What Elon’s $44 deal says about Tesla. August 8, 2025

25:45But there'll be some local domestic drug manufacturers just going, yay! That is the best thing ever. I have just got a massive, massive competitive advantage. Right. And, and, and he, look, I don't want to make allegations, but yes, I do. You know, I'm sure that there is something going on behind the scenes. Whereas if you, if you bend the knee and kiss the ring of the emperor, you'll, you'll be, you'll be showered in, in favors. And, you know, this, it's, it can all be dressed up for the greater good and draining the swamp and the rest of it. But it's, it's not, it's very, he's very transactional.

26:18And I'm sure that there's someone somewhere who's helping to sort of lobby and fund things. He's just like, you know, it'd be really great if we didn't have all these cheaper drugs from overseas coming in. It'd be something like, gosh, it's hard not to be cynical these days, but it's probably something like that. So, yeah, I don't know what to add other than it's going to be terrible. But here's the thing. If it is terrible. No, let me rephrase that. When it is terrible and that starts to be revealed in the statistics, well, we can fix that too. Because when we get statistics we don't like, we just fire the head of that department and we put in a patsy.

26:57And if you think I'm speaking of some like banana republic weird regime somewhere, he did exactly that to the head of the Bureau of Labor Statistics. unemployment figures came out you would have heard this i'm sure unemployment figures came out they weren't flattering it's like fake news you're fired yep and and it's so wild that this is happening in the united states of america and as i've said the other thing that's happening at the moment too is he's whacking poor old pal over the head every opportunity he gets pal's out the door whether he goes early or not even if he sees out his full time he's gone next year he's going to be replaced by someone who's nothing other than an overt political placement, who's going to be hyper-duvish, which is just a fancy way of saying he's going to do whatever Trump wants.

27:44What does Trump want? Trump wants super, super low interest rates. So that will do that. Now, again, I'm sure there'll be some people going, well, what's the problem here, Andrew? Lower interest rates are good, right? It's like, not always. And there are consequences to having unreasonably cheap credit. and if you don't know that's true well then open up a history book look at the gfc look at what happened post-covid like this there are very very real implications to all of this kind of stuff and and his legacy if you know he's not going to be around forever but but these things are going to be very hard to undo apple's like just a case in point i mean it is the preeminent poster child for u.s corporate exceptionalism like i can't think of it i mean maybe nvidia i don't know There's a handful of companies that would be in the same orbit as Apple.

28:36And look what you just did to them. They would have spent God knows how much money. Can you imagine the scale of operations that you've had to close down? I don't know they got all the way, but they certainly started to reposition themselves in India. The scale of that operation, the resources and capital required to do that. and then at the stroke of a pen and a brain fart of an idea has now all been done. So I guess we're doing it in the US now. So let's spend another$400 billion and we'll get there and then the new president will come in and go, actually, let's get back to China. It's much cheaper and easier there.

29:10And also, I guess, then this will be the next thing. The price of iPhones will come up and it'll be like, oh, evil business. Look at Tim Cook screwing over the little guys. Like, well, our costs just went up massively because of what this buffoon has done. What do you want us to do, right? Like, it's all madness. And it all stems from economic illiteracy and populism. And there'll be a few very small handful of big winners and a massive line of big losers, including almost everyone listening to this podcast. I will say I'm not going to defend Trump in the slightest. I mean, by the way, I will happily agree with any of his policies I think are good.

29:49Just because I don't like the man doesn't mean he can't do some good things. If he does, I'm happy to say this. I'm not a one side, your side thing. It's like on a policy basis. I'm yet to see what he's done that's actually being useful. But if he does, I'm happy to say it. Pox also, by the way, on the opposition, both in terms of within his party and outside the party. Why is Trump so successful as a populist? Because other potential solutions, other potential candidates, past administrations, other would-be alternatives, have not been able to provide people a set of solutions that they prefer.

30:21and so if you run an economy if you run a society to your point if you run a country such that people go stuff this for a game of soldiers I'll vote for that bloke because he seems like mad but nothing you guys are doing is working then we kind of I won't say we deserve it but it's the people who allow him to be the least worst choice for half of people who voted I mean that says that's a lot about Trump it's a lot about the voters it's a whole lot about the rest of the potential alternatives too and you know it's not the Democrats fault not even the Republicans on the fault that Trump's an idiot, but the fact they couldn't present a viable alternative, an electable alternative, a track record that suggests these people should be given more time or additional terms or something.

31:02Again, not just Biden and Harris, but someone on the Republican side, multiple people on the Republican side. It tells you a lot about how things have been allowed to develop so that people feel like, I mean, you know, the Tea Party was around for years before Trump turned up and they had nothing about it. You end up with Trump. You know, it's, it is what it is. Oh, gosh, dude. It's a story as old as time, right? Every populist comes in on the back of a long decline and malaise of just like inept leaders of any ideological persuasion. Correct. It's not a political view. It's the reality of people get sick of everything else that's been offered, everything else that's been provided, and say, well, I guess we'll give this guy a go.

31:48I'll give anything a go. Because he talks our languages. Yep. Yeah, I'll give anything a go. I think I might have mentioned Malay recently in Argentina. Imagine coming in on a platform, I'm going to like fire half the public service. I'm going to get rid of all your entitlements. I'm going to do all, you know, like it's pretty wild kind of stuff. Someone like that only gets in because everyone's like, oh, gosh, how many decades of overt corruption and crony capitalism do we need before we actually give someone a go? By the way, I don't know if you have Neil Ferguson. I can never pronounce his name.

32:17I think it's Neil. Neil? It's N-I-A-L. He's the British economics professor dude. You know, some things I like, some things I don't. But anyway, he had a good thing to say. Apparently, things have really turned around there, right? So it's interesting though, isn't it? Because there is – not that I'm necessarily a cheerleader for Malay, but it does – you kind of need a license to make radical changes. And that license usually will come from just an utter and overt and at a point undeniable failure of previous regimes. And you might get lucky where you get – I'm not close enough to it to speak with authority on it.

32:59But ostensibly, it looks like he is doing good. Maybe he's not. And people who know better might correct me on that if you're lucky. Or you might get someone like Trump. Or you're lucky. Frankly. or insert dictator authoritarian person here. They always start with revolutionaries and they quickly become authoritarians. By the way, I'll say this about Malay for what it's worth. I haven't followed it super closely. What I've said about governments before, I will continue, which is very few governments actually deserve the credit or the blame they are given by their supporters or detractors because they normally come in having inherited what, Yes, they've changed some stuff, but do the changes themselves, people say, so I'll whack my leg on the libertarian side.

33:48People say, oh, Jim Chalmers has fixed the budget. No, he hasn't. The government has done almost exactly zero to make it. What happened? Well, welfare spending fell and tax revenues rose because the economy picked up, period. Or commodity prices. In turn, because commodity prices. Yes, yes, company taxes went up. What a genius. Did Chalmers fix the budget or was Chalmers around when the budget improved? Now, could he have done worse? Of course. He could have spent more money. Sure. But the cause of the draw, it's his correlation with the causation. And so in Malay, they had two years of recession.

34:21Now, most recessions don't go for two years. Yeah. And so all you have, and remember, recessions aren't even necessarily, well, you don't even go back to where you started from. You just have to stop declining. So if you have two years of 5 % declines and then the economy grows half a percent in year three. That's true. Oh, the recession's over. We fixed it. Yeah. It's like, well, did you fix it? Yes. Did you fix it? Or do things just simply bottom out and start to recover? Because generally speaking, you made the point about, you know, amount of intervention from reserve banks and others. Generally speaking, you know, we can argue about how deep and how long these things will go for, but there's never been a permanent recession, permanent depression.

34:55You know, the Great Depression was awful. Most recessions last for 18 months. If Argentina's was two years, it was a bit longer, a bit worse than most. Almost by definition, the expected bounce back, just because things do find a new equilibrium and then start to grow from there. That's a great point. They just kind of tend to. And so, again, I'm not saying - We'll have to wait 10 years before we know. Yeah, that's an excellent point. 10 years worth of other influences. The world economy grew. Did that help? Did the Argentina's currency fall and therefore their products were more competitive for exporters?

35:23Probably. If inflation rose, then the currency probably fell and maybe imports became more expensive. So it helped people buy more Argentinian produce and manufacturers and therefore the economy grew. There's so much of this, which even in 10 years' time. And again, whether it goes well or badly, I don't care who your preferred team is. You look at me and say, oh, he fixed it, they fixed it. It just doesn't work. You can look at their, if Chalmers had changed in Australia, had introduced X tax, that raised X dollars and fixed the budget, cool. If he's cut X dollars from spending and fixed the budget, cool.

35:57If he just happened to be there when the cash was counted, you know, I had the green eye shade on and I get to count the money. Oh, it turns out we made some money. I delivered a budget surplus. No, you counted the surplus. That's fine. It's true. It's real. Better than deficit. But let's not give too much blame or credit, by the way, if the reverse had happened. If Chalmers had walked into office and the economy had fallen because COVID extended or the US went nuts, funnily enough, or whatever happens, are they going to be responsible for that? No, of course they're not. They shouldn't be given too much credit or too much blame no matter what happens.

36:26Oh, it's an excellent point. I 100 % agree with that. I've often said you could drop me in as the CEO of any listed company. Make me head of CBA and I promise you, this is going to sound arrogant, but I promise you it's not. I will explode profits. And I'm in a good way. I will make it rain money for a year or two and then the whole thing will collapse in a heat. But I'm going to look like a genius for a little while. I'm just going to give anyone who can fog a mirror some credit. I'm going to offer the lowest rates on the market. I'm going to gobble up market share. It's all money that I created anyway, so I've got unlimited amount to lend.

36:59you know cut back on branch refurbishments half your marketing budget for 12 months get rid of half the stuff we're not going to do we're not going to improve the website we're not going to undo this get rid of the call center I don't know how much more you can save on the call center it's so terrible but anyway but do you know what I mean charge dead people for insurance oh they're already doing that they've already done that yeah that's okay rig the FX market no we've done that as well I was a CBO that's the other mob even our podcast is not long enough to list all of the oh they keep happening I know everyone asked on radio about the latest bank scan I'm like Like the Royal Commission was out eight years ago.

37:30Like at what point do you kind of go, oh, that was before. That was before. It's like, no, no, it's now. It's like, oh man. Oh, what I love, what I love is you get some numpty journalist go, but they got a$10 million fine. Stick that up, you know,$10 million. That's petty cash. They made that in the last 40 minutes. Like, do you know how to do maths? Do you know? Like, it's like that idea of like a million seconds was a few weeks ago in a billion seconds was like when the pyramids are built. I'm making it up, but it's something like, these are orders of magnitude that are different. And to think that these fines do anything.

38:09Obviously, they don't. The fact that it keeps happening probably suggests that it's not punitive enough, right? Correct, right. Yeah, they don't care enough to actually bother spending money and trying to make sure it's fixed. Yeah, exactly. We'll get onto this in a moment, though, but it's sort of like, this is a good segue. I'll lead you into this. The best way to do it though, because politicians are idiots, is to say, but I know we did this bad thing, but it was just a few bad apples. But if you do this to us, we might have to fire some people. What about the workers? You can't do that to us.

38:40All these people are going to lose their jobs. You're not making this up. Because we know exactly what happened. I'm going to read you the beginning of an AFR story from Tuesday. Tuesday. Quote, The New South Wales government has delayed plans to restrict cash use on gaming floors in a bit to avoid the potential loss of thousands of jobs and provide the country's two major casino operators with some financial relief. Oh, poor, those poor little pedals. Customers at Star Entertainment's flagship Sydney Precinct and Crown & Resorts Casino and Barangaroo can gamble up to$5 ,000 in cash every day.

39:24But not more than that. The figure was meant to fall to$1 ,000 on August 19, but the two operators requested a delay over concerns it could drive out customers. Reid demanded a delay. This is the second time in two years the New South Wales government had delayed cash limit restrictions. The$1 ,000 limit, which was a proposed way to mitigate financial crime, was originally meant to be in place from August last year. The government delayed the transition by a year after Starr and Crown said they weren't prepared for the changeover. Oh, well, they weren't already yet. Please help us out. What about the workers?

40:02You're right. And just like, actually, despite it all, I can only be impressed that it works. Like, yeah. I could imagine being in the boardroom and it's being discussed like, Like, well, we could play that card. And I'd be the naive fool to go, that's not, it's so transparent. We can't do that. They won't buy that. They will pick that up a mile away. The press will have a field day with this. No, they'll swallow it without even blinking. And the politicians will pony up the dough and the party will keep going. That's why. So this is, when you said that in the boardroom, right, I'm going to sit across the table before I say, Andrew, Andrew, Andrew, Andrew.

40:46What do politicians care about most? Votes. Votes. And if we have unemployment rise, are we going to have more or less votes? Less. And if we don't make the change and there's a bit more crime, it's financial crime anyways, it's white collar crime, who's going to care? White collar crime. It's almost victimless, isn't it? So hang on, I'm going to have no one complain about me leaving the restrictions in place if I leave them in place. if I take them away we might have less crime and I'm in government I'm supposed to care about that and I do kind of but not as much as I care about votes Andrew so I don't care they can have the money because you know what if they sack some people you're on the front page of the paper and they'll say the US government didn't do anything to help us out and we'll get blamed so if I'd rather have votes than actually do the right thing I'm going to give Crown and Star another two years doesn't that sound like a good idea to you?

41:41it is absolute and to your point It is so incredibly transparent and completely unsurprising. By the way, it sounds familiar. Wayala, South Australia, anybody? We talked about last week about Mount Isa and Glencore. We might attack some people. If you don't fix our problem for us, is it justified? It's a hostage. You're taking a hostage. Like in any other circumstance, it would be seen for what it is. It's like you're grabbing some innocent person, putting him in a headlock and pointing a gun at their head and saying, unless you give me what I want, I'm going to shoot this person. It's effectively what they're doing.

42:13It's exactly what it is. And we go, okay, we won't negotiate with terrorists unless they're in a suit. And then we will absolutely negotiate with you. No, we won't negotiate. We'll give them exactly what they want. There's no negotiation. They send us a ransom letter. Pay it. We could probably pay less. No, pay it. But what if we just ask them, no, pay the bloody bill. Just pay the ransom. Make it go away. It is atrocious and absolutely atrocious. The New South Wales government deserves every bit of opprobrium they get. it is just extraordinarily craven and gutless there was licked they did it to crack down on financial crime in other words and let's be very clear the measure that was designed to prove to have less crime is being shelved which can only mean we assume there'll be more crime as a result than what there would have been had the change been made that's what they are literally trading off here let's support a few hundred jobs maybe a thousand jobs and let crime go undetected and unmanaged, that's the trade-off.

43:09Yep. And the other component, gosh, it's hard not to be cynical, isn't it? It's so hard not to be cynical. It's cynical, mate. If cynical would be, I have a feeling these people are worse than they actually are, or maybe they're presenting. Yes, right. You don't have to be cynical. You look at the news, it's a very rational view to simply say, I'm not even saying they will do other things. I'm saying this thing. If you and I said, you know what, Andrew, I reckon they'll probably, If Crown and Sarai ever did it, they'd probably do it. That's cynical. When they actually do it, it's not cynical anymore.

43:40It's just like, it's black and white. They've literally said, they've told us, they've said the quiet bit out loud, as you like to say. It's not cynical anymore. It's just straight out, we are trading some jobs for more crime. That's the deal we decided to strike. And the other component with it is, is that we get a kickback on this. And it's like, well, it's not necessarily a kickback. It's actually called a casino duty. And in 2020, I had to look it up. In August of 2023, there was a new tax arrangement that was agreed. And this is in regard to the star, Sydney, that would generate$2.7 billion over 10 years.

44:11So they get about$270 million per year on average. By the way, they actually rolled that one back too because Star complained. What? And here's the thing, right? Because people always say, and I know what you're saying, people say, oh, they do it because they get the money. Yes. I swear to God, the pollies care about the tax revenues, but not as much as the jobs. they're collecting less tax than they would have from Star because they're worried about losing their jobs. So not only have they allowed more crime there's less money coming into the state government coffers. Why? Because they care more about votes than either tax revenues or crime.

44:44Oh my gosh. I don't even know what to say and do. Yeah, I don't. I mean, normally I would sort of say, well, don't vote for them. But then like, well, the other crew do the same. That's the problem. That's exactly the problem. Motley Fool Money. For more, subscribe to the free newsletter at fool.com.au forward slash listener.

45:08Can I take a massive tangent, mate? I should. As long as there's a rant involved, sign me up. Well, it's not actually that much of a tangent. On the weekend, if you have a subscription to the Age or the SMH or one of the old Fairfax 9 newspapers, Peter Fitzsimons the the former rugby player and journo author interviewed the minister for gaming and racing in New South Wales wasn't even about that it was about pokies that's why this is a slight tangent but it's definitely a rant in it okay um I'm trying to find the I'm trying to find the the request um quote from Fitz quote for this interview my focus within your portfolio is pokies as a serious question do you accept that pokies are misery machines and the more they are in the community the more amount of misery results um the minister says we accept that for some people it creates massive problems right we absolutely acknowledge that but not for most people it is legal one of my roles is to make sure it's legal activity is done in the safest possible way he says um here's the other quote um fits quote with the greatest respect this is prevarication so the minister goes on a waffle around yeah let's have a mind experiment there are two communities of people blah blah anyway he says at the end what would be your expectation of the net amount of misery in those two communities when compared so one is when there's more or less pokies right yep gosh what what could possibly be the answer what's your definition of misery god they're good i mean they're good at one thing right and they're very good at it start with domestic violence bankruptcies depression suicide depression etc the myth says but are you taking into account alcohol are you taking account employment other under employment other factors It's okay to be addicted as long as you've got a job and you're paying tax.

46:47Fitz then says, no, all else equal in the fair income department, in the no bullshit department, direct quotes, I'm going to say it. Which one do you think will be happiest? The minister? I can't definitively say because it's not black and white. I swear to absolute God, mate. And then the same people go, people are losing trust in politicians. Yeah, exactly. What's going on? What's happened to society? Oh, everyone's so jaded. Can't they see that we're, you know, and it's just, it's so hard, isn't it, to be anything other than jaded? And by the way, they're talking about the number of machines, right?

47:22And there's more entitlements for poker machines than actual machines. So just to set that up, the minister says, oh, no, no, there's fewer entitlements. So the number of machines haven't dropped, but the number of entitlements have. What do you mean by an entitlement, sorry? So you can have up to 100 ,000 pokies in the state. There's currently 95 ,000 of them actually being operated. so they reduced the 100 ,000 entitlements down to 95 ,000 and say see we fixed the problem there's less entitlements now but are there less machines no but there's less entitlements it's like saying there's fuel cars there's the same number of cars but fuel people with driver's licenses so anyway we've got to make it about this but it does always get me it's just sort of like Lord help me if I want to go buy $100 a Bitcoin and try and get that through the banks but if I want to like dump like you know $20 ,000.

48:12No problem. You can gamble$5 ,000 a day at Crown. You can't buy 10 grand worth of Bitcoin. So that's for my safety. Yes, it is. But that's not for my safety. That's criminals can money launder. That's okay. Just be careful with your Bitcoin. But they definitely don't launder through the casinos. No. No, that is impossible. That would never happen. You put it on Blackboard, you can't buy, what do you say, funny internet tokens, what do you call it? Magic internet tokens. Magic internet beans, yeah. mate let's well let's go from one interesting we're gonna end on on an upbeat note let's just try and aim for that is that your face says your face says that's a tall order let's let's quickly talk about a couple of things uh asx so we talk about high margins right talk about monopolies the other thing monopolies tend to do is make companies fat and lazy yep and i'm not going to make that assertion necessarily about the asx other than i don't remember the last thing they did right.

49:07Between the outages, between the blockchain technology to replace their chess system, TPG Capital made a bid for a little software company called InfoMedia. It's actually a formal recommendation way back in the day. TPG Capital. I'm saying capital twice because just keep that in mind. And so the ASX posted the statement from InfoMedia saying, guess what we've been offered some money from tpg capital and asx has to post that as an announcement what they then do is let's say woolies were going to buy coals just for the fun of it coals say hey woolies are going to buy coals and so coals put the announcement up on their on their announcements the asx will cross post that to woolworths as well because it's about another listed company right it's appropriate that's done that way in there i'll say wisdom i feel really sorry for the poor bugger who did this because they weren't doing deliberately just made a mistake and it's all awful but they posted it against tpg telecom to infer to investors that tpg telecom was going to make a bid for infomedia rather than tpg capital yes victimless same acronym was that a crime it's a complete stuff up right but it's just i don't know what's going on at asx i suspect that they make a lot of money uh i suspect that their market wants to make even more money i suspect that there's not a lot of growth going on on the asx because i think so many shares trade and listings and they get a bit of growth over time but you know so what do you do if you want to do that well you probably try to keep your costs under control you probably don't over invest in your systems you probably try and maximize every single dollar you can get a bit like the banks unfortunately for what it's worth uh and speaking of power i suspect a lot of fund managers who made bad trades on tpg for the 10 minutes or so until the mistake was corrected have a little more power than other people, other parts of the economy.

50:54Certainly the poor dead person with the insurance policy or the person who's paid more fees than they should have for the bank. And so, yes, this is... The ASIC's been dragged back over the coals for the nth time. I don't know if there's any skin left on their back that many times they've been dragged over the coals. But again, having made this... When you've got a lot of fat covering you, you know, there's some padding. Nice, I like it. There's no even a serious so what here, other than I think to the point I was making, I just kind of want to make the point that it's monopolies can be wonderful businesses.

51:23They get fat and lazy. By the way, take Telstra, for example, it was Telecom Australia. You can have your views about sacking workers, making people redundant, but the number of staff that are now employed by Telstra versus what the light in the, during the last government ownership, despite the growth of mobile internet since then tells you that, you know, monopolies get fat and lazy. I'm not against government ownership, by the way, it depends on the asset and lots of stuff, but just to make the point that when you've got a monopoly business, You don't have to try very hard. There's only one place you can trade shares, so you go to the ASX.

51:50It's not true, by the way. You can do it through CBO these days, the Chicago Board of Exchange trade ASX stocks. But when ASX got the settlement monopoly, you know, yeah. I suspect if this was a private business with competition, they'd make a few less mistakes. Oh, 100%. I mean, we started this podcast talking about net margins, right? I just had to calculate it. So for the last 10 years, it's averaged. I said very, very few companies ever get to 50%. Well, ASX has been hovering around that for 10 years. Net margins. I had no idea. And I've just gone to ComSec and taken the earnings per share and divided that by the sales per share.

52:32Nice. It's 45 % over 2024. Just put that in perspective. That's after every single cost, non-cash or cash. It's after tax. It's after everything. they made per every share that exists they made$5.43 last year and after everything was said and done they kept$2.45 of that like so revenue versus profits revenue versus profits so if that was if that was Woolies you know they would have made $0.27 off the back of that yep yep and it's sort of like wow how come they can get those mines because there's no competition there's your answer right and then you go well that must be an incredible investment Like there's no competition and they're effectively a vital service in our modern economy.

53:21It's like, yeah, earnings are kind of grown, but they are, despite that incredible privilege, I think they're one of the poorer-run businesses out there. And you can afford to be. Correct. There's no competition. There's no competition, right? And so you look at a lot of the things. I mean, anyone who can blow up$100 million on quote-unquote blockchain technology that anyone could have told you was never going to work in the first place beforehand. And not fit for purpose. Yeah, and it did not fit for purpose. And by the way, even if you needed to do a bit of research to figure out if it was viable, did you have to spend$100 million before you realized this thing ain't going to work?

53:59I mean, and that's just - Over years, by the way, they didn't have one check for 100 million. They kept going and going and going and going. Just because you've got a fat - I don't think I'll get sued if you don't mention name, but I mean, just a board that's so distracted. You go in, you have your coffee and sandwiches once a month. You talk about your latest ESG mandates. It all sounds good. And you go off and have lunch at your gentleman's club of your choice, you know, and it's just like we don't have to try because we're just going to mint cash no matter what. And it's just sort of like it's not so much tall poppy or screw you guys, you know, that's not, why can't I do that?

54:37No, it's like, it's actually us, the investor and Australians that suffer from all of this. We do not have the range of services and the cost of services we would otherwise have in a better functioning market. And okay, look, there are certain things that sort of tend towards monopoly. But it's like Crown, right? It's another example where the government, the people who are meant to protect us from the overt, unreasonable use of monopolistic powers just never do anything. They're so captured by these people. So all you have to do is play the jobs card or play the we're vital to the economy card or something, you know, whatever it is.

55:17And the gravy train goes on. And yet, despite all of that, you would have made$2.20 per share 10 years ago. And now you're making$2.45 per share. And it's why high margin businesses aren't necessarily great investments because they've got to be growing. Remember where you start from. It doesn't actually matter where you start from. High margin businesses can be higher quality businesses sometimes. And the quality in this case isn't actually the business quality. It's the monopoly quality. And if that's genuine, monopoly is a fantastic competitive advantage. So that is demonstration of that. And that gives you protection from competition.

55:44So that's good. But it has until now. It may change. But where do your returns come from? Your returns can only come from either buying at a really cheap price and or business can grow its earnings. And you can be in a monopoly business in a, you know, I won't say no growth market, it'll grow a little bit. But just remember that all of this is already baked in. Don't pay twice for quality. You've got to get that growth or you've got to be buying for a really cheap price. Neither is true of the ASX and the returns have been ordinary as a result. I'm a little bit more salty and normal with this because it impacts me personally.

56:17I'd forgotten about that. Yes. And I won't go into the details, but obviously running the business that I do, I need kind of access to price data. and we've looked in the past at other things as well it's like you know what would be really cool if we could put some ASX announcements on there hey ASX this is assuming you can find someone to talk to right and if you're ComSec no problem they'll send a limo around to collect you if your little old me is like hey I want to give you some money fellas can I give you some money I want to buy some of your stuff and they go, yeah, finally you get someone and they'll go, they couldn't care less, right?

56:58So they'll reply to you after two weeks and they'll go, yep, no problem. Have a guess at how much it costs to get ASX announcements per year. 10 grand? 25 grand last I checked and that was a couple of years ago. Oh, I have to correct myself. That's not to get the announcements. That's to get the license to be allowed to display the announcement. I've then got to go to S &P or Morningstar or one of these other oligopolies. I can't even say it. Joking on my own rage. To then pay them a flipping fortune to do it. And again, it's just sort of like, well, it sucks to be you, Andrew. It's like, no, it sucks.

57:38Well, it's kind of about me, but it's also it's like, wait a second. This is a, the key is in the name. It's a public market for the public, right? And it's like, here is a public institution. extensively to service the needs of everyday Australian investors. And it's not unreasonable for you to go, can I get the information that these companies are releasing? Because they have to release it to you as per the listing rules and they have to release it to you. So again, there's no other choice. They have to do it through you. If it's a requirement for that to be published, it must be universally available at no cost.

58:17Now, the ISX will turn around and go, well, it is. You can get it from our website. If you want to use a website from 1994, we've got one right here. And you can navigate through this ridiculous interface to try and get announcements. But if you want to put that in any other form, it's easy for consumers to get and read. It's like, no, you can't do that. Or we're going to charge you. It's so egregious. Now, they've got costs. There's a server that needs to hold that information. There's someone that needs to. I'm not saying they should give it away, but are you trying to tell me it costs you 25 grand a year?

58:56We know it doesn't because we've seen the margins. It doesn't, right? By definition, we know what the costs are. Their costs are about half of what you're paying for that service. A little bit more of a rant, then I'll shut up. And here's why it matters to you, dear listener, because it's not always all about me, although it's kind of all about me, isn't it? The reason why it's about you is that when you go and say, hey, I would like to participate in this great capitalist experiment of ours and become a part owner in some of these wonderful Australian companies. What do I do? It's like, well, there's three or four megacorps that you can choose from, a whole bunch of Johnny-come-latelys who are just never going to get scale, and that's it.

59:34So in other words, your choice as a consumer is extremely limited to the E-Trades, the Comsecs, the Macquaries of this world who can afford a floor full of, you know, administrators and lawyers and regulatory consultants to navigate this and who can pay the egregious fees and who love to pay. They know it's egregious, but they're happy to pay because it keeps people like me away. You don't want the dude in their mom's basement building up an app that's going to be 50 ,000 times better than whatever nonsense E-Trade is serving up. Yeah. So the reason that your experience isn't 50 times better as an investor in Australia is because of that.

1:00:13It's because of that nonsense. And it's got all the – again, this is a stroke of a pen fix. It's like, well, you are a monopoly and we regulate you as such. And so we're just going to say that as a provider of a public service, you must give affordable access to anyone who will ask it of your pricing. I'm just talking about pricing data. Dude, just oversharing here. Just to get closing prices, not current prices, not 20 minute delay, closing prices. The market closes at 4 p.m. Sydney time. At 6, I might get updated on those prices. And for that, I've got to pay the ASX a license fee each year of several tens of thousands of dollars and stand in and pause, about$18 ,000 a year.

1:00:59Like it's for price data. And people wonder why there's not enough apps out there that do it. Now, other people get around this because they scrape the data. They just build a bot, go to the ASX, scrape the data. And it's completely illegal, but it's whack-a-mole. And so, but they'll never get scale. They'll never get commercial success. And so, but this is also used as a reason as to why we can't do these things. And it's just, it's all an elaborate charade to basically keep the circle pretty tight, if you ask me. Rant over. Sorry, had to say it. Well done. ASX of bastards. I'm going to fish with the rant on my own.

1:01:32Please do. Lay it on me. Hey, by the way, if you've made it this far on your Elon fanboy, now's a good time to turn off. During the week, it was announced that Elon Musk is going to receive$44 billion, for Australian, about$29 billion American worth of shares to hang around. Well, we don't want to let him go, right? Warren Buffett for the last, I don't know how many decades, has been paid$100 ,000 a year. Now, I can't remember if that's$200 ,000. He's not as rich as Buffett, though. He's not as rich as Musk, is he? No. Now, I don't know. It's either$229 ,000 on 290 ,000 times what Musk is getting based on some simply Musk drew no salary yeah so if he worked for 290 ,000 years at 100 grand a year he'd have the same amount of money so you can do that if you want so that's a good deal now I want to say a couple things really clearly very clearly firstly there's a whole lot of shemozle about the court overturning what Shea was already approved I don't think that's a good idea as long as I'm not a legal expert I have no left-leaning court I don't care it's not about the court overturning whatever the court overturned the original deal was also stupidly egregious here's my here's what I want you to think about if you're listening to this right now you're hopefully an investor you're hopefully an even thinker an equal thinker and I want you to put aside the Musk fanboyism for a second you've got Scott Phillips and he's running he happens to be an EV genius and Musk is a genius right he's done a very good job building his businesses there was no criticism of him whatsoever you can by the way this is the other thing you have to take a side you say that is good that is bad it can be about the same person and that's okay surprisingly enough same party that's also possible believe it or not guys Let's go with that.

1:03:13No, if it's not in black and white, I can't compute. It's pure black or it's pure white. So my team works their team. I love my team. I hate their team. That's all I have. Bad person, good person. So Musk getting$44 billion worth of shares to hang around. So he's worth it. Maybe he is. That's a different question. He is the negotiation. At some point, the board who represent the shareholders, not the company, the shareholders, which is another way of saying the owners of the company right thank you have to have a negotiation with the employee the highest ranking employee of the company the CEO and they have to sit down with that person and say look our shareholders want the highest return on investment they can get on any investment we make and Mr.

1:04:00CEO, Mr. CEO Mr. in this case you are an investment we are going to pay you as little as we possibly can and get the most out of you. Why? Because that is our job. Why would you pay someone more than you had to? You wouldn't. Why would you accept less out of someone than you had to? You could demand. You wouldn't. So, by the way, that's how I get paid. Right? If you're a wage earner, that's how you get paid. Your boss says, I don't want my wage bill to be higher than it has to be. I reckon Scott's worth$15 a day, so that's what I get. Right? Now, if I can get$16 a day somewhere else, I'll go somewhere else.

1:04:34So the boss might pay me$16 to keep me if you think I'm worth keeping. But broadly, they've sat down with Musk and said, well, we don't know what the conversation was. The net result is we know, they said, he's$44 billion to hang around. Now, here's my question to a fair-minded listener who's not an Elon Musk fanboy. You're going to like him, just don't fanboy him. Here's my reasonable question. Was$44 billion required to keep Elon Musk? And there's two possible answers to that. One is, yes, because Musk, if he gets anything less than that, he's leaving. Now, is that reasonable when most of his wealth is in Tesla shares?

1:05:11Was that a reasonable gambit? Maybe. If it was right, if it is accurate, they paid as little as possible. It cost exactly$44 billion to keep Musk. I was going to walk. Just recognize that as other shareholders of Tesla, you're effectively being extorted. Because Elon Musk has said, money or the gun, either you give me the money or I walk. And so that's the person who is running your company. And that's okay. He's entitled to make that claim. The board's entitled to pay him that much money. But if that was the number that took Musk to say, otherwise I'm leaving, and it was a genuine threat, then just know that he took$44 billion out of your hands and gave it to himself, because he could, to stay, when otherwise he would have walked away and left the whole thing crumble.

1:05:52That's one outcome. The other is Musk would have stayed for$30 billion or$20 billion or$5 billion or$2 billion or$150 million. Or zero, because all his wealth is tied up in shares, so he would probably call that bluff any day of the week. In which case, they've paid him somewhere between zero and$44 billion too much and done the absolutely worst negotiation in, as far as I can tell, executive remuneration history. One more quick thing, just to put that$44 billion in context. Last year, in 2024, Tesla's net income was$7 billion. Yeah. don't you know now has he built a wonderful company seven years worth of profit at the current rate right yeah has he built a wonderful company absolutely has he revolutionized transport absolutely has he revolutionized home batteries absolutely would this have happened anyway maybe would it happen as quickly no clearly not do we owe him a lot for having made those changes yes do tesla shareholds owe him a lot for having done what he's done yes guess what he's got a lot he owns the shares he's he's done very nicely from his own hard work thank you very much does he deserve the money you can argue that maybe he does does he did the board have to give him that much as i said either they've massively overpaid by somewhere between zero and 44 billion dollars or he literally said i will blow this whole joint up if you don't give me that money yeah and that's fine but know that that's the ceo of your company i'm not making assertions i don't know which one it was i doubt it was the this is the my only price or i'm walking maybe it was if it was you know that that's what happened if it wasn't then the board have paid him way too much money so when you look at 44 billion dollars don't go to the he's a long he's done a wonderful job of course he has but if you paid him 20 billion dollars you'll be saying the same thing if you paid him 10 billion dollars you'll be saying the same thing so 100 billion dollars it was the same thing what we're talking about is the price and as a board either paid exactly the right amount of money and musk has effectively threatened to blow the place up or they paid him way too much and neither of those should be something as a tesla shareholder i would be particularly comfortable with, I've got to say.

1:07:57Yeah. I mean, that's, it's, I can see, I know you got some flack on Twitter for that. Little tiny bit. Yeah. And it's kind of like, what was interesting, because I've just been scrolling through it. I'm walking my world. Which is, which is fun. If that's the right word for it. But it's so funny how like everyone takes what you've said completely out of context and focus only on the fact that you're being mean to us. That's what it was. It feels like you're being mean to Musk. Yeah. The point is, it's very simply. It's just like the board's job is to get the best deal for shareholders. Correct.

1:08:36And they probably didn't here. That's it. No comment on his character, on his capability. I mean, it's all different things can be said. Yeah. But it's just that's true, by the way. Has he been wonderful? Yes. Is Tesla was good without him? No. Those things are all true. And then there's a negotiation about salary. Yeah. It's not either. If it was a quadrillion dollars, we'd just say, oh, he's worth a lot to the company. It doesn't mean what it is without him. No, I know. I get that. The question is, how much is he worth? What should he be paid? That's the question. The other one is, but it's not cash.

1:09:08It's shares. It's like, yeah. Yeah, it's worse. They took money out of your pocket and gave it to him. Yeah, they lose it to you. Yeah, yeah, yeah. I love this non-cash kind of way of looking at things. It's like, if that's true, I tell you what, just don't pay me any cash. Just give me half the stock of Commonwealth Bank. It's not cash. It's not real, isn't it? So imagine this, right? People say it's not cash. It's not cash. You're right. Let's say you and a mate. Let's say Andrew and I own a cafe. I love the cafe around the corner from Andrew's place. It does mocha, soy, chai, latte things because Andrew's that kind of guy.

1:09:44He grows a beard and does most coffee. We own half of it each. And then tomorrow morning I said to Andrew, so by the way make a fortune we're really good at this stuff right Andrew has great coffees and I just say out of the way and it's great and then tomorrow morning I say oh by the way Andrew look I I decided to give myself another half of the business so actually half of your shares so actually I own 75 % now you own 25 % but let's tell you it's not cash you didn't take any of my shares you just created some new ones out of thin air yep either way you know I own 25 % of the business I own 75 % of the business but it's okay it's not cash non-cash it doesn't cost you anything it's not cash it's only shares don't worry about it that's cool you still get your$14 now pulling coffees yeah it's not cash it's fine it's so obvious right that's ridiculous well just remember that analogy next time the government borrows a gazillion trillion dollars to buy something that they can't afford if you find that that share issue is exactly the same with the money it's not the borrowing it's the printing but it's the same thing it's the printing right yeah well it's a whole other thing but yes good rant mate thank you mate I liked it a lot again it's not by the way it's still not anti-Elon it'd be the same as any other CEO I did make the point that Buffett's salary versus Musk because I think there is something about there's something there's something there's something to be said about Buffett jokes by the way he's never been asked to be on a remuneration committee in his life because he would actually drive a harder bargain than the boards tend to there is something to be said for what an already rich person decides to demand or even accept in that kind of situation is all I'll say.

1:11:22And again, because to your point, Matt, it's not even that he got some made up new money. I mean, he's made up new shares, but he literally diluted other shareholders in Tesla for that purpose. So if you're a Tesla fanboy and you own Tesla shares and you're happy that Musk has done that, I'm just going to ask you to maybe just recheck your investment thesis because you can love Elon, you can love Tesla, you can think even despite this, it'll do well, you just get less of it. and he must didn't need it and the board didn't need to give it to him. In my humble opinion, his future was well truly tied to the Tesla share price.

1:11:54If Tesla was well from here, he's going to make a squillion dollars. He doesn't need the money. If it doesn't, then the share's not worth anything. Either way, if he's not committed to stay with you other than for the money, have a think about what that means. Yep. Yep. No, 100 % well said. I mean, this is such a broader conversation to be had here over general remuneration on these kinds of things. and you look at the way businesses are run, particularly in the listed space, and they are not optimized for longevity and stability. And you look at it from the outside and you go, that's crazy. You're building these hyper fragile things, but actually it's perfectly rational.

1:12:32If you're there for a good time, not a long time, like here you go, Mr. CEO, and more often than not it is Mr. um you you will we're going to pay you this much money per year and we're going to give you these really generous bonuses if you're able to do x y and z which ostensibly all look pretty good like yeah grow the share price or whatever but again you can do that just by strip mining business right you can all the things i i sort of said before and so we've got a modern economy in large part we're especially in the megacorp sort of side of things where the goal and the incentive is really just to amp the share price rather than build the most resilient, long-lasting and significant degree of cash flow that you can over time.

1:13:25And it's a very different thing because, well, so that means I'm very much incentivized to take on huge amounts of debt. So it's going to be a hyper-fragile business. I'm going to be very incentivized to make all kinds of big acquisitions because that's going to sort of help do whether or not it makes sense to do this. And I'm just basically going to cut all costs that are associated with long-term capital expenditure and development and all that kind of stuff. And we sort of look around and we wonder, it's just like, how did we get here? It's like, well, we, you know, Mungo, right? He said it.

1:13:58Show me the incentive and I'll show you the outcome. Yeah, exactly. So I'll give a shout out to the ASA here because I think they do a lot of good work on this. I don't think enough people recognize the significance of having appropriate remuneration structures. Not because I don't like rich people, rich people bad, that big money me not like, which tends to be the media's reaction. Oh, he's on$20 million and that's so unfair. It's unreasonable, yeah. No, honestly, some people actually, believe it or not, only one person in the world can do that. They're probably worth$20 million, right? And it's fair enough.

1:14:31And if they can only do that by creating immense amounts of value for the world than good. Like that's a fantastic thing. So it's not about the quantum of it. It's about trying to align it so that our interests are aligned so that, you know, that you do well if I do well, not in one particular orbit around the sun, but over the entire tenure of the business, then it just, things radically change. And I don't know. I don't know how you change this, but I think it's, again, we get like to our earlier conversation, you get the politicians you deserve. And we also get the corporate leaders that we deserve as well.

1:15:06And everything you've just said is case in point to that. We are way deep into the podcast, mate, but it's also worth, you asked about remuneration. Here's the insidious for shareholders, wonderful for executives the way this works is, and this is, we're about above average drive. 90 % of us recommend above average drivers, right? Let's say you take every CEO in the country and you average their pays. Roughly half of them are going to be below average. So every time there's a review, someone in the bottom quartile, the bottom 25th says, I'm being underpaid wealth for every other CEO in the country.

1:15:38I should get more. Yeah. And the board goes, all right, you can have some more. And they drop up into the second quartile, just above average. And guess what happens when you do that? The average comes up. No, then in the second quartile, they'll still be below average. No, second highest quartile. Oh, second highest. Second highest quartile. Sorry, yeah. So that drags the average up. So guess what? There's someone else now who was in the second lowest quartile, now in the lowest, who says to their remuneration committee, I'm getting paid way below the average. I'd like to be paid the least average, please.

1:16:04So they get paid a little bit more than the average. Guess what? The average comes up. But wait a second. Aren't there people in the top quartile who the board go, actually, you're in the top quartile here. You've been paying too much. The average is down here. We're going to knock your pay down. Yeah, no. That doesn't happen. No. I couldn't even say that with a straight place. And by the way, here's the other thing about Axel Musk and the board. Why? Because it's a hard conversation. Yeah. The board want to be nice to the CEO because they want the CEO to keep working in their favour and they don't want to cause any unnecessary friction.

1:16:29So you just kind of go, okay, we'll leave it. it's why you see repriced options why you see reset incentive schemes because they sort of say well you're not going to get your bonus but then you'll be desincentivized so i'm going to give a higher bonus to intent i'm going to reset your bonus you at least get something so you're incentivized to perform it it is a it is a fascinating study in human psychology in all of the worst possible ways the way it is set the way it's remunerated every remuneration committee by the way every remuneration ex so-called expert comes with the same report here's where they sit on the bell curve they're below average they should get paid more the average goes up someone Someone else is now below average, the average goes up.

1:17:02Someone else is below average, the average goes up. And around and around it goes. And do that enough times. Iterate that process enough times over 40 years. And guess what? You end up exactly where we are. And the answer in the same basket. What did Buffett call them? Ratchet, ratchet and bingo? Yeah, that's great, isn't it? Such a great line. Remuneration consultants. Yeah, love it. Yeah, yeah. Anyway. Who's Bread I Eat, His Song I Sing. Oh, I love that one too. I guess what you do as an investor, just to end on a practical note. No one reads it, but I do. I would encourage you to do it as well because it's actually, funnily enough, one of the biggest sections of the annual report is read the remuneration section.

1:17:39Not to get angry, although you probably will. I was going to say. But just to find out, you know, what bread is being eaten, so what song will be being sung here? Like whatever they're incentivized to do, they're going to try and do. Not because they're evil, but because they're rational, sensible people. What? I get$20 million if I do what? I'm going to try and do that. And it's not the CEO's fault. It's the board's fault for setting that. So again, you've got to be careful with this as an analysis, because if you look, we said before, perfection is the enemy of the good. If you only invest in companies that sort of align with some ideal remuneration structure, you'll invest in precisely one company probably.

1:18:23And that's probably Berkshire Hathaway. Everything else will be uninvestable. So you will need to make compromises. But definitely look at it. definitely look at it. Particularly be aware of things where there are near-term EBITDA targets in your remuneration, because you can do that instantly just by conjuring shares out of thin air and using it to acquire another company. And your earnings are going to go up guaranteed, no matter how much that makes sense. All kinds of things like that. So just take the time to read. Or nowadays, it's even easier, upload it into ChatGPT and just say, break this down for me in in a way that I can understand and it'll do a pretty good job of it.

1:19:01There you go. Nice bit of advice to finish with, mate. We've probably gone long enough. Will you come back on Sunday? Yes, hell yeah. Excellent. Until then, enjoy the first half of your weekend and full 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. Subscribe to the free newsletter at fool.com.au forward slash listener. The Motley Fool operates under Financial Services Licence 400691.