Mailbag: incl. Should I trade options for income? April 23, 2023

0:10Welcome to Motley Fool Money, our very special mailbag edition. as it always is every single Sunday. I'm Scott Phillips from The Motley Fool. He is Andrew Page from strawman.com. The, um, the, um, uh, actually, it's a Profit Island Investment Club, isn't it? Hey. Hi, hi. I'm paying attention. A red letter day. I'm good, mate. What letter though? Capital F? F for finally? I don't know. F for something else. Couple. Yeah, exactly. Hey, should we get on with it? Let's dive right in. No preamble. No preamble. Well, just have preambled. There'll be tangents, but no preamble. Question from Darren. I'm stopping myself saying anything else.

0:52G'day, Scott and Andrew. I'm a long-time listener. Every week, he says, and first-time questioner, also a current subscriber to Share Advisor and Dividend Investor. Thank you, mate. Hoping you can please discuss my question. I regularly invest in dividend stocks and use a dividend reinvestment plan where possible with the goal of never selling and dividends forming a significant portion of my family retirement. I love that, Darren. Typical stocks I invest in are the Vanguard Australian shares ETF, Westfarmers, Beta shares UMAX, Solpats, Brickworks and Sonic Healthcare. Dividends tend to range from between 2 % to 6%.

1:25Here are my questions. One, interest rates are at the top end of the dividend payments I receive. In other words, rates getting close to the dividend yield. At what point should you consider leaving money in an offset account that is not subject to tax rather than adding it to my portfolio? you know what i love about the offset account or just you know old-fashioned paying down the principle is that it's a guaranteed form of return yes it is and tax-free it's pretty that's a pretty one-two punch isn't it that's great it's great and and it just it also means that you've got more optionality down the track because you now got more equity if you do want i mean there's there's no i'm not going to say that it should be no debt or all debt but there's there's a big shade of gray in between there's a big spectrum and i i just love that ability now that is a that is a pretty ordinary proposition when i'm getting six percent in a great dividend stock versus one percent in a term deposit yeah you know but when you start yeah right and but when you start to get comparable rates well yeah i i think it's i think it becomes a more difficult decision of course as someone who never intends to sell and be a long-term investor what you have to factor for this is called the yield trap, which is this idea that we quote dividend yields based on the current price in last year's dividend.

2:44Now you look at the best dividend paying companies, and by the way, the best dividend paying companies aren't the ones with the highest yield. And they're not the ones with the highest yield, because even though you might start off when you buy it, the quoted yield is 2%. If that dividend rises 10 or 15 % every year, your yield on your capital actually goes up and up and up and up. Now that's not going to happen in that other alternative, right? So they can be deceptive and they're more like most things with compounding and this kind of mass, long-term it becomes very deceptive. So you'll get to what we were talking about spiffy pops last week, that idea where share price goes up more than your cost space in a single day.

3:23You can get to situation, I can't remember off the top of my head, I used to be able to quote a few of them where people who had held some great dividend paying stocks for 20 years were effectively getting half their cost space back each year in dividends. Domino's would be that over 10 plus years. I think Woolies might be that over 20 years, for example. There's some good examples, yeah. It's just phenomenal, right? So it's not a black and white thing. I will just acknowledge the listener's question, which is, yeah, it becomes a more difficult choice the higher interest rates go. Well, let me rephrase that.

3:56The smaller the disparity between yields and interest rates. i completely agree uh now it darren's second question is how much of this is behavioral and should i just keep investing for the long term i'm going to use that question to help answer the first one i didn't give andrew that opportunity so jump in later go for it um to my mind so here's the thing right you and i've talked before about investing versus paying off a home loan you know and mathematically over the long term you're better off paying down sorry better off paying minimum home loan because it's not the interest in tax deductible or renting God forbid.

4:31Right, well, that's right, exactly. And then investing. There are lots of things that are mathematically more important. In this case, I actually completely agree with you, Andrew, and I would be mathematically inclined to say it's pretty close to a line ball after tax and with the guarantee rolled in. If you can get, you know, four and a half percent or save that five and a half percent probably in mortgage savings, then you're probably better off. A couple of things are different though. Firstly, your principal as a residence will compound with house price growth, but you're probably not going to recognize any of that value so the money the interest you save is going to an asset that yes is growing but unless you're going to sell on downsides you never really get a return for it so behavior such an excellent point but yes right so behaviorally i would say if you can afford to pay the interest on your loan and keep putting money in in shares just just you're better off behaviorally mathematically it still never makes sense because you can still put the extra money into shares as well as the home loan you know math there is no there is no avoiding the math numbers and numbers and numbers you mentioned last week maths is maths um you know so so that's you know the real honest reality is mathematically there is a best decision behaviorally i would honestly until rate if rates got another one percent then maybe change you change your tune but think really seriously about it because i think it's um i think that's the the behavioral bit is is really what matters uh paying a loan and then investing in growth assets independently separately now you could just pay the loan off quicker and then at that point in 15, 20, 25 years time, you put even more money into buying those growth assets.

5:59That's what I mean about the maths working out either way. But that's what I would do. Question three, should there be... I just want to add to that when you're trying to do the math side of things and base all your calculations, this is the unavoidable reality of having to forecast, right? So there are classic, quote unquote, dividend stocks like Telstra. You could have bought it in 2014, you're getting 30 cents a share. You're getting 16, 17 cents a share now. So it doesn't like, you know what I mean? So you've got to, so often is the case, the answer is it depends. What's the best path? Well, if you can find an incredibly strong dominant dividend payer that's going to compound its dividends at 10 % every year, that's the choice, right?

6:39If you think you're buying that, but you're buying something that's more akin to Telstra's 10-year history, well, it's a very different proposition. So just to acknowledge that point. Theory and execution are two different things. Speaking of which, Darren then says, third question, should there be consideration to turn off the drp and send those payments to the home loan uh again it's it's the same it's the same money either way right it's behavioral entirely if you make one decision event about your first question then the answers to question two and question three look after themselves by definition if money's better in the offset then wherever it comes from it's better in the offset wages or dividends conversely if you're going to try and take a behavioral lens and say well i'll keep compounding because at least i know it's happening now here's just back to my first point very quickly um most people say yes when i paid a loan on then then I will put more money into shares or put money on something else.

7:26We just don't do it as humans. We just, our lifestyles expand. We find reasons not to. We finally can afford the new car. We finally can renovate the house. We'll find reasons not to. So that's why I'm a big fan of behaviorally, just doing the right thing every day, just day in, day out. Don't wait for some future you to make good decisions because maybe you will, maybe you won't. Once you give up that, if you start making bad decisions, you've given up years and decades of compounding. So that's my view. What I would influence for me in this situation It would depend on the degree of leverage I have in my home line.

7:57That's a good point. Yeah, good answer. So if I had paid 80 % of the thing down, I'd be much more inclined to put the excess capital into dividends, right? Because I've just got such a huge buffer there. The interest burden is probably not massive, and therefore the interest savings is not relatively that big. If I've got a 5 % deposit and I've borrowed 95 % of the value of my household, And I'm very much putting as much as I can towards the offset just to reduce that down a bit. And that's purely, I mean, that's actually the worst thing to do from a return perspective if you expect good house price growth, right?

8:30Leverage helps you when things go up. But I would be doing it just for the what if. And I think too rarely do we think about the downside of what can go wrong. And so, yeah, if you're highly geared, shift it towards the offset. If you're not, you've got more scope to focus on the dividends. Yep. Mate, I'm going to ask a question that I'm going to be happy with from Mark P who says, Discord and Andrew, I love your podcast. It's intelligent, educational and entertaining. It's also the best value for money investment podcast going. Thanks, I think, Mark. We need to set up Patreon accounts or something like that.

9:07Oh yeah, we should. You know why we shouldn't do that? Because when no one paid, that would just be depressing. Exactly. Couldn't you pay your account in six weeks' time as I can buy a coffee to share with you? I invest in Washington H. Solpats and just listened to their first half 2023 performance presentation. It all sounds too good to be true, says Mark. And before I forget, everyone knows this, but I own shares in Solpats. Their reported stats are truly amazing, says Mark. Total ROI, return on investment, over the last 20 years has been 921 % versus 498 % for the All Lords Accumulation Index.

9:45By the way, that's the right index to use because you're including dividends there. Solpats has consistently beaten the index over the last 5, 10, 15, and 20 years, and they have 23 consecutive years of growing dividends. I know you're both expert stock pickers who also like using broad-based index funds as a fairly safe long-term Aussie core portfolio investment, but surely Solpats has to be up there among the best long-term performing and broadly diversified shares on the ASX. I'll take that as a comment, Mark, because it didn't say my questions to you are, one, do you know of any other single ASX listed stock that matches the consistent past performance of Solpats and two given the recent performance does Motley Fool still consider Solpats to be a buy he says in brackets sorry I don't have a Motley Fool subscription but I did love your Solpats summary podcast about 12 months ago which laid out the long term buy thesis I'd love to hear your general thoughts on this including Solpats recent performance PS you can mention my name kind regards Mark as I've said Mark if you put that at the end you've got to have your name mentioned so as our listeners know if you don't want your name mention put it at the top of the pod question um i'm a solpac shareholder i'm a very happy solpac shareholder i'm going to show you question one is absolutely are there any single listed stocks that matches the consistent past performance of solpac there'll be something out of that's done better than solpac almost by definition over 20 years something will have just shot the mood probably fortescue frankly i don't know if it's 20 years old but would absolutely smash solpac um csl might be close maybe more than that here's the thing about um solpac and any any listed investment company or conglomerate, by definition, the diversification means you can't do as well as a single company.

11:20Because, well, I guess you can literally in theory if every single one of those components did well. But almost by definition, they've got an equity portfolio. They've got probably four major investments and half a dozen miners. Almost by definition, they can't all perform as well as a single company that'd be listed on the ASX. Even if they were in the iron or game and had other things, a pure iron or player like Fortescue is going to smash them because it was smaller, it got bigger, all that kind of stuff. So, yes, there is absolutely. You say consistent past performance? CSL is probably close, I guess.

11:52It's probably been reasonably consistent, I guess. Any thoughts on kind of comparators, mate? Yeah, they're out there. I mean, kudos to Sol Pats. I mean, it's just an incredible track record. And it's past is, what's the usual refrain in our industry? The past is no... No guarantee of future performance or something? And it's not. It's not. But it's a pretty good tell, right? That's a good start, isn't it? I think every company out there has a good story. Otherwise, they wouldn't have been able to get listed, at least at one point in time. And no matter how bad things get, management, and it's their job, right?

12:28They'll sort of paint the way out of it and the future is always going to look right. But when you've got someone who has delivered and a team of people that have delivered for so long, it doesn't guarantee anything, but it is pretty good. And given the sums of money they're working with too, I think that makes it harder. That's true. What I would say, and again, this just sort of wave my flag for a little bit here. There is, again, I'm very big on small caps and for a bunch of reasons I've talked about before, but they just get overlooked by so many people because they are quote unquote risky and all the rest of it.

13:05And that's generally true. But what I would say is you start venturing outside of the ASX 200 or even 300, you would be surprised at the quality of companies that are out there. There's just two that come to mind off the top of my head. One is called Supply Network, SNL is the ticker. I'm looking at the market now. They've done one trade today worth$300 in total trade value. It's a hyper-illiquid company. Been around for decades. Consistently paid a dividend. increase that dividend every year. They do truck parts and other kinds. Yeah, it's a quote-unquote boring business. But wow, that exists?

13:42I bet you no one on this podcast, there's very few people on the podcast would have heard of it. Another one's Objective Corp. It used to be a very small cap company. It's less small cap now, so I think it's more than a billion dollars. But again, you wouldn't have heard of it. They do software for government enterprises and this kind of thing. Consistently pay a dividend, consistently increase that dividend. In fact, effectively manage their capital so brilliantly well. Buybacks when it's cheap. extra special dividends when it's not, you know, it's just really, really. So I'm not, I'm not trying to shill for those two companies.

14:10And by the way, I don't own shares in either of them. I don't know why. I really, I really love them at a point and I tried to be, oh, they're a little bit expensive, you know, some stupid rationalization. But I just, I just make the point that don't dump your soul, Pat shares, you know, I can't give advice, but I mean, there's, there's a very good reason to hold it, but you would be surprised that we have the luxury of choice as investors. 2 ,000 odd companies are out there. Most of them are mediocre. Fair share of them are absolute rubbish. But there are plenty of diamonds in the rough that will do what Solpats has done and more and more.

14:45And that's the fun of stock picking. You got to go out and find them. Yep. Nicely put. For what it's worth though, I happily own Solpats as a large diversified ETF style investment, but I think better. I'm more than happy with it. But yeah, Yeah, Reb's absolutely right. But there will be, as I'll pass, can't almost by definition, well, I can't say by definition because nothing's absolute. Almost by definition, will not do as well as some of the small cap companies that you'll find because they're small and they're going to get bigger. Others will be big and get smaller and others will be small and stay small or go to zero.

15:16Those things are all absolutely true. So it depends on your investing style. Go and find one that suits you. If you're looking for a large, safe, broad-based, well-run investment company, I'm very happy to have sopats in my portfolio. um but equally i also have other individual companies for the same reasons rams just mentioned that's just uh horses for courses um but i don't know over that period of time yeah it's i there's there's i think it's again you're talking about past performance mate um because of when you buy an investment glomerate like solpats or west farmers you are far more likely in my view to have a much lower risk future than buying a single company in a single industry just almost by definition because you can't know what's going to change that industry right if your job is allocating money um maybe maybe changes happen to the money allocating business but you can choose the assets you want including they could buy shares in objective corp or supply network tomorrow for example right so that's that's the benefit of having that structure by the same token you can do exactly that yourself you know sopets you know is that structure that you can have other people's investment decisions made for you or you can go and do it yourself i'll play i don't i have not done the work but i'm i'm just on on the question there um i was thinking well is it i guess there's always that question of is it a good buy today and we we're not going to give any recommendation of course but just to talk that through so i brought it up i looked at the consensus forecast let's take them with a very big grain of salt because they're worth exactly what you pay for them um but again if consensus forecast was right everyone would get exactly the market performance because they don't be right about the consensus so yeah yep it's too easy to lean on but i'm going to go with it right so so in 2022 2022, what does it say here?

16:52Solpats earned$1.61 per share. Is that right? Yep, that's right. 2023 forecast,$2.05. Nice, going in the right direction. But then for whatever reason, again, I haven't done the work, so I don't know, it drops off to$1.44 in 2024 and then$1.29 in 2025. So more your point here of it's not so much what the actual numbers end up being, but directionally there's sort of like an improvement in the current year and then things seem to be tapering off a bit. That's fine. Well, you know, I don't know what the rationale behind that is. But I also note that at the same time, shares are at a P of 28 and offering a yield of 2.7%.

17:30Now, I'm going to speak out both sides of my mouth. I think when it comes to being clever on very high quality companies when the intent is to hold for many, many, many years, trying to be too smart on valuation usually is a disservice, right? But if you had spare capital today, is it a good buy today? given that outlook, given that consensus forecast? Are you asking me the question? Yes, yes. Yes, I think so, for three reasons. And very quickly, we want to kind of get through some questions. Sure. One is that this is really boring accounting, but it's actually really important to know if you're buying Solpats or a conglomerate, particularly if it's a conglomerate of partly owned businesses, those earnings are just the reported earnings.

18:17and because Solpats owns an equity portfolio, they only report the dividends, for example, as earnings rather than the actual under-operating earnings of the business. So depending on how much of a company you own changes how you account for the cash flows. So if I owned 60 % of a business, I would include all those businesses' revenues, costs and profits and aggregate them, consolidate them, as they say, to my profits. If I owned 20 % or 90 % of a business, I only get the dividends. So let's say I own Berkshire Hathaway, the value of Berkshire to my portfolio it would have been zero earnings-wise every year for the last 60 years.

18:50I'm not that old, but you know what I mean. Compared to the fact that Berkshire over that period of time has compounded its value at 20 % a year. So that's just a really nice, easy example, by the way. So just be a little bit careful of the reported earnings. That's why yield is such a good metric under this system. It's correct. It's hard to beat, right? Yeah, because it's cash, right? Like the yield is the yield gets quoted. And they're paying that cash out of their actual cash flow. So they're also doing exactly the same thing. So that's a nice one. second one is that the cross-shading holding with Brickworks makes things really really really messy because they pay some money to Brickworks Brickworks pay some money back to Solpats we've talked about that previously it's a bit painful the third one is that the fall in earnings is probably predicated on the New Hope coal shareholding most people expect the coal price to fall and so that should come down with it what I would suggest anyone who's interested in Solpats not to shill for it although I like it I own it it is a buy for us at Motley Fool so let me be really clear about that uh is that uh you kind of you know who knows where the cold price goes but also the company reports normal earnings not just um so cyclical or you know they don't report they have to report the actual earnings that's statutorily required but they will then say i normalize earnings of this um i can't remember the phrase these management earnings or something else it's like owner earnings or something yeah most companies use that term when they want to make sure everything's better than it looks but sopets will do both if if they have a one-off windfall gain they'll say well that's our you know statutory profit but our real underlying profit was this and it's less than that uh i would expect it's very very likely that saltpats continues to create value um one really quick one mate so if you're looking at saltpats use the i use personally for saltpats uh the value of the asset underlying assets rather than earnings yield for saltpats so you can actually add up everything they own literally line by line shares some of the parts shares of new hope coal this much money brickwork shares this much money and some shares of TPG Telecom, this much money, equity portfolio, this value.

20:44And you can get a sense of how much it's worth compared to the current share price. That is my, to my view, is the best way to start with one quick wrinkle, which is you then need to work out whether the market is valuing those businesses correctly. So if Solpats had recorded a$1 billion valuation for their Enron shares, they didn't own them, just to be very clear, back in the day, would you have paid$1 billion for Solpats? Well, if you had and then Enron went broke, you wasted your money. So you have to know not only what the market price of those things are, but particularly for the big share holdings, we think the market's getting it roughly right or not.

21:14And that's probably the big bit. So that's a very long and complicated answer. I think it was worth sort of articulating it. I agree. Let's go to Carmen's question who says, hello, Scott and Andrew. Love the podcast. I find it a much needed dose of common sense amongst all the financial hype. Man, haven't you heard Andrew talk about Bitcoin? Anyway, I have a financial question, says Carmen, that I need to get through a bit of politics to reach. so please bear with me. Russia and China are much closer than they were meeting in Moscow. China has broken a peace deal between Iran and Saudi Arabia, the latter of which was a close ally of the US.

21:48Both countries are talking of joining the BRICS, Brazil, Russia, India, China and South Africa, along with a lot of other countries. The current BRICS countries have been stockpiling their gold reserves. Now, Saudi Arabia... I love the direction of this already. This is great. Now, Saudi Arabia is talking about selling its oil in yuan instead of US dollars. with the growing economic influence of china through its belt and road initiative what would happen to macroeconomics if the yuan became the world reserve currency specifically to the australian economy and any investments in the usa such as u.s shares etc happy to hear your thoughts on the matter regards carmen uh what happens when the yuan becomes the reserve currency mate wow i love the question carmen i think it's actually really legitimate and and and serious one and I don't know what the answer is but I guarantee you that places like Russia and China do not enjoy having the US dollar as the global reserve currency yeah right they just they objectively don't particularly when it's weaponized against you and all of your your money is ceased as Russia found out sort of the hard way so yeah I don't think it's likely to happen the US is kind of the best of a bad lot and there's also questions of just the depth of the liquidity pools and there's all these technical intricacies that make it unlikely to happen in one fell swoop.

23:06But they're definitely trying to make moves towards that, at least in trading particular commodities in that way or particular volumes in that way. And this weakens the – we've had a sort of monopolar world since the end of the Cold War. The US has enjoyed great advantage from that, and it kind of weakens them strategically, I think, And I think that's a big part of the attraction, frankly, for its enemies. So I don't know where it's going. But I can see things as we move into a more of a multipolar world, as China continues to rise, that there's no law of the universe that says we can only have sort of one globally agreed monetary system.

23:48And I'm not going where you think I'm going with that. Whatever it is, there will be others that cover the really attractive position of reserve currency and that try and do what they can to benefit from that. It'll just be a very hard transition. It's probably something that plays out over decades. But this is, I mean, the 21st century is going to be wild, not just for all the technological advancements, but just on the geopolitical stage. Yeah. I don't even. there's there's so many different directions it could go do you have a sense of of what what you think um no uh i think it's further away than most people would imagine for one major reason which is while my enemy's enemy is my friend in other words russia's happy to deal with china because it hates the u.s the where does russia gain from the yuan being the central currency they just have to deal with another superpower who is going to wield their own influence so you know to the extent that uh some people would happen to say the u.s bought down a peg and you'll put it on a multipolar world ender i think it's the right phrase um i don't think it's happening anytime soon the other thing is while you say well oil is being sold in yuan that's true but that i bet you i bet you that oil price in yuan is pegged directly to the u.s dollars because we all talk in u.s how much is it how much is the battle you know of oil worth oh x yuan what's in u.s dollars well this much okay cool that sounds like the u.s dollar price i'm paying now let's do it for as long as and this has echoes of bitcoin andrew but we're not gonna talk about bitcoin uh this has echoes of for as long as you for as long as you translate the price back into something else then you aren't as useless right we if we say a bitcoin's worth 30 000 australian dollars then it's worth 30 000 until we say one bitcoin's one bitcoin and we all think in bitcoins or think in that other currency now for workers in australia we say a packet of tim tams is worth what's a packet it's four bucks four australian dollars we don't say a packet is worth four australian dollars okay that's two dollars 78 us we say four dollars because our base currency as individuals is australian dollars is where we live it's what we do uh global trade is going to have a reference point a reference price and you can say it's in australian dollars or it's in yuan and that does have some implications in terms of the need for foreign exchange and that kind of stuff so there's not it's not worth nothing but for as long as people then say well what's that worth in the actual thing we're used to talking about um gold so think about australians right We buy oil.

26:10We know it converts to an Australian dollar petrol price, but the deal is still done in US dollars. I think that, to my mind, is the same thing. So I think there'll be a more multipolar world. The US influence will fall. Do I think it's going to have any impact at all on macroeconomics? Not really. Not in a noticeable way for most people. Is it influencing my investing at all? No, not even slightly. Genuinely, I won't say I couldn't care less because it makes sense if I don't look at it or don't think about it. it's making literally zero difference to what I do. Yeah, I don't know. Look, I'm not going to say I totally disagree, but just in terms of the plausibility of it, one of the great benefits of being a reserve or having a reserve currency is you get a lot of foreigners to sort of fund your deficit, right?

26:59And so if you take away a lot of those capital flows, and a lot of this capital is being recycled from other trade and still very turtles on turtles. It's really complicated kind of stuff. But it does at some point influence the fiscal spending, which influences the economy, which influences investments, which influences share price. And we're talking about the current stage, at least, the largest economy in the world and likely to remain one of the largest ones in the world as well. So it could, if it got dire enough, definitely have macro economic impacts and impacts to investors. Again, it's going to play out over a long time.

27:35and maybe it doesn't even play out in that general direction. The other point I would make too is that I hear what you're saying in terms of converting everything back to one sort of centralized measuring stick, which is all money really is, is a measuring stick. The more fundamental value of it is what purchasing power can I get for it? So the great thing about the US dollar is I can trade with China and then I can get my US dollars from all the exports that I have and then I can go buy stuff from Sweden. And it's that sort of fungibility across sort of different domains and jurisdictions that makes it really attractive.

28:11But if I happen to have a lot of trade between two nations, I actually don't know what the stats are. But there is China needs oil. Well, Russia's got that. And Russia needs a lot of the stuff that China makes, right? So you can actually perfectly function. You might sort of accounting-wise account for it or convert to US dollars. but you can still, you actually don't need that convertibility when we're trading directly with us. So when there's a big overlap there, right? And there will, a natural exchange rate will emerge. You don't need the transactions, but it's still gonna be referenced because China's gonna sell that oil to someone else if they, or whatever, Russia sell that oil to someone else.

28:46You're thinking about a price in US dollars versus Yuan. It's a bit like currencies in general, right? The Australian, we're talking about the cross rates. The Australian dollar is worth so many US dollars. US dollars are worth so many Canadian dollars. Canadian dollars are worth so many British pounds and British pounds are worth so many Australian cents. Yeah. And like it's, the currency markets work exactly that way that even though we we don't dominate stuff in u.s dollars and trade is sometimes settled in that that that the swings around about the cross rates it's all still it's not perfect but it's pretty it's as close as efficient as markets get which is you'll sell you'll sell you we will sell to the country that gives us the most australian dollars right now how that's dominated is kind of you know maybe 48 canadian dollars or 28 us dollars or 13 British pounds or how many rubles that ends up being.

29:28I think those are the same things really because we all know how many Australian dollars we're getting for that because those cross rates are so efficient. It's effectively an abstraction of the barter system, right? Again, just that two country scenario here. It's like, hey, I'm Russia. I've got all this black stuff. Do you want to? Yeah, I do. What do we give? We'll give you a bunch of TVs and t-shirts. Right. That's effectively what's happening. So yeah, I mean, you can convert that to anything you want. Doge Queen for all I care, but there is a value for value transfer. And so, yeah, it is super, super fascinating.

30:04And it does have implications. What's really changed - They're not very likely and not very big and they're not very soon, right? I think theoretically that's all true. Potentially big. What, in the next 50 years? I don't know what the time - It's not going to happen tomorrow. That's for sure. But there's a really interesting map I saw recently, and it was a picture of the world highlighting who the dominant trade partner is for each country. And you go back to 1990, and it was like US and Europe had huge control over things. Now it's all red in what the map was colored red for obvious reasons, but it's China, right?

30:42So when you ask, who's Australia's dominant trading partner? Not the US anymore. It's distant. I don't even know if it's second. you know it's probably after japan and the rest of it right but probably yeah yeah yeah it's china and it's not just australia's relationship because we've got all these these nice rocks under the ground it's like virtual i think it's something like two-thirds of the globe china is the biggest currency so we can abstract it back to whatever we want but i'm actually trading something with this person over here stuff i have for stuff they have it just becomes it becomes less of a necessity for me to go to an exchange, convert that foreign currency back into US dollars.

31:21I just don't need to anymore. It's the same when you look at Australian companies that have operations in the US. And we all have to sort of convert it back when we look at the financial statements. But there's plenty of their operations that are based in the US that, yes, they're earning US dollars, but they've got expenses in US dollars as well. So that repatriation, And that conversion actually doesn't really make sense at a certain level. So it's kind of – anyway, I just – I don't know. Again, I'm not like I'm firmly opposed to you, but I'm less certain to say that it's nothing. In fact, it feels like it could be something, but it's beyond my small brain to comprehend.