mad maxing it out in the desert. Like, there's two very different kind of scenarios that are there.

1:04:04I mean, it's actually the per capita GDP conversation we had on Friday. Yes, yes. We have a population growing, but GDP per capita is falling. Now, we can't say just because population shrank, we wouldn't necessarily have growing GDP per capita, but we might or not. And that question is to your point of how we get there matters, and you can't assume that one necessarily is the other. Maybe 10.3 billion people is a lot more economic demand. And the other thing, by the way, the 10.3, the very fact that population is expected to decline implies, I think I haven't seen it actually written, so I can't assert it, but it implies that we're all wealthier, because that's why we're having fewer kids.

1:04:37And so in that environment, there's fewer people, but probably more GDP. Now, again, GDP is not the only measure to your point, Ram, but this is why this is complex, right? Because the number of people, if they all had the same purchasing power as today, if it declined, that'd be bad. If there's 10.3 billion people who had Australia's standard of living rather than China's or rather than Rwandan's, then you've got a very different economic circumstance, which is fewer people with a whole lot more money, in which case GDP goes up anyway. So there's so many different feedback loops here to be thought through.

1:05:04By the way, it assumes we avoid economic and climate catastrophe in the next 75 years in the first place. So hopefully our kids are on it because we're screwing it up. But, yeah, there's lots and lots going on there. Yeah. I mean, what's the saying? In the long run, we're all dead. Exactly. So we are very much long-term investors, but there are limits. There's long and there's long. Yeah. Hey, the other question that our anonymous questioner poses is also fascinating. And I am mindful of sitting off on a rant here, Rand, but I'm going to take the risk anyway. Also, on a related topic, says that questioner, if rising inflation is caused by more money in the economy, let's pretend we live in a fantasy world.

1:05:44If the first business didn't put their price up, would that stop the domino effect of other businesses putting up their prices, wage increases, etc., in turn stopping inflation? I know that businesses will increase price any opportunity they get, but let's just say they didn't. is it the first business that really kicks this whole thing off? Or am I missing something? You're missing something. You have touched on one of my favorite topics at the moment, which is game theory. And no one's going to do that. And why wouldn't they do it? Now, game theory is just a fancy way of saying, I've got to make a set of decisions in an environment where there are other players on the board and their decisions affect my decisions and my decisions affect their decisions.

1:06:30So I'm trying to find these - And you know that, so you've got to make it in that context. It's the prisoner's dilemma. It's like, I'm looking for a Nash equilibrium here is what I'm looking for. I'm looking for a steady state. Like what, given that uncertainty, how am I best placed to act? And here's the beauty of it. There is no collusion necessary, right? It's just rational people acting in rational, logical ways under those circumstances. And when you do that, the person who doesn't increase their prices, it's like, well, no one else is going to do that. Like, in fact, everyone else is going to go, okay, thanks, I guess, you know, and you're going to go out of business and become less relevant.

1:07:09Or maybe, you know, it's like, well, turns out that the market really likes that because it's better value and you lose margin, but you gain market share. There's a whole bunch of dynamics that are at play here, but it's not as simple as has been posited. So that's really important to sort of stress. Here's the other thing, right? And I'm a little bit of a bugbear of mine. Whenever inflation rears its ugly head, you do get the usual chorus of businesses being greedy. And there's some truth to it. But here's the newsflash. Businesses are always greedy. That's something that gets me. People think price gazing started yesterday.

1:07:46It's like, what? They've been press maximizing. We were all really nice. We were really nice. We didn't want to put our prices up. Oh, let's do it now. Should we do it now? Let's do it now. No. Every single day, you will think, if I can put my price up, I will put my price up. And they should put their price up, right? Because again, price is a language, is a signal. It says that there is more demand than supply. And other entrepreneurs and actors in the economy will go, oh, wow, I can do that and make that kind of money. Maybe I'll do that. Guess what? Impacts supply. Guess what? That impacts prices.

1:08:22Guess what? That's how things improve steadily over time. So are businesses greedy? Yes. Are they the cause of inflation? A resounding, definitive, objective, data-backed? No. No, they're not. And whenever I say this to my friends, like, oh, you're sticking up for big business? Like, no, I'm not. They're bastards. I've got nothing but bad things to say about them. But just the things that they - This is one of them, yeah. This is just what they do. In fact, this is the whole Gordon Gekko greed is good thing, which is just such an excellent speech when you really think about it. philosophically, right?

1:08:55It's like a really good, you know, like for human prosperity, it's a really good speech. And that's what it's getting at here. And it's like, if you want, look, I'll just, I'll throw this out there and I'll shut up because I've got the risk of going down a very deep rabbit hole. But if you want to stop inflation, stop increasing the monetary supply faster than the rate of production. Full stop, period, done. So I think you're 100 % right. I also think the questioner is right, but it's the hypothetical that doesn't bear reality. Right. So if no business increased their prices despite an increase in the money supply, then there would be no inflation.

1:09:30So the question, theoretically, the question is 100 % spot on. If businesses didn't increase prices, would there be inflation? No. There wouldn't be, right? Because prices wouldn't go up. So we're measuring the impact of what happens. And if there aren't prices that go up, then no one's costs go up, no one's costs go up, no one's prices go up. It would absolutely shortcut the entire inflation cycle. If all businesses start tomorrow, we're not going to put our prices up anymore. Now think about, you know, communism and other things. They could just say, nope, don't put your price up. That'd be it.

1:09:55People have said, talk about capping rents. Would that stop rental inflation? Yes, by definition. Would they do it voluntarily? No. Should we make them do it? Here's the problem. No. This is a really great question. I say as a former renter, very resounding. I'll explain why in a moment, but go on, go on, go on. So we know from, because one of the crazy about studying history and one of the great failures of not doing it is the opportunity to learn from other people's mistakes. So what did communism do? Communism capped prices on stuff, right? No inflation. What happened? They ran out of stuff.

1:10:25And that's the other thing is because in that hypothetical world, anonymous listener, you posit, what happens if money supply goes up, more people have more money. They buy the same – sorry, the price of things they buy are the same. They can buy more of those things. And if we all have more money to buy more of the things, it feels good for a while, except that we ran out of the things. So Ram talks regularly about capitalism being the allocation of scarce resources. And that's exactly what we're talking about here. So would we stop inflation? Yes. It would stop reported inflation. That would be important.

1:10:55Our cost of living wouldn't go up. Our living standards wouldn't decline at first until we all bought all the things and there was no more things. Why are there lines for bread? Because the price signals didn't get to the baker and to the wheat grower and to the flour miller that we wanted more of those things. That was in their interest to invest, to create more of those things, and around and around it goes. More to the point, there was a price signal and the price signal was, We're going to force you to sell this at a loss. So now the producers, whether they're making bread or eggs or houses, are going, well, if I build that house, I'm going to lose money.

1:11:32Yep. If I build that new mill, I'm going to do it at a loss. I'm not going to do it. Right. And so supply plummets. It's worse, mate. It's even for businesses. They're not going to even bother replacing broken machinery. Nah, why would I? Right. So supply actually falls. It doesn't even say stagnant. Look, we can be mean to the businesses as much as we like, But they're not wrong to say, wait a second, my job here isn't to run at a ridiculous loss to supply everyone. And if you think it is, then you are welcome to start up a business and try that and see how you go. Eggs are too expensive, get a poultry farm.

1:12:06Sell them for three cents a dozen. And unless you have very deep pockets, you are out of business and then you're not selling anything. Correct. And that is exactly the net result. You end up with business going broke. the whole thing falls over. That's why the allocation of these resources is so important. And, again, it's the right question, right? And it was a theory. It wasn't a suggestion. It was a theoretical question for a bit of a head scratch. And it's a great question. But that's... Excellent question. Would it stop the domino effect? Absolutely. Just be careful what you wish for. Because doing that would be a bad.

1:12:39Look, it's a really interesting sort of navel-gazing kind of, well, interesting what happened if this happened. What's really scary is when you get people in very powerful positions who say that, you know, to a news reporter. Potentially powerful positions who want to get to vote. You vote for them because they have the simplistic wrong answer. So my little boy said it the other day, actually. He's not so little anymore, but he's just like, Trump said he was going to lower the price of eggs and they've doubled. It's like, yeah. And then I explained it to him in like three sentences and he's like, yeah, it makes sense.

1:13:09And I'm not saying he's like a genius, but it's just sort of like it is the scary. They're very natural questions. very natural and i think all the really good questions are very simplistic at first it's digging it and picking at those questions to really uncover a very very fundamental important truth and so i really applaud the person who who who is able to sort of say god i might be embarrassing myself here but i'm going to ask this question anyway um even in retrospect it's okay it was a dumb question well it's not it's not right what's scary is that when these questions which have been asked over hundreds of years and some of our greatest minds have thought about this stuff and we've seen evidence and we've seen it play out and then in the year 2025 you still get people saying that we should do this it's like no we should not do this it's it's it's politically attractive and horribly simplistic and horribly damaging and this is why it's really and again mate you're right i'm really glad people are asking these questions because it is literally the the expanding the the simplistic the question seems simplistic is also by the way the answer that's being provided by people in answer form, which is equally simplistic and equally wrong, and at least asking the question is the right way to interrogate it.

1:14:19Not that Ram and I are geniuses, not that we know everything about everything, but if you think that the basic way the economy works is, and I hate this, there are so many kind of, there's all these economists now these days that kind of head nod to a particular ideological view. It just drives me a little bit nuts. But there's one, and again, I think it might be a libertarian, I can't remember, it doesn't matter, is that there are no solutions, only trade-offs, right? And that's kind of – I don't love doing stuff that ends up – I feel like I'm aligning with one ideology or another, by the way.

1:14:51It's not about that particular one just in general. But I use it because it's right. There are only trade-offs. What do you want to swap? Unlimited demand from humans, finite resources. Yeah, totally. And so the impact you have, you can cap rents, for example, right? And we know where rents are capped in New York, for example. There's a whole lot of under-the-table black market rental deals because someone's got something they're paying$50 a week for. They can rent out for$600 a week. I'm making the numbers up. So what do you do? Well, you either live there for$50 a week and you say, I could make a lot of money here.

1:15:19I could go and rent somewhere for$400 a week. Rent my place out for$600 a week. I could pocket the difference. You create black markets. And that's what happened in communist Russia, right? You create black markets for this stuff where on the surface, people feel like it's a good solution. I mean, who could possibly argue against rent caps if they worked, right? Except investors don't invest. Houses don't get built. you know markets black markets happen these these trade-offs these outcomes uh and i by the way the other thing is i i love people who just like i can't i don't want to think about the bad stuff because i just want the good stuff to be true and like i you know i talk myself about being pollyanna a lot of times right and i am it's just what i hope to be true but i try and try and moderate that with reality i get people like oh and okay we'll wreck outside of battery but let's just like try let's just do it anyway because it might it feels better right it's like it just seems like a solution and yes i know there are side effects but who cares just do it and just because you so desperately want that thing to be true you so desperately want to be like at least if i deal with that issue i feel like i've solved a problem and it's so enticing right so keen and you got a politician out there saying vote for me because i will solve all your problems with magic solutions yeah i like a really i have a lot of sympathy for people who just want to like the world's too complex can we just have can we just at least fix this thing and i get it right but it creates, you know, so many feedback loops and so many ripples in that pond.

1:16:36There are just things you want to go, you know what, I wish it was true but it's not and I just have to do the reality thing rather than, you know, the pretend thing because it just, the side effects aren't worth thinking about. They don't work. And sometimes you've talked relatively, you know, the simple and wrong and the complex but right, that kind of thing you talk about regularly, that kind of image, it's just so incredibly important and so true that you've really got to push yourself through the whole, I wish the world was perfect and I wish the simple answers were okay and I wish there were no side effects and I wish this would work.

1:17:06It just doesn't and it sucks and I wish it did. But when you're confronted with reality, you can either choose to ignore it or accept it, but it doesn't make it not real. I really wish, particularly journalists, would be less afraid of asking quote-unquote dumb questions. I mean, you go back a couple hundred years a reasonably intelligent person could be pretty much across all of the major disciplines. That's true, actually, yeah. The knowledge base wasn't, I mean, you could know everything there was to know about biology, chemistry, physics, economics, just, I'm not saying it was easy, but it was one brain could get all the big ideas.

1:17:43In 2025, there's not enough space in there. There's not enough compute power in there. So we have all these domain experts and, and, you know, people will ask a question and then it gets responded with a lot of jargon, a lot of big words, a lot of trust me, bro. And rather than going, well, this is why kids are so brilliant, right? Cause they'll go, what? What do you mean? What? I don't get that. Adults, we got big emperor's new clothes kind of stuff. I am so worried about looking dumb in front of my peers that I'll go treasurer, what about this? And I'll go, well, you know, the per capita, blah, blah, blah, blah, blah, word, word, word salad.

1:18:23And you go internally, the monologue is, I have no idea what you just said. That makes no sense, but it sounded smart and everyone is nodding. So rather than going, I don't understand the question, you go, thank you. And then someone, and I was like, no, no, no, no, you are absolutely legitimate in asking a follow-up question there. And I will bet huge amounts of money that you push far enough, then they won't be able to answer the question. Like, this is like, I don't understand what, it's the five whys. Keep asking why. Ask why five times in response to all of those answers. And I guarantee you'll get even the most highly credited economist, boffin, whatever.

1:18:59It's like nine times out of 10, they'll be like, I actually don't know. Right. And it's the, was it Einstein? I think it was, you know, basically said, if you can't explain it to a 12 year old, you're a fraud. Yeah. And I think it's so, so true. And every now and again, you come across a thinker and it's not like they're the smartest person in the field or that they know more than anyone else. But it's like the Richard Feynman or the Dr. Carl, you know, to bring a local example, just that person who's got that gift of they do understand things well. And because they understand it well, they're able to give you an explanation without all the jargon.

1:19:37Now, within the very pointy and cutting edge of, you know, state of the art, okay, you do need a lot of these words to sort of have an intelligent conversation. But if you can't get the thrust of it across, then you're a fraud. And I would, as I say, I think the more, the older I get, the more I learn about this stuff, the more I just realize that the emperor has no clothes and that, you know, 90 % of the quote unquote experts that are speaking is like, you don't really get it either, right? So all I'm saying is don't be afraid to ask the dumb questions. Be more worried about the person who can't answer the dumb questions.

1:20:14I think that's right. The other thing I think, we'll wrap this up, but the other thing I think about asking dumb questions is also there's a, you're right about kids and adults. As you were asking, I was thinking, the adult answers to things are kind of, there's the flip side of that, which is so resigned to the things that we choose not to do or confront that we kind of cover it up almost for our own sanity, that cognitive dissonance. I drove to the Unblock. We did Tamworth last week. Oh, that's right. I did the Country Music Festival, your old hometown, for the weekend. Did you do a Peely when you were there?

1:20:47I did do a Peely. Especially not in the car because it was blocked off, but I did a Shanks' Pony Peely for you. Nice. Walked down Peel Street. Anyway, when you drive up past from my place, you go past the Liddell and Loyang. Not Loyang. What's that one? I can't remember. Power stations. The coal-fired power stations up in the Hunter Valley. New Newcastle, there? Yep. Yeah, exactly. And it wasn't this time, but Ryan, because we were driving past it, but last time we were driving past, we did the thing two years ago. And my uncle was like, Dad, what's that? Oh, it's a power station. Okay, we've got a pollution.

1:21:18You can see the smokestacks. He said, why do we burn coal? Well, we should stop doing that. And it's kind of one of those questions that hangs in the air, and the answers are all, depending on what side of the ideological debate, oh, we can't do that because, oh, we shouldn't do that because. and it's all just it's all just the kind of idea of not supposed covering up but that idea of like well actually that's probably a good point but it require trade-offs or conditions or change the mind or something and so the easy way to do is just say no no so we need to do that because of xyz you know and it's that kind of it's a different version but same kind of thinking which is not just not afraid to ask answer or ask the dumb questions but the whole idea of like i should accept the status quo because it's more comfortable and i didn't do that i said well mate look you You know, the downside to it right now would be we have to power some stuff.

1:22:04We don't have the replacement energy and whatever. But also I agree with you. Having it and continuing it where we have other options does feel kind of mad when we're kind of, you know, warming the atmosphere. It feels like a stupid thing to do. And it's kind of that simple when, again, the kids' questions are like, we should stop doing that. It's like, I can't. I can't. I can't. Come back. Right? And people are saying right now, let's do this. Oh, we need the power. You can't just turn it off. It's like, no, I know. So let's just be really quick about replacing it. Oh, you can't do that because it costs money.

1:22:33Yeah, it does, but on the flip side, we're burning the environment, and that seems like a bad idea. It's all that stuff where it's just easier to, and that's where the, let me offend some more people, the whole climate change hoax thing, right? It's like, it's just easier to believe. I find it amazing. People find that easier to believe that it actually might be real. And that's the bit that really blows my mind, that given two choices, the idea of some multinational, multi-agency, multi-government hoax is easier for them to believe then maybe we should stop burning coal. And again, that's very political, ideological, and if you're still listening now, it's your fault, not mine.

1:23:07But I just, yeah, so there's the ask the hard question, or, you know, not except the easy answer, but it's also the cover-up of, like, just the whole, oh, no, we can't do that because. Yeah. But really? Like, couldn't we make some different choices? No, no, no, I can't do that. Well, let's think, again, the same idea of ask the follow-up question, like, but why? But why? But why? and that's when you really get some good answers but it's deeply uncomfortable we don't like being uncomfortable as humans we don't like going you know what that does suck and yes maybe it might be expensive but yes we probably should do it anyway that's what people find way too difficult I don't know if it's a cushiness thing or I think a lot of times it's just if I ignore it it will go away I don't want to have to think about it so I don't and it's easy for me to say well if I pretend it's not real then I don't have to confront it that sort of stuff I think is probably where I'm going to oh gosh you keep tempting me to throw I'm sorry.

1:23:56And I won't because of the time. Except I will say one thing. You're always going to add something. Just because it's funny, sad, cry in a fetal position funny. But it's the whenever, because my folks live up that way, and you drive past the power stations and you see the big signs because there's the evaporative towers and there's the chimney stacks. So one is where the carbon dioxide comes out of and one is where it's just water vapor. And there's these big signs that show the cooling towers with steam coming out of it going, water vapor and it's just like what's the message here i don't know what it's it's kind of like it's it's insulting and laughable at the same time it's kind of like yeah so are you is your point that there's no pollution or you're just saying don't worry about that chimney this chimney's cool it's just like what yeah yeah and it's just like some some pr muppet right yes you You know, either some government body or at the power station thought, hey, people might think we're polluting if they look over here and they see all this steam coming up, but it's just steam.

1:25:02Yeah, let's put up a big sign that tells everyone that it's just steam. As if people are going to drive by and go, turns out it's just steam, honey. Like, we've got a water-powered economy here. Like, really? Yeah. What about those chimneys? We're not talking about those chimneys. It is disgraceful, isn't it? At least own it, you bastards. like i did like and look i'm i'm the first to like say don't turn them off right like like i don't want to live i just had a week without power right like trust me i am not advocating for switching these things off tomorrow but to your point it's like there's there's trade-offs there's pathways there's etc etc and the speed matters and other things you can we have these choices we are literally choosing not that's fine but let's at least be honest but one of the choices is let's put a big sign up pointing to the water.

1:25:49Like, okay. Why does so much of what we talk about end up with me thinking about Clark and Dora and towing the vessel outside of the environment? The front fell off Clark and Dora. Here's a point I always make with them and with most comedy. It's like comedy that the only reason that comedy is funny is because it's grounded in truth. That's right. If nothing they said, like if there wasn't any truth to what they were talking about, it wouldn't be funny. It's just like, it's just silly. it's like no it's hilarious because it absolute like it you know it's like the the the jester being the only one who can tell the king the truth because it's cloaked in comedy right i think that's the comedians are the modern version of that oh on that happy note you've got to go and try and fix the internet again or is it i think we think it's fixed don't we well we'll see as i say there is there is i can see a leaf slightly swaying in the breeze so that's not that's not a good sign for where i in that case let's finish this before i have to finish the podcast by myself.

1:26:46Mate, thank you for spending some time with me. I won't even bother sharing the social at this point because if you're listening this long, you know what they are. If you're not listening, then it's a waste of time. But if you do have any questions, feel free to send them to info at fool.com.au and look out for apparently a reopening coming for strawman.com. Until we speak next Friday, Fool on. Cheers. The Motley Fool and people appearing in this program may have positions in the companies mentioned. General advice only. Please speak to your financial professional to understand how it may pertain to your situation.

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