Bondi Massacre Hit Albanese, Taylor Swift’s Riches, ASIC’s Netwealth Fail, PuppyGate, Chemist Warehouse, Shayne Elliott’s $13m Cash Grab and Lululemon Deep Dive

27:26I think part of ISIS's goals is also to change the way of life. I think to an extent this has backfired. I think this has galvanized the non-Jewish community in a way that couldn't have actually happened without that. Certainly the outpour, I think every Jew appreciates the incredible outpouring of emotion from the non-Jewish community in the last week. I know certainly I've got messages not from – I've had messages from Muslim people who work for us and from obviously non-Jewish people who have been incredible in their support. And I can speak for everyone and how much it's appreciated. I think this has galvanised the community as to the threat.

28:02I think it's also happened in the backdrop that the war in Gaza is mostly over. There's still some spot flare-ups going, but it's mostly over. So I'm not sure the timing. I think the timing would have been far more effective six months ago for this attack to achieve those goals. I think it's almost had the reverse effect in some way. It's possible. The last thing I want to say, and then Mike, I'm super keen to hear what you're kind of outside of you and all of this. And you don't have to comment about all this, like the detail, but like just, you know, your feelings and how the week played out for you and amongst the people that you're friends with.

28:35But the last thing I want to say super clearly is this. if the con look we definitely have to make citizenship harder in this country to achieve it's got to be something that is earned i think we probably need to make immigration the bar higher and it needs to start with the null hypothesis i.e we're not going to let you into the country unless you prove to us that you're the right kind of person culturally for us to have in the country but i want to say that if this results in i said this last time if this results in a huge rise in the far right, because the far right is also a problem, just much less of a problem, if it results in people saying no more Muslim immigration, full stop, if it results in Islamophobia and persecution of Muslims in our society, then that is also, like that is not the solution to the problem because that is also inconsistent with Western liberal democratic values.

29:23And so that's why I say, like, we've got to walk the line here. Like, it is so easy to be angry about this. My God, I am so angry about this. but mostly and like and like obviously when you're angry and you're fearful that leads to hatred that is what drives one of the things that drives hatred and i think it's really important to fight that inclination towards hatred because that also undermines the western liberal values that we're trying to preserve in at the moment and so mike like what's your give us your take on all of this the last week? Yeah, well, I think it's impossible to be an Australian this week and not be hurting.

30:06And earlier in the week, I came home and my partner was watching the news crying. And that's the effect that I think something like this has on ordinary Australians who aren't linked to what's happening. And it's devastating to see this. I have a few Jewish friends, all of whom have posted on their own socials about how they've been feeling. And I think all a lot of us want to do is reach out with love and help people to feel safe and comfortable in this country because I see personally in my generation, particularly online on social media, so much hate, so much anger and almost farming for it, farming for engagement that hate brings on a lot of issues, not just this issue, on a lot of social issues.

31:01And I hope that we can be united in some way by this. I think this is just an absolute tragedy. It's absolutely probably the most horrific thing I've seen in my lifetime. I'm a bit younger than you guys, but one of the most, well, the most horrific thing I've seen, and I never thought I would see something like this in Australia. so you know as a bit of an outsider I'm not Jewish but I have a lot of Jewish friends and yeah like I said coming home and seeing my partner in tears watching the TV I think that was something that just really hit me and made me realize how how widespread this impact is.

31:46Do you think people your age that you know do you think they look at this attack and see it connected to the government or connected to the protest movement that's been going on or not? I think it's really hard to say. I'm really not 100 % sure. I think people of my generation are maybe a bit hesitant to label it as because of X or because of Y. I think people, maybe hesitant is the wrong word. I think people maybe don't, they want to have a level of disbelief or ignorance or, you know, that ignorance is bliss. They don't want to link it. So yeah, that's maybe the best sort of analysis I can give.

32:34I mean, I think if this happens again, I mean, again, God forbid, this happens again, but I think another attack is the end of the government. Like, I don't think the government, like, I think the government can survive one of these if they do the right things. and because it's so far from the next election. But I think another one is the end because they'll look weak on security. And I had someone say to me recently who engages in polling for a particular reason, which I won't say on air, but they're not political directly, but they engage in a lot of polling, engage a lot of polling. And they said that cost of living has been the primary concern, especially amongst under 35s for a long time in Australia.

33:10But what they've started to see before this attack is that concerns about security and safety have started to rise on this survey. Probably especially in Victoria, I assume. It would be worse in Victoria, but it's not just safety against crime. It's also broader security. And I think this is obviously going to exacerbate that. And fundamentally, like if Labor were to go to the next election, where one of the primary concern had shifted from cost of living, to security and safety, they'd be at a huge disadvantage even after this attack, let alone a second attack. They would just, I think they would be wiped out.

33:52And so I don't, you know, I'm a bit cynical in what I'm saying, right? But they, I think Albanese would be horrified by this and devastated. I think politically they would know this has to be stopped and they have to take extreme measures to stop it because they can't be re-elected if another attack happens. Jews, against whatever. Like it doesn't matter. I think that's the reality. You know, I joined, I just found out today, yesterday, I joined LinkedIn in 2006 because I got the LinkedIn annual and my most connected person for the year was Mike on my LinkedIn annual. So there you go. So a few people actually sent me those and I was the number one interacted.

34:32I comment on all your stuff. And so you're my number one thing, but in about 2009, so a few years after when I was messing around with Facebook, you know, I've said this too many times before. I said in public, I think that social media is fundamentally the greatest sadness machine that could ever be invented and I think it's going to make society sadder. I think it's delivered in spades over the last like 15 years. Like it has delivered more sadness to society than anything outside a world war could deliver. Like it's dreadful and I wish it was all shut down and I wish it all disappeared and I would even be happy to sacrifice LinkedIn if we erased all social media.

35:10But I definitely think this just continues to emphasize how dreadful social media has been for the broader society, notwithstanding that Insta is a great way to sell stuff. But like overall, it's been terrible. I think we did this a while ago. I think ranking the worst social media platforms, and I think you look at sort of probably TikTok and Twitter, are probably the two worst. And obviously TikTok controlled by the Chinese government subvertly. So I totally, I'd much rather say, I think that's why we love the social media ban so much because it just at least reduces it for some part of the community in the most vulnerable part of the community, which is the under-16s.

35:50So I think that's, again, if you look at some, one of the good things the Albanese government did, that was it. There wasn't plenty of stuff that we disagree with. I think that was some great points. We'll actually go to a quick break and we'll be back in a moment with our regular stories.

36:14and we're back and idea how was your taking obviously outside the horror let's go back to some some nicer things which is let's talk about money yeah talk about money which is obviously nice than what we talked about before yeah let's make some money so you know who's made money Taylor Swift, she's made a lot of money. And so let me ask you some questions about Taylor Swift making money, which I think you'll find very intriguing. I'm going to talk about, so this data that I'm going to share was very meticulously put together, not by me. And I looked at the way it was put together and I think it's reliable information.

36:49So that's why I'm sharing it. You can recognize the little dig I'm having at you based on the usual content that you share in these quizzes, Adam. So if I start you with this little anchor point. So Taylor Swift's Eras Tour, the value of ticket sales, I think this is all in US dollars. You want to guess broadly what the value of ticket sales are? Just round it out. Was it either one or two billion? I forget which one it was. A bit more than two billion USD. So now you know it's two billion USD. and since Mike is the quiz guru, if she sold$2.1 billion of tickets, how many dollars of merch do you think she sold?

37:32Well, I'm going to say for every ticket sold, someone might have spent$100 on merch. So what does that come to? Well, that's an impossible calculation because you're bringing in a unit of measurement that I haven't given you, which is the number of tickets sold. I don't know how much a ticket is. So$2.1 billion of ticket. So let's say a ticket is, what,$200? So you think half that number, again, might be merch sales, a billion dollars. What do you say, Adam? I think maybe – I think the average ticket price was higher, although the ticket price did vary a lot around the world. I'm going to say$600 million.

38:14Well, you're very close. I mean, you're both in the right ballpark. Like it was 500 mil and like I was astonished by that, that one-fifth, 20 % of all revenue generated from the Iris tour was merch-related and it is much better revenue than… Margin is massive. Ticket sales, right? Because I'll tell you, what do you think the margin is? What do you think the margin is on that? Like how much – because I've got a number here, merch cost of goods. I don't know what the people cost. 75 % margin, 75 to 80. So you think on the 500 mil, 75 % margin on that, okay? I'm talking about cogs. There's probably some selling costs on top of that.

38:53No, I know. I'm going to just end it there and say, you nailed it. Like there was 100 mil of costs on the 500 mil. She kept$400 million of the merch. Like that is pretty good, right? And she's got to do this little cut to the venue. You know how much she paid the venue on that 500 mil? $15 million. Seems like a pretty good deal. So merch, that rocks. We're going to come back to that. Now we have to do something with our ticket sales money. We have to pay three different things. We have to pay staging and production. We have to give the promoters some money. And we have to pay for the stadiums.

39:26So what do you think the order of those costs are in? Not how much, but what's the order? Stadium one, as in most expensive. Yeah, most expensive to least expensive. Most expensive stadium. What were the other two? It was promoter and it was ticket master. Staging and production. Then staging, production, then promoter. What do you say to that, Mike? Do you agree? I actually think. I'll give you a tip. You should agree. What were you going to say? Let him disagree. Okay, well, then I agree. No, no, I was going to say I actually think the same thing as Adam. Yes, well, that would be a very good thing to say.

39:58There you go. I saved you from yourself, which really is the main person you need to be saved from, I think, in your life. So what do you think? I'm trying to think about a way that doesn't make this boring. but like of the 2.1 bill how much do you think those three costs added up to how much of the 2.1 bill was eaten by stadium fee staging and production and promoters cut stadiums aren't cheap i reckon more than half gets eaten probably two-thirds gets eaten by costs so she's luckier than you would think she is because only 1.2 bill of the 2.1 bill gets eaten so a bit more than half but like that is still a lot right she's getting she's having a lot of the stadium cost 600 mil staging and production 400 mil and the promoters took 200 mil i'm just rounding it out and where does um where does ticket master come in as well because you gotta pay them as well i think they would be part of the stadium fees i think because you know they usually link to the stadium like they've got an agreement with the stadium yeah that's right and so she's kept 1.2 bill out of that, a 1.1 bill out of that.

41:04Then she'd pay this thing called crew slash performer bonus of 200 mil. God knows what that is. I suspect half of that probably goes to her anyway. What's like her, she got like a band and all that stuff, dances and stuff. Yes, but what's interesting is at the end of it, basically on all of this bit more than$2.5 billion of revenue that she's done in ticket sales, before tax she keeps a billion dollars which is a pretty i mean i wouldn't mind that 40 margin at scale like she's got a profitable for tax margin of 40 before like at scale she's done this and what's i think remarkable is that 40 of that earnings before tax has come from the merch which is only 20 of total revenue like that is how valuable this merch sale is to her and then she pays taxes and then she keeps$665 million of the two.

42:01So that's the way to think about this is 2.5 bill comes in the front end and 700 mil comes out to her after taxes. I suspect she gets a bit more because of that crew and performer bonus. It's pretty interesting economics, don't you think? I actually think given she's by far the most commercial performer in the world and this was probably the biggest concert. I think the concert went for 18 months. It was a long concert. Yeah, this was by far the most revenue generated by a concert. If you think about all that. By a tour, we should say. Not a concert, by a tour. Each concert was four hours and she was out there almost every night.

42:37This is a pretty incredible feat. Given that she earned and caught$300 million a year, not for a second saying that's low, but given what you've got David Zasloff misrunning Warner Brothers and earning more than that. I actually think there's an argument that she was underpaid in the realms of performers and CEOs and what some people get. Like I think she's the best in the world of what she does. She put an incredible amount of physical labor into this. I'd argue she's on the scale slightly underpaid for that. Yeah, I think that's a defensible point. Basically it doesn't matter though, right? Like what the hell is she going to do?

43:16I think at least 100 mil of that 200 bonus had to go to her. so at the end of the day she's pulling down 800 million dollars usd after tax look she'll probably split a little bit about that here and there but i don't think she needs more money like that's not her problem in life is it so but i take i take your point i found it very fascinating she's also probably making money there'd be incremental downloads so the whole tour creates incredible buzz about taylor and there'll be a significant amount of incremental downloads it allows her to get more buzz around your album so there's there's other tangential secondary benefits that come from from a successful and she sells 28 versions or something of a record in various not just the taylor's well no because you know they make all these different like special editions and so if you want to buy her um album like there's 28 different ways that you can buy that album in different packs with different stuff like so i think i my guess is that the this tool constitutes the bulk of her income, but she is very adept at making money in all sorts of different ways.

44:25That's a great question. And now to pivot onto something else, I don't really know how to phrase this as a question, so I'm just going to tell you about it. Maybe I'll ask it like this. So I've got a graph in front of me that was sent to me by a fund manager and the fund manager, the graph shows NASDAQ plotted against the Australian Tech Index. And so from December last year through to the middle of August this year, they were basically mirror images of each other through to August this year. I'm actually surprised at that. The lines almost are on top of one another just about. And then something happens in August.

45:12And so what do you think happens in August? What's the NASDAQ done since August? Oh, they've both struggled since August. Oh, maybe the NASDAQ's come back and the Aussies dropped off. So the NASDAQ, interestingly, is actually up since August this year till like late December. it's not up by a lot i'm trying to kind of vaguely calculate from this graph it might be up by five percent it looks like from you've obviously got some companies doing really well and others doing really badly i mentioned there's a big dichotomy the nasdaq is up and it's pretty close to its 12 month high right now yeah not quite but very close to it what has the australian technology index done since mid-August this year.

46:02When you think the Australian technology index isn't that deep, you've got WiseTech, you've got Xero. Drone Shield. Who else is in there? Technology One. Catapult. I'd say it's down 20%. So it's plummeted, basically. It's gone down from about 4 ,200 to about 3 ,300. So that's 25%. What's a far off? You look at this graph and you just see the total separation of the fates of US tech as measured by NASDAQ, which is predominantly the Magnificent Seven, and Australian tech as measured by the Australian Tech Index. and you'd have to say, and I just want to now give a huge caveat because Catapult is in the Australian Tech Index and obviously I think it's been quite unfairly savaged over this period, but you'd have to say that given how long they mirrored one another, either the NASDAQ is going to have to plummet down to where the Australian Tech Index kind of is, or the Australian Tech Index is going to have to rebound on its multiples to push back up there.

47:15And there are lots of things going on right now in Australia that are very negative to growth stocks. I mean, a few funds have lost mandates, which means investors have said, we talked about one of these funds not doing well last week, but a few investors have said, give me back my money, you're hopeless to some of these funds. And so they have to go and find this cash. And in order to find that cash, funds don't really hold much cash at the moment. And so the finite cash they have to sell. And so that creates obviously downward pressure on pricing. And there's also been fund flows back to the US.

47:48And somebody very reliable also said to me that something like 48 of the 50 best performing stocks on the ASX have in the last three months, I think he told me, has been mining or mining services like resources. Definitely, it feels like we might be at the start of a resources boom. I don't know much about resources there's a guy i'd love to get on at some point to talk to us about resources but i think that definitely there's been a cycling in australia out of growth including tech or maybe especially tech that um that has been much more dramatic than anything that's happening in the us and um the fact that trump is basically jaw boning the hell out of the fed to put interest rates down obviously that further increases the stock market.

48:37Yeah, I think that's a big point. I think in Australia, anybody who saw that 3.8 % inflation print, which is 5 % on the quarter, should have pretty quickly realised this is going to be a problem for tech stocks. And look, there's some really good stocks that have been smashed. REA has been smashed, Catapult, as you know. These are tech one. These are really high-quality businesses. Well, REA is very interesting because REA has been smashed on the back of all of these factors that don't really pertain directly to the way REA is performing. One is people are worried that CoStar is going to be a serious competitor with Domain.

49:11Two, people are worried that Google has gone into, feels low, right? Two, people are worried, Google is doing real estate listings in the US. I mean, they went around that block some years ago as well. Like, so that pressures it. People are worried AI is going to take over and someone, I don't know, I saw some post where somebody put an apartment on Insta and it was just sold off Insta in six days and they never ran the campaign and they saved$10 ,000 on REA. That's fine, but the apartment was a million-dollar apartment or something, right? Like, it's fringe cases. I think I haven't looked at REA in detail.

49:47Oh, and they're getting one of the best CEOs starting running the business as well, right? Obviously. So, like, I haven't looked at it. We started. Cam started. Cam started, right? And so, I haven't looked in detail. Maybe we look in detail at the business again. but it feels like REA might be getting, starting to head back towards being a buy. Yeah, I think, you know how much I love this. All these great businesses finally getting to a price that becomes rational. I hate it when we see great businesses expense. Like we've talked about Xero, we've talked about WiseTech. These are inherently very good businesses that were just crazy overvalued.

50:15So just, I hate it. And now I get into a point where you can actually buy these, no one likes, I hate paying retail. I want to pay wholesale. So I love a crash because suddenly everything's wholesale. Let me just finish on this. So REA fell on, worries. By the way, if you believe in the incumbency advantage, if one believes in it, and if one doesn't, then they should get their head red because it's real. It's called brand essentially. Like REA has got such a crazy incumbency advantage that even if they were to be disrupted, probably anybody in funds management today doesn't need to worry too much about that day coming unless they're very young.

50:49Like I think they've got a very long off ramp to being disrupted. It's my guess. I might be wrong about that, but it feels like it to me. and you've got a great ceo versus co-star which has jason pellegrino so you could give me cam versus jason any day uh so i don't see how there's any chance these guys lose any market so i really fell on that drone shield fell on the stuff that we've talked about now rocketed back joe's not a real company well drunk drone shield hit is on a trampoline right because they just bounced right back up but like then i look at a catapult and like this is not just catapult there's also like Life360 and maybe ProMedicus as well.

51:24These are stocks that have fallen on no news. There's been no news. It's business as usual. And so it doesn't even necessarily take any news at the moment to kind of be a part of this falling tech index, essentially. I think there's a lot of those companies that I think Life360 is a great company. I always think Catapult's great. I think there's a great businesses that obviously you can't talk about it, but I can. I think just the valuations got ahead of themselves based on froth that I think are now becoming to the point where I'd like to buy some of these businesses. Technology One, amazing business, like locked in revenues.

51:55It's just the multiples have adjusted. Well, TechOne plummeted, right? My guess is, you know, as I always say to people, it's like the way you make lots of money is you believe something other people don't, you bid on it aggressively, and then you make sure you're right. They're the three steps. And so I think now we're finally getting an opportunity to start being able to be a contrarian and to start being able to make bets while other people are scared and panicking and, you know, doing all sorts of things. And I think ultimately this is a time for sowing and they'll be reaping down the track because I think, you know, whenever you get broad sentiment that pushes down everything in an industry, like that generally presents an opportunity.

52:40I still find these prices generally a bit expensive but they've gotten a lot better. but that's because my bent is to value, not sort of high growth. But it certainly got a lot better. Just on this note, obviously, this is kind of a great friend of the pod and obviously I'm friends with Matt, but did you see the net wealth issue with First Guardian? And NetWealth has agreed to refund$100 million to victims of First Guardian, which was a criminal fund of some sort. People invested via the NetWealth platform. They all have admitted to the corporate regulator that failed to understand and to evaluate the risks before offering First Guardian to clients on the platform.

53:15Between First Guardian and Shield and other criminal enterprise, 12 ,000 Australians could have lost$1.1 billion after they were signed up by lead generators and financial advisors. Superannuation platforms, often referred to as RAP platforms, are used by financial planners to manage and administer their clients' investments. ASIC is also investigating whether Shield and First Guardian potentially misuse funds, while liquidators are seeking to recover those funds. ASIC Deputy Chairwoman Sarah Court said the regulator would not seek a penalty for net wealth after securing the compensation agreement, which has had resolved uncertainty for hundreds of victims.

53:47Essex's investigation was sure that NetWealth restores these members to the position they were in before they saw their savings eroded. As part of the undertaking, NetWealth must also refrain from onboarding certain new high-risk investment options to the platform, according to APRA. Dear, before I give you my views, do you have any views on this? Well, I want to ask you a question first. Is$100 million a lot of money? Like, is that a lot for NetWealth or not? I think NetWealth's valued at about$6 billion, So it's not nothing, but it's not insignificant. Yeah, yeah. So they can absorb it because at one stage they're asking the government to assist in funding it, but I see they've dropped that.

54:21I mean, what I think this says pretty clearly is that unlike social media platforms, net wealth is responsible for what is on its platform and it is seen as a curator, not an impassive provider of just a platform. And when people go to NetWealth and see an option on there, I guess what they're implying with this is that NetWealth owes a duty of care to the investor to ensure that these are credible and reputable investments, not that they're going to return high yields, but that they are not fraudulent. And so I think that is a... It feels to me like a pretty significant call to say you are responsible if you have a platform for curating it and making sure what's on there is legitimate.

55:16Yeah, it's an interesting position. I think it's good. I wonder if it's realistic. Like could people have known that this first Guardian was a shonk or not? I think it's terrible for two reasons. And you might say, oh, Adam, you're friends with Matt and whatever. but this has nothing to do with my relationship with net wealth or our relationship with net wealth. This is just ASIC absolutely losing the plot as they tend to do. So ASIC basically do nothing about criminality for 20 years. They let incompetent businesses prosper. They let dodgy directors escape unfree. And in this case, you've got – so this is why I think it's stupid.

55:51Firstly, whatever happened to moral hazard? If you invest – if someone is greedy and wants an extra two or three points of return, and I see people, especially old people doing this all the time because – partly because the government created a situation where money had no value because interest rates were so low. So you create the situation where people are hungry for yield and you've got these criminals who come into the picture, the alleged criminals in Shield and First Guardian, and offer a little bit more yield at a much higher risk and speculators try and get this little bit of extra money.

56:22And if it goes wrong, and heaven forbid we blame the people who lost the money, who was fault and who were greedy in the first place. No, we've got to find somebody else. Let's find the rich people. Oh, Netwell's got money. Let's take money from them because they're rich and let's ignore the moral hazard that we allow these greedy speculators to invest in these ridiculous investment vehicles. This isn't Netwell's fault at all. And Essex basically forced them to come up with this. Said, if you don't pay these guys, we're going to charge you. It's effectively what's happened. Well, that's a separate issue, right?

56:49Like, you know. It's a issue. Well, you can't call it blackmail if it's a regulator doing it. That's what regulators do. This is their job. Let me ask you this devil's advocate question. Because my question to you was, do you think the First Guardian fraud was identifiable and reasonably foreseeable by people that were platforming? Well, the question is, is this the responsibility of a platform to invest tens of millions of dollars to assess what's on there? I don't think – is it the responsibility of the ASX to make sure that no companies are fraudulent? Like, we don't blame the ASX when a company goes under.

57:24Why are we blaming the RAP platform when a fund goes under? I don't see the difference. So what do you think? so I'm just being a devil's advocate here. This is why I raised this whole point, right? Because what they're effectively saying is this isn't a platform, it's a curator. That's why I'm saying it. And so what do you think, like net wealth makes a lot of money, what do you think the economic value is that they're being paid for if it's not to be a curator? It's essentially a tech platform. It's a tech platform that makes it, and why I use it is because it provides a great ability to effectively save a lot of time when I'm doing my tax and I've got a lot of complex investments that just make it really hard to keep track of.

58:02That's why NetWealth is a tech business essentially. It's not a stockbroker. It's got hundreds and hundreds of things on this platform and this is one of them. And it can't be responsible for everything on the platform. It's ridiculous. How should they decide what goes on there? Because they don't put anything on there. I think it should be an open platform. This leads to my second point in that what now will happen is NetWealth and Hub and all the other sort of options are now going to have to – anything that's got any element of risk is going to take it off so you're left with just a bunch of etfs i guess on these like anything that's remotely risky of course net wealth and hub hub 24 are going to just remove them so it removes optionality for investors on stuff that might not be fraudulent but is obviously higher risk so remember your point on sophisticated investors not being able to invest in venture capital unsophisticated investors not being able it harks to that it just makes reduces the investment options that could be good options for for regular punters so because of these small fraud like small frauds these frauds It's a billion dollar fraud.

58:58It's not that big in the context of things. People want to be greedy and chase alpha. They can do it. And if they lose their money, it's moral hazard. We live in a capitalist economy with creative destruction where not every investment works. And that's bad luck or bad management. Not everybody has to – we've talked about Bondi. You can't just rush to blame someone. Sometimes people have to take responsibility of their own actions and this is actually completely dropping the ball. I don't think net wealth is necessarily the party that should be taking a responsibility for this. I think someone should.

59:28I think because I think the investor's ability to assess fraud when they're making an investment is different to saying to them, you took a riskier investment, you chased 10 % instead of 6 % and you end up getting 3 % because like it was risky and you got hit by the wrong side of the risk. It's different to this is a fraud and we stole all of your money. And so I kind of tend to agree with you that it's going to be very hard for net wealth to police. that, even if they should police it. But let's take a bit of a different look at this. So this is a business that presumably had an AFSL, Australian Financial Services License.

1:00:07So someone granted that AFSL, it was operating under someone's... Macro or Asic would have. Right. And so maybe the answer is, raise the bar on, either raise the bar on the AFSL, I don't know what's required. I think it's not easy to get an AFSL. And make sure that you're regulating and policing the behavior of those parties that are operating under a license that you regulate i would have thought this is more in the domain of the regulator than in the platform that made it available unless unless they were aggressively promoting this as an investment to people using their platform i feel a bit differently if that was the case and i think i think those conflicts of interest, they're more concerning in the investment world.

1:00:53You know, you saw tons of that that happened pre-financial crisis where there would be something on a platform and people would trust it and then the platform would go and aggressively promote it and the ones that were the riskiest could pay the highest commissions because of the nature of them. And so that creates a moral hazard, right? I just don't get like – I don't know how this is different from the ASX platforming a bankrupt or fraudulent business, which happens obviously regularly. How is it from a financial planner giving advice? Like financial planner, most of net wealth investment comes via, like we obviously go direct, but most of it comes via financial planners.

1:01:30Now that's a good point. Because I think, because when, I use this one as an example, but when GetSwift got taken to the cleaners by regulators or by court, I can't remember which one of the two it was, or both. Thank you. Like the ASX didn't get fined for the performance of Dan Swift. That's your argument, right? I think that's a very solid argument. I think you have made a very solid argument and if they wanted to fight against this, they should have called you and you should have formulated an argument for them. I think they probably can also be smart people. But I think your argument is very solid about that.

1:02:10And so what would you do in this situation now? Would you just give up and say, I'm not going to platform any investment that has any risk attached to it? Not just Netwell, but Hub24 and there's others as well we'll have to do. They'll have to remove any kind of – they'll leave really the black rocks and all that sort of stuff. And anything that's got any sort of potential risk, they'll just remove, which just reduces options for investors. What if the main page of my landing page and written everywhere was, this is just a platform. We don't vouch for the legitimacy or returns of anything sitting on the platform.

1:02:48Go use a financial planner or do your own risk. We're just a platform. What about if they went down that extreme route and just emphasize that at every turn? Do you think that would be enough? That's what I assumed it is. When I look at net wealth, you've got a thousand things you can buy. It can be shares, it can be funds. I just assumed this is a platform like ComSec in many ways, but a better version of ComSec. Call it an enterprise version of ComSec. And that's how I view it. I'm staggered that ASIC – what appears to happen is ASIC's realised, well, we've stuffed up here. How do we find somebody else to fund our mistake?

1:03:20Oh, these guys have money. Let's explain them. That appears to be what's happened. And ASIC's got the full weight of the law behind it. And they couldn't get the money off First Guardian because there's no money basically I guess. Yeah, they're frauds. They've stolen the money or they've lost or whatever. I'm not an expert on exactly what happened there. We can – there's another episode. But I don't think anybody saying First Guardian have done the right thing. No, I think your points are very comprehensive. I think ultimately there should be clarity provided on the way that these platforms are expected to behave and what they will and won't be held culpable for.

1:03:53And I think if you're going to run like a little game of this is in and out for platform liability, you can't just make it these two or three platforms that happen to have had this on it. Like, you know, you use ComSec as an example. I don't think you could buy First Guardian through ComSec, but you can buy managed funds through ComSec. And like what if one of those turns out to be a fraud? Is Comsec going to be held liable? I think there's no chance they would expect to be held liable for that. Helps when Matt Coleman's Jim Chalmers mate as well. So that'll probably resolve them. Way of putting that to the side.

1:04:24Pick any bank. I think there would be no expectation. And banks are hated. Like people try to hold banks responsible for everything, right? If someone's in a bank branch and they get a cold, they sue them for getting sick. So, like, but I think they still wouldn't expect to be held liable for that. So, yeah, I think you've raised a very good point, a very good point. And just, I haven't spoken to anybody all in their wealth about this. I just happened to see this in the paper and it just piqued my attention because it just seemed so ridiculous. No one is accusing you of partisanship on this. You don't have to be so defensive.

1:04:57I would never have thought you were partisan. I want to raise something that happened during the week, but I don't know if it's on your run sheet. I definitely didn't look at your run sheet. this do you have something that i call puppy gate on your run sheet no definitely not have puppy on the run it's puppy gate but in the truest sense because it really does pertain to a gate and a puppy and so this is the story i'm sure you must have come across this story this is the craziest work from home story that i've ever seen and i'm shocked that you have not seen this oh this is gold you are going to love this so there's a woman i'm going to say her name because it's just such a great story her name's Lauren Verco I don't know her she basically was working from home and she has a puppy and so she doesn't want the puppy in her work area so she put like this gate like a fence kind of thing to get the puppy out of the work area and then she had a little break from work at her computer I mean I'm paraphrasing this a bit for dramatic effect but it's something like this she had a break and she went to get like a coffee or a tea or something and she tripped over the gate and she hurt herself and um she wasn't very happy about that and so she then decided to make a claim and say well this is the responsibility of my workplace for this injury this is a work cover related injury because um i'm at work you let me work from home therefore this gate is part of my workplace and you've got a responsibility to uh to make sure i've got a safe workplace and you didn't because you didn't stop me buying a puppy and you didn't stop me putting up a gate and you didn't stop me being a bit clumsy and tripping over the gate.

1:06:33So you're responsible for it. And it went to, I don't know where it went to, fair work or a court or something. Like it went somewhere, right? And thank God, sense prevailed. And it was like, no, that's not going to be happening. But it really, this is where we have gone with work from home. we once had in a slightly different but equally absurd incident this is like years ago where it was one of our sydney employees it was raining and they were walking home although they caught the bus walking home and they slipped on the footpath and they took a work cover claim because and we said what the hell like you're almost home you happen to slip on a footpath what the hell was i could do with work and thankfully as the case was progressing new south wales changed the rule saying you can no longer claim for court on the way to work injuries.

1:07:23But before they changed that rule, like work cover will may have had to pay for that. So it's crazy. I think this case, I mean, basically, I think it just kept going on and on and on to the employment tribunal and then kept going. She worked for a city council, which adds insult to injury of this story. So we paid for it. And like. Or someone paid for it. you know, I think what this hinged on was not the absurdity of the fact that she brought this on herself or the absurdity of trying to blame someone for your problems, but it's just that the gate happened to be in her personal space and couldn't be considered in her workspace.

1:08:07But if she had rolled her chair backwards and fallen over the gate because it was right behind her work chair, maybe the outcome would have been different. We're actually living in an alternate reality right now it's unb i sound like you like i can't this is what work from home has come to like not only do you have the right to work at home but if you make do anything wrong at home that is your fault have a go at trying to pin it on your work for not making your home safe for work despite letting you work from home i mean what the hell is going on well it kind of stems back to the economy we now live in where it's or somebody else is always picking up the tab we talked about the net wealth thing a minute ago or this or just whatever it is like it's always something like australia has permanent deficits at state and federal level which is somebody else picking up the tab that's what happens when you're running a deficit you're paying for stuff you can't afford when a 70 billion dollar ndis has two-thirds of new applicants having being autistic young boys who clearly aren't the main purpose of ndis the cost of 70 billion dollars we run these and jim chalmers is running 40 billion dollar annual deficits despite having 770 billion dollars in revenue we're a country that has just lost the plot and this is just yet another this is the thin edge of the wedge this is a classic example where nobody takes responsibility everybody wants somebody else to pay nobody has to do any hard work there's always somebody else picking up the tab let's work from home let's not work at all let's get let's retire at 65 let's all make somebody else can pay for it is essentially the view of so many people here so i saved the best part of this story to last by the way and then we can move on.

1:09:38So the best part of this story is it started in 2022, this issue. That was the first thing. It kept getting appealed and actually it's now, I think it's over now because the full bench of the South Australian Employment Tribunal, they actually overturned the decision that granted her workers' compensation. So it's not like everyone thought this was crazy from the start. Like she got it. and then they appealed to the full bench and it was like the full bench overturned it ultimately. But like this was a – It would have been a union rep. It would have been a union rep commissioner who granted it for sure.

1:10:18Well, I mean – I'll put my left leg on that. This is like – this is not like laughed out of court. This is an unbelievably near miss for employers. As we talked about before, this isn't – the industrial relations commissions aren't courts. They're partisan kangaroo – best kangaroo courts where you've either got an employer representative who's usually pretty sensible or a union representative who'll just take the most ridiculous position every time. So let's not place too much credence on these industrial tribunals because they're a corrupt joke of a system. I knew if we talked about this long enough, you'd go on about something.

1:10:50So, but I just want to preach this a lot. This is what happened. Is this, I just can't, I don't know why I love this story so much. So Verco, a council operations program, I'm reading this from the Fin Review, had gone to make a coffee. That's what she was, I got that bit right. When she tripped over a 60-centimeter fence, I don't know if that means high or wide, she erected between her workspace and the kitchen to keep her pet rabbit away from a colleague's puppy she was minding for that day. This is what she tried to get workers' compo for. It's crazy. If that microphone falls on Mike's finger that he's currently using, is he going to sue us for workers' compo because working from home?

1:11:34No injuries, Mike. Make sure you stay. He's an independent contractor, so I'm not sure poor Mike has an avenue here, but potentially, who knows? Why wasn't that on your run sheet? I can't believe you didn't see that case. Let me finish with one thing the judge or whoever runs the tribunal said, yeah? This is what he, in his or her, I actually don't know if it's him or her, judgment that this was like some of the rationale for not granting her workers compensation. They said, if Virgo had sustained an injury in her front yard whilst collecting a newspaper during an authorized break because she fell into a hole dug by SA water, doesn't necessarily follow that employment was a significant contributing cause of the injury.

1:12:23that is how absurd our examples have to be for why she shouldn't be getting workers compensation anyway i'll leave it at that but it's a crazy story yeah i'm in the uk now so incidentally speaking of me being in the uk god it gets dark early here it's dark at like four o 'clock it's actually been a really nice week of weather but uh i always give my quick sort of travel update so london is absolutely pumping like we talk about the uk being in a depressed sort of economic state which I think many parts of the UK are, but London has this sort of London bubble. It is. When was the last time you were here?

1:12:55Sometime during the course of this year. I can't remember exactly when, but I was there in 2025. I'm like, you go to these restaurants, like everything's super expensive here now because you've had massive inflation and you obviously got a pound that's quite strong. But I saw a donut cost like$13 or something like that. There was like$14. Like stuff is obviously in buy it for multiple reasons, but just stuff is expensive here. Do we eat donuts or not? Oh, not often, but not for$14. Donuts used to be my favorite food as a kid. And then my parents took me to Surfers Paradise when I was young. I loved Maccas and I loved donuts.

1:13:30And they said, you can have as many donuts as you want for two weeks and as much Maccas as you want for two weeks. You can have it every meal. Unfortunately, there was no breakfast at that stage of McDonald's in Australia. Day eight, I couldn't eat another donut. I was cooked with donuts. Was that your parents' intent that they knew they'd turn you off at? Yeah, yeah, that was their intention. and I'm not sure like giving your kid diabetes is the way to get them off donuts. But anyway. I think it's genius. So day eight, I was off donuts. Day 14, I was still eating Maccas. Got back to Melbourne.

1:13:55First thing I said is can we have Maccas for dinner? So God knows what they're putting in Maccas, but the donuts couldn't compete. I did love a donut, but anyway, go on. Actually, I'm wrong. I took a photo. It's actually a$16 donut. It was. So this is like$16. What's that, eight quid? Yeah, yeah. It was super fancy donut, but really,$16. Anyway, stuff is expensive. We went to Wagamama's, which used to be in Australia briefly. It's sort of a kind of westernized Asian chain, which does a decent job, but it's not cheap. And this was in a country town type thing, and it was completely full. And you're up for sort of$40 to$50 a head there.

1:14:28I'm committing to Australian dollars. So things are expensive, and people are spending, certainly in the London bubble and the sort of home counties, they're spending a lot of money still. So you wouldn't think this is economy in trouble. This feels like it's buoyant. Coffee is the price. the digit is the same as AUD but it's got a pound symbol in front of it basically. It's 2x the price of a coffee in Australia. Yeah. Getting to Danish prices. Yeah. Does it feel like people are rich in the UK right now? Like does it feel like things are pumping or just that things are expensive? Because usually when things get too expensive people feel poor.

1:14:59I think there's that. I think people feel poor but they're still spending a lot of money. One of my colleagues, so we had a Christmas lunch thing, we got six people in London and someone came in about a two-hour train journey. But so not like, almost equivalent, I'm trying to think of the equivalent, maybe Wollongong, like a decent, maybe a bit further. How much do you reckon it cost him? It's effectively a long commute, call it. I think in Australia it might cost you$15 or something. I think it costs a little bit more than that, but$250 Australian. $250. So if you're, like, you need to earn a lot of money to be able to afford just the train to get you into, so I can kind of understand work from home in that situation.

1:15:35That's ridiculous. Yeah. Even for, if you want to take a, like, call it a 25-minute train journey, that's a$50 return trip,$50,$60 return trip, easily. Yeah. I can go to Paris for less than 250 AUD from London. Yeah, probably can. We had a great customer service experience with our friends at Kogan. I never actually spoke to David or Russell about it. I just went through the normal channels. But I bought an Apple Watch because my – remember, I was whinging about my last Apple Watch. I thought I was going to buy a new one because this one just is effectively dying. you know you can buy the cellular one or the non-cellular one and i was looking at a bunch of different things and just stupidly bought the non-cellular one by mistake and it was 100 % my mistake like no question i just bought the wrong one and i thought understandably that'd be difficult in the return i said oh can i can i is it possible to get a return they said yep no problem sent me a thing i sent it back credited my account in like two days it was an exceptional customer experience much much better than amazon like amazon would have been a massive argument massive fight, dealing with a third party, blah, blah, blah.

1:16:37I thought the Kogan experience was leaps and bounds ahead of Amazon. I think that's not, Kogan haven't been known for great customer service. I don't think they've been known for bad. They were known for just being fine. I think their customer service is now, that was elite customer service that I haven't experienced in a long time. Oh, very interesting. So did you see Chemist Warehouse is flying worth more than, I don't know, some small countries. Meanwhile, you see what happened to Priceline during the last week? Isn't it, didn't Coles buy it or Woolworths buy it or something? API. Yeah, API owns Priceline.

1:17:13But I think some of the stores are franchised out. The brand is franchised out. Yeah, yeah, yeah. That's a pharmacy model, yeah. So one of the franchisees is Infinity Pharmacy Group. And 54 of their Pricelines have just gone into administration. So there's still 400 other Priceline stores around Australia that are fine, right? Presumably they're owned by different people or some of the same. But isn't it amazing that in an era where the pharmacy game has turned out to be so much more lucrative than anybody could have ever imagined, one of the most well-known brands in Australia in the pharmacy group just put 54 of its stores into administration.

1:17:50Like it's really a tale of two different operations, the pharmacy industry right now. Well, I think you've got one incredible operator in Chemist Warehouse and one fine operator in Priceline. I don't think Priceline's badly run. I think it's okay. But I think you've got Chemist Warehouse that is just so exceptionally good. They're just sucking up all the demand. It's just an absolute beast of a business. It could be. You know, I was suspicious that Chemist Warehouse was going down the Amazon road, which is we start off being super cheap and then we're not so cheap over time, right? But every time I compare them, they're always cheaper.

1:18:23Like they're just consistently cheap. I think they're not always cheap. You can almost rely on them. It's almost a Walmart. You know you're not going to get bad. You might not be the absolute cheapest, but you're going to be close to the cheapest. And sometimes it's really cheap. And sometimes it's just like same as everyone else. But you know you're going to get ripped off. This is where brand is so powerful. You can trust. You can walk into Chemist Warehouse and not price check or not worry about price checking because you trust that they'll always be thereabouts. They'll never be double the price or 50 % more.

1:18:52Yes, I agree. But whenever I go in there and you see those like end caps of a particular brand with a TV up there and, you know, like, oh, that's where all their profits coming from. And they've turned that into an absolute machine of just promotion, right? It's actually remarkable how well they've done that. They're a media business, essentially. They're a media business masquerading as a pharmacy and they do an incredible job. Got to do something to get people in the door. You do. Speaking of which, a quick shout out to a little business called Luxury Escapes. What do we do? Do you know what we did last week?

1:19:22I know that you finally got yourself a private jet, which I was very impressed about because you've teased me for a long time about private jets, which have no interest to me on every possible level that you could think of. But it turns out it was just a smoke screen for you getting your own private jet. Is that right? Sadly, it's not my private jet. And I'll be flying economy in the back of it. But yeah, we launched our first, we obviously have a couple of charters, like one-off charters. This is our first regular airline, so to speak. So we're flying weekly from Melbourne to Mali, which is the capital of the Maldives.

1:19:53It takes about 10 and a half, 11 hours, a little bit less on the return, so direct flight. So saving almost half the time and a much, much better flight. So you can fly overnight both ways and land in the morning and just get... It's unbelievable. So what's it called? Air LE? Lux Air. Nah, it's really Maldivian Airlines. So we're partnered with Maldivian Airlines who are the domestic Maldives carrier. They don't do international stuff. They do a couple of charters like this. But what code, what are you calling the code? Like what code are you? I actually don't know the code. It's a very good question.

1:20:22I should actually work out the code. Oh my God. How can you come to this podcast not knowing the code? Surely, I thought you would have selected the code. I was expecting some very smart answer. I hope it's LX or something like that, but I'm not actually fully sure. You've dropped the ball. It could be a Maldivian code actually. Have you given the airline a name for your one flight a week or not? Well, it's technically Maldivian Airlines. So we work with Maldivian to set – like so Maldivian, we take all the risk. We have exclusive pricing power and Maldivian do all the others. So they'll operate it.

1:20:54It's their airline. It's their pilots, their crew. It's their – effectively Maldivian – there's quite a bit that goes into getting a route set up. I certainly wasn't aware of the extent, but you've got to get effectively bilateral government approval. So the Australian government and the Maldivian government had to sign off on this. It takes a while. We had great – Melbourne Airport were amazing. They were huge supporters of this and Laura is amazing. And the whole team at Melbourne Airport is fantastic. They did a great job. Was it hard to get a slot in Melbourne Airport or not? Yeah. So it was the slot, but not just the slot.

1:21:23You've actually got to get the right to fly in and Melbourne Airport were great with that. And there's one more thing we need, which we're working on now, which is effectively CASA, which is the, because Maldivian haven't flown there. So that takes about six months. So we've sort of left a few months up our sleeve, but we're going through the CASA approval process now, which is generally how it works. So you get the slots approved, the bilateral approved, you then start selling it. And then in that sort of six-month period, you get your CASA approval. So it's a big process. And we've had a lot of people working on this.

1:21:50It's a pretty big team. And so is it hard to get slots in Mali or not? Mali, well, there's a brand new airport there. So they rebuilt the airport, literally opened it last year, or this year actually. When I was there in July, they're about to open it. And it's sort of opening since stages now. So they've actually got lots of slots. So that was okay at that. And what aircraft are you flying? An A330-200. So like what Qantas flies to Singapore. So dual aisle, business premium and economy. And whose fit-out is it? Is it Maldivian Air's fit-out? Maldivian Air's fit-out. So it's not – we're not talking a Qatar fit-out, but it's as good as any full-service carrier, much better than a BA fit-out, for example, a British Airways fit-out.

1:22:29Maybe not as good as the ultra-elite carriers. Will I get a bed in business class? Yeah, yeah, a full bed in business class. And we're also doing – we've created what's called cuddle class in economy. So you can effectively buy four economy seats kind of for the price of two. So it's about the price of premium economy. You can get four economy seats and effectively lie down across four economy seats, which is pretty good value. It's not quite as good as the New Zealand product because they built that special skybed. We obviously haven't built that because that takes years, but we're certainly allowing you to buy the four seats, which is probably how I'll be traveling there because business, we assume, will sell out relatively quickly.

1:23:05But yeah, it's pretty exciting to be able to have effectively a little mini airline. And so tell me more about that because I'm very intrigued by this because no one has ever – I promise you that no one listening to this podcast – well, that's actually not true. Almost no one listening to this podcast has ever organized flights between two points. People will be very intrigued. And so how many seats on the plane? How many business? How many economy? 280. Just under 280 seats. 276, I think. And what, 25 or 30 or something business? 18 business, I think 30 something premium and about 230 on economy.

1:23:42And do you think, because you know what your demand is. Like if I'm going to the Maldives, why would I ever go a different route? Like this is by far the number one best way for me to get to and from the Maldives, right? Well, if you're in Melbourne, absolutely, there's no question. Like it's by far the best. Like if you're in Perth, you wouldn't come backwards. So it doesn't make much sense. If you're in Brisbane – Yeah, I get it. But Sydney, I probably would fly to Melbourne. Sydney, it makes sense. Melbourne, like – and part of the benefit isn't just the fact that you're saving all that time, sort of, call it eight, nine hours each way or even more potentially.

1:24:15Because, like, I flew Qatar. You can fly Qatar and Emirates to get there as well. That's like a 23-hour flight. So you're actually saving even more time. Yeah, yeah. The main bit – if you look at this, the most people will tend to fly Singapore Airlines, obviously a great airline. But the problem with Singapore is they don't have a direct route, so you've got to go by Singapore, which involves either an overnight flight to get to Singapore, which is a pretty annoying flight because you can't really sleep enough. It's like a red eye. Or you have to spend overnight in Singapore, which is obviously costly and super inconvenient.

1:24:42It adds another 10 hours to the trip. And then on the way back, you've got to either take a red eye or a much more expensive one o 'clock flight and you'll lose that last day. So the beauty of what we've been able to, we could pick the slots. So we could say, we want to leave at Melbourne at 11 o 'clock at night, which means you land at 5am so you land at the perfect time you go straight to your resort we've arranged most of our hotels are giving early check-in that's worth a thousand bucks so you get you can go straight in straight by the pool have lunch all that stuff uh rather than having to wait seven hours for that so you get that extra half half a day and on the way home instead of leaving the resort at 9am or midnight as in like having to take a red eye you can see the flight's 10 o 'clock in the night so you leave at sort of five o 'clock you get late checkout free so you get another half day free and then you leave you fly overnight land in melbourne at like midday so we've been able to create perfect time slots versus all the other airlines who aren't timing their slots for singapore they're time there's like they're not time there's lots for meld they're time there's lots for for dubai or kutakar or doha or singapore so we've been able to create the perfect journey and effectively give you seven days for the price of five can i only book it as part of a package with luxury escapes at the moment we probably will sell standalone loan shortly but at the moment it's just it's just so we may have an like you may have bought maldives through your local travel agent and let's assume that travel agent so obviously we sell luxury escapes through travel agents so if you if you've got a smart agent who can buy who sells luxury escapes you can obviously do that but if you let's say you go to a different agent who don't work with or you went to booking.com and bought a maldives package it shortly you'll be able to buy air separately we just haven't actually activated that yet we're just activating we just activated packages at the moment uh and we just package it up at one price but you think you'll have demand to fill the planes basically we certainly hope so so if you look at our existing demand we feel so let's say we don't sell any incremental passengers it's just what we sold last year for example with and we assume that everybody from melbourne flies it and some people from sydney fly it and then adelaide and brisbane as well we get to about 60 65 full and then hopefully we can get some incremental new demand because it effectively turns maldice from a 20 hour journey to effectively like going to Phuket and for basically the same price as Phuket.

1:26:54So in a much better plane because Phuket you're flying a single isle jet star plane in many cases. So you're getting a much nicer plane, similar travel time, maximizing your route in a much nicer journey for not that different price, probably the same, if not cheaper than Hawaii, probably similar price to Hawaii and easy to get to. Very interesting. So you know that you're successful when another carrier, who we won't name, decides to try and run a flight as well. Yeah, and obviously whether Qantas runs a Jetstar flight, I doubt they'd ever run a – well, I never say never. I expect they wouldn't run a Qantas plane, but they could run a Jetstar plane from Sydney, which I think would be a great thing.

1:27:32We just expand them up. We sell – 50 % of Maldives goes through us, so I would be very happy if Qantas ran a Jetstar flight to Maldives because we're not going to run – we hope to run an all-year flight, but at the moment it's just a six-month – effectively six-month trial period in off-season, and then if we can sell through, will ideally keep it running forever. That's certainly the hope, but we're always pretty conservative and just want to make sure we've got everything right. But fingers crossed, we can run it permanently. That is super interesting and well done. It's actually pretty unbelievable.

1:28:06Pretty unbelievable. And we obviously talk about it quite a lot in Hamilton Helmer and we look at a lot of stuff through the lens of Seven Powers and for us this is how do we create a cornered resource nobody else flies direct to Maldives this is an exclusive exclusive product we have that nobody else has so obviously helps brand a bit but really it's how to create as much cornered resource exclusive product as we can and not be commoditized because so much travel is commoditized booking.com expedience trip everybody largely sells the same stuff well i tell you what i love it's not just yes you've got a cornered resource but because of the scale advantage you've got with Maldives given that you sell half of it so one is That's what enabled you to actually do this, the scale advantage over competitors.

1:28:49But the beauty of that scale advantage is this. You sort of alluded to this, but I think it's a scale advantage benefit. If Qantas goes and sticks a Jetstar flight there, your scale advantage means, yes, it might challenge your Qantas resource, but it just emphasizes the value of your scale advantage because you'll sell tons more hotel bookings there. so I think that's the real magic of these seven powers is not just how they insulate you against competitors but how a competitor behavior like in this case Qantas would become a competitor for this how a competitor behavior actually confers some benefit on you too because of your powers I think Qantas actually wouldn't be a direct competitor because they don't fly to Maldives now you actually can't fly to Maldives on Qantas it's pretty much impossible but they would be if they put their own flight on right yeah you can argue indirectly because people aren't flying to Phuket as much or people aren't flying to Bali as much but it's very indirect it's much and you argue okay you're competing against Singapore who's a great partner of ours but even Singapore I can't imagine are overly bolded it's it'd be such a small amount of their revenue that they wouldn't really so it's kind of creating a what we think of it as creating a completely new Greenfield route where people otherwise wouldn't go and now makes make something much more accessible you can take a family there it'd be it was pretty hard to take a family there to Maldives before.

1:30:06Now you can jump on a direct flight, buy four economy seats and actually is pretty incredible value to get. And you get actually some, everybody thinks of Maldives as being these super expensive Ritz-Carlton, one and only patina,$5 ,000 a night places. You actually get three,$400 a night places that are incredible, like buffets and really clean and nice and amazing weather. It is very accessible for middle class. It's not just a rich person's sort of playground. Well, I'm very excited. Well done. It's tremendous. We'll go to a super quick break, back with some more stories just in a moment.

1:30:50And we're back. And I do not know if you saw former ANZ chief executive Shane Elliott is now suing the bank he ran for a decade after it's stripped him of millions of dollars of bonuses, citing failures across its retail and stow banking divisions. Elliott said he and ANZ had a clear, unambiguous agreement on the terms of departure and had been breached. And Joe Astin, who wrote some, I don't know if you saw Joe's piece, but it was brilliant. Joe Astin observed, these are the words of a man untethered from reality, a man deranged by the cold turkey of his higher power status. ANZ recently agreed to pay ASIC a$240 million penalty related to mismanagement government bond deals, are incorrect bond trading and refusal to refund fees paid to dead customers.

1:31:32Elliott, of course, was CEO during all these incidents. ANZ share price was a basket case under Elliott. Currently, it sits at$36 per share. Bear in mind, in 2015, before Elliott took over, it was$36.38. Obviously, they do pay dividends as well. As Aston observed, ANZ paid$4.9 billion for Suncorp a couple of years ago, basically to restore its mortgage market share to what it was before. Of course, Elliott spent many years on its much-vaunted ANZ Plus product, which was a long-running embarrassment. And its architect, Marley Carnegie, departed recently. ANZ Chairman Paul O'Sullivan said the bank would, of course, fight Elliott's lawsuit.

1:32:09And he said the bank has been very considerate and deliberate in its assessment of remuneration outcomes. And Joe probably said it best when he noted, it had been apparent that for years ANZ was underperforming, its tech wasn't working, and exuded a piss-poor attitude about its culture. Of course, the ANZ board wouldn't hear of it. Through the final four years of Shane Elliott's shitful of poke, the directors backed him and backed him until finally faced with their own consequences, i.e. being voted off the board, they suddenly decided that Shane's got to go and if it's expedient, so does his plunder.

1:32:36I'm not sure if you knew Shane Elliott. I don't know Shane Elliott and I don't have any views on him really. And I think running a bank is a weird job is my general view on that. It's like sailing a ship where you like turn it and then it doesn't turn for a very long time and by the time it turns, the situation won't, like there might be an iceberg where you're about to turn it to that wasn't there when you tried to start turning it, you know? Like everything's such long lead times, you can't really do anything. So I know that like ComBank has seems to have been run well recently but I think running a bank is a weird job, right?

1:33:13Any of these enormous, overly large organisations are just not the same as running a luxury escapes or a catapult or whatever. Like you can't turn these things. And so this is what I think about this particular issue. It's super straightforward. Like there's a contract. Nothing else matters. There's words in the contract. Work out what the words say. If the words say you've got to give him his money, then give him his money. If the words say you can get out of giving him his money, then don't give him the money. And the sad thing about this, as simple as that is, is like I don't see a way that this is not going to go on for the next five years because it's too much money for him to say, don't worry about it.

1:33:55What is it,$13 or$14 million, right? It's tons of money. And so he's not just going to say, oh, whatever, I'm going to move on. But the directors, as Jost correctly said, the directors, like, if they give him money, they're dead, right? They're voted off. They're not going to survive that. So they can't give him money. And so he needs the money, he wants it. They can't give it to him. Everyone needs a judge to decide what the outcome is. It's just contractual. All of this other stuff, it might make good copy and some funny reading, but it doesn't matter. Nothing matters. All that matters is the contract.

1:34:31I think you're somewhat oversimplifying it. There's a lot of complexity in contracts. There's not like there's one simply worded clause that says, ANZ must pay Shane 13.5, ANZ must not pay. There'd be a significant amount of nuance in this contract. and every contract has factual and factual matrix that underpins it. So I think this would be complex and that's why we have multiple. No, I'm not saying the contract is simple. What I'm saying is all of the social commentary that surrounds this, it's all irrelevant. Like, oh, he bought Suncorp to buy back market share and it was overpaid and whatever.

1:35:06Okay, it's interesting. Unless that pertains to the contract, it doesn't matter. Oh, they got fined by ASIC for this much money because this stuff went wrong. Doesn't matter. Like maybe it matters if it matters to the contract, but if not, it doesn't matter. I'm sure it matters to the contract. The contract would have a clause based on performance in there and the board would have some discretion. I think it 100 % matters. That is the problem. Yes, there's going to be a war that comes down to what does the board has the right to exercise its discretion mean and how does that relate to his rights in the contract?

1:35:38And my point is that all of these issues, they should be solved through a mediation. None of this should go to court. Like, basically the bank probably should just give him a bit of money and he should just take that bit of money and they should move on. But he's not going to take – I don't think the bank can give him one cent. That's the problem. No, nor should they. Well, you say they shouldn't. What if this is going to be a five-year court battle and cost$20 million? Shouldn't they just give him two mil to get him to go away? No, I think you need to send a message. I think the message is that when you perform incompetently, then we're not going to pay you.

1:36:10Well, what I think is that this is going to cost$20 million. It's going to go into the judicial casino to see which judge comes out. Don't forget, this is like the casino. The bank is like the house and Shane is like a punter. So ANZ has got unlimited money, essentially. Shane has limited money. He's been paid a lot, but he's got limited money. So the problem for Shane is the longer this drags on, the harder, unless he's being funded, which he may be, but I doubt, then he's bearing this cost himself and eventually he runs out of money. To me, this is mind boggling that he would run this case. Like I met Chain once and I've actually found him a nice guy, but frankly, he wasn't a good CEO.

1:36:48He was a very average at best, best being generous CEO. If he's got any sense at all, this is like he should abandon this case because it is ridiculous. It's making him look like a laughingstock. He was already a very poor CEO. He's just going to put the whole spotlight on just how bad he was again. It's just, this is a, he's streisending his own incompetence and it is just a bizarre move for a few million bucks. It's not a few million dollars. It's$15 million. But he's been paid tens of – this is a guy who's not short of cash. And also it's going to ruin it. Maybe he wouldn't get a job anyway.

1:37:19Who's going to give this guy a job ever again now? He could have snuck into board roles. He could have done some stuff. Now no one will hire this guy. You think this is going to stop him getting into board roles? I think it will. Absolutely think it will. He's just taken on a blue blood board. It's crazy. What odds this doesn't go to court and it settles out of court? I'm pretty sure it gets settled at some point. Eventually, rationality seeps. I think he's also been very poorly advised by whichever lawyers he has. This is where smart lawyers tell their client, mate, this is crazy. Don't push it because if he wins, he loses.

1:37:54He's a pariah. He was previously a nice guy who was an average CEO. Now he's a fool. I think you're harder on him than most people are. Number one, the fact that he was a banker. Like a lot of society immediately is going to roll their eyes at that. That's not his target market, right? You might say his target market is he wants to get on boards or whatever. I'm not sure he does, he doesn't. Lots of people don't, right? It's kind of not, it's not that great. I'm not saying he doesn't, I'm saying that what is he going to do from here? He's trying to get 15, look, I'm not defending him. I don't really have strong views about his performance at ANZ because I don't bank with ANZ and I don't care about them.

1:38:27And I used to bank with them and actually I banked with them for like, I reckon they lost money on me for 15 years. And then when I finally made money and I went to their private banking, they treated me so shabbily and tried to charge me such high fees for private banking that I went and spoke to Neb, who I'd never used. And they said, yeah, just come here and we'll put you in business banking. We're not going to charge you a cent. And like they send me emails on a Sunday night from my business banker saying, oh, we're a bit worried that one of your transactions might have been fraudulent. You want to check that or do you need us to help you?

1:38:57Like, I mean, so that was my ANZ experience. But I think the guy can legitimately go after his 15 mil. I think you're too hard on it. Like, he might have done a terrible job running the bank. I take your word for it if you say he does. But, like, if I was thinking I was going to get 15 mil, and then maybe I thought, oh, they might give me five, then they give me zero, I think, like, you're going to have a go. But this is not a guy who hasn't been paid. It's not as if they never paid him. This is a guy who got paid tens of millions of dollars. What did he get? 40 mil, let's say. 40 mil. I'm going to just make up a number.

1:39:28Okay. So let me tell you about 40 mil, 40 mil tax, 20 mil. Okay. So now you're at 20. And so 20 mil, I don't know. Doesn't he live in Sydney? He's probably in Melbourne. Sydney, I don't know if he can buy a house anymore if you're a banker for $20 million. And so this would be a significant top up to his wealth. He doesn't have like three generations of my family don't have to worry about working kind of wealth. He's got, I live a nice life kind of wealth. And so I think he feels aggrieved by this. Now, you might say it's unjustified, but, you know, human emotions are what they are. I think he feels aggrieved.

1:40:01I think he feels they should have given him something. I think it's impossible that they could have given him anything even if they wanted to. And so this is where we find ourselves. I'm not so judgmental about this. You're very judgmental about this. I think Joe got you worked up about this. You read Joe's article. Your blood started boiling. Joe gets you worked up. That's what happened. I was worked up well before Joe's article. I had it on. AFR covered it pretty well. And even AFR, I think it was Johnny Shapiro. This guy wants money. They don't want to give him money. Let's go get the money.

1:40:29Now lawyers get lots of money. So, you know, then there'll be a roll of the dice in court. There's only three possible options to this. One, he drops it. Two, they settle. Three, it goes to court. What's the most likely option? Tell me of those three. What's the most likely? Oh, clearly they settle at some point. I don't know, but before it goes to court or not? By court, I mean a trial starts. Probably before court. All right. Well, it'll be interesting to see how that plays out. I'm not sure how that's going to play out. I think the single worst bit of advice he got from his lawyers was to go into the public domain and comment about this.

1:41:04They should have just lodged it if he was going to lodge it and say, I've got no comment about it. I just consider a contractual matter. The end. And so anyway, it'll be interesting to watch. I feel much less passionately about this than you do. You and Joe are very passionate about this. I couldn't care less. I think you do. And now let's go to our M &A Deep Dive, one of our favorite segments brought to you by friends at Terim Capital. Terim acquire technology companies to grow sustainably over decades. Thinking of selling? Discuss how it might work at terim.capital.com. Speak to our good friend, Scott, one of the best in the business.

1:41:36Absolutely. What are we deep diving? We are deep diving into a business close to your heart, Lululemon, which is, of course, you're a big fan of Activewear. Is that close to my heart? You're a big Activewear fan. Someone who's my style consultant, let's call him, although he'll be very offended, thank God. He doesn't listen to the podcast. He said to me, I need to go in and improve the quality of my tennis attire and I should go into Lulu and do that. And I've been intending to do it, but I really haven't gotten around to it. So tell me, talk to me about how this business is going because I really haven't followed them.

1:42:09Lulu LeMond CEO, Kelvin McDonald, will step down in January with a company under pressure from its founder. Of course, its founder is the very controversial and legendary Chip Wilson. and chippers claim that the business has lost its cool and has been privately taking steps to run a proxy fight. Shares rose 10 % aftermarket after the company announced the leadership change. Lululemon was an upstart that revolutionized athletic apparel with its leggings that were so functional and flattering that women wore them not just to yoga class but to brunch, the supermarket and just about everywhere else.

1:42:38Last Thursday, Lululemon reported a 7 % increase in net sales, $2.6 billion for the quarter ending November 2nd. All that growth came from international markets and in the Americas, obviously, its core market revenue fell 2%. To date this year, Lulu shares have fallen 51%, erasing$25 billion in market cap. Although I should recognize between 2017 and 2024, the shares almost 10 bagged. McDonald took over as CEO in 2018. Under McDonald, Lulu grew its store base, which now numbers more than 780 worldwide, entered into international markets and it's expanded its men's business into categories, as you just said, such as tennis and golf.

1:43:18We've also seen quality problems cropping up. Lulu's breeze through leggings were so poorly received by customers who said the fabric was too thin and the V-shaped scenes were asymmetrical and unflattering. The company stopped selling them a couple of weeks after their July 2024 introduction. Adir, what are your views on Lulu? So when I look at this stock, it's now trading on 14 and a half times earnings so as tech goes bananas in the u.s a lot of retail businesses are trading on vastly vastly lower maybe historically lower than average p.s this has obviously been pummeled but 14.5 times earnings what that says to you is not quite that investors have given up, but that they don't think this is going to return to significant growth anytime soon.

1:44:12It's pretty obvious why they've got problems, isn't it? Firstly, in terms of textiles, I'm currently in the middle of reading a book called Textilepedia, which I don't think was meant to be like a novel. I think it was meant to be a reference book. But anyway, I was very keen to fully understand textiles. So I'm working through these 280 pages of Textilepedia together with some AI. And I can tell you this, textiles are pretty complicated and it's hard to get right. And there's a lot of things that can go wrong and there's a lot of opportunity to innovate in textiles. And we shouldn't forget that what made the founder of Lulu so controversial is that he made these pants, these yoga pants, and they were designed to not to be shapewear effectively shapewear is stuff where they try to make you look thinner and have structure in them and then people started complaining that they were too sheer i.e you could see through them because clearly the elasticization of them probably put the threads too far apart and so you could see through and his response was that's because you're trying to wear them like shapewear and and people that are larger than what should be wearing them are wearing them.

1:45:24That was not a popular remark, right? That's pretty much what brought him down. But his underlying, I think he used harsher words than that. There was underlying truth in what he was saying, which is that he didn't design them for shapewear and stretching them to that degree is going to make them sheer because that's not what the textile is made for. My point in saying that is like there's always been challenges with these textiles. Yes, there's been probably a drop in quality, but I don't think that's fatal. I think textiles are hard and sometimes mistakes happen and you'll remember I think it was Nike that made the baseball MLB pants that was see-through, bit too see-through.

1:45:56So even like the big companies make textile mistakes. I think that's not their problem. The big problem they've got is they largely popularized the category into the mainstream and they grew off the back of that. I mean that was an enormous tailwind for them to grow and And they became by far the most well-known brand in popularizing effectively active wear for day-to-day wear with versatility that it became socially acceptable to wear it not just outside the gym, but kind of not quite anywhere, but almost as just daily casual, let's call it. In fact, as daily casual. And so that is the tailwind that boosted this business.

1:46:39and because that his brand was synonymous with the category, he got to have the pricing power that that conveys to a business and that is how the business grew. And if we fast forward to today, what's been remarkable to me is in this category, one, it's continued to be so socially acceptable to wear this attire, everything. And two, actually, it's much more revealing now than it was when people were shocked by how revealing it was when he popularized it. Like if you look at the, I don't even know how to describe this, but if you look at the fit around the buttocks of some of the cuts of these leggings now, it's much more dramatic than when it first started.

1:47:20So this has really retained its status as like a culturally cool and acceptable piece of attire. But the problem is that everyone is doing it now. Brands that have more cachet than Lulu are doing it now. And so really what's happened is that they popularized the category they made tons of money from it that can't last forever everybody else piled into it and so they got some um some margin compression i guess because other big brands became known for doing it and they didn't transition and use that brand to diversify into other categories fast enough and those are the problems they're facing and so yes you can say it's not cool enough.

1:48:04What's a Kardashian's brand called again? Skims. I mean, Skims basically operates on high margins because it's so cool. And Lulu is definitely not that. But I think that's part of their problem. The other part of their problem fundamentally is, I'm sure if you looked at their P &L, the vast majority of everything is still coming from the same stuff that was driving it 10 years ago. It's really interesting. So Chip's obviously driven this as he's had this sort of war with the board. And it's actually quite interesting. So Chip's got about$2 billion worth of Lulu stock, so just under 10 % of the stock.

1:48:37So it's a material but not controlling shareholder in any way. But Chip's actually got a bigger investment in a business called Amos Sports. Do you know what Amos Sports is, Adir? Of course I know that business. Its parent company is now a big Chinese business. Absolutely. And to sports. That's right. And it owns – it's actually an incredible business. I mean, amongst other things, it owns Wilson. But it owns like a hell of a diverse portfolio of different brands. Big one is, one of the big ones is Arcterics. I'm not sure I've got that pronouncing. That's right. Arcterics is probably the most well-known one now that is growing that they own.

1:49:15Yeah. And that's massive in China now. It owns Atomic, which is the ski brand, Solomon ski brand and also Sportswear brand, a bunch of other stuff. As you said, Wilson, Peak Performance. And Chip owns, so Anta owns 44 % of it. Chip owns 16 % of this business, which is the second - Well, I did not know that. That's astonishing. So he's got actually a lot more of his net wealth tied up in AMA than he does in Lulu. And Lulu and AMA compete. So it's actually pretty interesting, the cross play here, where you've got someone sort of shaking up, getting rid of the CEO, effectively getting rid of the CEO, shaking up the board while owning a competitor or a big chunk of a competitor.

1:49:54It's hard to know exactly where his loyalty is like. It's not impossible or well, maybe it's all connected, right? It's not impossible. So Anta, they're rich. I think they started off as a running shoe company in China or just a shoe company in China. Yeah, it's Chinese. Yeah, exactly. And so they're growing like crazy and they're rich. What they did with Arcterics, which was very magical, is they provided a channel to market for Arcterics to become enormous in China and it's been tremendously successful. And so I suspect there is some possibility, given what you've just told me. I'm kind of just making this up on the spot because I didn't know that a second ago.

1:50:29But like Chip could easily go to Anta and say, listen, why don't we do a bit of a share swap? Like I'll give you my Lulu shares. You give me more of your shares. I'll earn more of you and you acquire Lulu into your enterprise and go do the same thing with Lulu in China that you did with Arctrix in China. Because ultimately if you can do that, that will drive an entire business Chinese growth. There's no doubt about it. If you look at Lulu as well, it's had some crosswinds. Obviously, tariffs are impacting it. I think it's got a Canadian manufacturing base which is impacting it. It's had some headwinds, I should say.

1:51:03And if you look at one of the reasons why it's PEs down to 14, which is pretty low, is it's, well, look at three quarters. Its earnings, its net income's dropped sort of 10%, more than 10 % in the last year. So you've got, it's over, and that's largely because it's US sales are dropping. So US sales dropped 2%. International's up 33%. but doesn't make up for the US sales obviously dropping. So its income's going backwards. And China's growing, right? Like China grew 50 % or something. I think they did half a billion dollars in China for the quarter or something. Yeah, so its net revenue was up, but its profit was down.

1:51:38And its gross profit was up as well. So clearly there's some higher costs in there as well. So it's not a terminal business, but as you say, there's a lot more competition. It had a near monopoly, and it's actually quite an expensive product. So when you've got being competed from sort of the cheap side, the expensive side with skins, the cheap side as well, it's kind of getting hit from all angles. I can kind of understand. And it's been a great story. So Chip Wilson eventually got fired in 2013 and he sold out in 2015. Had he just simply held his Lulu shares and not diversified into Anta, he would have been worth$8 billion.

1:52:14He's now worth$6 billion. So he's still obviously done very well, but he actually would have done better holding Lulu and not sniping from the cheap seats. He's obviously still done quite well. Well, he was very aggrieved, right? Like he came up with this idea, he put his heart and soul into it, he built it. And then what I guess he realized and what no one really thinks about is when you become a public company and you let all these other people into your business, then it's not your business anymore, even though it feels like it still is. And they can fire you from it, even though they might be dumb to fire you, but they can still do it.

1:52:44I think this business is starting to look very appealing. Like this will turn, I think this business will turn around. There's enough growth levers to pull here that I think this business will turn around. Like, I think you could bet on this to turn around. It depends on the new CEO is. I think I'd probably base it on that. But if it's a good CEO, I think they'll figure out a way to turn this around. The business is strong. It's growing internationally. It's growing in China. I think they'll figure out what to do here or else somebody will look at this price and say, we know what to do with this.

1:53:14Let's just pay a 50 % premium to take it off the market. So I actually think this is starting to become a pretty interesting proposition, but you've Let us see who the next CEO is. By the way, you know, talking about getting paid for failure, you know what this CEO gets paid for as his annual compensation is? No, what does he get paid? Circa 20 mil. I mean, that's a pretty good pay for halving a share price. Even though it's dropped off lately, the share price is significantly higher than when he started. So, yes, it's been a tough year, but it had 10x'd. So, it's obviously dropped off its highs, but it's been still a pretty good story.

1:53:46Did he quit or did they fire him? I think he quit under pressure. So six of one, half dozen of the other. But is he the guy that 10x'd it? Yes, he started in 2018 and it's 10x since 2017. So overall, he can take a fair bit of credit for it. But obviously, it was a pretty good business before he started. This is why being a CEO sucks in a public company because he did everything right for a significant amount of time. And then you go through turbulence and everybody turns against you and just says, what have you done for me lately? And that's the end of you, right? And you compare Lulu, we talked about Nike, and Nike share price continues to fall, really.

1:54:30Nike's down to$58 a share. It was sort of$180. Nike's down almost 70%. Nike's still got a P of 30. So Nike's double the price in that sense of Lulu. Would you rather own Nike or Lulu now? Well, I'd still pay more for Nike. Also, Nike is recovering. Like their sales are slowly starting to rise again. They've still got gross margin problems. Well, share price has been shocking. It hasn't recovered at all, really. It's actually continues to drop. But if you said to me, well, one of their main problems, I know we're not talking about Nike, but like their direct business is going backwards, right? That's their biggest problem.

1:55:09So I still think Nike is such a strong brand, such a strong brand. I think they'll almost certainly turn that business around. It will take some time. We're in an era where tech, US tech, we're talking purely about the US market now. US tech is very expensive. Now, some of that might be justified. Google, Microsoft would be the, Alphabet, Microsoft would be the two that are probably most justified. And everything else, some of it is really cheap. And anything in consumer goods, retail, like that is where you find bargains today in the US market. not universally and probably don't say 30 times p for nike is a bargain because they really are testing the stretch of the brand right but we shouldn't forget like nike is one of the world's most recognizable trusted and valuable brands and they're going through a particular slump now and drop the ball pretty badly but they still are a tremendous brand much better than lulu as a brand much better.

1:56:10And I think Lulu at 14 and a half times earnings, it's really in the strike zone of potentially a good buy. So I think there are bargains out. There's value outside tech in the US for sure. Well, I think Lulu at 14 is getting to, even though its sales are dropping, sorry, its sales are dropping, its profits dropping. I think Lulu seems a lot more justifiable at 14 than Nike at 30. You say how good the Nike brand is, and I'm not disagreeing that it's had a a fantastic legacy brand, but clearly things change. IBM was once the greatest business in the world. And what's that now? Things change. Look how dominant NBC, CBS, ABC were in the States or broadcast channels here as recently as 15 years ago.

1:56:53Things change and we could be witnessing, is it a faster horse? No, I think we're arguing about how fast horses are. Yeah. I think Nike's category hasn't been disrupted? I'm not saying the category's been disrupted, but has the brand been disrupted? Essentially, these are branding business. I know we discussed, is it a commodity, is it not? But largely commoditized products. There's a little bit of IP in there, but it's largely a commoditized product they take and they put some great marketing around it and sell it for a huge markup. Essentially, it relies heavily on signing sports talent, which is what Nike really did so brilliantly probably since 1982 to just sort of two or three years ago.

1:57:34And eventually you get to the point where people bid up sports talent. So you get hit at the margin level and things, just things that were cool stopped being cool. And Narki's been cool for almost 50 or literally 50 years now. Maybe that's come to an end. Maybe. But the two things I'd say just against that are one is it still sold 12 and a half billion US dollars for the quarter. So that was slightly up. So that's pretty good. Still a real business. And number two, I think their problem is not the price of athletes has inflated and hurt their margins. I think the problem is the shoe businesses in particular that have flown, which is ASICS, ON, those types of brands, Hocker, they're not signing athletes.

1:58:18You've got the Roger Federer stuff with ON, which is… All right, but that is not purely a the best people in the world use us marketing pitch, which is Nike's marketing pitch. It was Adidas' marketing pitch. It was Under Armour's marketing pitch. Like I think Nike has a moment in time problem here, which is what is selling shoes is not just association with athletes and therefore you can't buy your way out of it to sales because Hocker and Essex are not about athlete endorsement predominantly. And so I think that's the issue. I do think it's going to move on from there. That's one of the reasons I'm confident with Nike.

1:58:57I think in the age of influences in particular, which is the age we're in, I think it will revert back to the more traditional drivers of marketing. But I think right now, yeah, Nike's problem is they can't just buy athletes to buy their way out of a sales problem. It's not the moment we're in right now. That's a good point. I think on that note, we'll end it there. It's been obviously a big episode and a really difficult week as well. So thank you, Adi. Thank you, Mike. We'll see everybody on Saturday for our Ask Us Anything episode, as always. Thanks for listening in. And Merry Christmas to everyone who's celebrating.

1:59:30And unfortunately, I can't say Happy New Year because you're forcing me to do another episode before the New Year. So we'll say Happy New Year then. Well, as you know, we're the only podcast in the world that never stops. So everybody else takes a break. Oh, I know. Pathetically. I know. But we never stop. So our listeners can be rest assured. They'll hear us every week, twice a week. Merry Christmas and see everyone next week.