Nvidia's AI Trade, Telstra’s Disaster, EasyJet’s Takeover Fight, Protein Mania, and TEG Loses the Plot

25:29It's the wrong substrate, I'm going to call it, or the wrong added. McMeister, what have you got?

25:40What do you see written on the front of bars? Protein or something? Yes. Oh, it is protein, yeah. If you want to sell something today, just pour some kind of protein into it. No one's even going to know what protein you put in it. Put whatever you want. It doesn't matter. And then on the front, just write 15 grams of protein. People will just buy it by the box loads. The price of one of the core proteins that's being used in all of these products at the moment, it's gone up 104 % in the last year. So like that is - The memory chips are food. Yes. I've seen that everywhere. I haven't noticed in Australia, but in the UK, I've seen protein everywhere.

26:16Everywhere. Well, you probably haven't noticed it here. because you're not here right now. But if you walk through this. But I was there two weeks ago. I can't imagine what happened the last two weeks. Why are you not walking through the supermarket? You love the supermarket as much as I do. I've noticed in the UK straight away everywhere. I haven't noticed in Australia, like to a great degree. Certainly not to the degree I've seen in here. Well, I'd be surprised if it's more in the UK because it's everywhere here. Anyway. I feel like I've seen it a lot, like lots of just like on packets of anything.

26:45It just says extra protein or something. I've seen a bit of that, but I think you say protein. It's not as I haven't seen it in Australia. I'm going to hold this up. I feel it's really amped up in the UK. Can you see this brand? Okay, you can't. It's a bit out of it. Siggis? Siggis? Siggis yogurt. By the way, this is called Skier. It's actually not yogurt. It's cheese that is sold as yogurt. It's actually a kind of cheese. I don't put that on the brand, but, yeah, I think that Skier is actually a very liquidy cheese. Sounds really appetizing, this thing. Well, the reason I love this, it's got like five ingredients.

27:18Like it's very healthy and it's fermented. Obviously, yogurt is fermented versus cheese, but it's fermented, which is very healthy for you. 14 grams of protein. So that is what is written in very big letters on the outside and less sugar, whatever that means. They don't really add sugar to this in any meaningful way. So, yeah, protein. If you want to sell something, you've got gummy bears. I know you're involved in a business that sells candy. Is that right? I used to be. That business sadly went under. Did it? It was my finest investment. Yeah, it went under years ago actually. I thought it IPO'd.

27:51Candy Club. It did, then it went under. I had chances to sell the ounce. I've only got myself to blame for that one. Well, if only they were around today, they could just go and add protein to their gummies. Totally. And then they could say – No, there were some fundamental problems in that business that protein couldn't have fixed unfortunately. All right, we'll leave that. We won't go into too much detail. Well, let me tell you one other Australian thing. God, I've got so many. I've got to pick one. I've got to pick one. Oh, my God. It's hard to know which one to pick. You know, they say a good podcast or a good show is one where you've got heaps of stuff that you didn't get to that was really good.

28:29That's how I'm going to feel about this. I'm going to pick this one to have a bit of a contrarian rant about something, okay? How about that? Something in Australia. So, you know the Australia Institute? What can you tell me about the Australia Institute? Is that the left-leaning institute? Yeah, that's one way of saying it. Yeah. The left-wing think tank. Richard Dennis used to work there. We used to run it, maybe. I mean, I don't have their org chart, so I can't really give it a answer on that. But let's say they're a left-wing, left-leaning, left-whatever think tank that occasionally does some deep thinking, and at other times maybe I would be less, more critical of their thinking.

29:06And so they're ready. We cannot agree with them. There's nothing wrong with left or right-wing think tanks. I don't think it's not the left-wingedness that is my problem. You know, the thing is this. If you had a bird and you had a beautiful eagle, right, and you cut off one of its wings, doesn't matter if it's left or right and it tries to fly, isn't it just going to go in circles? That's not going to be useful. That's how I feel about anything that only looks at the left. Would it go in circles? Wouldn't it just drop? I don't know. I'm not an engineering engineer, but I reckon one wing wouldn't go in circles.

29:34It would just fly. Or it would drop or bleed to death would be the probably other way of saying it. And so that's how I feel about anything that's either left-wing or right-wing. That's why I like hearing all sides of things, right? So – but this is my issue. They ran – so I don't know if you are aware of this. It hasn't been that widely reported. But in order for the despicable Greens – is that a good adjective to use for them? A poor wing, horrendous. Yeah. So in order for the despicable Greens to agree to pass horrendous capital gains tax legislation through Parliament, They had to be bribed is how I describe these things in politics, political bribes.

30:14And their particular political bribe was, do you know what it was? NDIS reform, putting off, assuring that the NDIS can still remain a cesspool of waste fraud and corruption, I think is what the Greens demanded. Yes, you're correct about that political bribe. And so that bribe obviously is going to diminish some of the savings that the government is banking on. Well, just to clarify, what they've done is they've done a two-month, instead of passing the legislation, and the Liberals are at fault here as well because Liberals could have actually passed it, but instead of passing the legislation, they basically agree with the Greens that they'll put a two-month review into it.

30:54So it just delays. It means the fraud continues. It means the fraudsters in Western Sydney can hear rip-off taxpayers and run these criminal enterprises, basically. They're good work roads. And so I've given you a red herring by asking that question because that would be a great thing for the Australia Institute to complain about how many dollars a day are being wasted by this delay, but that is not how many dollars a day they've complained about. Instead, they've said that the delay in some anti-gambling legislation or the lack of anti-gambling legislation is costing Australians$95 million a day in losses.

31:33That's the delay that they've decided to target. In fairness, that also is a problem. I agree with you. Yes. Well, let me give you a contrarian view because I've been thinking a lot about this because, you know, I've got big issues with gambling companies targeting problem gamblers and sending them broke and casinos targeting problem gamblers, and there's been lots written about that, And I think it's quite uncontroversial for us to have that particular view. I'm sure we share that view. But I want to talk a little bit about this$95 million a day that Australian gamblers are losing. So I took my daughter to Time Zone in the Gold Coast.

32:11You've been to Time Zone? So when you play... Not that one, but yeah. Okay. So you know how it works at Time Zone. You play these games and then you get tickets. Tickets. Yeah, of course. Which is gambling. Absolutely gambling. And the tickets used to come out as tickets. and now they're just on this card. I thought it was much more fun when they came out as tickets. My daughter incredibly used this claw and yanked out this ring that was like 350 free tickets, you know, on one of their gambling games with the claw thing. And then I had to carry this ring around so I said, give me the bloody tickets on my card.

32:43I got rid of the ring. Negated my entire argument. But anyway, so you got this thing and the thing is this. The reason we don't call this gambling is because the primary reason that you're doing it as a kid or an adult is to have fun with the games and the stuff that comes out, the tickets and the prizes you get at the end are just a bonus and very occasionally you might win a prize worth more than the amount of money you've spent but you almost never do, right? Mainly it's about having fun with the game. I think there are many people in Australia who use sports betting apps or go into casinos or bet on stuff, especially people that bet with friends.

33:26And the main purpose of this is to have fun and to enjoy it. And a secondary purpose might be we're going to try and win money. And that might be most people or half the people or a quarter of the people or 10%. I don't know the answer. I'm not talking about problem gamblers here. But I think to tar it entire industry that people are using as entertainment with Australians having$95 million a day in gambling losses stolen off them, I think it's an unfair way to characterise the industry. What do you think about that? You can smash me if you want on that view. No, I'm not going to smash you. I think it's a reasonable point.

34:03I think the challenge is how do you define a problem gambler and does sports betting. Obviously, the really bad stuff is pokies. That's the one that kills families. It leads to bankers because it's so insidious and they're programmed to steal money from you. So I think pokies 100 % should be banned. That's what the Greens really should be focusing on. That said, I'm much more sympathetic. If all the things the Greens say, this is the least offensive thing they say, like compared to the NDIS. Well, this was the Australian Institute. I just want to emphasize it. This is the Australian Institute.

34:32But they were a greener line. So at that point, you're right about the sportsman thinking that you want another form of gambling, which is arguably the most insidious that my son will kill me if he hears me say this. But Pokemon and football cards is pure gambling. Oh, I totally agree. You're trying to get these valuable cards. My son won a$2 ,000 card a couple of weeks ago. He's addicted to these things now because I got this$2 ,000 card. Like it's pure gambling. That$2 ,000 card's crazy that he got a$2 ,000 card. Yeah, and he somehow knew straight away that it was a$2 ,000. Now it's been sent to the US for grading, which cost me bloody.

35:03So the loser here is me spending$100 for grading. But once it's graded, it becomes worth$2 ,000. Once it gets its PSA 10 classification. But I can throw a whole lot of stuff into that. Like let me throw everything into this basket of gambling to emphasize how hard it is to draw a line. So all of these little plastic balls that you buy, that kids buy in stores that have got, they used to have Shopkins in them and now they've got other things in them and you crack them open in their mystery boxes basically. Have they got real value? Can you sell them? Well, you could sell them but even if you don't sell them, the fact that you don't know what's in them and you're paying for them, That's a form of scam.

35:45Yeah, I think the blind box is less problematic than something that actually has real value. There's a real tradable liquid market for it. To me, that is a bit more extreme. Well, that's the most extreme version. Then there's the online loot boxes that you pay for where you absolutely can sell some of the things that you find in those. And it's totally – so my point is this. Gambling is now everywhere in some form or other. Lots of it is targeting kids. We just don't call it gambling. I think loot boxes might have actually been banned in Australia for under 18s. So my point is this. Like I think we need to think more carefully about what it is that's gambling and not gambling.

36:29We definitely don't want people to be addicted to it and to lose their houses. I think that's terrible. And that's historically why I haven't gotten involved in the gambling side of business in the past. but it's harder to draw a line now than it is in the past. And I do want to emphasize that sometimes the winning or losing money, maybe I'll say sometimes the winning money aspect of it is actually secondary to the primary enjoyment that people are getting from actually engaging in the activity. Yeah. I think if you look at the spectrum, pokies by far the worst into kind of table games, into sports betting, into those loot box things, then into kind of cards.

37:10I think there is a spectrum there. Yeah. And the question is where we sit. I don't think, like, I don't really love any of it, to be honest, but obviously I'm much less sympathetic to POFIs, which is just legalised theft, essentially. And the governments are partners with because they get gambling revenue. And will the LMCT +, like, that sits somewhere on the spectrum as well? Yeah, in the middle, probably. Somewhere in the middle. Yeah. Yeah. And governments are looking to ban that, trying to ban that, hopefully. And crypto casinos? Crypto casinos sit. That's towards pokies. Far end of gambling, right?

37:41That's basically pokies. So Tab Corp, Gil McLaughlin, who I saw one day before that was announced, is the investigation by Oztrak was announced. He seemed like he was in a pretty good mood when I saw him, maybe not have been the day later. He's done a pretty good job there. I think he's done a great job there. But the thing is that he's currently having his arms and legs torn off by Oztrak over, you know, money laundering, let's call it. That's what these guys do. Dude, that business is, that Austrax business is tearing, like if Austrax wasn't tearing somebody's hand off, they'd be accused of not doing the job.

38:12So he's just a person whose hands are being torn off. But let me tell you, I've said this before and I'll say it again. 20 years ago, if you wanted to launder money, based on what I've been told by this gambling industry, it was very hard for casinos because that was a great place to launder money. On the roulette table, for example, would be a great place to launder money. But now with these crypto casinos, you can just go run money offshore totally anonymously through these crypto casinos. I mean, like largely most of the money laundering, I think, is migrating to those platforms. And I don't think stake pretends it's not happening.

38:49I think they know that it's happening. So anyway. Just to clarify, there's two stakes. There's Nat Lieber, which is stake, which is essentially a ComSec. They're good. And there's the other stake, which is owned by Ed Craven. The crypto casino. Which may or may not be good, but it's just Matt's steak is very good. So we're not going to obviously just make sure we get the right steak here. Yeah. There's two Australian steaks, both very successful. Now, I'll move on. You didn't want me to talk about it, but I'm going to give the listeners just a taste of my Uber experience because obviously we love Uber.

39:20Our friends do an amazing job, but I couldn't not tell you about what happened in the UK on the way to my Barcelona trip. So I had this EasyJet flight, and EasyJet, obviously not the most forgiving airline if you're late. So you sort of got to get there on time. Well, we didn't have bags check-in, so I had a bit of runway, but pardon the pun. So I mean, where I am now, as you can tell by the alpacas in the background, is rural UK. So I'm about 45 minutes from Luton Airport. But in the middle of nowhere, I can't just go and hail a cab. So I had to reserve an Uber. Do you reserve Ubers in Melbourne?

39:52Well, you've got a guy, don't you? What do you mean, reserve for going where? I mean, I don't know if you've got a guy, but... I've got a guy, so you better watch what you say about me because, you know. When I go to the airport at 6 a.m., I'll reserve the Uber to the night before to make sure I'm not booking in the morning in case there's light. No, I haven't found that very reliable in the past. I've had an amazing experience in Australia with this. I've probably done it 20 times and it's worked 20 times or maybe worked 19 times. And they don't really differentiate the price, so it might be like a dollar more, but roughly it's$65.

40:27So it's a really good service. I think it's really great. In the UK, there's two issues. One, they charge about a 50 % premium, which I kind of understand. I'm paying for security. They've got to get some guy out to my house in 20 minutes. A 50 % premium for which bit of it? For the fact that I'm going to book it the night before rather than get it on the morning of. A 50 % premium? In fact, even – no, yeah, exactly. It was exactly a 50 % premium. So instead of being 33 quid, it was 50 quid. God, you get worked up about strange things. Like you get worked up if something comes and it's at like the foods at like 72 degrees instead of 80 degrees.

41:04But someone charging you 50 % more because you booked it, you're pretty relaxed about that. I'm shocked about that. As to your point, I'm paying for a service. The service is I'm getting inverted commas, guaranteed, pick up. Because otherwise it can take 15, 20 minutes to come. And my time's got value. All right. I can guess where this story is going. But even if it would have turned up, which I suspect is where this story might be going. Oh, you're sort of right here. You're not fully right. A 50 % premium, even if it turns up on time, I find that excessive, but I'm happy that you're prepared to pay it.

41:36You are the target customer. Uber's looking, what's the market willing to pay? I was willing to pay this. Clearly, other people are willing to pay this. I've got, like, the market's the market, and you of all people know this. So if Uber can get away charging 50 % and, more importantly, give the drivers a lot of that premium, I actually don't have a huge issue with it. What I do have an issue with is what happened next. So driver was actually rated 5.00, so perfect rating on Uber, which is always a bit suspicious, but lots of ratings. Anyway, I got a message. So I had a 4.30 a.m. departure, so pretty early, and I was cutting it fine, but I was getting there about two hours before an international flight, so I was going to be fine, but it wasn't masses and masses of time.

42:15So I booked it at 4.20. I get a message. It's on the way. At 4.25, I'm still just getting ready. I said, I'll be there at 4.29. He was going to be there a little bit early. parked next to the white car out the front. It's down this sort of weird laneway, typical English country lane. Anyway, send the message. He didn't reply. 429 miles apart. I start walking out. I don't see him there. I look at the Uber map and he sort of – the way this sort of laneway works is it's sort of the laneway forks and it's this lane the way that goes – it's effectively a long dead end. So I start walking up the laneway to where I thought the car was on the map and I get up and he's sort of parked in someone's residence behind a gate, Basically, the car was hidden somewhere, which is really weird.

42:58So I couldn't get to him. I'm messaging him. He's not replying. I'm calling him. He was deliberately hidden? Well, you'll find out in a second. I'm messaging him. I'm calling him. No response. 429, 431, 432. After a certain period of time, they can then cancel because they said, oh, you haven't rocked up. So I'm desperately trying to reach out. It's very hard to get another Uber. I paid this huge premium to reserve it. I've got to get to this easy jet flight. Like the guy's not replying to me. I then, I'm just, I'm then sort of waiting at, the guy basically has, it's a one-way road. So I'm waiting there.

43:30He cancers on me, drives right past me. Like literally, and I'm like, my hands are in the air standing. Basically, he always hit me, drives right past me, speeds off in his Tesla. The only thing I can think of is this guy purposely hit the car, waited to the time to expire, got paid the full fare, which is this massive premium fare, and just went off and did another job. Like there's no other explanation for it. I was ringing him. I was waving him down. And then I quickly requested another one. He obviously ignored that request. The story gets even worse. So the original fare was 33 quid. I went back to that 33 quid.

44:02Starts looking for an Uber. You know how it goes up, looking, looking, looking, nothing. 10 minutes, nothing happens. I'm like, oh, bloody hell. I'm like, my plane's about to leave here. And then it says, okay, you can do this express. We'll give you a better, we'll do like a better search. 67 pounds. It's now doubled. So we went from 33 to 51 to 67. And eventually one comes on the 67. So I've now paid$140 or$150 to go a 35-minute journey, almost missed my plane because this Uber driver has literally stolen from me. And there's no way I can dob on this Uber guy because he cancelled. The whole thing evaporates.

44:38So there's basically this legalized fraud going on here where these Ubers are hiding, waiting for time to expire, and completely shafting customers who are then missing planes at 4 a.m. in the morning. Well, it's interesting. I'm just going to say this for 15 seconds because I didn't want to encourage your Uber stories, but I had a weird experience on the Gold Coast where something, I didn't book it, but I had a situation where a guy turned up and on the map he was right in front of me and I couldn't see him for the life of me and he didn't respond to my messages and then he cancelled. I suspect that was more though because I wanted to go north and he's probably at the end of the day and he wanted to go south, go home at the end of the day.

45:12But there is something a bit weird going on with that map. So I'm with you on that. I'll tell you this 30-second bit of advice for people in Australia. I remember that country. So when you're over in your warm 85-degree UK heat, I'm talking Celsius. This is what I do now. You tell me if you ever do this, Mike. So I've got Uber One or whatever that Uber thing I pay for is, and I got a free DoorDash version of it because I'm an Amazon Prime member. Yeah. And now when I book Turkish food yesterday, I go and order it on Uber Eats. I go and order it on DoorDash. I see who's got the cheapest price. Usually it's pretty similar, but actually DoorDash was$10 cheaper on like a$70,$80 order yesterday.

46:05So I wonder if that was an anomaly. How much cheaper? $10 on a$70 or$80 order. Oh, wow. Yeah. So I wonder if that, and I always click the priority thing for an extra$3 or$4. I never used to, but then on a Saturday night, they've often got nine orders to drop off before they get to me. Yeah, exactly. And so it's completely cold. It's worth the$4, right? Yeah, sure. But I wonder if this is the beginning of a trend in some price competition between the major platforms or if it's just an anomaly, but you'll be excited to know, I'll keep you posted. Can we move on? I am totally in favour of moving on.

46:43The World Cup's massive at the moment. We're after a semi-final stage. So we're obviously recording this over the weekend. Just had the two big – the last of the two big quarters. So Argentina are through. So Lionel Messi's Argentina's through. They'll be playing England. So obviously I'm in England, so it was a pretty big deal here. So we're actually just across the road from a pub. So that was going absolutely off last night. So hence didn't get to sleep until quite late. What time was the game, English time? Started 10 p.m. So you couldn't get a better time for pubs to start the game. It was roaring.

47:15Were you watching it in the English countryside or in London? In the countryside. And what time do pubs usually close in the countryside? You'd be shocked to know I'm not a massive pub guy. I presume they shut around 11, 12 maybe? So this is good news. And they got permission to stay open late, I think, when there's a World Cup game. It started quieting down around midnight. It started quieting down. So I presume that's about the time they usually shut. But this would have been – it's great news for pubs, right? Like every time – You couldn't get it. You couldn't get it. It's a fairy tale for pubs.

47:45Because remember, people – a 10 p.m. game means people get there at 4 p.m., 5 p.m. and they're there for seven hours. So it's unbelievable. And the game went all the way through. It went to extra time. So you couldn't have got – like you couldn't have got GDP. Just rock it. But I reckon that – to me, who do you reckon the star of this World Cup has been? The breakout star. You're a big soccer guy. The breakout star. Well, I thought Haaland would have been the breakout star. Yeah, Haaland. I mean Haaland. Okay. Yeah, absolutely. So it's actually his first world car. I thought he went to the last one, but he wasn't at Qatar.

48:13He's 23. But I'm not sure you saw the Wall Street Journal had a great profile on the Manchester City beast. Oh, I did see that, yeah. It was a little bit about Harlem, but really it was about Norway. And we know Norway is really kind of in many ways a socialist country that has these elements of capitalism about it. And this sort of typifies this. Well, a country with the luxury of being using this kind of neo-socialist Scandinavian model. because it goes and finds North Sea Gas that funds the entire country to the point where they have to force people to retire at a certain age or else they just want to keep the jobs available to people.

48:50And to their credit, so not to their credit, they talk a lot about climate change whilst making all of their money from North Sea Gas exports. 97 % electric cars. Yes, but to their credit on two very consequential decisions they made, Decision one, they sure know how to tax resource companies in Norway. Yeah, absolutely. And they have a very good model for doing that. And number two, they made a rule, which is their mega sovereign wealth fund is not allowed to invest any of its money in Norway to not bubble up the economy. But as a consequence of that, they own something like 1.5 % to 2 % on average of world stock markets.

49:32I think it's the biggest sovereign wealth in the world, right? There are many things I love about Norway, including the fact that they're great catapult customers, their teams, but there are also some things I don't love about Norway, obviously. Yeah, I'm the same. Political climate, but they have done their economics exceptionally well in that country, in my view. I think they've done a lot of things very well. And the other thing I really love, and this is the sort of one thing I do love about socialism, is they've got a really low-cost, high-participation system of youth sports, which is the opposite to the US, really.

50:04And this is what the journal said. It was basically said that it was always that everybody should play equally, everybody should have fun, and winning matches at a young age is not important. Obviously, I'm a pretty competitive guy, as you know, but this is one thing I really agree with. And a sports scientist named Martin Erichstad, could you get a more Norwegian name, heard a place that was nurturing talent while keeping everyone happy and went to Bern, which is where Harlan grew up. Harlan's dad, of course, played for Man City. So Harlan could have actually played for England, ironically. But he went back to Norway, grew up in this sort of really egalitarian place.

50:38So in Norway, participation matters more than trophies. Norwegians are famously born wearing skis and skates, but two-thirds of the country's boys are still wearing soccer boots when they're 11 years old. The nation is so committed to egalitarian ideals of social enjoyment, proper development and sport for all, the kids aren't even sorted by talent until they're 13. By then, most precocious Americans are already burning out. Only after Norwegians have sampled a bunch of different sports, they specialize in one. Harlan, for example, grew up cross-country skiing and playing handball while destroying records in what might have been his best sport of all, the long jump.

51:10I absolutely love this. I've been around, obviously, kids sports. I've played kids sports like you did for a long time, and my kids both play kids sports at varying levels. They're really great at some sports and not great at other sports, as most kids are. But what I've noticed a lot about team sports in Australia, and I think this is probably the case in most Western democracies, is there's this – Malcolm Gladwell talks about this a little bit in Outliers with a 10 ,000 hour thing where in many countries, like almost every professional sports person is perfectly old for their year because they sort kids so early that the kids who have developed six months earlier get put in these priority streams to become better.

51:46So there's that element. But even if you go to a sort of less high level, just sort of regular sports, footy clubs, group clubs, whatever, especially footy and soccer and basketball sort of team sports, is you get coaches who are often dads or mums, but usually dads who are okay sports people themselves and very rarely elite. Elite people don't have this problem, but they're not elite coaches. And they tend to – their kids are usually pretty good and they seem to be – and they almost always will give the better kids a massive run and the lesser kids are usually the smaller young kids, no run at all.

52:17And that means the team might win a few more games, depends on the make-up, but it means certain kids – and if your kids just develop more slowly, they basically never go run and never amount to anything. But the way that sort of these coaches are motivated is I think they need to win every game at every cost, which is exactly the opposite of what Norway does, the non-keeping score thing. And it results in a worse overall system. And it's not real capitalism because it's just effectively an autocracy. And I hate coaches that don't give even time. It's different when you're under 16s or the 15s level, whatever.

52:49That's very different. Or a rep team. But in non-rep teams that are effectively playing for fun, coaches who don't give even time, I absolutely hate. And to me, it's just terrible coaching. Well, the U.S. is the most extreme version of that, which obviously I see a lot of this through Catapult. You know, the amount of pressure on young kids in the U.S. with things called travel teams and the like is pretty dramatic. I'll give you an example of another country because I generally agree exactly with what you're saying. I'll give you an example of another country. There was a leadership lesson that happened this week in another sporting event that in any regular year would be the number one sporting event being reported right now, but because the World Cup is on, it's been slightly overlooked.

53:35Do you know what event has just been going on? Yes, Wimbledon. And so there was an incredible, I don't know if I'd call it a leadership lesson or probably a personal high-performance lesson that came out of Wimbledon this week, and that was the victory of Linda Noskova, a Czech player. Her opponent was also from the Czech Republic, and I'm going to touch on that in a second in terms of, like, the lesson that you've just given here is a lesson for Australia. I'm going to reinforce it. But Linda Noskova, she won, but first she lost, and this is her first Grand Slam. She's very, Grand Slam victory.

54:11She's very young. she lost five set points and then she did something very unexpected. Do you know what she did, Mike, after she lost five set points? Five set points through the tournament, you mean? No, in this final. She lost, like she gave up five set points, I should say. Oh, sorry, she had her own. Sorry, I thought she lost. To win the match. So I really said this very badly. She gave up five match points. Yeah, five tournament points. She had five tournament points. That's right. I didn't see this, no. Yes. Do you know what she did, Adam? She won? Well, she eventually won, but first she did something that was very surprising.

54:52She cried. Oh. She was on the court. She lost these five chances to win, and then she cried. And everyone looked at her and thought, well, that's the end of her, like she's going to fall to pieces. And then she pulls herself back together, and she goes on to win in three sets. And if that is not a lesson in human high performance resilience, then I don't know what is. It's remarkable. The only thing I would want to talk to her about, if I could speak to her after that win, would be on what happened in that moment. And like, was that controlled? Was it uncontrolled? Did she have to pull herself back together?

55:30Or was it like a psychological strategy to keep going? I thought it was one of the most remarkable pieces of human performance I've seen in a very, very long time. But the thing you should also know about the Czech Republic, the women are very, very good at tennis. They have won Wimbledon five out of the last probably 12, Yeah, it's an amazing tennis country, the Czech Republic. And there was also some good male tennis players as well, not quite to the extent of the females. Okay, that's a good point. So the women are amazing. It's a country of 10 million people. Yeah, it's an amazing sporting country.

56:03It massively outperforms Australia on tennis, but especially… Not just tennis though. I think they're good at a lot of sports, to be honest. Well, the women are unbelievable at competitive tennis, much better relatively speaking than the men. Why do you think there is the gender difference? There's a reason for this. Absolutely no idea. You know Mike? No. So it has nothing to do with gender and it is actually an incredible sociological experiment, which is that men tend to gravitate to the two biggest sports in the Czech Republic which are football. Soccer, yeah. Soccer. Yeah, soccer and ice hockey.

56:47Handball, man. Ah. Ice hockey, yeah. And so that's what sucks all of the men across or many of the men whereas for women this is the number one sport in the Czech Republic And so what you see is the outcome cost of focus versus a more diffuse talent pathway into other sports. Can I just make the argument, though, that wouldn't that be the case with, like, the UK, for example? Obviously, females do play soccer as well, but, like, football was a, soccer football was a massive spot for men in every European country, yet there's other European countries where the women aren't as dominant in tennis.

57:26I'm not sure that fully explains it. No, no. So there's a reason why the women are dominant in tennis, and the reason should also be the same for men in the Czech Republic. And the reason is I thought it might be a bit boring for you, but basically when the communists were hanging around, they created these great tennis academies, tons of tennis courts. It's super easy and cheap to get onto a tennis court. They were really good. And then they go back into the system, like you just said about Norway and soccer. They go back into the system and train young kids and have the same kind of attitude towards soccer as Norway has, to tennis as Norway has, to soccer of like nurturing these kids.

58:04and they end up to be really, really good. And that is peculiar to the Czech Republic. And it makes them really good. But the reason the women are so much better than the men in the Czech Republic is because of the alternate pathways that men have for sporting success, whereas women are very focused on this. The bottom line is I think if you take what you just said about Norway and what you said about the Czech Republic, there are some lessons for Australia in how we can go and create great elite athletes again in some of these sports? Because we've kind of waned in Australia, to be honest, in the last decade.

58:39Some sports. I think some sports. But going back to my original point, one thing I do notice is when you've got a really elite coach, as in there was a guy called Tim Clark who coached another team when I was briefly coaching at footy, and Tim was a great footballer himself. I didn't quite play AFL but wasn't far off, and his kids are incredible sports people, could be AFL players, and he was really good at giving everyone a very equal go despite having an incredibly talented team and that team performed really well over four or five years so interestingly it's the long-term view which is giving people a go giving people an equal go and building them up over a longer period leads to a better result for the entire team uh but you don't have that maybe you don't have as much short-term success in year one and two but you're three four five and that's what i think when you've got elite coaches they generally realize this it's the parents who have a talented but not elite kid who tend to and all All they have is the kid being okay at this whatever sport.

59:33They tend to want to, and maybe this is subconsciously biased, but I don't think they mean to do it. I think they do it unintentionally, create this sort of caste system within the team, and I think it's by far the wrong result. And Norway and Haaland is a perfect example that happens when you don't do that. The greatest soccer player in the world came through an egalitarian regime. And also you get the advantage of a 50-foot Viking who can move a mountain before lunch. So there are some biological advantages as well. Yeah, that certainly helps. Let's go to a super quick break. We've got a heap of great stories coming up, so don't turn off.

1:00:16And we are back. There's a story I just couldn't resist this week. I think you know what I'm going to talk about, and it warmed the cockles of my heart. Economic Papers Journal released a study that found Australians who work from home do less exercise, eat more food, and are at greater risk of becoming obese. This, of course, comes as disastrous Jacinta Allen, Dan Andrews' government, prepares to force Victorian businesses to make staff work from home two days a week in a last-ditch vote-buying effort for her viscerally hated administration. RMIT University academic Apoku Adabor found that adding just one hour of working from home increased the body mass index and significantly boosted the likelihood of being obese from 7.5 to 9.1 percentage point, which is pretty incredible.

1:00:59Adabor found that main channels through which working from home led to weight gain was increased frequency of snacking on Twinkies probably reduced physical activity. The structured office environment also imposed norms around mealtimes as did not exist at home, while workplace smoking bans discouraged cigarette use. The research used 16 years of data from household income and covered 22 ,000 individuals. This comes just weeks after work-from-home van Canva, directing new hires work from a slavish Sydney office. And, of course, probably the biggest proponent of work-from-home globally, Alassian, has lost 80 % of its market value since allowing staff to work from anywhere.

1:01:34idea. We saw COVID really created this work from home epidemic, ironically. And what obviously COVID killed was obese people. Are we seeing the greatest anachronism of all time here with work from home leading to obesity? Well, I'll just give you two quick rebuttals and then agree with you. One is I think Atlassian losing 80 % of its value in being a work from home advocate might be called correlation is not causation. And the second thing I'd say is it wasn't just obese people that died in COVID. There were a lot of obese people that died in COVID, but there were also a lot of people that were not obese that died in COVID.

1:02:10But now let me agree with you and say even more than agreeing with you on this work from home thing, it's very relatable for me because when I'm working from home, there is no doubt that I spend a lot more time in the kitchen hunting down snacks. And when I'm out and meeting people, even in a cafe, which is full of snacks, I don't eat the snacks. And when I'm at work, I don't eat the snacks. And I don't smoke. But I can easily imagine that if you're at work, like if you wouldn't be smoking there because you can't smoke. And at home you can have your vape or whatever it is that you do. Yeah, it's all, I mean, like the thing is this.

1:02:44There are some really complex problems that exist in the world and they're really hard to figure out. You need like lots of maths and detailed models. This isn't one of them. This isn't super obvious. Like, of course this is what happens. It's obvious to us, but I don't think it's obvious to people who are massive fans of working from home. I think there's always upside and no downside. It's still obvious. It's obvious as they're stuffing their faces as I am. Like it's obvious to all of us. It's just do you want to accept the reality? Now, there are things that I do that I shouldn't be doing, and you would go and do your little speech about this, and this happens and that happens, and it would be obvious to me as well.

1:03:26I just wouldn't want to accept it, So I just engage in A-grade cognitive dissonance and I would find a way to pretend that it wasn't happening so I could keep doing the thing I don't want to do. Like I like to eat snacks and so I cut back on snacks. And I know when I eat processed sweet things, it's going to be not good for my pancreas and it might increase my risk of diabetes. And I've got familial type 2 diabetes. I can tell you all the cognitive dissonance ways that I make myself feel okay when I go and get the ice cream. I've got 100 of them. Like, I know how to do it. And so people that want to work from home, they got their tricks as well.

1:03:58It's not like they don't see this. Of course they must see this. I think another big reason is offices are a lot bigger than houses. So if I want to go and speak to Mike on the other side of the office, I've got to walk around 50, 60, 100 metres constantly through the days. There's a bunch of that incidental exercise. The other one is getting to work almost always involves at least a kilometre of walking, even if you drive, you still want to park in a car, but I can get up. So there's a significant amount. Most people don't have car spots. Most people are catching public transports. Yeah, 100%.

1:04:26But even if you do have a car spot, but yeah, public transport, you've got to walk to a train station along the platform. Like I'll generally, I'll obviously try and walk to work as well because I'm lucky enough to be a 15-minute walk to work. But there's probably an extra half an hour to an hour of exercise simply by getting to and from work for most people. So there's so many benefits of going to the office. You get promoted, you get pay rises, and you lose weight. It's just why anyone wants to work from home, other than the people who really have to for obviously caring reasons, but that's a small proportion.

1:04:54A lot of people who work from home who don't have to, who still insist on working from home against their own interests so massively is completely bizarre to me. On all of your points, look, I feel the same way about work from home in a sense as I feel about the AI revolution. What I mean by that is there's been this dramatic change and it's very hard to know how it ends. It's easier with work from home to know how it ends than AI, but I don't think it ends going back to what everyone was doing in like 2015. Like I don't think that's how work from home plays out. I also don't think it plays out like what was going on in 2021 or even 2022.

1:05:35I think that the balance of where people work shifts. It's not exactly clear precisely where it's going to land, but I think it's becoming clearer. And in bad news for you, I don't think where it lands is, and it might not be bad news for you, by the way, I'm being a bit facetious, I don't think it lands with five days of full-time work in the office. It would surprise me if that became the standard in five years' time. That's the opposite of bad news for me. I love the fact that our competitors aren't five days in the office. That's a competitive advantage we have. So by all means, if you're competing against us in the travel space, we don't pay too much attention to this, to be honest, but if you're competing against luxury escapes, Work zero days a week.

1:06:15I would love that because it means it's a huge advantage for us. It means our customers are being served better. It means our team are working more collaboratively. What I do care about is public servants spending our money not working five days a week, but any private enterprise can do whatever they want. Like managers, bosses, CEOs, choose what you want to do. I don't care, but public employees should be at the office. Why aren't you worried that you will not get? You will get a reduced set of employees you can choose from by not – I'm going to talk five years in the future, not today. So let's say five years in the future, there's some element of flexibility that comes into things in terms of being in the office five days a week and you say that's not our philosophy at Luxury Escapes.

1:06:57You see how I gave the very gentle version of what you might say? And so do you not worry that constrains your set of potential employees? That maybe if we lived in a town that has 200 people, it would constrain us. I live in, we have offices in Melbourne Sydney that have 5 million people. We don't need to have a subset of 5 million people. So there's that. There's also, I understand people's scenarios change. Sometimes we hire people and they then have four kids. So in that case, their scenarios change legitimately. So we'll be much more understanding. So it really depends on the circumstance.

1:07:30We don't have 100 % of people working five days a week, by the way. We have probably 80 % of people working five days a week. and that 20 % who have a real requirement flexibility get that flexibility they need. What we want is people who can work in the office working from the office, which is a big difference. And our team's the best it's ever been by a long way. And our turnover is less of the people who work coming to the office. So our own data has been that it's been incredibly beneficial for team quality. If anything, we had too many people at one point. There wasn't enough churn. So we seem to be having the other issue.

1:08:03Let's not say things don't change, But I think what we're finding is people are realizing, and especially remember the people who want to work in the office are younger people, people who don't tend to be older people, and they're people who are transitioning out of the workforce. So if people need flexibility, we give it to them. If they don't need it, we won't give it to them. It's a pretty simple policy and we don't really have any issues there. There are people who really, for health reasons or for caring reasons, need it. That's completely fine. We've never shied away from that. But if you're a 25-year-old tech bro who wants to eat Twinkies at home, go work somewhere else.

1:08:36That's not our 25-year-old no kids, I should say. We very much look at case by case. We don't have broad policies like Atlassian does. And if you look at our performance versus Atlassian's performance, Atlassian's a much bigger company with incredible competitive advantages. If you look at our last five years, since we had these different policies, I think our performance has been far better than theirs. And I think if they had the time again, maybe they would have chosen a different policy. Well, I think the good news for you is that a 25-year-old, not only are they unlikely to have kids, but they probably still live with their parents.

1:09:07I think they're pretty keen to get out of that house and get to work. Probably. So I think that's a good tailwind that's playing in your favour. Let's move on. AI Billionaire Factory and Media Machine Thermos was back in the headlines last week. The report was about to raise$2.9 billion in fresh equity at a headline valuation of$15.5 billion, which is unbelievable. We should actually take this as a big grain of salt given it's preference share, it's not common equity. And you've warned really well to our listeners that a preference share. Well, I was going to just reiterate what this means, which it means if I put in how many billions am I putting in?

1:09:432.1? 2.9. 2.9. So if I put$2.9 billion into this business and I have a preference share, we'll keep it a simple preference share. We'll call it a one times non-participating preference share. By the way, that's a simple preference share. This is finance. It's so complicated. There's all these words. So one times, that means it only applies to the amount of money that I put in, not more, so I can't go up. Well, not one times means I can get my money back at the end if I want to. Non-participating means I have to choose between getting my money back and getting the value of my equity. I can't participate in the equity after getting my money back.

1:10:27And so if I put $2.9 billion and it sells for$2.9 billion by the receivers in three years' time, then I would get the whole$2.9 billion, assuming no one else had preferences, which I'm sure they do. So I would get the whole$2.9 billion and nobody else will get anything because I would trigger my preference share. But if the business went to$100 billion, then my 20 % of the company for my$2.9 billion, not a bit less, but my 20 % of the company, that would be worth$20 billion. And so I would say, I'm not going to go and trigger my preference share and get my$2.9 billion back. I'll get my 20 % equity and get my$20 billion.

1:11:04So that is what it means. And the reason that you just said that it has an effect on valuation and the valuation's a bit pretend is because of this. Whether the valuation is 20 bill or 30 bill, I still have this one times preference. And so if I look at this business and I say, I'm betting it's going to be either 200 bill or it's going to explode. But I think even if it explodes, I'm probably going to get my$2.9 billion back. then if I have to pay$29 billion valuation to get in versus a$21 billion valuation, but my thesis is it's going to$200, that's a worthwhile bet because my downside is still protected in exactly the same way.

1:11:47So it just gives you more flexibility to pay a bigger headline valuation if you believe that you're betting on a mega outcome and that if it fails, you'll still have the same likelihood of getting your money back. So that's one preference is distort valuation. And then maybe I'll have dividends attached. So it becomes, it's not debt-like, but it's more debt-like than common equity, essentially. It's caught further down the stack. Well, a good preference share, if you're on the buy side, an even better preference share, is one that says you have to pay some returns, a minimum guaranteed return, or one and a half times, so 1.5 times liquidation preference.

1:12:25So I put my$2.9 billion in and I get one and a half times that back, not just one times. Or a participating preference. That's nasty. That means I get my money back and it means I get my equity as well. Or a ratchet, which means if certain things don't happen, the value of my shares, I get an increasing number of shares. There's a million different ways. Maybe this is my overarching comment. I had this exact conversation with someone maybe three days ago. the greatest asset for a institutional investor like a venture capitalist the greatest asset is a founder who is fixated on valuation on headline valuation because when it's like a magic trick if i can get you to look over here and just focus on the headline valuation then with a sleight of hand i can do all of these other sneaky things like put in vetoes and ratchets and all sorts of other stuff so don't fall for them and most vcs are not nasty like that but don't fall for the magician's tricks don't just watch the hand with the headline valuation look at the whole package that you're being offered by the by the investor and part of the reason that they were that uh co-founders executives want this higher sort of headline valuation is so that we think thermos for example wants to list in a couple of years they want to list at a higher valuation again so this sets and we think it's we know it's a fake flaw but it's at some sort of flaw it doesn't always work We saw what happened with SoftBank and WeWork, but this is kind of a fake flaw being set at this 15.5.

1:13:51We know this is not a real valuation, and any smart investor knows it's not a real valuation, but some people will think it's a real valuation. So the funds itself won't be used for the recently announced Indonesian data. Hang on, hang on, hang on. Let me just disagree with something that you've said there, okay? Okay. That's very – you've given a very sophisticated view of why the headline valuation is so important. But like Sigmund Freud, he would have a different view of why the headline valuation is important. I'm not going to do his German accent. He would say it's all about ego. That's what he would say.

1:14:23And the Skyhooks, you know who they were? I don't know. That's before my time. They sang a song called Ego is Not a Dirty Word. Shirley Straughan. Yeah, Ego is Not a Dirty Word. That's their song. Red Simons. And so that should be Ego is Not a Dirty Word by the Skyhooks should be the theme song of the startup industry because all of these headline valuations largely are there to drive the egos of the founders. And that is the gift that I'm talking about that founders give to VCs because VCs, what they care about is making money. And so if you want your ego to run rampant and chase a high headline valuation, they are more than happy to facilitate your ego if it increases their chances of making money.

1:15:08Absolutely. And the funds won't be used for the recently announced Indonesian data centre, but rather pitched as a final piece of funding for its Tasmanian data centres and early works in South Australia. Bear in mind, Firmus recently raised at$8 billion, which itself was a massive increase. But not everybody's falling for the hype. John Pearce, the well-respected COO of Unisuper, which manages$150 billion in retirement savings, didn't expect there would be public float of Firmus soon, making a rare public expression of scepticism about the company's plans. Pearce even claimed they didn't think Firmus' non-deal roadshow was well received in Australia.

1:15:42Paul Smith, who heads up the AFR's tech section, which is a great section, was also critical in the AFR, knowing that while most investors don't want to get against NVIDIA's chief executive, Jensen Huang, the circular nature of the AI trade when NVIDIA funds all of its customers who then use that cash to buy more NVIDIA gear is a massive stitch up. Apart from its currently unproven cooling technologies inside its unbuilt data centers. Thermos facilities will be shockers with expensive NVIDIA gear which depreciates faster than a sports car. Any downturn in demand or the currently unlikely emerges as a better rival, which is leaving them horribly flapping in the breeze.

1:16:21If a$15.5 billion number is to be believed, Oli Curtis will have a net worth of$2 billion and his co-founder Tim Rosenfeld$725 million. This is obviously a pretty big stuff idea. What do you think of the whole NVIDIA circular Ponzi scheme, circle jerk? Well, it's hard to support it now that you've phrased it like that. But the good news is I wasn't likely to support it anyway. I will say about this. If I'm wrong about neoclouds, I will be so wrong, and I'm happy to do a mea culpa of how badly I got the whole thing wrong. But the way I just – Just to clarify, Firmus isn't a neocloud. CoreWeb's a neocloud.

1:16:59Firmus is a data center operator. Yeah, but predominantly it's signing deals with – a hyperscaler assumed to be meta to go and... Who's actually selling off its capacity, ironically. Who's selling off its capacity. But you say they're not a neocloud. But, like, why do you say they're not a neocloud? They are a neocloud. They're a data centre operator that is making capacity available for hyperscalers to use in order to run their machines, their models. Correct me, my understanding of neoclouds are people who almost rent capacity in data centres... And then sublease those capacities onto the hyperscalers.

1:17:36That's one version of a NeoCloud. But ideally, every NeoCloud wants to build their own data centers because that is going to try to turn, you know, the old Netflix trick of turning a variable cost into a fixed cost and then it declines as a variable cost. So if I have to pay for every bit of data center I use, then the more revenue I pay, my cost just scale with my revenue. That sucks. And so if I buy a data center, yeah, there's a big upfront cost, But eventually, if I'm really successful, that cost will be much smaller than I would have actually spent paying the scaled cost if I rented the space.

1:18:09So I don't believe in any of this. I don't believe. I think AI, I read somewhere that someone said AI is like electricity. That's how big the transformation is for society. I think the jury's still out on that. But I think it's possible. It's not impossible. I don't think it's likely. But I think it might be a change that is not that different. and I think it might be on the level of the internet, which, by the way, is still a pretty dramatic change. Like the internet's not as big as electricity, but like, you know, we don't have to argue about like whether it was big or small, it was dramatic.

1:18:40I think AI is going to be like that. But I think that the economics that are powering the AI industry today are farcical. The reason I say I'm going to be so wrong is it's so obvious to me that this is ridiculous. and so if I'm wrong that means I just had this huge blind spot and everyone else saw this thing that I just couldn't see which is certainly possible but it will be a huge mistake by me if that's the case and when I look at um any of these players iron firmus whatever you want to call them and I look at the way what you just described as the economics it feels to me like there's this house of cards that's being built with a really good core that's nvidia but it's got this great core and it's building this house of cards around it its house of cards is that two thirds of its revenue are coming from like three or four customers that's its house of cards and also there's all of its clients are now so angry about the mega margins that they're making they're trying to build their own competing ships so you know and and jensen huang in fact i'm going to tell you at the end of this ramble what the the i think what might be the high point of the bubble in a second but um like ring the bell moment okay but so you've got this great core it's a great business nvidia has got this house of cards built around it and then what happens is on top of that house of cards they start building these other house of cards all over the world and i think firmness isn't one and they've got no good core they're just a house of cards balanced on the house of cards bit of nvidia and when the house of cards collapses they all collapse down nvidia's house of cards part of their business collapses as well i think that's what's going on here with the circular funding and the underestimation of depreciation schedules which i think will hurt hyperscalers and their depreciation having to expense all this stuff earlier than expected more than um neoclads because neoclads have got bigger problems the fundamental economics of neoclouds don't work in my view and so i think the capacity being built out is too much none of this seems real to me and i'll tell you what i think is like you want to ring the bell of the bubble i'll tell you what just happened this is my son sent this to me it's very amazing so do you know that over the weekend or end of last week nvidia just simultaneously released 14 new cards Do you know that?

1:21:02No, I didn't know this. Well, these are not the cards that you think they are. These are trading cards with a chip on every single card plus some amazing games that made up the history of NVIDIA plus one card that just lets you see how many of the other cards you've got. And these cards are going to be available live and you can go and get them if you go to events. You don't get them if you buy the products. And my guess is, so one of the cards I think is like it's the 10 series, GTX 10 series, which was the first big step up in graphics cards. And my guess is that a lot of these cards, if they're in short supply, will trade on eBay and other platforms for more money than the underlying card that they represent, these trading cards.

1:21:58This is the high point of the bubble. NVIDIA is running trading cards of its chips that people are going to be so desperate to get their hands on. I know it's a ramble, but I just cannot believe what's going on here. It's mind-blowing. You've been right. I think we both 100 % agree here. And your comparison really early on was this is like the aircraft industry or the airline industry. Airlines are incredible. They have been one of the most transformative technologies in the last 100 years. As Warren Buffett says, a far-sighted capitalist would have shot down the Wright brothers, a kiddiehawk, because it's been a disaster.

1:22:33It's been a money furnace for investors, although that looked like they've actually finally got it right, ironically. But that's really got the back of credit cards and become a financial services business. But for 100 years, airlines burned cash nonstop. Reason being, there was no competitive advantages. And they were effectively selling a commoditized product, i.e. travel from point A to point B. and there was no reason why a Qantas plane versus a Latam plane versus a Lutanza plane versus a BA plane, there was actually very little difference between them. They all sort of took you from point A to point B.

1:23:02And in many respects, you look at the, well, I hate the name hyperscalers because none of these scalers really scale that hyperly for a start. They're just like kind of really, really. They should be called hyperspenders, not hyperscalers. Yeah, 100%. Hyperspenders. Hyper off-balance sheet spenders is what they should be called. Not off-balance sheet, on-balance sheet. Hyper on-balance. Sorry. Of income statement spenders. Of P &L spenders, yeah, exactly. So they'll hide the spend and they'll – but NVIDIA will book the spend, but we've talked about that at length. But I think the biggest problem is if you look all the way down the stack, no one has competitive – except for NVIDIA, and that's been ground away.

1:23:36NVIDIA's got incredible competitive advantages. Like we think they're overpriced, but incredible competitive advantages. They've got incredible corner resource in CUDA. They've got massive scale. They've got huge brand. They've got all that stuff, albeit Tranium's starting to chip away at it slowly and Intel's chipping away. They've got some pretty big competitive advantages. No one else does, though. And look at the price drops that OpenAI are doing. That proves there's no competitive advantage. The fact that you drop, what does competitive advantage give you? Pricing power. What does the AI frontier models not have?

1:24:02Pricing power now. Oh, sorry. Anthropic temporarily has it, but it's about to lose it because people are just leaving in droves. They're all going to lose it. And people are going to deep seek. So the whole thing, effectively, I think, and we both get benefit from AI running businesses. What percentage of your day are you spending on AI? I would say I'm spending three to four hours a day I'm spending. Oh, nothing like that. Way, way, way. When I use it, I use it from board packs, for example. And so I use Notebook because it's got Mano Banana, which produces incredible content, although it does the most ridiculous loosenizations and it just doesn't fix it sometimes.

1:24:38So like it will take the wrong data and I'll say, fix this data. It'll stuff it up again. I'll say, fix it. It'll stuff it up. I'll literally type the data in each day. It'll still stuff it up. I'll then have to delete the slide. but I'll give you a solution to your problems that more help you with hallucinations. So these models are what it turns out that the hallucinations happen most when the amount of context you feed into a query is very high. So you're trying to make it think about a lot of things at once. And so it's better if you think about the steps you want it to do, just put it into steps and get it to do like a step.

1:25:12And then the output of that step becomes the input of the next step. And if you do that, it narrows the context. then I think you'll reduce your hallucination. But even when I, because Notebook now has a revised slide function where you say, and it can be pretty good. Sometimes it fixes it, but I'll type revised slide and say, change this number from 50 to 60 and it still won't do it. You can't get any more simple than that. Like I'm giving it a simple change number direction and I can't do it. So there's clearly just some flaws in it. But generally it's something, we use it as a fraud engine, for example.

1:25:38It's way better than any other fraud engine we've ever had. It's reduced our fraud close to zero because we can just feed it with all these inputs. So obviously it's great for customers. Because patterns, fraud is all patterns, right? That's a pattern recognition engine. 100%. Our voice AI has gotten down to 3 % error rate, which is pretty incredible. It was. Incredible. 50%. So it's now solving 14 % of queries over the phone. So there's some great uses. Neither of us are anti. You're much more pro than me in your day-to-day. We think AI is very useful. It's very good. It's transformative. Same as the airplanes.

1:26:14or airlines, what's not good is these companies not having competitive advantage. And this is – Firmus is like nowhere on the stack of competitive advantage. It claims to have this cooling tech, which it doesn't have. Well, they would say their real competitive advantage is getting deals to get power. Hundreds. Well, no, NVIDIA deal is a competitive advantage. Well, no, but NVIDIA is going to give everyone a deal because NVIDIA deals are great. The chips. NVIDIA doesn't give everybody the chips, though. People have to beg for these chips from NVIDIA at the moment anyway. Well, I'm much more cynical than you.

1:26:46If NVIDIA gives you$20 billion and you've got to spend it on NVIDIA chips, that seems a pretty great way of turning your balance sheet into income to me. Totally, but NVIDIA doesn't give everybody$20 billion to buy its chips. It gives us a few people$20 billion. But, you know, getting – so what historically these data centres – I'm not just going to call them neoclouds – data centres, because the traditional data centre operators sell to many more people than just these hyperscalers. I think that's the fundamental difference. Like when I'm going to characterize a Neoclad, their predominant customer is the hyperscaler, and there's all sorts of reasons.

1:27:18I always say this, the Iron deal, these were who the parties were involved in the Iron deal, okay? NVIDIA, Microsoft, Dell, they were the parties involved, and Iron. Of all of those parties, who do you think is the least likely to be able to extract economic value out of that deal? I mean, and like we know what that deal is and how it worked, and like we know why Microsoft is doing it because they can't get enough chips themselves. Like there's all sorts of games being played. I think in the past people would say, well, they could get power and getting power is very hard. Number one, that is getting increasingly hard now.

1:27:56But number two, it turns out now that a whole lot of these deals to get power were phantom contracts that are not really linked to the build-out of data centres that are imminently being built anyway. way like there's just so much dishonesty going on in the industry oh these are my two issues i've got one issue and then i'm going to ask you a question with your airline analogy which i know you say it's mine but now you can make it yours i'm going to ask you a question um it is yours the fundamental problem that i see when you used anthropic as an example is this anthropic has now overpriced its tokens to its customers while underpricing its tokens for its own ability to make money.

1:28:34Like it's caught in the worst possible situation. Like they're too cheap to make a lot of money and too expensive for people to want to use in that kind of volume. Which just shows why this business is doomed. And you've got DeepSeek and you've got the Kimmy Kaye and DeepSeek coming in for like 90 % less cost. Like everybody's going to be moving to these. There's a bit more heavy lifting involved, but we're certainly going to be moving across. I can't imagine your business is already halfway moved across. Yeah. Now, what you'll find is that as you break stuff down into steps, the sophistication required to solve each step in general is actually quite low.

1:29:06You don't need these frontier models. You can use vastly less complex models. You can use models that take less tokens or you can run locally. Like that's where the world is going. But this is my question. So in the industry, you've got airlines and you've got aircraft manufacturers. Now, airlines, there's a few profitable ones now, but airlines are buying other people's aircraft and then they're providing a service on the back of that. It's a complicated service but a service. Aircraft manufacturers, you've got Airbus and Boeing, the two big ones, but then you've got people like Embraer and Cessna and a whole lot of other ones as well and military manufacturers.

1:29:40Do you think that you can continue the analogy in this and say there's aircraft companies and airline manufacturers? Sorry, sorry, there's aircraft manufacturers and airlines? Can you think about it like that? I think that's a pretty good analogy. Like Boeing and Airbus and there's a Chinese version as well, I forget the Chinese company, but there's really – they're really a – and they're a duopoly and they've got backlogs, thousands and thousands of airline – They're a duopoly for – They can't keep up with it. They're a duopoly for big planes? Yeah, I'm talking about big planes. I'm not talking about the private stuff.

1:30:11But not just private. Like there are commercial manufacturers like Embraer, for example. And so – Yeah, or Embraer's the Brazilian third competitor. Yeah. They do passenger jets, a bit smaller. Yeah, they do. Like the Embraer 190, it's flown by Australian airlines, by Qantas certainly. It's like a hundred-seater, right? Yeah, it's a smaller plane. But my point is this. There's lots of aircraft manufacturers like Bombardier. Like there's lots of them that have found a way to make money. And then you've got these airlines which their biggest expense is leasing these planes and then buying all the fuel and stuff.

1:30:46And they have to provide a service built on a platform of the hardware of other companies. And I feel like there is some analogy in this industry where you're going to have all of these companies that buy infrastructure from existing large players and then build their own unique models or services on top of them. And when I look at a company like OpenAI and I go and fast forward 10 years into the future, they're going to be very unlikely that they're the aircraft manufacturer of the industry. And I think that like the services that are being provided are more likely to be very niche-specific high-value services to particular industries than these catch-all generalists.

1:31:31That's what the future kind of looks like to me. And so I think it's easy to bet on Alphabet. It's easy to bet on Amazon. I think ultimately they'll start looking like a hybrid of the aircraft manufacturer and the airline in ways that break down the model a bit, the analogy. But I think that what we'll see in 10 years is a whole lot of niche, very specialized service providers that are servicing individual industries with quite precise solutions for those industries. And they're the airlines, basically. If you look at airline manufacturers, so Boeing and Airbus, the big ones, they've got incredible process power.

1:32:08Definitely. Incredible process power. Great corner of resources. They've got so many powers, which is why you want to be a manufacturer, which is why obviously Boeing's had huge issues and Boeing's cleaned out. Boeing basically merged with McDon Douglas, got rid of all engineers, put the finance table. So they stuffed it up. They're still a very valuable business. Airbus has been a great story. They're also somewhat lacking confidence in many ways, but still incredibly valuable business. So it's hard to see anything happening to these guys. But the airlines, like, yeah, they've done well now because they've become finance companies, but they've had 100 years of hell.

1:32:40So I think that, funnily enough, you talk about peak kind of AI bubble. I reckon the peak AI bubble is what happened last week when you mentioned Aira and the two founders, Macquarie Bank and Stan and Will Roberts, already have a billion dollars worth of Aira in stock. They were granted another billion dollars of Aira in stock. Literally, it's restricted stock. All they've got to do is hang around for six years. They get another billion dollars. This is Elon Musk times 10. Well, they have to hang around for six years. Their company has to not go broke for six years. That's the bigger obstacle, I think, to this grant.

1:33:11But they don't think they're going to go broke. Like, clearly, they wouldn't do it. I understand, yeah. Listen, I think that's, you know, the fundamental difference to me between Iron and Firmus, just looking from the outside, is that the Iron founders just spent a lot of personal capital. I mean that not in terms of dollars, but reputational capital, let's call it. They just spent a whole lot of reputational capital on a six-year bet that requires them to fundamentally believe in the business's future. whereas like daddy firmus he just sold down 100 million bucks of his son's company 150 yeah 150 and so i think to me at least you can say about the iron founders they seem to be drinking their own kool-aid which is something right is that a good or a bad thing i don't know exactly where that sits on the on the stacks it's higher integrity because if they go down they will go down in no way as being shysters.

1:34:10I mean, I think that Grant was a bit excessive, to say the least. I'm not calling them shy. I'm not calling them shysters. No, I know. I know you're not. This is pretty outrageous, though. To give yourself a billion dollars for simply hanging around when you've got a billion dollars. Their excuse was, an iron spokesman said, we're designed to attract, retain, and motivate high-caliber leaders. Well, I'm pretty sure you're going to retain guys who have a billion dollars stake in their business without having another billion dollars. I totally agree. But, you know, greed, like in the 80s with the Wall Street movie, they said greed is good.

1:34:39You had to say it like explicitly. Now no one wants to say that because like the pitchforks will come after you. Do you know who said that in the first place? You didn't use exact words, but do you know who said that where Michael Douglas' speech came from was a real person? I'm going to say, I'm going to guess and say it was, who's the junk bonds dude? Was it him? Michael Milken? What? No. He was the guy who was associated with Michael Milken. Let me have another guess. Let me have another guess. Ivan Boski? Ivan Boski died recently. Oh, I got it. The insider trader. He didn't say greed is good.

1:35:13He said something along those lines at a commencement speech. Definitely we're in the era of unbridled lust for money right now. That is the era that we're in. I actually don't – I'm not saying that some people don't have that, but we also live in a world of the giving pledge where – Then there's also a greater social contract between very rich people and the community. And you look at Mel and Cliff from Canberra are great examples of this. They've repeatedly talked about giving away most, if not all their wealth. So I think there is a greater understanding of the need to be mindful of what – and Elon Musk maybe is a little bit different category.

1:35:47I don't think he's – I think he wanted wealth at scoreboard, not to spend it because I don't think he's – Yeah, ego purposes. Well, that's most people. That's most people. But like – but the reason I say it is because of this. So I've thought about recently the fall of Bitcoin. Bitcoin's fallen, right? And remember, we have these long discussions, what does Bitcoin correlate to? And the answer is the closest thing I worked out was when the NASDAQ is frothy, it's even more frothy. It's like an option you take on the - Yeah, it's correlated to pure correlated degrees. But the NASDAQ has done really well and Bitcoin has done badly.

1:36:19And this is my new theory on Bitcoin. All of these young people think there is no way to get ahead. So they need to gamble. and Bitcoin, that was a great thing to gamble on. But now it turns out there are better things to gamble on that look more substantive. SK Hynix, the Korean memory company, you can gamble on that. Sandisk gone up 17x in one year. You can gamble on that. I think there are so many things to gamble on. Or Polymarket and Kalshi, real gambling. There are so many alternatives for the fast buck right now without having to work. You don't need Bitcoin for the fast buck anymore. There's too many good AI options for the fast buck.

1:36:59Plus, you've got MicroStrategy, which was a big – MicroStrategy was a big marginal buyer. People forget how. It was like 3 % to 4 % of Bitcoins, Michael Saylor's business. Me and Matty Gellidova had the famous bet on what will happen to that business. We could never come to a financial bet, so we've got an honor bet, which I'm currently well ahead of with Matty. He might have an NBL ring, but I think I'm going to take this bet out. But, yeah, I think the fall of strategy – because strategy is a pure Ponzi scheme that is being unwound now, and that has had a big impact on Bitcoin price for sure because it's selling Bitcoins now to pay its dividends.

1:37:29But I think we are in a world that is completely dominated by greed still and my view of firmness, by the way, there's still plenty of time to get in and out of the AI trade and find the biggest sucker. Like I don't have the stomach to do it but there will be people, I do not encourage this by the way, but there will be people that today go and buy something in the AI world and I suspect we'll still have the time to 10x their money before the crash. I'm not sure what it is you should buy. I mean, I don't think you should buy any of that. But like if – and so what we're seeing is – I think that window – that window – It's closing.

1:38:07Firmus at 100 million was a great bet because if you can somehow get out now, you have 150x your money. I don't think any of this stuff now, you're really going to – you're better off going to the casino, I reckon. Maybe Firmus. Basic coin flip stuff. No, no, I'm talking about all this stuff. I think it's point for us. I'm not saying it won't go up, but I think it's now the point where it can equally go up and down, whereas the bet in firmness at 100 mil was actually a great bet because the asymmetric upside, regardless of what you think of all the guys involved, good or bad or whatever, it was a great bet and it was a smart bet.

1:38:40And my bet may not work, by the way, but it was a smart bet. Now all this stuff, it feels like the smart money is basically exiting. Like Tim Curtis selling firmness. How smart is this guy? This guy knows his stuff. $150 million out. is just dominated. So I think the smart money is now starting to get out. Sailors selling Bitcoin. Like all this bubble is reaching its epoch and it's a matter of time now. We always do when I get it too early every time, but I think we're starting, it feels like we're starting to get pretty close to the end. But Iron. The financial bubble. The Iron founders, they should be looking at ways to liquidate their existing stock, not getting more stock would be my suggestion to them.

1:39:19Can I just move on to a final story? I've had a long episode, but this is a pretty interesting one. AFR had a great yarn on Sam Buckingham Jones, a great media reporter, discussing the unfolding disaster at Ticketek, which has proven to be one of the worst private equity investments in decades in Australia. Last week, Ticketek fired former World CEO and I think McKinsey consultant Brad Banducci after a calamitous 13 months running the ticketing business. The business is now hemorrhaging money. It lost$160 million in 2025,$100 million the year before. This is probably a lot of interest payments, but still, even if it's breaking even, this business was bought for$1.3 billion.

1:39:52And the reason for its follies is the group lost two high-profile stadium contracts and is burdened by a billion dollars in debt. The AFR reported that Banducci's grand strategy to turn around TAG included hefty investment in AI, funnily enough, and machine learning, a loyalty program, and new tech features. And Bollinger Ticketek is at its core a sales business and something former CEO Jeff Jones, who's just incredible, he's not a founder, but he's effectively like a founder, was the master of these relationships. And Banducci is just a consultant, had no idea how to do it. But apparently Banducci never spoke to the stadium's people and ultimately lost the contracts.

1:40:24What Brad did do was hire a bunch of expensive former Woolworths staff and the AFR claimed that a dozen people who worked at Woolies or Woolies X joined the entertainment company as AI and machine learning engineers. In the 13 months, Banducci held the business. TEG lost the multi-decade venues in New South Wales contract. They do, of course, stadiums in SEG, Allianz, to Live Nation, their nemesis. It also lost the Rod Laver Melbourne Park Arena contract to AEG, this is an absolute disaster. Do you know the background, how TEG was formed? I didn't know. This is super interesting. Oh, I dealt with them ages ago.

1:41:00Wasn't Channel 9 involved in this business in some ways? Is that who sold it? Yeah, it was owned by Channel 9. It was owned by Channel 9. Do you know why it was started?

1:41:10Because Ticketek was owned by maybe E Corp? So you think, yeah, so Ticketek is TEG, same business. So there was effectively Bass. Remember Bass sold tickets? And then that became Ticketmaster. Yep. But TEG was founded by Kerry Packer in 1979 to sell World Series tickets because he was the rogue new tournament. Oh, that's why. Because I remember the Tickettech. Back in the dot-com boom, the last boom of this. God, I hope there's one more boom before I die because I promise you by the next bubble I'm going to have worked out what to do. When I think that it's all over, I'm going to go and invest all of my money in the bubbliest of bubbliest shares and just let them go up 50X.

1:41:47So, but I remember in the dot-com boom, Ticketek was owned by E Corp, which is the nine people. Daniel Petrie was running it. Run by Daniel Petrie and with Alison Deans there. Absolutely. And so I remember when I couldn't, I could never really figure out why Ticketek was owned by E Corp. But until this moment, I didn't realize that it had been set up to, sorry, Ticketek was set up to sell World Series cricket tickets. Oh, that's funny. Absolutely. Fascinating. So it was a great business. And it obviously was massive as part of E Corp. came back into but back into nine nine obviously ipo'd in 2013 and then it spun out the ticky tech business the teg business it was bought by affinity the hong kong-based private equity firm they also bought velocity the freaking five business uh they then did an unbelievable trade selling to silver lake 1.3 billion jeff jones ran it through all this period he was just the master of all this stuff he was the king of this business he was um he had this long time uh consigliere cameron hoy who was looked over in favor of banducci which clearly was the wrong call.

1:42:47Now Cameron's been put in as CEO belatedly, clearly too little, too late. Even worse, TG is now in talks with Silver Lake to raise hundreds of millions of dollars in fresh capital, which basically implies this business is bankrupt or close to being bankrupt. Because private equity firms don't like putting money back in six years after buying a business. That means they're only doing it because I think the business is dead otherwise and they can't raise money or sell it. So this is a disaster. Do you have any views on what lessons can we take from this? I had some interactions with TEG some years ago because I think they have a panel business or something that they make available.

1:43:22Like for research, you can get a panel from them or marketing or something. I've always found ticketing to be a bizarre business. this idea that says that if you go to a stadium as an entertainment act you don't get to choose who sells the ticket to your entertainment because the stadium has made a deal with some other party with a guaranteed economic structure it's just a weird industry well who has the power in this relationship is it the stadium that ultimately has the power yeah it's it's actually terrible like they make a lot of money even at live nation which is really vertical they own everything so So Live Nation owns the ticketing element, which is really actually a small sliver.

1:44:03They also own the stadiums. They own the promoters. So Live Nation is fully better, which is why they tried to get the US, I think that whatever, Justice Department tried to break them up. Because Live Nation owns Ticketmaster. But the actual ticketing component is actually a really pretty bad business. You've got to pay, and talk about competitive advantage. They have very little competitive advantage because you've got to pay stadiums. It's huge, what they call key money. So you'll go to venues in South Wales and pay them a billion dollars over 10 years and then have the rights to then clip the ticket every time somebody buys something.

1:44:30So semi-technology businesses, but tech isn't really tech. They really kind of – they have long, short – like this upfront massive cash cost and then just clip the ticket over a long – so it's not a business you really – it's a really great business to be honest. I think both Nine and Affinity did a great job selling this business and getting – You know what I would call this model? I would call this a rights model. This sounds like a rights business. You buy the rights for something. You pay a lot of money, commit a lot of money, and you try and make it back on the back end. And this is how every media business buys live sports.

1:45:07They buy the rights. Like the NRL just sold their rights for$5 billion. And then it's like, well, how the hell do we make back this$5 billion? Well, we've got to sell ads. And then you start with that. And basically your skill is you're arbitraging. So you buy the rights, you have your own platform, and then you try and sell ads on it. And the platform in the case of sports rights is distribution. Like you want lots of people to come, but effectively people are going to come anyway because they want to watch the NRL, for example, or the AFL. I think the AFL will have a bigger rights deal. And in this case, you're just a tech platform that, and the act, I mean, that's downs.

1:45:45The crazy thing about this is in sports, you're buying the right from this actual entertainer and you're trying to sell that downstream. and here you're not even buying the rights from the entertainer. The entertainer is going to come into the thing you bought the rights from. And so – Yeah, the sports analogy is not – like there's a small element of analogy, but the difference is, and you sort of touched on it, but like if I'm Channel 9 or Channel 7, I'm buying the rights to the AFL, I'm getting these viewers to my station and on the basis, they're going to watch other stuff and I'm going to somewhat at least semi-own that customer.

1:46:22So that's why people use 10 Poles by the Australian Open to launch. Yes, there's ways to monetize. It's an acquisition tool. Yeah, yeah. It's not just arbitrage. It's acquisition. But, no, there's another benefit as well, which is when I buy the NRL or the AFL or the EPL in Australia, English Premier League, like I know the entertainment that I'm buying and I can price what I think the value of the entertainment is. when I go and do a deal with a stadium, now I'm completely dependent on who decides to go and perform in that stadium. Yeah, exactly. I don't even know what I'm buying. And by the way, the fact that I, you know, the way that these companies like Ticketek has tried to do more than arbitrage and turn it into actual acquisition is by whacking Rokt and businesses like that on the back of it to try and secondarily monetize the customer.

1:47:12Well, they're also, TEG also, and obviously Live Nation's on it more, but you've really got to be vertical. That's why Live Nation's vertical. So Live Nation is actually super smart. They've seen the exact issue you're talking about. And they've said Ticketmaster, which they own globally, is just this small cog in this big wheel. And we're going to do all it. We're going to own the acts. We're going to own the stadium. It kind of makes sense when you're fully vertical. And then you can start ripping off. But the reason why Ticketmaster Live Nation has been successful is they can basically rip off the artists.

1:47:40And they have the power to do that or rip off the customers. More over, not so much the artists, more over, rip off the customers as well. whereas Ticketek isn't vertical enough to do that, which is why they're struggling more. Yeah, agreed. That's a great finish to the week. Thank you, I dear, for another great episode. We were back on – actually, I'm going to announce our quick, as you know, our fabulous weekly winner. So if you subscribe to multiple platforms, obviously subscribe to the list and to the show, but also subscribe to our fantastic newsletter. I wrote a great article. I think it was a great article this week on what I think tax changes should happen.

1:48:15So I talked about having a much higher GST, having much lower income tax. Have a read of that if you get a chance. And a good friend of the pod, Tim Rosanis, who, of course, now is running Turo in the US, is our weekly winner. So congrats to Tim. So crazy. Tim doesn't really need the voucher, but we'll give it to him anyway because he obviously did do the right thing and subscribe to multiple platforms. So congrats, Tim. Thanks for the support. Tim was one of our very first listeners, actually. He's been super loyal throughout, so super grateful for that. And I think maybe who knows the correlation causation here, but Tim's now got a massive job running Turo almost globally.

1:48:50So that's what happens when you listen to the Trarians. You get these big exec jobs. So there's a great tip. So well done, Tim. Thanks for subscribing. We'll be back. We're going to do a special episode this Saturday, a deep dive episode. We know how much people love our deep dive. So Athea and myself will deep dive into Bending Spoons, which is a really interesting Italian-based NASDAQ business. So that'd be super exciting. so don't forget to listen on Saturday thank you for listening in we'll see you soon