The 12 Days of Motley Fool Money Christmas. December 22, 2023

39:04I was going to say, you're kind of thinking through the ideal structures or the ideal implications of these things. I'm much more a pragmatic kind of, you know, I start from the outcomes and work backwards. And neither is right or wrong. But I would say in that context, I'm not entirely sure that, I think moral hazard is real. I think governments, I'm more worried about the governments, frankly, acting badly on behalf of vote buying rather than companies that may or may not, you know, get a couple extra dollars here or there. I just, I don't think it's, it offends your sense of right and wrong far more than it worries my sense of you know does it make a meaningful difference to the economy or to the society at large is australia that much worse off because we bail that corner i'm don't be wrong i've tweeted long and hard about the corner's bailouts and stuff um is it annoying is it wrong is it kind of offend my sense of right and wrong yeah kind of some degree if i so so i there are separate things i agree with you entirely by the way on almost everything you said except that i'm not sure it matters as much as you maybe think it does or maybe you don't we're just talking about the idea um but in overall the overall scheme of things my much bigger concern is the structure of the economy as dictated by government something about debt here for example or budget management the stuff that's a really really big picture stuff that worries me personally far more than whether kornos got a couple extra bucks or jerry got a couple extra bucks i should say i'm a harvey i'm a shareholder i don't think i was during covid but i might have been so maybe i benefited somehow so take your grain of salt with that wherever you want to um but uh yeah just just for what it's worth i think just i kind of just put that on the on the table uh not that you're wrong in any way shape or form i do i guess i'm just not as exercised by it in terms of how worried i am about the outcomes on much more than just uh you know those bastards got away with it yeah they did well that's not fair no it's not uh do i care all that much in the scope of things you know if i had a budget one would i change it yeah i don't really think it's a bigger deal i guess i suppose that's what i'm saying yeah well we can agree to disagree hey let's move on then because uh superannuation uh at least as we record this on the 21st of december some numbers out from chant west to uh our mob who get the name of the paper every six or twelve months by talking about superannuation returns and i'm not sure what else they do actually um that's probably what they do uh have put some numbers out say the average super fund is likely to gain around 8.8 percent now this is you know what's the average again average with an asterisk everyone's different blah blah about 8.8 percent this year roughly equaling or offsetting the decline last year of a similar amount i think last year might have been down nine i think from memory thanks largely to a booming u.s stock market the growth of tech and unfortunately for the recovery in some property prices sorry dude uh the uh it's it's i like i don't know you know i think if you're a casual listener to this if you're listening you're an etf investor or you you're whatever you're not buying individual stocks i guess the um i guess my thought just straight out mate is you know it's a reminder of for all of the money lost in 2022 and the headlines and the either super was supposed to make money and oh my god i'm losing money the recovery this year is kind of the point right that that that's not that it was going to ever happen in exactly a year or it's a nice symmetrical number it could have taken five years could take it in six months could have taken two months um but i think it's worth for anyone listening who's got a casual interest in finance or they're super or wondering you know what's in it for me or what does it mean for me i just think it's i think it's i think it's something worth remembering because like we just talked about through most of the pod so far easy to focus on some of the negatives because they stand out chance of recession or you know government largesse or moral hazard those are all real things and real things to be addressed um but also in that context and we talked about the fact the market tends to front run the economy the super numbers actually might be the best evidence the best general evidence uh for all of us with superannuation of kind of what's been happening recently yeah um yeah i mean on one hand it's just like really unremarkable because what do you expect it's you're gonna have the occasional bad year some good years probably gonna average about what the average has been you know what is it the stat is usually something like on average the market is up two out of every three years yeah so it feels feels about right feels about right yeah um the which is kind of worth saying right because while it is unremarkable it's remarkable because people don't realize it's unremarkable yes that makes sense yes yes yes the other thing just to be my jaunder self again oh come on it's almost christmas well i should have introduced you as andrew bar humbug paid now if i was if i was actually good enough and interested enough and dedicated enough i'd re-record the intro but i won't ebenezer page here exactly i mean there has been really um striking uh what are they what's the term cost of living pressures cause he lives cost of cost of lives cause he lives was the one cause he lives all right right lives oh my goodness um you know uh the purchasing power of our money has eroded substantially to the to the extent where uh you know a hundred dollars uh will buy you um what a hundred and sorry let me get this right so what you could have bought for uh 85 dollars three years ago now you have to spend a hundred dollars on yeah so a lot of these gains they're they are they are nominal and they're not real so that again that's not i don't want to rain on that parade, but we have - Yes, you do.

44:29In a period where we had - And a black little rain cloud. Well, we had this really long period of like, just inflation wasn't a thing. And then when you had some good years in the market, then that was just a much more real than, I don't mean that in the casual meaning of the word and the economist sort of meaning of the word. That's right. They're very real kind of growth. And now it is less so. um i think so just just to put that out there i did notice too in the um uh in the fin they were comparing the pair and they had the retail super they said compare the pair retail super closes the fee gap the performance gap between industry and retail super funds is narrowing raising the prospect of a fight back for a bot by for-profit super after the savaging raw by the banking royal commission and you know already i'm rolling my eyes and it's sort of like so did the back the backstory here is that industry superannuation has thumped retail superannuation for forever and is it because those running industry super funds are much much better money managers no they just don't charge as much motley fool money for more subscribe to the free newsletter at fool.com.au forward slash listener oh can i say mate i i i love the dedication that the fans of for-profit super and usually they there's two groups of these they're the ones who work for those companies and they're the ones who hate the union movement so much they'd actually rather make less money just so they can hate the union movement which i don't care about your views on the union movement uh i i think for what it's worth i think unions have been useful i think they are useful um they overreach as do employers and whatever uh but those who say yeah bloody unions i'm just lying in the union's pockets i'm not going to get that it's like you are literally going to cost yourself tens or hundreds of thousands just so you can hate you don't think I can change you're literally not changing a thing you're just hating on the union movement which is knock yourself out if that's what you're going to do I find that just astonishingly when they say to me oh yeah well the industry super is only better because in their balanced funds they put these unlisted assets they're overpriced and whatever whatever and I say well yeah maybe but the fees are just different to believe that in their world for their and if you're one of those people listening thank you Merry Christmas and you can turn off now the when you try to believe that, A, you're charging more in fees, but the only reason you're losing to industry funds is because industry funds have unlisted assets that are overvalued.

47:01In other words, your belief is that retail funds as a group are somehow mystically capable of achieving better returns than industry funds. Just somehow all of a sudden, large group of people in large group of funds, the average in retail would be higher than it would otherwise be despite the fees except these unlisted funds i just think that amount of magical thinking is really really really impressive because it's just hard to prove i mean it's not it's not proven it's it's it defies it defies any sort of mathematical consideration that even with your higher fees you are such better money managers as a group you happen to somehow magically all those different funds have attracted all the best money managers and all the worst money managers happen to be in industry funds and so the only possible way industry funds can be better is because they treat their assets differently just just think that through if that by the way if i'm if i'm talking satirically and you don't get it just trust me and move on but it's just there's some really fun magical thinking in there that is uh makes my head spin i do find it funny that it it seems to imply that the for-profit industry was unable to invest in the unlisted asset class which is like there's that too well no they can invest there yeah but yeah but they didn't and that's why they underperform yeah but yeah yeah and then in wait a sec in the paragraph before like literally the paragraph before that you say that um in the year to october 31 so all of a sudden we're going to take a one-year measure is to mean anything yeah yeah um the retail my super index compiled by rainmaker outperformed the not-for-profit my super index 4.7 versus 4.5 So 0.2 % outperformance.

48:39And they said the small outperformance by retail funds was mainly due to their higher allocation to shares, which have rallied in the later part of the year. So in other words, they've done better. It's only over a year period, but they've done better. They've completely underperformed over 10 years. Well, they underperformed under 10 years because the for-profit didn't invest in this sector. They say you should really take it with a grain of salt. Oh, but we outperformed over 12 months because we allocated differently. But you shouldn't dismiss that. That's important that we did that. You can't have your cake and eat it too.

49:08There's so much logical inconsistency with all of that. And I'm, look, don't get me wrong. I am all for any for-profit entity. I actually think fundamentally that the very nature of our system requires. That's right. The profit motive is what keeps the whole. It works. It's why all of us go out and do stuff. Trying to sort of better our situation, we need the proper incentives to sort of do that. That's why communism doesn't work, right? Like it's so fundamentally important. So it's not like a hardcore lefty shaking their fist at the sky and they want to make profit and therefore they're bad. No, it's just sort of like I would argue as a hardcore capitalist that those that create genuine value for people deserve to have profit.

49:53What sticks in my craw is when you don't deliver value and you still charge ridiculous fees for it. That's the bit that's sort of like, if we were having this conversation and there was a genuine value add that was demonstrable and objective, then it's like, brilliant. I'd be here on the podcast going, put all your money into for-profit retail super. It is a far better option because they are clearly better at it. And these lefty unionist thugs trying to manage, like they're idiots. Now there's so much data here on this and you're managing such large sums of money really that it's just like, what percentage do you want to put in each of these three buckets, eight or four buckets?

50:33It gets to a point where it's all a little bit stupid. But yeah, the AFR knows who its audience is and they cater to their audience, right? They do. They do. And that's, you know, you do what you do. Yeah. Oh, you know what? You know what I find really fascinating, mate, is you're probably right about the audience. I wonder whether they do know their audience. I mean, at some point, I guess they get the clicks and maybe it's controversy itself rather than pro-business. Because I think I don't... Maybe there's a silent majority, which, again, is one of those phrases that belongs to shock jocks and whatever.

51:09But if you talk to almost anybody, if you listen to almost anybody, there are absolutely examples of the people you speak of and absolutely examples of others. But most business people, most economists, most journalists, again, I do the good oil regularly, right? Most of these people, again, there's some who are absolutely on that side. I'm not saying everyone. why not but it i'm saying i think there's a more more of a spectrum than than um they might assume although we might assume i think that that's almost the point right i don't know if i talk to someone here someone's like i expect that person to be a certain view so oh no it's this and it's that and it's that's like oh okay we had good point i bet you're right i think there's more there's more middle ground uh than maybe the headlines allow for maybe as you said maybe it's the outrage clicks and maybe it's the you know maybe it's the echo chamber clicks or whatever um and the afr is absolutely pro business but i guess i'm just saying that among their readership i don't think it's i don't think the readership shares the papers viewed or as much as we might otherwise assume yeah but maybe that's me being um being hopeful mate um can we talk about chemist warehouse for a second yes we have got a question on this one coming up but i wanted to i i had a thought during the week and i wanted to i wanted to just kind of throw this up because there's a A lot of people who are, again, we'll answer this question in an upcoming Marbag, I think, or maybe it was last week.

52:25We're in a weird pre-record kind of time warp.

52:31Chemistry House has been backdoor listed into Sigma. So Sigma Healthcare, I think they're called now, used to be Sigma Pharmaceuticals. Sigma Healthcare, the proposal is basically somehow the Chemistry House gets 85 % of Sigma, the business is bigger, it's worth more because you combine the two businesses together, and then Sigma, whether it's renamed or not, just remains the listed entity, but if you own those shares you get some chemist warehouse with it first thing i'd say by the way just for anyone who's wondering is if you only if you buy sigma now you're not going to get chemist warehouse for free right you're going to get the sigma share of what you get and when you when you when they merge if they do you'll end up with a very small proportion of a very large much larger business which is fine it's not bad it's just you're not you're not there's no free lunch bike just yet but i i thought about um i was thinking about disruption mate i was thinking about innovation and i think he i'll just make a statement i'll just get your thoughts i said on twitter that i people are looking at chemist warehouse saying i want to buy sigma because i get chemist warehouse chemist warehouse the great business have done really really well and therefore if i buy it or keep doing really really well and again i'm giving something away we said in the upcoming episode that you know it relies on future growth particularly talking about going overseas and whether that can be done is an open question chemist warehouse has exploited a very uncompetitive pharmacy market here if they can find the same opportunity elsewhere by the way, they should do it and they should do it well.

53:45If they can't, if it doesn't exist, then that's a different thing. So if they can find the market opportunity to do what they're trying to do, all power to them, and they may well do very well. I wouldn't assume though you can necessarily take the business model here overseas because what they've done is exploit an industry, a sleepy industry. And so you can't take that model into a competitive industry and pretend you can get the same sort of outcomes. Not that they are necessarily, not that even that our listeners are assuming that i just would i would i would caution them against it but here's the thing i i i'm very very bullish on e-commerce as you as you well know this is not about kogan drink um but it's about e-commerce generally it's kind of why i like kogan but it's not the other way around i i fully expect decently more than half of retail sales are online in the fullness of time there's there's zero reason to go to a shop unless you have to or want to and those things are fine if you have to want to you'll do it if you don't have to and don't want to Why would you?

54:41And think about the economies of scale of fulfillment and range. And by the way, deliveries will get quicker when the more people are doing it. Like this is a snowball, right? They're talking about one hour delivery in capital cities, right? They're already doing it in the US, right? Why are they doing it? And by the way, the online penetration is higher in the UK and the US than it is here. And something like almost twice as much, I think. Something like that penetration of online commerce. There's a density issue probably, but yeah. So I think we'll go, I'm not saying we'll get to their levels, right?

55:07well i think we'll be much much much higher so i think i'm massively bullish on e-commerce and if you don't think it'll happen i'll remind you that people didn't think people would buy couches or music or beds or clothes online and guess what we all do um ask my wife uh so that's uh that you know that's that's i think that'll happen now why i want to take this one of the great one of the great under penetrated areas of online commerce is pharmaceutical retailing and i'm not making a prediction here necessarily. What I am doing is painting a potential outcome and inviting people who would otherwise buy shares in Chemist Warehouse or anything else to remember this is possible before you assume that the industry dynamic, that everything has been done, that this is the final state.

55:49There are, and by the way, people have said to me, well, these things already exist. They absolutely do. By the way, Love Film existed before Netflix and QuickFlix existed before Netflix. And just because things existed already doesn't mean they are the final state. So I guess I wanted to make the point that if you think about pharmaceutical retailing, particularly prescriptions, there is zero reason why you should need, I'm going to offend a whole lot of people, a pharmacy, not necessarily a pharmacist, but a pharmacy as the distribution point for your medications. There is no reason. Now, you can, same as you can use a supermarket, perfectly reasonable.

56:28And then there's people who buy stuff online. Why? Because you can do it easily now think about a world in which your doctor says thanks scott um here's your prescription for uh something i was gonna make some jokes i'm gonna ignore i'm gonna avoid all of those just for interest of good taste uh here's your prescription um and now the doctor says here it is on paper uh go and do your thing with it cool imagine a world where the doctor says uh scott says on your uh your medicare record or your patient record or your practice record whatever it is uh you're you're a you're a member of a new thing that west farmers have bought called instant scripts would you like me to press this button have it delivered to your home using your preferred payment network it'll be there by four o 'clock this afternoon oh that'd be great thanks doc

57:11done or the doctor says uh i've uploaded your prescription it's available on your medicare um patient record log on to my gov and you can press a button and send your order to one of four local pharmacies will deliver it for you by the way by the way the doctor might be saying this over a zoom like screen. Right, that's the other thing. So you're already at home because you're crook. Having the medication dropped off by that afternoon. If you need something straight away, of course you're going to go to a chemist. I'm not, people love the binary of this one. Yeah, black and white. Yeah, well it won't work.

57:39It won't work if I need to buy drugs now. No, of course it won't. That's what the chemists are for. Yeah. Same as, you know, people won't buy from Amazon and have it delivered in five days of on and out. No, they won't. They'll get a big W or Woolworths but if they're happy to wait five days they'll get it from Amazon or wherever else, right? So I'm not saying it'll happen for everyone. I'm not saying it'll happen tomorrow. I'm just saying to imagine there is a world in which we don't find a better way to make it easier for patients to order and get access to their medications. Now think about repeats, where the doctor says, here's your medication, here's five repeats.

58:11Go to the chemist every month and get more. Why would you not log on to something like instant scripts or something else and say, can you please deliver it on the, what's that, the 21st? Deliver it tomorrow, please. And then every month for the next five. Thank you. Locked in. so just come it just turns up i it just it boggles my mind for people to try to believe that the current cumbersome way of driving from the doctor's surgery as you say that's probably online anyway so drive from home the surgery to the pharmacy putting the script over the counter waiting to get it back getting the thing back taking your repeats home with you driving back another month's time having having that awkward like you know trying to avoid eye contact with the pharmacist for this super embarrassing medication really they do the price check on really is that right yeah you know i've i've heard i've heard we just learned something uh no i just anyway i'm not saying it'll happen for everybody i'm just saying to believe that there's no disruption coming now the only people say well well chemist warehouse might win that they might and they should frankly because they're massive and they're dominant so they should but who's going to so i'm an amazon shareholder right i'm massively i'm not saying it'll be amazon but but there's this scenario where they say hang on chemist warehouse has x hundred stores across the country makes them local makes them easier makes it fast but they don't have scale and they don't have speed and they're not also delivering a box of kitty litter and uh a you know bag or something in a stereo next door so you know whoever it is it could be dhl because they're going to most houses around the country or whatever else it is i don't know who wins this and it probably frankly it's chemist warehouses opportunity to lose because they've got that spread already yep but if you think about what pharmaceutical distribution needs to be yes pharmacists provide health care advice and there'll be so many people yelling at me right now um yes they help out yes they answer questions about drugs yes they give whatever i get all that stuff i'm just simply saying yes chemist's done a wonderful job to get to this point just don't assume a their growth can continue forever or b there is not potential disruption coming just as it has for other parts of the retail landscape yeah there are regulatory barriers the pharmacy guild uh speaking of unions if you hate unions have a look at the pharmacy guild just quietly i don't think you should hate them i'm just saying they are remarkably powerful and uh But a guild was something that kind of, you know, in the old days kept other people out and kind of kept, it's perfectly named just quietly.

1:00:19Yes. Anyway, maybe regulations never change. Maybe governments get scared. There's a whole thing that could happen. I'm not making any predictions. I'm just saying, if you're thinking about chemist warehouse, be mindful, be mindful of what could be coming down the pike. This is an older thing now, but do you remember how for the longest time, the supermarkets, Coles and Woolies predominantly, were really lobbying to allow pharmaceuticals to be sold, you know? And you kind of think, well, actually, that'd be hand. I've got to go pick up some bread and milk anyway. Can I grab my scripts while I'm there?

1:00:50And some very powerful lobbyists prevented that. I don't even know that was a bad thing. I don't know if these players needed even more concentration of power. That's what it's true, too. So there's that. I do know a bit about Instant Scripts because Bailador, who I've got shares in, is basically a private equity company. It's listed on the ICX. They were one of the early investors in it. all right yeah they they got an internal rate of return of 62 percent on that investment yeah they they um they yeah anyway so it was it was incredible i really like bailed out anyway they've they've um uh they saw it early right and they i think they invested in multiple rounds there and it i'm i'm i have this lesson fairly regularly but it still surprises me it feels having been someone who grew up through the rise of the internet the rise of smartphones and now you know on the cusp of 2024 um that the internet is okay tick we've done that but i'm i'm still reminded of how incredibly early we are and it's kind of like we've grown up with it our kids have not known anything other than it i mean oh yeah oh they feel like when i say i was thinking about the video store experience and i was like oh your mom and i used to on a friday night you know we'd go and we'd pick up our pizza and we'd go and pick out a movie and then we'd have to rewind the tape and we'd have to drop it back and they're looking at us as if like we were carving a story in a stone tablet or something.

1:02:25But it's new. And it's, but the thing is, it's kind of like, I feel as though we think, okay, this is the internet. And what we would, I would have extraordinarily high conviction that we look back in even 10 years time and go, oh my gosh, that we was like 2023. It was just like, you could only, you couldn't do that online at that point, you know? Looking at some of the stuff that Meta is doing, which I've been pretty bearish on to a point, but some of that tech is - Meta being Facebook to business. yeah but they're all about the metaverse now it's kind of it's pretty negative on that and i don't know if they will be successful at it but it shows you what is able to capable of being built on top of of this infrastructure we call the internet it's just like wow it's fascinating and my point being is is that we're only you and i who have been talking about this stuff for gosh a decade or more it's like we're only now talking about scripts being delivered i know that's the that's my points like this is this is the and by the way i was running multiple hidden gems years and years and years ago and we invested in a business that was trying to do something like this and it just went broke and it was terrible and just too early because the market wasn't ready to make the shift yep but in the meantime mobile phones smartphones connected devices uh frankly patient national patient records via medicare every time we get closer and closer and closer to joining this stuff up yeah honestly if my doctor said tomorrow hey i've just i've just connected this thing would let me do that oh thank god please do that yes yes please do that thing you know yeah i haven't used instant scripts yet and the hurdle the biggest hurdle frankly the biggest benefit for the pharmacies is most of us don't go to the doctor that frequently and get drugs that often but if you're someone who's on you've got a chronic condition you're having the same medication either for the rest of your life or is that magic cholesterol lowering drugs or um treatment so right yes exactly that's it like it's that idea of actually if you can make my life easier i can do a teleconference with you 15 minutes time for now whatever it is go through my issues you can issue me another repeat for another six months and i can upload that directly you can do it for me or i can do it for myself or some other way it's like oh good tick that box good that's done move on another another thing rather than get the script go to the canvas use the mobile phone do whatever it's just maybe it never happens because maybe it's just there's too many obstacles regulatory and behavioral but to imagine it won't i just think if you're framing a market maybe this is the exception that proves the rule but i don't know it's probably not so the the classic story here is with uh you know the kodak story of inventing the digital camera you know and then not wanting to do it because it would disrupt their business that's right and the other example being amazon who sold books and realized that that books are going to lose share and like disrupted their own business that's my favorite example by the way it's great right it's really and very very we always use that example because i don't think we can think of too many other examples where companies see the future recognize that it undermines their their business model and disrupts themselves because they it's not a it's not something any business wants to do but the reality is and the bezos saw this like well whether someone's going to disrupt it so i guess we do it right and then and that that was a probably painful and expensive adjustment to make but we saw how that worked out now can i give us a wrap actually on that one just quickly i think And Qantas launching, as much as Qantas, you know, as a corporate citizen has had its hits and losses, Qantas creating Jetstar, literally a whole second brand at a cheaper price.

1:05:42There have been so many people inside Qantas saying, but hang on, we sell tickets for$400 each. You're going to sell Jetstar for$250. That's going to cost us money. You're an idiot. Why would you do that? And the foresight of it probably was Joyce, or it might have been the CEO before him, to kind of go, no, no, we need to be playing at this part of the market. And adding it, yes, some of our customers will absolutely trade down for Qantas Jetstar, for sure. We will take more share from elsewhere. and in net net overall, it's worth it. Those things, they're gutsy, smart, really super thoughtful calls.

1:06:10I had someone on Twitter the other day talking about, we're talking about working from home. And he's kind of saying, he was making the point that companies, how can they be so stupid as to not realize whatever it was? And it was about working from home. It doesn't need to be. In this case, I was kind of like, my response was, because there are people working for those companies. And we're all this fallible and we have our psychological biases and prejudices and assumptions and first order thinking and a lack of experience and that kind of stuff. These are not easy decisions. So I just wanted to, again, not like O 'Quant or something, but give them a wrap because creating Jetstar was a gutsy, gutsy call for a whole lot of people internally who would have said, but think about our margins, think about our yields, think about our revenue per seat mile.

1:06:48That's crazy stuff. And it worked really, really well. Yes. And so where I'm going with it is like, so when API bought Instascripts,$135 million they paid, But it really completed the picture there because I don't want to make light of this because having built software, I know how hard it is. It's hard. But it's sort of like you can have the coolest, most streamlined app. But if you don't have the warehousing and distribution, if you don't have the regulatory green light, if you don't have the branding and the reach and all of that, it's kind of going to be a very, not impossible, but just a much, much harder road.

1:07:27So with API buying that, it's just sort of like, well, we can leverage our massive warehouses and our buying power and all that. So if I was Chemist Warehouse or Sigma, I would be absolutely doing this because it's going to happen. It is happening. It's happening right now. And you can either be a part of it or you can just watch it, you know, sail past you. and yeah exactly and this is this is i mean i would imagine if you could go back to the traditional newspaper companies um i forget the names now pbl and uh oh god yeah that's right publishing and broadcasting publishing and broadcasting yeah the packer the packer business yeah uh with news corp obviously yes yes um i mean well news corp credit where it's due and lord knows they don't deserve much credit in a whole range of things which i won't get started on thank you but they're the biggest investors in rea.com yeah that's right and and they they absolutely internet completely disintermediated their their their revenue models like classified but wow and that's been the best performing stock on the asx in 30 years i think it's just actually it beats amazon in terms of total returns since that's right i did too yes i think you told me that i was just like that's right really i know it was one of my team actually i'm not in my number i think it was i don't want to give her to remember who it was someone in the multiple statement but i said to me have you said this i was like no way it's incredible but but genius genius yes exactly right you know if i was a bank i would be investing in a certain technology right now you know if i well let's not go there but if i i would i would there are there are there are um inevitabilities as much as there can be an inevitability and i think anyone who bets on the internet, not in the internet, not becoming a bigger thing that penetrates more and more is like naive in the extreme.

1:09:24If your assumption is my investment case can't be disrupted by the internet, that is a low probability bet. You might be right one out of 10 times, one out of 20 times or something, but it's a super low probability bet to say, if the internet did be a thing, I'd be killed. If I'm going to bet it's not going to happen. That's a, I don't even mean to people. That's about as silly as an investment thesis. It's insane. And actually, you know, I've had a few conversations like this lately where, because I'm a bit obsessed with AI at the moment. And so I'll talk about it with anyone who'll listen. And the conversation usually goes, you know, like, wow, have you seen this latest model?

1:10:00It can do this and that. And then it's going to be able to sort of like disrupt a lot of jobs. And the person will go, yeah, it's amazing. Although I think my job is safe though, because there's a certain, you know, requirement that only my special kind of genius can make. And I just, I feel like you're too close to it to realize. And not necessarily that you're wrong. And obviously there are some industries that are more immune than others. But it's sort of like the only person I can take seriously there is maybe the hairdresser, you know, or the plumber. Because that's going to be hard for AI to disrupt.

1:10:33That's right. You know, the person. Mate, you've seen the robotic building company, Fastbrick. Oh, yes. Yeah, yeah. Fastbrick. Amazing. Yeah, yeah. Anyway. I mean, you know what? I reckon that was just another, that's another quick flicks example. Just too early. I 100 % agree, yes. That is a robot will build houses. Very, very new term, I think. Some combination of prefabrication and assembly and local production, whatever combination of those is cheaper. Where are you seeing? You're seeing frames delivered to building sites. Now you wouldn't have seen that, I don't know how many years ago, but the combination of technology and scale and capability and prices coming down, frankly, um you know that the the number of places we're finding opportunities for robots computers machines whatever whatever combination of that to be faster cheaper easier more flexible 24 7 those those advantages are huge well i mean it's it's kind of the free market doing its thing it's like well i'm not going to do that it's there's nothing there's nothing better than than building a brick wall with your own hands and you know it uses better fidelity it looks better as like all right cool um let's put that out into the tested in the real market in the free market and maybe that is true for a little while.

1:11:45I actually think it gets to a point where very quickly it's indistinguishable between what the machines do and what a very skilled brickie can do. But even if there is a slight difference, someone is going to say, so this is basically almost as good and it's going to cost me half as much. Oh, let's be generous. Let's say it's only going to cost me 10 % less. A lot of people will take that. A lot of people will take that kind of option up. And, you know, it just, that is the capitalist system doing its thing. It will allocate resources to where the market says those resources are in most demand.

1:12:20And anything that can deliver more for less is probably going to be in more demand than that which delivers less for more. And it is, whether you're talking about scripts being delivered or packages being delivered or robots building houses or whatever, It's sort of like that is the march of progress. And I think we can get hamstrung by trying to be too specific in our predictions, in the exact outcomes and the nature of the timing and how it all unfolds. That's a mug scam. It's really difficult to get that stuff. But I do think that, yeah, I'm so bullish on the internet. It's insane how bullish I am.

1:13:03And we are just so early. I just, I can't, I can't. My kids, kids, when I have grandkids, will just be gobsmacked. Have you looked at some of, there's a way back machine. You can go look at old websites from the late 90s and even 2005 and 2006 and whatever. It's just like they are so antiquated. They are so clunky. They are so awful. But that was, I guess I was alive then. And I remember thinking, wow, this is so cool. Look at, oh my gosh. look at this and now it's like oh it's so passe and to think that but now now this is it this is we've hit the plateau that's right exactly yeah yeah this is good as it gets yeah exactly exactly no i think i think it's true i think you know i i don't want to do the old man reminiscing thing right but i i was at uni and the um some people in the unit in the uni computer lab because you had to have computer labs the computers were uh kids think about that um had the um they were using the chat group like the text-based file transfer protocol chat groups right and that was kind of that was the internet and there was this thing called mosaic it was netscape navigator and it's like you could slowly bring up a picture like oh my god now i will say at that point as as always happens with these things half the computer lab was looking up adult websites they shouldn't have been because that was you know i wonder if i could type in that what if we type in that no sense of being able to be frankly you probably couldn't have been tracked the technology didn't exist back then but that's what half of them are doing um the uh the other half we just hadn't got around to it yet yeah i hadn't realized the sydney morning herald only its tech uh tech section was online updated once a week and that was the smh's website the city world herald's website was just city world herald tech section updated once a week when the new one came out on a thursday or whatever it was um it's it's it's remarkable to think about that sort of stuff get this get this i won't name names or companies but one of the first main companies i worked for the person who managed the tech department had a PA who part of their responsibility was to print out emails so he could read them, write a response, and then she would type it back in.

1:15:06And it was just like, are you kidding me? Now, it'd be like laughable if it was anyone in the organization. Yeah, that's right. But the head of the tech department, like what? You know, it was, we are so early. We are. It's a hell of a thing. I don't know what I was going to say. Probably good because we're over time anyway. Oh, again, over time, as if there was a time limit and this sort of stuff. By the way, try and tell the kids about linear television. In fact, you only watch your show at 7.30 on a Monday night and if you missed it, you missed it. Or if you had to go to the toilet, I'd do it in the ads.

1:15:38I'm like, cannot fathom the idea of not being able to pause a TV show. It's just a heck of a thing. We're getting up to change the television channel. Had to get up, walk across the thing, press the button, go and sit back down again. Dad had a stick. that was our remote my dad had kids it was only three channels anyway so it wasn't like you had to rotate through oh two seven nine and ten i was yeah we couldn't get sbs the signal wasn't strong enough it was this grainy thing every time there's tour de france or something else you could do that that was about it and uh town 7 was dodgy on a tuesday night but other than that it was it was fine that's a heck of a more episode and i would ask you if you could come back for it but uh we've already recorded that one so i will chat to you on sunday we'll be back in our listeners ears on sunday and every week between now and well the holiday season until we come back and pre-record some fresh episodes uh we've got a whole lot of stuff set up and ready for your listening and dancing pleasure uh so as much as uh i want to do the christmas farewells we're doing it tomorrow or sunday so So until Sunday, until a bit of a pre-Christmas mailbag episode, full on.

1:16:48Yeah, cheers. Thanks for listening. The Motley Fool and people appearing in this program may have positions in the companies mentioned. General advice only. Please speak to your financial professional to understand how it may pertain to your situation. Subscribe to the free newsletter at fool.com.au forward slash listener. The Motley Fool operates under Financial Services License 400691.