Oracle Flies and Ellison the World’s Richest Person (Briefly), Amex Devalues, Adir’s BOOKING.fail, ANZ’s Cashback Retreat and Adam’s Bike Stolen

20:44Which is the idea is that if you, it's the opposite to, I mean, it's not in a critical way. It's literally the opposite to the ethos in Victoria right now. It is, if you're hard on small, petty crime, it sends a message up the chain that you're going to be tough on crime and you've got to stop it at the small level. And Victoria's attitude is quite different, especially in the magistrate's court. It is, if it's small and petty, let's try not to be hard on it. We don't want to put people in jail. Well, Victoria's got the worst of every world. So in Victoria, if you're not wearing a mask during COVID or you're out more than five kilometres from your house or you're on a playground or you're marching for freedom, then we will arrest you and put you in jail.

21:23But if, or if you're posting on Facebook. We'll shoot you with paper balls. Yeah, or if you're posting on Facebook or throw you in jail. You've got to move on from COVID. It's like, we're all scarred. It's actually, it's actually relevant here because you got to the point where people were criminalised for doing stuff that wasn't bad. Like stuff that victimless and that didn't hurt anyone. We agree. And it desensitised the population to infringements on liberty. And now we've got, so people, innocent, normal people doing stuff that wasn't hurting anybody was getting thrown in jail. And now you've got a situation where people are stealing bikes in the middle of the city.

21:50And one of my wife's friend's friends was walking down Beaconsfield Parade at 5am. This was on the news a couple of days ago. And she got attacked from behind. I know. And she's a - I don't know that, but like - And her ankle got broken. And this is a serious, a very serious injury. And there's no way the police are going to catch this person. They wouldn't care. What was it? We're trying to rob her? Or rape her or rob her. Who knows? Because, you know, I'm angry about your bike. But - This is far worse than the bike. All in all, yeah. Like the big problem is this kind of violent crime is on the rise, home invasions, et cetera.

22:19Yeah. I mean, there's not much – like I whine about this every week. There's not much point talking about it more except that your bike got stolen so it's now topical. But like nothing will change under this government. This government's the cause of it. Jacinta Allen and Dan Andrew are the cause of this problem. They are the worst government that Australia's ever had. Possibly one of the worst Western democracies ever had. These people are so bad. Well, I wasn't around before the 1970s so I can't – but definitely it's the worst thing I can remember criminals are walking the streets with impure it's like a dystopian hellscape this place because of Dan Andrews and this guy is often and being friends with dictators around the world it couldn't be a more appropriate place you've got people on bail murdering people and attacking people so think if you're a criminal A the chancellor of the police aren't going to do anything to you like I went to the police station they said oh not my jurisdiction mate I said you're 50 metres away no that's different it can't be something oh there's a police station right here yeah You can throw a stone for the police.

23:13I can't do it, mate. Anyway, so the police probably won't do anything. They said that it's not their problem. Not my jurisdiction. What does that mean, jurisdiction? You've got to go to another police station. As in the front of your office is not their geographical jurisdiction? Geographical jurisdiction. Or they don't do bikes? No, geographical jurisdiction. Right. Because there's like a line and it's three metres in the wrong direction. You know where the line is? The line is wherever the other side of where your bike is stolen was. Yeah, I should have said it was the other side of the street.

23:36Yeah. So the police probably won't do anything, but sometimes the police do. The police do. and you go it's not their fault yeah I'm not blaming the police but the problem with the police if you go to the courts or they go to the judges and they've got these woke left wing judges appointed by Dan Andrews who let them out or give them bail so they can commit more crimes like it's just outrageous I'm not sure I think it's more of an ethos in the magistrates court than specific because like I agree with you like in the judiciary definitely the government appoints the judges in the magistrates court I think it's an ethos that's flowing through it must be terribly demoralising for the police I feel sorry for the police why bother if you're just going to be let on bail anyway.

24:10I totally agree. There's no solution. Well, I think you have to go to broken windows. But you're not going to broken windows. You're no one. I'm no one. We're no one. Well, not me personally, but the state needs to go to broken windows. They don't care about broken windows. Their windows don't get broken. But do they care? That's why I say, I can't be bothered talking about it anymore because, as I said a few weeks ago, everything in this state is broken and the government's going to win. That's the bottom line. And so you can move to a different state, but I'm not sure you can fix anything here.

24:42It sounds defeatist. It is defeatist. It does sound very defeatist. It's defeatist. Like they're going to be defeated because you can't change leaders and this leader can't win. So something dramatic would have to happen. Yeah. Hopefully something – I mean, hopefully something terrible. I think Pasciutto would have won. I think changing – We can all do counterfactuals. He was winning. Like he was doing really well. He was winning and then he caused his own disaster. Yeah, it didn't help himself. No question. Well, that's how it goes. I'll tell you something much lighter now, okay? You use Google Translate?

25:09No. You use Google Translate? Oh, I have used it before. You use Google Translate? Yeah. What language are you using it in? Oh, just wherever I am using it for a bit of Japanese. If you're traveling or something. Yeah, just traveling. All right. You use it at all? Yeah, I use it on a travel. The picture tool is really useful if there's a sign. Very cool. You can show the camera. That's good. I know how you do that. Yeah. If you do on Chinese, what's cool is you can write the character. That's cool. Which is good practice. So I use it quite a lot for a few languages and whatever. And so what I noticed two days ago is they've got games in there now to teach you languages.

25:41Do you know that? They're trying to compete with Duolingo. It's pretty bad. It's like you can do French or Spanish. I don't even know if they've been French. And they've got like, I know nothing, beginner, intermediate, advanced. But I don't have the I know nothing yet. So it's obviously super early. But I went through it a couple of times. Turns out I can understand more Spanish without knowing Spanish than you'd expect. yeah and but I wonder what is going on there I thought it found it very perplexing like are they planning to compete with Duolingo like what are they doing here speaking of that did you see the new Apple launch yesterday a couple days ago the phones with a million different features that are like 2 % different the one thing they actually as you know my views on Apple these guys are post growth yeah what the iPhone Air these guys are finishers of companies it's a question of how long they'll last for well I wouldn't say finish no they're going down they're going down they're going down and Tim Cook's back and killed her and eventually it will die but who knows how long it's going to take everyone loves Tim Cook except you no I think a few people don't lie this is a guy who's never had a product innovation in his life I should say except you and me I feel the same way as you do about this but he's still seen as like you know this is where all the value was created in Apple not Steve Jobs Tim Cook I'm not sure I agree with that all he did was just wring out the value from the previous hard work but one product actually looked pretty cool was the translate function on AirPods did you see that?

27:01AirPods AirPods are, I think, becoming the most sophisticated product in the entire Apple lineup. Yeah, and that was, again, I think it was a late-stage safe jobs product, but the idea. But that can now, if you're speaking in Chinese to me, it can translate into your ear, which is pretty cool. I mean, its quality as a hearing aid is improving dramatically. Like, I think that might end up, probably the watch and the ear, the AirPods, will end up being, in some ways, like the most innovative product in their lineup. I mean, what's going on with that watch with biometric data? Yeah, it's cool. It's pretty incredible, right?

27:33I agree with you. All right, I didn't impress you with that Google Translate. Let me try and impress you with something else. How about this story? Can we talk about Oracle? It's like a magician about to pull something out of a hat. Because I don't know what's on your run sheet. I was tempted to read it before I came in, but that kind of ruins the magic for me. Even Mike in Korea was reading the run sheet before you. I mean, I don't know. Mike's not even here. We can say bad things about Mike because he's not here. You say bad things when he is here. That's true. It's actually more fun when he's here.

28:00How about we talk about Amex points devaluation? You got that on your sheet? I don't actually. I'm actually much more interested in your view. So this is what happened with Amex. I'm going to summarise, okay? They changed the rate at which points convert to, like American Express points convert to airline points. Well, they're changing. It hasn't been kicking yet in a few months. And they made some other changes as well, some of which, that just looked bad. a friend in the pod Steve Hoy told me about this as it came out and a couple of devastated blokes on what's out there yeah I couldn't I actually couldn't believe it this isn't the first time so just to give context usually there's a heads up it's gone from like two to one one to one to two to one to three to one to four and this has been like this constantly making it worse every year to make it worse well the one to one to two to one was a sleight of hand because they said we're just we're doubling the value of all of the points that you have but they don't really we're only increasing the earn rate by 50 % they're hitting you from both sides So Amex have made it worse to transfer to airlines and also worse to earn.

28:56So now you only earn like 30 % less as well. So you actually didn't smash both ways. So I wanted to say like when airlines increase the number of points required for a seat, I'm okay with that because that's inflation. Same as increasing the dollars for a seat. No problem. But there's no – and so like this Amex increase was a whole lot of conversion that was going – was three to one has gone to four to one. And some that was two to one has gone to three to one. Well, I think the only four to one is Emirates. Yeah, Emirates. No, there are some others as well. Oh, and Singapore maybe as well. Emirates is four to one.

29:28Qatar is now three to one. Almost unusable at four to one. Plus the taxes. Emirates got huge taxes as well. So Emirates almost – And so the thing is this. They're going to blame it on the upcoming changes to – What is it? The RBA – We'll talk about third junction in a second. Yeah. They're going to blame it on that. But fundamentally – Well, AMX isn't part of that. So I don't know how I can blame it. Like what do you think is going on here? Greed? I think there's a market. and they realize, well, we can charge it. Like any point, the points conversion is a margin. So they say, well, we can make more margin by charging a higher price.

29:59Customers willing to bear it, we'll charge a higher price. So that's what they're doing. So I've been on - It's highly rational. I've been with Amex for a very long time, like more than 20 years. I got it when I was quite young. Centurion or your Platinum? Platinum. Yeah. Centurion, the black one. Black card. Oh, they keep sending me invitations to do that. It's like$10 ,000 a year. It's more. Oh, it's more now. And then there's a sign up of maybe 10K or 5K or something. And I tried to... It used to be a lot cheaper. It's gone up a lot. I tried to understand what gets me that's better. Because the thing that Amex gets you is really the platinum fee...

30:31Do you use the concierge? No, I don't. But the platinum fee is completely offset by travel credits. Pretty much. Not completely, but heavily, right? You've got the personal platinum then, I guess. Yeah, the personal platinum. And so that's fine. Well, the main reason to get platinum is the double points because you get double the points conversion than non-platinum. Yeah, but why would I get the black one for so much money for the black one. Why would I get that? So I can show off. It's now got a slightly better point than platinum. It never used to, but now it does. So do you think that, so what I'm trying to understand is, why did they increase these points, right?

31:03Why did they make it more expensive? And one argument is greed. Well, they're trying to maximize profits. But another one could be they're trying to differentiate this$10 ,000 a year card from the$1 ,700 a year card. No, but the point conversion is the same. It doesn't matter if you're using black or platinum. So they've also increased black? Yeah, it's the same. Oh, I see. So that's no difference. That comes from the airlines as much as it comes from Amex. It's both of them agreeing this is what we want it to be. They're both getting more margin. Well, what a coincidence they all agree at the same time.

31:30Yeah. Come on. This is an Amex call. This is Amex with the airlines. So should I get rid of this? Like as in use the points, convert, transfer, and all? Yeah, you should be transferring. But remember, some of them expire. Emirates and Singapore expire after three years. They don't want to dump them all in there because they can expire. But what do I show? Should I just get rid of my Amex Platinum card and move to another card? Well, probably Amex is the best of a bad bunch. What about you? What about this? You know in the US they've got this Sapphire, what is it? Chase Sapphire. No, they have Morgan Chase.

31:55There may be a Luxury Escapes card coming soon, which will be the best value card in the market by a long way points-wise. Is that hard? Watch this space. As in, do you think I'll be able to use it for non-Luxury Escapes stuff? Yes. Absolutely. But you're going to have to just dump me my points into Luxury Escapes. Yeah, but it's the best value points in town. Oh, yeah, okay. Well, I don't argue about that until I've seen that. I'm sure it'll be amazing. We've literally built our society, which is our program, and we talk about this a lot on the show, obviously, knowing the faults of all these other programs.

32:21And also we're a challenger program. So Qantas is dominant and SQ is dominant in Singapore and EK is dominant in Dubai. We're not dominant. So we want to try and get market share. We're going to get market share by being more generous. Will you let me buy first class seats on Emirates with your points? Well, it wouldn't be a classic reward style redemption because we don't control the seats. But you can buy luxury escapes hotels, for example, for amazing rates. And if we have charters, plane charters, you can buy on our plane charters for the same rate as Emirates. And until that comes out, so are you familiar with this Chase Sapphire thing in the US?

32:49We need to be based in the US together. Is it better than the Amex Platinum? I'm not. What about this Founders card? That's another thing as well. The Founders card's a different type of card. Forget about that. That's, no, it's a total, it's like a perks card. Right. You can get, that goes, that's not a credit card, but in the US, because US, the merchant fee is like 20%, so US is much more, US is one to one still. So you get, you buy a dollar, you get a point, and it's, so I've got a US Amex that I use, but the problem is the exchange rate, you lose a bit on the exchange rate, but it's much more generous than Australian cards now.

33:17You lose on the exchange rate because the native currency is US dollars. So when you buy something in AUD, you pay a penalty for the... Because they're pretty aggressive on that. Forget the Forex thing. It's just the points you get are devalued. Still, it probably is worthwhile at one-to-one. I need to go and buy residency in the US. It's a lot better than four to one. So what do I need? I need a house in the US, an address, a billing address. Yeah, exactly. And if it's a personal card, you need a personal security number potentially, but not always. But you need a billing address. I've got to look into that.

33:46And so do you think, I mean, I know you haven't really had a good look at it. Yeah. But do you think like, I mean, Steve is the person to answer this. Although he's going to have a very biased answer to it. But do you think the days of like being aware of what's going on with points gave you this amazing ability? Arbitrage. Yeah. Do you think that's over? It's definitely getting a lot harder. If you think, go back to sort of 10 years ago or 15 years ago, the glory days where you could easily get redemptions. It wasn't that expensive. Yeah. And now it's – because you're being hit from both ends.

34:15You're getting hit from the earn end. So it used to be one to one. Now it's two to one. So one to two. So for every dollar you spend, you get half a point instead of one point. So you think about it. It used to be one to one and one to one. Now it's six to one. So it's one-sixth the value. So you've got to earn six X the points or spend six X the dollar. By the way, when I booked an Emirates first redemption seat through Qantas, much cheaper than doing it through Emirates. Yeah, Qantas is very cheap. like like if you actually very hard to get though if you were booking it if you were booking it using amex converted points it's fewer points as a number yeah plus the quantus conversion is like twice as good as the absolutely emirates conversion very hard i don't know how you got that first class emirates no like there's no i had no magic like there's no magic thing i just i got lucky that's like it yeah that's incredible so i think well i don't know well you know what this is a very big topic that listeners like they love these travel topics yeah and so maybe we should delve into this in more detail at some point.

35:13We'll get Steve on the show, but it is definitely becoming more depressing. This is how it happens. It's a case of supply and demand. You've got a lot of demand. A lot of demand, people wanting to use points and the banks and Amex realise this. This is making it less and less generous. Then you've got the RBA surcharge on top. Yeah. If I say this, what if I make this commitment? You're going to, you're going to, oh no, you're not going to, you're not going to be happy about this. What if I say, what are you going to say, sometimes in the next few weeks, we will have a segment and it will be, this is the way to deal with all the changes that are going on and how to maximize your points.

35:44We can get Steve on just for a general chat. You want to do that? That'll be a good segment. We can get people to listen to that segment. George, there's a segway to that. You're very dismissive of me today. I'm getting no traction with you at all today. What do I mean to say? Was I not sympathetic enough about the bike? I thought I cared more about the bike being stolen than you. Don't you think? No, I was very, I was like, oh my God. I agree with you getting Steve on. I don't know what the issue is. I was so upset about it. I was messaging you and you're like, no, it's more just annoying. I can never predict what you're going to get worked up about.

36:13You're much more worked up about the memory of the mask mandate outdoors than your bike being stolen this week. The mask mandate was absolutely ridiculous. Is it any more stupid than making someone wear a mask doesn't work outside when it was irrelevant anyway? How am I going to get back on good time? I've absolutely bombed this week with my topics. All right, come on. What have you got? Can we talk about the credit card surcharge? Because it's so interlinked with this. Because a big reason for these changes is the pending credit card surcharge removal. Yeah. What does it mean when I go into a cafe now, there's not going to be a thing that says there's a 1.5 % surcharge for using a credit card?

36:44Well, we don't know yet. The proposal is no surcharging. And apparently, this is what the RBA is claiming, is that banks won't be able to charge the merchant fee onto the merchant, which is caught 100 basis points. So the aim is the merchant is non-the-worser, and the banks is charged less. But of course, this is just make-believe fairytale world. the RBI has no idea about actual market forces. This is the world where there is no doubt we're going to enter the world of unintended consequences. We can speculate on some of them, but a lot of the time they're unknown, unknowable. So the Australian Banking Association, which in fact obviously the union of the big banks, is shockingly not opposed to the push to ban credit card and debit card surcharges.

37:25However, it does not support the second part of the plan, which is reducing the interchange fees. Well, what a shocker. So they want to smash merchants and say, damn, charge them for themselves. The bit that doesn't affect us, that's fine. The bit that affects us, we don't want that to change. Could they be any more predictable, these banks? I know, but like everyone talks, but you get worked up about them. Everyone talks their own book. They're literally a union. Have you ever seen a union come and say, you know, we think our workers are slightly overpaid? Like, it's the same argument. I think it's fine.

37:53They're in a reunion. They act like a union. Okay, okay. Just so, like the fact, I can understand I'm saying, don't change it. Everybody's fine. I'm in the camp of don't change it. What do you think is the advantage to them of removing the surcharge? I think the advantage - Oh, it's pretty obvious. More people use credit. It's going to be used more, right? And they get charged more interest. So they're just talking their own book. Totally. You can't get upset about people talking their own book. I see the RBA head of payments acknowledged there was widespread criticism of the policies for the ban, with many submissions received saying small business will be worse off, which of course is what we've been saying for three weeks and how the RBA just completely blown this.

38:28Apparently, Ellis Connolly, who is the head of payments, said, we are very much hearing these concerns loud and clear. He said, after 151 submissions, the RBA published expressed scepticism that its proposed cuts to exchange fees will be passed on to merchants. Exactly what we said. Three weeks ago, two weeks ago, last week. To customers, you mean? No, to merchants. Like, customers won't have to pay it. But customers will pay it a different way. They'll pay it through more interest, through no interest-free periods. So customers will have to pay more. They'll just pay more in a different way. Hang on, isn't it?

38:55Through a higher annual fee. The thing with merchants is this. If I'm running a business and I've got a, I don't know, let's say a 15 % margin at the till on what I'm selling. It's a tight margin, but let's say the tight margin. I'm going to use it for just around numbers. I charge 1.5 % for a visa. That's probably high, but let's say I do. They weren't meant to charge more than they were getting charged. That did not happen, right? There's people charging 2.5%. When I booked at the Ace Hotel, they quoted me the price for not using a credit card but then i could only use a credit card to pay but that's definitely illegal no one cares about any of this right and so if i've got 15 percent what the bank is now saying is guess what i'm going to make you take another what the rba is saying is hey merchant you're going to take another one and a half percent cut to your margin which is 10 of my margin and so all i can do is either say well now i'm going to go from marginally profitable to loss making or whatever because you know a toy store for example is not rolling in money or I'm just going to make my stuff a few percent more expensive for the consumer which you can do in certain industries but not in others where it hurts so you've got a small travel agent not us because obviously we have a bit more market power and get better rates so you're a little travel agent on high street and you're paying the one and a half percent suddenly you have to absorb that fee when the booking.coms and luxury scapes have a much lower fee and can much more easily absorb it illegal for me to say there's a fee for using a credit card yes illegal yes That's how it used to be.

40:20Yes. That's how it is in the UK as well. We basically went through this whole, what, 15 years, it feels like, of we've got to make more transparent and not hide the fee inside to come back to where we started. But in the meantime, we got everybody used to the new system. Yeah, it was the ultimate bait and switch. But we're basically back at the starting line. It was just a very long loop because this is how it used to be. Yeah, but it used to be, but not many people used credit cards and you had people paying cash. Oh, you're right. So we basically created this system. Then there was COVID. Then everyone went to credit cards.

40:51Then Apple brought their thing and Android. And now everyone's using credit cards in the developed world, whatever you call it. And now we say, but we're going to go back to the old system. It's crazy. What's the argument for it? It's unfair to consumers. I think they are just absolute morons who are intervening themselves. But just imagine the world in which you, like me, don't think they're morons. Now think about it as if they were not morons. I think they're trying to purportedly act on the behalf of consumers. even though they're not and consumers will be worse off because I think it's unfair that consumers have to pay extra for using a particular form of payment and the corollary to that was two obvious arguments against that one is well you're getting real value and that you're getting not just credit card points you're getting insurance you're getting fraud prevention you're getting a bunch of stuff that actually costs money and has value to customers so there's that and the second thing is people are making a bargain like you can use a debit card let's say I think they should ban on debit cards because I think there should be a free option and debit cards are much less costly.

41:51Why do you like bans? Like, you know, the capitalist world is a competitive place. I don't like bans. Why do you want to stay out of it? My preference is no bans, but if you're going to ban something, ban on debit cards, which have virtually no fee anyway, you can happily absorb that cost. Can I tell you another form of payment that has a surcharge? Yeah. There's another way that I can pay, which is I don't want to pay now. I would like to pay you in such a way that I pay you over the next two years. Yeah. And that's a loan, right? That's all available. Yeah. And I get charged interest. I mean, it's interest-free.

42:23I get charged interest. It's baked in. No one's trying to regulate that. I mean, it's got some regulation, but no one's like, you can't put interest, you can't put whatever. Like, they've just picked one particular form of payment. No one's saying, oh, you can't charge extra for cash. You can't give a discount for cash. Is it illegal to give a discount for cash? Yeah. So, I just don't understand why it's one payment type that they're picking out to regulate. It's because it was so obvious. Every time you pay, because every cafe, every market store or has a thing, X dollar surcharge, and people come constantly getting rid of it.

42:52It's like one petrol post goes up. It's really noticeable. Let me tell you about how I think about unintended consequences for this. So if I say to you, as a merchant, this form of payment is going to cost you money, but this other form of payment, cash, is not going to cost you money. And then the RBA is going to say, but there is a cost of cash because of Armour Guard, which is basically broke and got resuscitated and whatever else. But let's say at the time of payment, there's no charge for paying cash. As a merchant, is the unintended consequence not that I'll say to you, there's like a 1 % discount for cash and try to encourage you to pay cash?

43:30Of course, that's what I'm going to try and get you to do. And so is what the RBA wants to encourage a return to the cash economy? Because the ATO is not super enthusiastic about the cash economy. I don't think that's what the RBA wants either. But that's one of the unintended potential consequences of this, right? The greatest absurdity of this all is if it does lead to more credit card use, what's much worse is the usury interest rates on cards at 22, 24. That literally bankrupts people. That's a great point. That's a great point. I mean, I think - How about they cap the interest rates? It wasn't working.

43:58It was working fine. It was working beautifully. That's the whole point. I don't know. There's a long list of things that we can improve. There are organisations - How about basic policing in Victoria? There's one. But that's not the - Who's doing this? RBA. Or instructions of Jim Chalmers. Right. So the treasurer, let's call it. So the treasurer is doing this. There's lots of things going on in the economy around finance that are terrible. For example, places that people are putting their self-managed superannuation are lying, committing fraud and losing everyone's money. Focus on that. Don't worry about this.

44:31There's lots for you to do. Leave this alone. Fixing the problem that doesn't exist and leaving the problems that do exist unabated. I mean, there's limited resources. Focus on stuff that matters. I know you want to move on because you're returning pages. but like are there votes in this or no votes in this? That's my question. I mean, maybe that's where we should have started because it's politicians. Are there votes? Do people care enough about surcharge or change your vote? Well, I'm trying to think about how I'd pitch this as a vote. And is it even a vote? But I'm not sure voters would give charmers credit anyway.

44:59From now on, so most people that vote for Labor are not owners of small business. As in like if you look at the population splits, small business owners, the majority would not vote for Labor. Although last election, everyone voted for Labor, right? And so do they want to say to consumers, who is their constituency, especially younger people who they don't want to go to the Greens, Younger people aren't using credit cards anyway. No, they are. Everyone's using credit cards. Buy now, pay later, and all that kind of stuff. Well, I mean, that fee is hidden inside the cost. No one's talking about that stuff.

45:31Absolutely. So I think maybe our big mistake is we should think more about this is quite an interventionist government in terms of its involvement with the RBA. Yeah. And everyone's very critical of Trump. Trump is trying to fire governors or whatever. But no one really much talks about how interventionist Jim Chalmers is. Jim Chalmers is wayward. Jim Chalmers has completely reorganised the RBA into monetary setting boards and non-monetary setting governance boards and he's putting his far left lackeys onto the monetary board. I love how I introduce the topic and then I like, you talk, you talk.

46:04I agree, I agree. And then eventually at some point I'm like, oh, God, why did I do this? But I think our mistake is we should have started this discussion by thinking about how can this get more votes for the Labor Party? Because probably that's where this all starts, is my guess. I'm not sure there's even a vote. As much as I dislike Justinth Allen's work from home policy, that's a pretty obvious vote winner. You can say it's a terrible policy and it's destructive and it's terrible for mental health and it's terrible for young people's careers. It's a great vote winner though. You can sort of see the political mastery behind that.

46:31It's blatant. Yeah, versus this, which I don't think is political. This actually makes it worse for people using credit cards because you're not getting points, you're not getting insurance, you're paying higher fees, you're paying higher interest rates. It's worse in every respect. One of my cynical criticisms of liberal democracies in 2025 is I don't think politicians are policy-driven. They're ideologically driven, and they're driven heavily by getting votes. And so I think I don't believe that many of these people really care about good policy anymore. I think predominantly it's like, can I have an ideological win?

47:00Or can this get me more votes? More latter. I don't think this is much of an ideological win. No, it's irrelevant, obviously. And so I think like it's got to, someone there must think that this is going to get votes because no one was crying out for a solution to a problem that doesn't exist. All right, I'll let you move on. What are you? Listen, you brought up before the billionaire index. Well, I'm scared to talk on this podcast. Let's talk about an article. Oh, because this is not, I see why you're saying that I brought it up because this is on your run sheet, isn't it? I told you it was on my run sheet.

47:28Oh, this is it. So basically to make me try to feel like I'm participating in this podcast, you're like, oh, now let's talk about your idea, which coincidentally I've written like 80 words about on my run sheet. Let's go to Adia's next topic, which is Bloomberg closely tracks. I just happen to have some words written about him. Bloomberg closely tracks the world's richest people. They reported that Larry Ellison briefly surpassed Elon Musk to become the world's richest person. Oh, is he back down again? I thought he was still. Well, he was on top for like an hour or something like that. But that's very close now.

47:55After obviously a jump in Oracle shares added a record amount to his fortune. Ellison's wealth soared by 90 billion US after Oracle reported quarter results that surpassed expectations with a promise of a lot more growth to come. Increase lifted Alison's net worth to $383 billion US. It's the biggest one-day increase ever recorded, putting him ahead of Musk briefly before the Tesla chief came back into pole position. Oracle shares have gained 45 % through to Tuesday last week and then surged 36 % on Wednesday after the company posted that major increase in bookings and gave an aggressive outlook.

48:29So that is wrong. Well, the first part of what you said is wrong and the second part of what you said is worth talking about what's wrong well firstly can i say larry ellison he's a very interesting guy yeah like um he is like one half like crazy mogul yeah like in like compete in america's cup and all of that yeah he won the america's cup didn't he yeah and one half uber nerd like extreme because there are not many like the thing i like about these people like larry ellison and elon musk is in there as well that's why I love the guy who's Tim Sweeney from Epic is they're OG tech nerds who have built these businesses and are still Bill Gates but he's not running it anymore.

49:08No. But these nerds, they're still running their shows in some way or other, right? That's why I love them. Well, Elson's been, Elson's remarkably, I think Elson had a 40 % stake in Oracle and he's done buyback, buyback, buyback. He hasn't participated and he's up to like 60 % now. He's not young. Like he's into his 80s, right? He looks good. And so he looks really young. I think he's actually – I don't know if you've read much about him, but I think he's actually a good person. That's what I like about Larry Ellison. I think he's actually a good person. 144, yeah, you're right. He's 81. Yeah.

49:35And so I tell you what you said that I think is wrong, although maybe – I mean, you would have researched this, I presume. He's got six wives. Yeah, he's got a lot of wives. He's got a lot of wives. I mean, I think for a moment when he was the richest guy in the world, he thought, oh, my God, thank God I've got some net worth back again. I'm giving all this to my wives. But so I don't think Oracle's results were good. As in, what I mean by that is, that's not my assessment. I think the market looked at them and said they missed. They weren't great results. Yeah. So this share did not go up on the basis of Oracle's results.

50:04On the basis of OpenAI forecasts. Yes, they went up on the basis of, this is what we think the next four years are going to look like. I thought the results weren't too bad. They were okay. Yeah. But hang on. Why are you relaxed about what I'm saying? Like, this share price rocketed based on Oracle saying, over the next four years, this is what we think our revenue is going to do. And I think the revenue from some part of it is going to go up to$500 billion. $400 billion, is like that. All right. So I think it grew 8%. So it wasn't terrible, but it wasn't. They missed consensus. Yeah. So do you not find what I've just said completely ludicrous?

50:37I'm about to get to that. It's ludicrous, right? So basically what happened is Oracle shares left. It's terrifying. 40 % on the basis of apparently a deal with OpenAI. Nothing's been signed, nothing's been paid or anything like that. So OpenAI committed to buying$300 billion worth of compute, essentially, from Oracle is now competing with AWS and Google Cloud and Azure. So it's now the fourth horseman of the cloud storage kind of compute game. And they're kind of the only independent one, which is pretty helpful because all the other three have their own LLMs, essentially, whereas Oracle is just sort of a gun for hire in that respect.

51:11And OpenAI, because OpenAI is obviously buying a lot of compute from Microsoft, but it needs more, apparently. It might be the four horsemen of the apocalypse, depending on what markets do. We talk about NVIDIA a lot and have NVIDIA share price is based on massive capex from these data center businesses, basically. Well, NVIDIA share price is based on extreme expenditure at the moment, 39 % of which is from two unnamed parties and the belief that it will continue into the future. That's NVIDIA's price, right? At least NVIDIA is making money now. Like we question whether this capital capex will continue.

51:45We both don't think it will, but the Oracle thing isn't even making money now. Now Oracle was saying, OpenAI, which, and I've got, OpenAI is allegedly worth $500 billion itself, even though, so I didn't open, I just did an OpenAI search. I wanted to do a search a couple of days ago. How is gold price versus Bitcoin? How have they done in the last? It's a pretty simple question. I went off AI. Create me a graph that shows gold versus Bitcoin. I thought I could do it. And it took probably three minutes, two to three minutes. It did heaps of stuff, like getting this, getting that, computing this, computing that.

52:16It was like the GPT-5 model. and it came back with something that was completely wrong. Really? Because I found it to be really fast. Not even wrong, but not even what I asked. It came up with a table showing the gold price. That's not what I asked for. So that would have cost, I don't know, 20 bucks. I don't know how much that query would have cost. Oh, I see your point. Yes, that's true. It would have cost a fortune. It didn't charge me a cent. I didn't pay for GBT. It was wrong. And this is that business model of providing really expensive answers to questions that's not right. And hopefully one day we'll find a business model that actually works.

52:43Well, can I say two things on that? One is, I just want to tell you how lucky Australia is as the lucky country since you mentioned gold. So I was quite interested in this. So do you know this country, Kyrgyzstan? No, I presume it's now Kazakhstan. Yeah, it's kind of nearby. So their big resource, they were considered to be like this gem of Central Asian stands because they were kind of heading towards full democracy. Kazakhstan's got a lot of natural wealth as well. It doesn't look like a lot of oil there. Anyway, life is not going so well politically there anymore. Oh, but their country is basically tethered to the gold price.

53:18Kyrgyzstan. Yeah. Because they have this huge mine. Yeah. And I was interested to know that huge mine produces like 17 tons of gold a year. That's a lot of gold. And that's what powers this whole country. And so they're quite rich at the moment because gold is high. And then I looked at, well, how much gold does Australia produce every year? Mine. I think we want like 300 tons a year. Like we are like - Massive gold producer. It's hard to really understand when we say we're the lucky country. Yeah. Like we are the overwhelmingly luckiest country in the whole world. Well, I think Norway probably has.

53:52No, well, Norway is a hypocritical country in some ways. Because all of their money is from gas, right? Yeah, absolutely. But yeah, no, but Norway, Norway is close to European problems and was involved in wars and all sorts. We're sitting in the middle of the ocean and every hole you dig, something comes out, almost everything China will buy. And if they don't buy, someone else will. like it's unbelievable how lucky this country is minerals wise also we've got a bit of dutch disease which is of course when you have so many minerals and you don't have to work for it and you know it's supposed to like a Singapore and Dubai that have built these incredible oh I totally agree with you plus it's amazing how badly in debt we can be with the hole there's a hole in every backyard you can go sell to China and so we're totally in debt right like it's actually bizarre on this oracle point the other assumption that's being made because I find this whole thing so insane basically this price has been bid up as if it was a startup with a four-year curve that goes up and to the right and it's like we've got one mil of revenue now but we're going to like 400 million four years we should be worth 100 million dollars oh okay we'll take pref shares except this company's huge it's not a startup it's bizarre and the most bizarre thing of all is the huge assumption is that open ai will actually have 300 billion dollars to spend this is a business that has fundamentally no unit economics I can't believe what's going on.

55:04I actually can't believe. That's why I keep saying it's 1999. We forget, 1999, it wasn't just the ugly girls that went up in the stock market. It was the pretty girls as well, or boys. It was BHP, it was Exxon. It was all these great quality companies flew up as well with all the shit. And then everything came down in 2000, 2001 because they realized this was just a bubble. And this is what we're in now. I know. Well, I have to tell you - Is your clock moving? Because you were 96, 97 when we spoke about it. Well, I think that what happened with Oracle this week is much more alarming than AI because generative AI, one way or another, it's going to be revolutionary.

55:38It's internet level revolutionary. it could be revolutionary and just not create value for the businesses that... No, I think there's a high chance it won't create value for most of those businesses. But society will gain a huge amount of value from generative AI. Yeah. But this Oracle thing, this is like startup fluff. Yeah. Like, I just cannot believe that this has been the response to a share price of like, we promise in four years we're going to be this rich. Based on a company that's got terrible economics that may not be around itself in four years. I think this is much more worrying to me.

56:10On the more positive side, I'm not sure if you heard Elon Musk's interview at the All In Summit. It was actually a fascinating interview. He basically talked about, and we're obviously very critical of Tesla's share price. And Tesla, he's basically almost turned Tesla into, A, obviously the self-driving stuff and he reckons there's new releases coming soon and be really good. But the other thing he talked about a lot was the Optimus robot. So he's talking a lot about the humanoid robot he's working on that he's very bullish on. And he's trying to reposition Tesla as a robotics company rather than a car company, which obviously the car company value is dropping.

56:41If you keep people excited about – I've thought about this a lot. What should ambition look like? And I thought this is what I've come to. A long way in the distance but not over the horizon. And I think basically that the dreams of Tesla's car business being amazing is now over the horizon. and so he has to need something new for people to focus on and the robot is the new one, right? But it's a long way into the distance. Yeah, well, he thinks robots are not that far away, but he doesn't know what's self-driving. Same as the Cybertruck. Yeah, the Cybertruck released just a terrible product. Well, no, it released very late and then nobody bought it.

57:13It's more self-driving, he promised, in 2016. Yeah, nothing ever releases, right? But by the way, we both think he's amazing, but this is just the next shiny thing to keep investors excited. We're talking about Ellison versus Musk. How much do you think of Elon's wealth is made up of Tesla versus SpaceX? Just top of your head. I think SpaceX would be two or three times Tesla. Yeah. So his stake in SpaceX is about$200 billion, give or take, a bit less, because he owns such a big chunk of it. And his stake in Tesla is about$95 billion,$93 billion. Not for long. Well, it depends if he gets his options and all that kind of stuff.

57:50No, he's getting$1 trillion of options or something. It has to hit$8 trillion valuation to get that, which I think we both think is pretty unmythed. One trillion dollars of options. Was he sitting around saying, you know, there's some things I want to do. There's no way I can do it without a trillion dollars. I need a trillion dollars. I think pretty interesting. Look at SpaceX. So Starlink's about to get even better. They have to do their own mobile phone plans. Imagine you have a mobile. They could be the biggest mobile phone provider in the world. I've said from very early on, the minute those rockets landed on their end, I maintain if I told you two years before that happened that rockets that shoot into space will come back down and land on their ends back on the thing to be reused again.

58:34You would say, well, that is seriously in the domain of science fiction. They've been in that for five years now. I know, but my point is that was like an electric car you could conceive of, but I couldn't conceive of that. Yeah, it's pretty amazing. Because remember what happened? The space shuttle went up in the end and threw off these boosters. They were in the ocean, good night, done. Yeah. And like, it was just inconceivable. I think SpaceX is much more impressive. And Starlink is unbelievable. They've got SpaceX and they've got the Starship and they go to Mars. I mean, he might actually get to Mars.

58:59I was quite sceptical about that, but I reckon it's looking like he's a shock. Starlink could be one of the most valuable businesses in the world. It is such an incredible business. It is the ultimate evil empire, is it not? Like I cover the Earth with all these satellites and I will decide who gets access to things. But think how smart a business – so he owns the corner resource. He's the only one who can get these satellites up in the air at a reasonable cost. So he owns that. And obviously Amazon's using Cooper, which is a competitor to Starlink now. But I think Amazon's got like, I don't know, five or 10 ,000 satellites.

59:31And I think Starlink's got like 70 ,000. So you can't even compare the two. And there's a network benefit there because the more satellites you have, the better the coverage is. It might be that Starlink ends up being the majority of satellites in space. I think it already is. Is it? They're very small satellites. So you look at that business, that is an incredible business versus Tesla, which we sort of have some doubts over. That just might be loving my Tesla car. So I think, so I listened to Elon and it's worth listening to the all-in. Realistically, I'm not going to listen to it. You won't, but I listened to mine.

1:00:02I thought it was really impressive and a great interview and just in terms of what he's doing. And I was super optimistic hearing that coming up, talking about SpaceX and Starlink. Yeah, of course. That's how he keeps getting such high valuations and so much money. If even you're persuaded, can you imagine the average punter? The product's amazing. But Starlink's, SpaceX is private. You can't buy it. You can't buy shares in it. I know. But the thing is that Elon, there's this aura around him of, I just need to get involved. Totally. Remember when he raised the money for Twitter? Yeah. All the emails that he got?

1:00:32Yeah. Pelicanus, all these people. Yeah, totally. Oh, just whatever. Please take my money, you know? So, yeah. So, let's go to a quick break. We'll be back with a couple more stories right after this. Don't go away.

1:00:51And we're back. And I think you want to talk about cash rewards. So that business is dead. Rest in peace. Yeah. Finito. Go on. Started by a lovely, good human being called Andrew Clark, who started it and gave, like, I don't know what percentage or whatever it was, but some substantial percentage of any profits that flowed or whatever to, like, charity. Yeah, he's a good guy. And Ian, who was the former CEO, was a great guy as well. Yeah, there were nice people around that business. So I had a cashback business. You did? What was it called again? It was first, initially it was called Start Here.

1:01:22That's right. Simon ran that. Simon was involved in that. Yeah. And Kelvin. Oh, Kelvin as well. Yeah, one of all-star castes. Steve Ford like single-handedly quoted the whole thing. Yeah. I guess off the charts. And so basically I saw all of the excitement and all of the downside of that business. It was like 2011. I think we sold it in 2015. Oh, you sold it? We got some millions of dollars for it. Oh, that's pretty good. Who'd you sell it to? Someone that ran it into the ground. Because we wanted to use it for charity reasons. and like, you know, I thought about, was I crazy to sell that? And then I thought it was such a terrible business.

1:01:54And the fact that someone offered a few million dollars for it was so crazy. And like, it was five years before COVID. And yeah, if we owned it in COVID, we could have had the same outcome as cash rewards. But that outcome, you know - You guys weren't the scale of cash rewards, were you? We were bigger. You're bigger? Yeah. Oh, okay. And then I think Andrew kind of built it. At worst, we were the same. I should have rolled it into him. We tried to deal with cash rewards for our coupon business for years. and they would never come to the table. Yeah, no, I should have merged them. But the thing is this, they are terrible businesses.

1:02:25And so let me - First explain what they are and then explain why they're terrible. So when I go to Luxury Escapes, if I'm a website that has the kind of customers that you want, you'll say, yeah, we'll pay you a commission, a percentage of sales if you refer a customer through to us. You'll especially want first-time customers. You might not love a customer coming back and you paying a commission on them as well because that increases your acquisition. acquisition cost. Yeah, some might and some might call it business. And so, the payer probably is the more likely one to call it theft. The receiver, it's business.

1:02:56And so, and so, and so imagine, I'm just going to use a round number. Imagine the average that companies are prepared to pay is 5 % of the price of the purchase. And just say, after pay essentially is the same sort of concept. The question is, what do you do with that 5 %? There's lots of cool things you could do with that 5%. The smartest thing that was done with that 5 % was use it to fund a lending business, which is what Afterpay did. That was the smartest thing. I was not that smart. No one was in fairness. I mean, that's an amazing, and I think in order to realize that opportunity, like a lot of things are the journey people have had, what generation they are, et cetera, right?

1:03:33And so that was a good idea. And another thing you could do is you could say, I'm going to take this 5 % and I'm going to give it to the customer. And so if you give the whole 5 % to the customer, that's not a good business. But if you give not all of it to the customer, Do you give 4 % to the customer? Well, 1 % would be better. So if I give 1 % to the customer, that might be quite a good business because I'm clipping 4 % of every purchase and so then it becomes a volume game, right? Unfortunately, there is not a lot of differentiation between Adam's business giving 1 % to the customer and my business giving 1%.

1:04:05And so then you're going to say, I'll give 2%. Then I'll say, I'll give 3%. And then all of a sudden, we're in a race to the bottom of margin destruction. And it's very hard to get out of that. And you think all these businesses are really sort of listing, almost like a classified site that just shows here some discounts you can get. Yeah, like if you want to do. Directory for discounts. Yeah, and it's more, yes, exactly. And so I go there. So basically the better ones are effectively, it's like an SEO play in many ways. Well, so what we did is we went to all of these different businesses. Actually, you don't even have to go to the businesses directly.

1:04:34There are all these affiliate platforms. You just plug into the platforms. Yeah. And what you have to build is some way of tracking the customer. So the cookies. Yeah, so what you have to do is click on a link, basically, and then we created a toolbar that you could just activate in the toolbar. Click on a link, and then you'll go through to the store, and as long as you purchase after clicking on that link, you'll get the cash back, and I have to find a way to build tech, is what Steve built, to track that it was you. And also I want to try and avoid scams, because the thing is this. Let's say you go and buy$2 ,000 of accommodation, and you're getting 5 % cash back on it.

1:05:09It's$100, and so I pay the$100. Well, when should I pay it? because if you cancel the accommodation, and so then you get into those and then you start the next battle, which is how fast - You have a 90-day cookie window where if you refund in the first 90 days, you lose your decision. How much risk do I want to take on in order to differentiate in the market? And ultimately what you end up with is you end up keeping about, I think we kept 2.4%. Oh, it's not bad. Yeah, but it's terrible because that's credit card kind of margins. Yeah. And I don't have credit card volume. Yeah. And also almost all the volume comes from a few players.

1:05:41It's accommodation provided. and Dan Murphy's. Yeah. And like maybe ASOS did a bit, but basically - Is ASOS still around? Yeah, they're around, but I think they've shrunk dramatically in Australia. Even in the UK, are they around? But you know, the thing is that it's all, it's travel because it's big ticket items and alcohol. Sorry, just, what do you reckon ASOS' market cap is? I've got no idea. So it peaked in - What was their peak market cap in COVID, presumably? No, it wasn't. It did come back in COVID, but it was, peak was called the share price of 7 ,000, so. Was this like a$5 billion business in COVID?

1:06:14The peak market cap was about 7 billion pounds. I could be slightly off there, but I'm roughly approximately 7 billion pounds. 700 million pounds. 340 million pounds. You're pretty close. It lost 95%. I was like, it lost 90 % and it lost 95%. That's pretty incredible. They were the OG online discount shopping site. So that was a good cashback source. And so the thing is, when you think about it, if you're only keeping 2.5%, Yeah. Like that means like every million dollars of spend is 25K. It's a lot of million dollars of spend. And so we would sell like ads in the newsletters that we sent out and try to all this other monetization.

1:06:49But the bottom line is that you really can't make enough money doing it. And you also end up on your balance sheet with this huge liability of cash that's been earned by people. Negative capital business, right? Yeah, because that's right. You get paid before you have to pay out and you hold this money, but it builds up a big liability. And in the end, I just couldn't figure out how to make money with 2.5 % clips on the way through. And I suspect Cash Rewards had the same problem. And ANZ, there's a new guy in town. He wants to clear out all the things he doesn't want. This is all sitting in this 1835i business.

1:07:24I think it's all going to be cleaned out and goodnight to this. The amazing thing is that when I saw this, I posted it. I'm like, that's a shame. 1835 did an incredible investment in Airwall. It did very well. and they've just sold down from that one. Yeah, I suspect that sell down is because this thing's being shut. Potentially. Yeah, that's my guess. And the thing is that ANZ buys this and they realise we can't really make money out of this thing. The Combank had a crack at it with something called Cheddar. Or Little Birdie as well, of course. Well, that was part of it, but then they did this Cheddar thing.

1:07:53Everyone has a crack. And like, so I posted. Have you noticed how few LinkedIn posts I've posted? I only post on desktop now. I thought you deleted LinkedIn. On my phone. Is it still deleted? It's deleted. Rest in peace. Yeah, it's deleted. I use it on desktop. Wow. Not often. Definitely not after like 8 p.m. Yeah. No way. And so it's not good for your mental health, you know. I think you've turned LinkedIn into Twitter. Well, I think it wasn't me that did it. Yeah. Like, I mean, I've contributed to it. But like not Twitter. Twitter's too extreme. Yeah, I agree with you. And so I was like, I think like why would Shopback now continue because they're the competitor.

1:08:29Yeah, the Singaporeans. Why would they continue offering high cashback prices? Totally. Because in a one-horse race, you don't need to gallop. Yeah. Encanter. Yeah. Well, you'll walk, to be honest. And so I tell you something very interesting. So I ran a survey on the website. So the guy that runs it in Australia. Angus runs the shop back in Australia, right? Yes, correct. So I posted that they're not going to do whatever, and he posted back and was very polite and whatever, and said, actually, we're not changing the payouts that we do. We're going to keep competing, and we're profitable, which I was very impressed by, et cetera, et cetera.

1:09:01They're a competition shop. They've raised a lot of capital. They've raised a lot of capital and they've got some technology that lets you – they've got a very smart thing where if I go into a store and I buy using Shopify, if I go back to that store the second time, they'll release the cashback from the first purchase. That is bloody smart. That is actually adding value to retail. Cash Awards talked about the in-store cashback. The e-clubs obviously perfected since, but they talked about this when we were speaking to them in 2019, I reckon. But that model is very smart. You don't get the cashback on the first purchase.

1:09:32Yeah, it's a great model. you get it on the second purchase that releases the cashback. So I was very interested to know if anybody would actually care about cash rewards going broke. And so I put this thing on the website. Have you cheated on this again? No, you told me not to cheat, so I haven't. I'm actually totally shocked that you listened to me. So I said, do you - It also didn't come up. LinkedIn hasn't taken well to my departure from the platform. It's like a tilted lover. I get a lot of emails now. You're like Tiger Woods' ex-wife, just like smashing you. I get endless emails from LinkedIn telling me how great the platform is and I should come back to it and I think they've throttled my reach a bit to be honest heaven hath no fury like a LinkedIn scorned I tell you and so this is my question do you actively use the main cashback websites in Australia or these guys being laid off on LinkedIn now in Australia because of you I hope that's not my fault it's like when Lehman Brothers closed and we just walked out plumbly that's kind of the scene at LinkedIn headquarters in Sydney at the moment yeah well they brought it on themselves so these are the four options do you use cashback yes only cash rewards yes only shopback Yes, both cash rewards and shopback.

1:10:32I only just use those two. And no, I don't use any. Yeah. So what percentage do you think use cash rewards? There's 128 votes. Good enough sample. It's a lot, yeah. I would have thought it's low. What percentage do you use? 25%. What's your guess? Do you use cashbacks or not? You don't? No. Do you? No. I can't believe you don't use cashback. It's just free money. I know, but just don't. It's amazing. What did you say, 25 %? Sure. What did you say? 25%. Oh, were you the same? Or did I just not answer? I didn't answer. I didn't wait for your answer. I get too slow. Joel says 25 as well. Joel's very slow.

1:11:06Too slow. I just miss Mike so much. You're channeling Mike's flaws. So it's not, it's higher than 25%. Really? Yeah. I'm shocked. 34%. I'm especially shocked of your audience saying it's that high. Yeah, well, it's not my audience, it's our audience. Oh, I thought it was your personal side. Don't distance yourself. Is that what I am toxic now? You're distancing yourself from my audience. I'm in. So 34 % use something. And what's interesting is that 9 % of the total, not of the 34, 9 % of the total use cash rewards only. Okay. 9 % cash rewards only, 10 % shop back only, 15 % both. And so think about this.

1:11:49Interesting. If 9%, I'm going to just use round numbers. If it was 32%, not 34%. Yeah. And if the number was 8 % instead of 9%, let's just round a bit. Yeah. That means one quarter of all people that use cashback only use cash rewards. That means that you would expect that Shopback is going to have up to a 25 % boost in its customer base, right? I mean, that might be incredible for them in Australia. It depends what people do, but I suspect people that are using cashback actively will find another cashback. Yeah. I think shop back is going to boom. Yeah. And I think this might be an industry. So my two theses on this industry is one, there can be no standalone player.

1:12:33And the only way that you can make money out of this is tying it into a finance business that's giving cash back. Like I can't believe credit cards are not providing this service. Like it's insane to me that a credit card company has not done this deal saying if you use this credit card, you automatically get this cash back onto your company in Australia. Yeah, I don't know about that. They give 1 % in Australia. There are definitely cards that do that. Yeah. So I can't believe this is not a credit cards business, but if it is a standalone business, I think there can't be more than one. I think it's a winner takes all because you cannot be big enough unless you're the only one.

1:13:03There's a lot of technology infrastructure in there. Yeah. Well, that's what's been born out with cash rewards in the last couple of weeks, right? I would really encourage you to use cash back. I cannot believe. I just want to say this. I just signed up to ShopBack Plus. God help me. It costs$40 a year. You get something else. I know, it's ridiculous. You get an extra 1%, but I just booked work hotels, and it was probably$4 ,000 or$5 ,000. You don't get cash back on the whole map. That's what, two nights accommodation? Thank you. No taxes, no whatever. You only get cash back on this. The core.

1:13:36The core. But that's already$40. It already came back in that one purchase. And so the thing about that, though, just to finish this thought, is the only benefit of these kind of lock-in subscriptions is if they influence purchasing behavior. But when there were two players in the market, the day that I signed up for Shopback Plus, but not the day after. Whichever one provided a better cashback. Yeah. I would still just use that. When it doesn't change behavior, right? Because the cashback could be 10%, so the 1%. Yeah, why would I, if cash rewards would have been offering 8%, and Shopback would have been 4%, but it's 5 % with this.

1:14:06Because often there's quite a big gap. There's no way that would have changed my behavior. I reckon the reason for the membership in the 1 % is they just don't bother looking. They don't want you shopping around. Yeah. So as you said, half the people are members of both, or something like that. So they don't want you, what's Shopback doing? What's Cash Rewards doing? No, I get that. Come straight back. It's building switching costs. But people like me that are going to be so keen on saving of getting a few dollars back on cashback, we're going to shop around. That's the nature of the customer, right?

1:14:30Yeah, that is the nature of the customer, yeah. And I think ultimately ANZ solved their problem for them. People are not going to shop around because there's no one to shop around with. Yeah. So I know how much you love quizzes. Oh, you've waited until late in the episode for a quiz so I wouldn't get worked up early and worked out. I know how much our listeners love quizzes. I know how much Joel loves quizzes. We can allocate three minutes to a quiz. Three minutes per answer? No. I'm going to answer quickly because I'm going to – no, this is a quiz that we have no idea about. No, I think we're just talking about it.

1:14:56World's richest people. World's richest people. One, Elon, two, Larry Ellison. Yes. Okay. Done? We've already told you that. So now the actual quiz. Two from two. Who's number three? Well, the thing is a lot of people have given a lot of money away. Would Bill Gates still be number one if he hadn't given all his money? Yeah, I think he would. I think he would do like 500 or 600 or something. I think you worked that out and sent it to me a few months ago. Yeah, I can't remember what I said. You know what's actually more interesting is instead of by person, by business. So as in accumulating. So putting Gates and Walmart.

1:15:24Yeah, Walmart's the obvious one. Gates and Bulma goes together. Okay. So is Walmart at the top? No. It used to be for a long time. So if you look at - Microsoft is too big now for Walmart to be at the top. So Microsoft is - Gates has given away so much money, it's actually not. Yeah, that sounds fair. So Gates and - It clearly would have been, but for Gates to give away. But now, so Gates is 120, Bulma's 172. So they're 300, or just under 300. And the Waltons are 360. 36. No, Walmart's bigger. Is that still at the top? Walmart as a combination would be the top, yes. Isn't it amazing that a business that is so old – Actually, no, I stand corrected.

1:15:59Somebody else will be at the top. Have you read Made in America? Yes, Sam Walton's book. That's a great book. Yeah, it's a great book. Yeah, I highly recommend it. So Walmart's number two. The font I read it in was like six point. It broke my eyes. It's such a tiny little book. Who's number one? NVIDIA's not big enough to do this. This is Jensen. He's 154. Yeah, so he's well under that level. And Bezos is$252. If you look individually, Zuckerberg,$3,$264. I was thinking about Meta, but it's not big enough. Yeah, it was just him. No, Meta's$2 trillion. It definitely is, but Zucker doesn't own as much.

1:16:28No, but there are other people in Meta that own shares. Yeah, that's the point. But there are other founders, so you don't put them together. Yeah. What do you put them together? What's that Dustin dude called? Dustin Moscovich. Yeah, he owns some. I know, but I've got top 16 here. So yeah, it definitely could be. So your quiz is really, this is why I try to limit this to three minutes. Your quiz is, if you take the top 16 people and you just collectively put them together, Which ones have the, you know, who created the most valuable? Who's the guy who moved to Singapore? I can't think about who.

1:16:55Eduardo Savarin. Oh, Eduardo Savarin. Eduardo Savarin. That's right. And his net worth. What's he worth? I'll tell you in a second. He's got a fair chunk. He got a bit shafted as well. No, he didn't get shafted. He did initially and then got it back. Oh, okay. He's$41 billion. So, yeah, Facebook isn't quite as high. Where's the cutoff of this 16? Amancio Ortega. Do you know where he's from? No. He's from Zara. So, he's$112 billion. He's number 16. People have honestly got way too much money. We're in royalty territory again here. The world's gone back to being royalty. Yeah, absolutely. It's actually crazy.

1:17:27There's one really obvious business that is just ahead. Is there? I can't believe you're missing this one. It's so obvious. I don't know who the big business is. It's not Apple. It's not Amazon. Because Steve Jobs is quite low. Now L 'Oreal Power Jobs is quite low. Jeff Bezos is number four, but it's just him. He's 250 billion. Well, his parents are pretty rich as well because his parents are the original seed investors. Tesla's only Elon. Yeah, Elon's obviously - It's not enough. we just spoke about he's number one at 34 so actually well i don't know he's just elon he's pretty close what business is it that i'm forgetting google oh my god i can't believe i forgot that it's like that's actually of all these businesses that's what i love most together they're 405 billion so they just edge out if you look they're actually really close they look at google's 405 and you've got the waltons at 380 you've got elon at 380 himself larry olsen at 380 himself zuckerberg and moscovich and sorette saverin at just under They call it 340.

1:18:17They're all roughly the same, these businesses. I'm going to say something that's going to sound very defensive because it is very defensive. When I was going through medical school, I really knew my stuff well. But when it came to these oral exams, I just could not think clearly. And I feel like I'm having a repeat experience whenever you're asking me quizzes. I'm just not good under this kind of environment. So I'm very badly on these. We've got tens of thousands of people listening to you get this wrong. Well, isn't it crazy, though, that there is this concept of, like, You can know all this stuff.

1:18:48And I can stand in front of 10 ,000 people and do a talk and there's nowhere I'm happier in this world. I feel zero stress just as a happy place for me. But when there's quizzing being asked, even when I think I'm going to know it, I know what Google is, right? I just cannot think clearly under this guy. It's a weird thing. I find the human brain is crazy. If you're a prime minister and I ask you how much milk costs, you'd be in all sorts of trouble. Well, I'd know milk. Is that the end of this quiz? That's it. Quiz is over. Ring the bell. Thank God. Do you know who's in there who I was surprised about?

1:19:14I knew this wouldn't be over. Yeah, it's not over. Number 10. Who do you think number 10 is? How would I know? You wouldn't. 151 billion American in the computer realm. Is it like a consumer business? Yes. Are they right? A consumer business. It's not that Snap dude, is it? Nah. He's way down, right? It's worth like a billion in the whole business now. Is it? It's way low. Really? It's been smashed. I don't know what Snap is. It's worth a billion dollars? 12 billion. Sorry. Who's worth a hundred and who? What? 15 billion. One's a computer-related business, consumer. 150 billion. I don't know. American.

1:19:47Like consumer-related, like tech software? I've been pretty clear on what it is. Software? No, hardware. No. Michael Dell. Oh, I did see that he rocketed back up. $151 billion. Yeah. It's pretty unbelievable. I read his original book that he wrote. Oh, yeah? It was terrible. Okay. Terrible. He had not suffered when he wrote that book. Yeah. And it was all like, I can do no wrong. Well, he still hasn't really suffered. Well, he has. Like, he plummeted. Didn't he privatize the business? But he did really well. And then Silver Lake came in and did incredibly well. I know, but he plummeted. Like he went through a lot of pain.

1:20:16And do you remember there used to be a brand called Gateway 2000? It was a competitor of Dell. Yeah, Steve. Stuart Galloway was on the board of that. Was he? It was a disaster, Gateway. Well, it wasn't for a long time. It was amazing. In the 80s, maybe, yeah. No. Or 90s. Like in the - It had the - The dot com crush was bad for us. The white and blacks. I mean, you can't call a business Gateway 2000, because 2000 is just like a futuristic thing. Yeah. And then 2001, it's not great news. Remember the show Beyond 2000 was on? I was thinking about that when I said - It's a great show. Well, before Beyond 2000, there was Towards 2000.

1:20:44Oh, was there? Yeah, it was like I was really young and watched that. I remember Beyond 2000. Beyond 2000, great. Amanda Keller, yeah, has done really well. And then after that, they turned it into something else and then it was no good. Yeah. So that's the same problem, right? So that's my quiz. Quiz over. Great quiz. Of which the top 16, 14 American. You obviously got Mancio, the Spaniard. And obviously, do you know who the 16th person is? That's because you don't know the Chinese people. Yeah, but China's pretty good. If you get too rich, you don't stay rich for that much long. I'm not sure that's necessary.

1:21:12He's the number one rich guy, the bottled water guy. Isn't Vladimir Putin the richest guy in the world? He could be. He could be. That'd be my guess. Yeah. How could he not be? Is he more than 400? I don't know. Is Russia that rich? Russia. It's just full of resources. Yeah, true. The other non-American is, of course, Bernie Arnaud. He's still number eight, actually, which is pretty amazing. He's still 162 billion. He has dropped to lazy 14 billion this year. So I'm going to finish on another travel-related thing. Okay. So do you know what Made Comfy, the Made Comfy business is? Yeah, we talked about it on the pod, the Airbnb property management software essentially that sold quite recently.

1:21:48Yes. And so I was having a bit of a closer look at that deal. Yeah. Who bought it? So a company called Oyo bought it. You know that business? Oh, the Indian OTA. Yes. Now I think that - It's had a torrid time Oyo. Well, I think Made Comfy raised a fair bit of money. Yep, possibly. Is it husband and wife? Yeah, that's right. And they sold the business to OYO. This was written up by Tess Bennett in the Fin Review last month. She wrote, it was sold to OYO in a deal worth more than, what do you think the number is? Do you know this number? 70 million? 50 million. Okay. More than 50 million. Yeah. And so my guess is that whatever they got was not$50 million of cash for this transaction.

1:22:33I don't know. Yeah. But like they're continuing with the business. they had a lot of like Rolf Hansen do you know who he is LeMay Sim co-founder he was in there Cliff Rosenberg was in there he's been a LinkedIn CEO he was in Afterpay obviously I think that was his big win right and so the person that like the person that started OYO you know this what's his name Indian entrepreneur Rich Hagerwald yeah he was like one of one of Peter Thiel's like don't go to university oh he was oh okay yeah yeah that's been the amount of people like the Ethereum guy was in there there's some incredible people in that I forget what it was called or whatever his drop out of uni thing was.

1:23:09It's been actually unbelievable. Well, do you think – and so I was thinking about this sale, which I'm very pleased for the founders that they got this$50 million sale away. Like I'm sure some of it was cash, maybe most of it was cash. Yeah. So they had raised$20 million. Sorry, so it's a Thiel Fellowship is what it is. It's not what I said. Oh, it could have been. So the Peter Thiel College Dropout Fellowship is what it's also known. Yeah. $200 ,000. It was launched in 2011 actually. So it's actually been around a while. some pretty interesting notable alumni so Ritesh Aguol which is obviously Dylan Field do you know what Dylan did?

1:23:42Figma that's lazy 60-70 billion we don't know what it's worth because we don't know when this is going to air so who knows right Lucy Gao from Scala High is another one there's actually been some unbelievable wealth creations but it is very self-selecting like it's in Silicon Valley it's picking people that want to do startups and he can be very selective on who he chooses. Co-founder of Anthropic, Chris Olar was one. A lot of AI businesses, yeah. Yeah, incredible. Obviously. Not to diminish Peter Thiel. Yeah, Vitelek Buterin who was obviously Ethereum. That's incredible. The list is actually an unbelievable list.

1:24:22Weldon Yan who co-founded Cognition AI. There's a whole heap of AI people on there. Yeah, they're big on AI. It's unbelievable. Like there's just a bunch of very, very – and so I think Peter's probably been proven right here. Yeah, I think so. And so Made Comfy, I was thinking about this. So as I said, it's very nice that the founders got an exit. Yeah, right. Supportive of that. Yeah, absolutely. They had 20 mil of venture capital. Oh, really? Yeah. Who were the main backers? So we said a couple of them and the rest of them are, I'm just reading from the article, Commencer Capital, Bridge Lane.

1:24:53I know Bridge Lane and some other just wealthy people. Okay. Yeah. And so 20 mil, when you have a 50 mil exit and you've taken 20 mil. Yeah. And it's probably prefs. I mean, it's got to be at least like you can at least have a non-participating one times preference. So when they sell for 50, you can say, I'm going to take my equity percentage or I'm going to get my money back. And I don't know if there's kickers on there or not, but let's even say it's that. 20 mil, you think that at 50 mil, it's likely to just be a money back for preference shares deal? So have you got a two to one prefs, you mean?

1:25:29No. Have you got one to one prefs? Because let's say that – how much of that 20 mil would they have owned? It depends how many rounds. But unless they had more than 50 % of the company that owns that 20 mil, they're actually going to take their money back, right? And so these are the economics of the way that this works. And this is why companies – like it's very possible that they had less than that. Why would they have sold then if that is the case? Well, that's right. And so there's only a few reasons that you sell a business. Like one is you have to sell for reasons that are outside the business.

1:26:02Another one is that someone offers you an amount of money that you can't say no. Another one is that you're out of puff and it's time to sell. And another one is that the other options are worse than selling. I think this business is performing well. I had 1 ,300 properties. I don't think they were going broke or anything like that. I think it was a pretty good business. It's just unusual to see a business that's raised 20 mil selling for 50 mil. Well, it could be that it was common equity and they took 30 off and the investors got their 20 back and that's a good result for everyone. I suspect that the founders, I mean, they would have made, even if there was no getting your money back, let's say the founders had 30 % left of the company.

1:26:44So 15 mil. And they're still pretty good 15 mil, right? Yeah. And so it's a good exit, but it's just not often, I thought it was noteworthy because it's not often that you see a company that's raised 20 mil in venture capital sell for 50. I'm surprised they've raised that much. I don't think they've raised anything like that in the amount of cash. That's an interesting exit. And a great business. And we talked about Airbnb. I've used, I've said properties managed by them. It was very nice. It was very nice. We talked about one of the big errors Airbnb made was allowing the made companies of this world to actually exist.

1:27:09Airbnb should have owned that space and they've really allowed themselves to disaggregate it. If you look at Airbnb's share price, it listed at 140 back in 2020. So sort of early-ish in COVID. Went up to well over 200. It's now back at 123 and really has been moribund for the last couple of years. It's been probably a disappointment, Airbnb, and Brian Chesky's the master of the press release, but he's struggled to sort of back his big talk with a lot of action. You know, I'm sure we're going to talk about Airbnb again in future, but I definitely think, so May Come For You is one of the best players in the market.

1:27:44Yeah. If you would have said to me six or seven years ago, how much do you think one of the major players that manages these Airbnb properties is going to be worth in Australia? I would have said 300 mil. So I'm surprised it didn't grow bigger, to be honest with you. There's also this Home Time, which is a great business. There's a couple of others as well. Home Time, I think, is bigger than this, right? Yeah. And that's Home Time, who I know Dave Thompson, who's one of the co-founders there. They actually raised, I think,$10 million just last year, actually, from NAB Ventures and ASI Growth. I imagine it's sort of around the 100 mil value, but it could be a little bit less or a little bit more.

1:28:22But they've got a couple of thousand properties. I think they do$28 million in revenue. So I would have thought that home time is a fair bit bigger than made comfy. But both have done a really good job. On that note, we will say goodbye. Thank you, our dear. Thank you, Joel. We'll have Mike back next week from his long, long holiday. But Joel's done an outstanding job stepping in for the last couple of weeks. So thank you. And we'll speak to everybody on Saturday, of course, for Ask Us Anything. See you soon.