1 hidden software stock and is value investing dead?

Bryce: [00:00:15] Welcome to another episode of Equity Mates, a podcast that follows our journey of investing. Whether you're an absolute beginner or approaching Warren Buffett status, our aim is to help break down your barriers from beginning to dividend. My name is Bryce and as always, I'm joined by my equity buddy, Ren. How are you going on?

Alec: [00:00:31] Very good, Bryce. Excited for this episode. We have a returning favourite.

Bryce: [00:00:35] We do, we do. We're very lucky. We've got a returning favourite and potentially an Australia first for podcast crossover episode. 

Alec: [00:00:44] Yeah. 

Bryce: [00:00:45] Yes, that's confusing

Alec: [00:00:47] It will be released on fall podcast. Yes. At the same time. Yes. Well, similar times. 

Bryce: [00:00:52] Going large. 

Alec: [00:00:52] But confusing.

Bryce: [00:00:53] Yeah, that's. 

Alec: [00:00:54] True. Well, it doesn't bode well for the rest of the episode for you. 

Bryce: [00:00:57] No, it doesn't. Well, we will. We won't. We won't. Dilly dally. We're really excited to be joined by Owen Raskiewicz of Rask Invest. We have been working on a couple of investing courses with him, which we know a lot of you in the Equity Mates community will benefit from. 

Alec: [00:01:12] So but it's not all about courses. Bryce Owen has a hidden software stock. Not sure how it can be hidden. It is literally a public stock market where companies have to publicly report their information. Yes, it is hidden because I didn't know about it. Did you know about it? No. So it is hidden from our blinkered view. So, yeah, really, really interesting stock that I hadn't heard about before from Owen. We also chat about the big question that a lot of investors have been asking for the last ten years. Is value investing dead? So unless you got anything further to add, oh, go listen to the dive.

Bryce: [00:01:49] Go listen to The Dive and sign up for FinFest.

Alec: [00:01:51] Yeah, here we go. 

Bryce: [00:01:52] Let's do it. Get everyone. We are really excited to be here. My name is Bryce. I'm co-founder of Equity Mates and I'm here with Alec and Owen Raskiewicz .Welcome. 

Alec: [00:02:04] Hi, Bryce. Good to be here, Owen. Good to well, not be in the same room, but be on the same call. 

Owen Raskiewicz: [00:02:10] Yeah, it's great to be here, fellows. Thanks for having me on your show. And for those of you that haven't heard my voice before, I'm Owen Rask, founder of Risk Australia. And this episode is going across the Australian Investors Podcast and the Australian Finance Podcast. I don't know about you guys. I know the equity community Equity Mates community's massive. We've got about 80,000 monthly listeners across the two podcasts, so I'm a bit nervous. I'm a bit nervous, to be honest. So it's going to be good, but I'm a bit nervous. 

Alec: [00:02:39] And you've been on our show before. Yeah.

Owen Raskiewicz: [00:02:43] I know. But this is this is like high stakes. This is going to be like the first crossover by for podcast channels. 

Bryce: [00:02:49] It is. 

Owen Raskiewicz: [00:02:50] Australian. 

Bryce: [00:02:50] It could be in Australia. It could be an Australian first, that's for sure. 

Alec: [00:02:53] Yeah, well, let's call it an Australian first and make people fact check us. But I think for the Equity Mates community, for the get started investing community, I think a lot of people will know and there's probably a lot of crossover between our podcast audiences. But Owen is the founder of Rask Invest, podcast host investor extraordinaire. Yes, that's and I don't know. 

Owen Raskiewicz: [00:03:19] About that, but I'll take it. 

Alec: [00:03:21] Yeah, I'll take it. Take it. And we've got a lot to discuss today. We were the first clickbait title, The Truth About Value Investing. Then we've got a hidden software stock and then a VIP pitch. So a lot of clickbait in that introduction, but a lot to cover. I'm excited to get into it today. 

Bryce: [00:03:42] Yeah, that's it. That's it. Ren. This is in celebration of the hard work that's been going on behind closed doors for the Value Investor Programme. That has been a long time in the making between Rask and Equity Mates and we're really, really excited to now be able to at least give the Equity Mates community a couple of really valuable courses to help them on their investing journey. So I know we're going to talk a bit about it towards the end, but do you want to just give a quick spiel as to what we've done and why we've done it? 

Owen Raskiewicz: [00:04:14] Yeah, sure. So we've launched two courses and one of those is the get started investing course, which we've kind of tried to marry against your great book, you know, to try and give an online lighter version of the book. And the hope is that all listeners can read the get started investing book and take the online course if they choose. And then we've got this epic programme which we call the Value Investor Programme, which has been an undertaking. I've got to tell you gents, I know you guys know this, but everyone listening, getting an online course is an easy and we've got about 15,000 students enrolled in our courses already. And this one is by far the biggest, most in-depth value investing curriculum we've ever put together. So super excited about it.

Alec: [00:04:59] Look, it's we didn't we didn't put the course together like our in the team did a lot of the hard work. But we know how hard it is because we had to fly down to Sydney, a flight out to Melbourne and then I'll have to fly up to Sydney, even just to. Ah, Al Potts. 

Bryce: [00:05:12] I know, I know. A lot of time and effort has gone in, and it's it's it's great and I'm really excited. And we're also incredibly thankful for the work that you've put in. And you mentioned that, you know, it's CFA chart holders, portfolio managers, chartered accountants, they've all done courses through you guys. So plenty, plenty of experience and there's a lot of value to take out of these courses. So yeah. 

Alec: [00:05:36] Yeah. I think for the Equity Mates community and the get started investing community courses is something that people have asked for a lot. And you know, Bryce and I aren't experts, we're not from the industry. We probably we didn't feel like we were in a position to actually teach other people through courses. But Owen, you're an expert in the field. You've come up in the Training School of Training Schools, which is The Motley Fool Australia, and we couldn't think of anyone better to put together a course for the Equity Mates community.

Owen Raskiewicz: [00:06:07] Now, I really appreciate that, guys. What I've found, you know, is that through studying things like the CFA exams or doing, you know, master's degrees and whatever, actually I'm really surprised that still we get people with ten years experience or more coming to take our courses on investing. And that just highlights how difficult it is to find really good sources of practical investment education in Australia and even probably globally. There are some really reputable firms, but yeah, we're stoked. I mean I did these, I did some workshops in person and I found portfolio managers are rocking up to the programmes and I was getting the sweats because I was thinking, surely you guys should be teaching me, but it's the way our industry is constructed and I'm so glad that we can just really help people, whether you're new or advanced.

Alec: [00:06:51] It's just it's just because they want that hidden software stock on. 

Bryce: [00:06:56] Well, yeah, we'll get to that. Yeah, let's get to that. So we're going to have a bit of a chat at the end of this episode about the value investor programme, why you should take it, what you'll get out of it, what you can hope to learn and how to get involved. But given that it is all about value investing own and that's kind of your wheelhouse, well, let's spend about 5 minutes or so unpacking, value investing and answering the question is value investing dead? So where? Where do we want to start? 

Alec: [00:07:24] Is it dead before anyone gives a technical answer? Bryce is value investing dead? 

Bryce: [00:07:29] No. 

Alec: [00:07:29] There we go. Move on. 

Bryce: [00:07:31] So that's how you get etc. and that's the quality content you've set for this course. 

Alec: [00:07:36] I know and talk us through it. It's obviously the last sort of ten years of our investing lives have been dominated by large cap growth stocks. The the value investor has underperformed the market. We've had a few on Equity Mates and got it's tough to be a value investor when growth is ripping, but is it dead as a philosophy? Is value investing dead? 

Owen Raskiewicz: [00:07:59] I would agree with Bryce. I don't think so. And I think to to understand is we've got to go back to what is value investing and value investing. It's just the concept of buying something for less than it's worth. And if we go right back to the beginning, like the forefathers of value investing, Ben Graham and and Warren Buffett, what we've seen is an evolution of value investing. So in the beginning it was try to buy companies where the total value of the company was worth less than the cash they had in the bank. So that was like during Depression era stuff where Ben Graham could just run a statistical analysis using a pen and paper or pencil and paper to figure out what was cheap. Warren Buffett then came along and started to take that to the next level and think about what he calls earnings, which is basically like dividends plus the increase in assets of a company. So as a company gets more valuable, does it buy more buildings, properties, etc.? Then Charlie Munger met with Warren Buffett and this is where things start to get really interesting. It kind of moves us into the modern era of value investing, which is Charlie Munger basically taught Warren Buffett buy wonderful companies at a fair price. Don't buy those cheap cigar box that Ben Graham taught you about. Buy companies that you can hold for ten or 20 years, companies that will keep compounding. And that's what we know today as growth stocks. So the companies that, you know, Amazon, Google, Apple, all these businesses started off as much smaller businesses and they had intrinsic values at the time. Well, valuations that were much lower than they are today. And that's what we've seen the evolution over time. One of the questions I always get is, is discounted cash flow analysis dead? That's good. DCF analysis is what we teach in the course. The reality is no, because at the end of the day, something is only worth what you get back from it. Whether you're however you're accounting for that, it's only worth what someone will buy it from you in the future or the dividends you receive. So, you know, regardless of whether you're investing in meme stocks, you're still going to get something back in the future. So we're trying to estimate what that probabilities.

Alec: [00:09:55] It depends what meme stock. Well. 

Owen Raskiewicz: [00:09:58] There are some stocks that, you know, just keep going down that become an even bigger meme. But, you know, I think one thing that's worth talking about is kind of the art of value investing. So there's like the right brain. Left brain. 

Alec: [00:10:09] Well before before we moved too far into. I guess the question that comes out of what you've just said there is maybe the right question isn't is value investing, Ted? The right question is, is value investing a useful label? Because, you know, we did an episode on Get Started Investing a few weeks ago where we spoke about you don't have to pick a side. There's, you know, active passive value growth. There's all these debates in the investing world and a lot of them, at the end of the day, don't really matter. And you can be on both sides of them. And it just feels like, from what you've just said there, the idea of value and growth being like two distinct camps constantly at war, disagreeing on the right way to invest is just a not a useful distinction in 2022. 

Owen Raskiewicz: [00:10:54] Yeah, and that's fair. Like I had it put to me that, you know, old value investing the way we were taught is buy a dollar for $0.60. But the modern, I guess, take on that is buy a dollar for a dollar that goes to a dollar ten. So buy something that increases in value and hold on to it. And I think, you know, you're spot on. Like we often draw these lines in investing. We give ourselves false choices. A false choice is like a, I guess, a shortcoming of our brains where we think, oh, you know, I need to turn left or right because I can't go straight ahead when both roads would meet in the end anyway. And you've seen the tortilla ad or the taco ad where the young Mexican girl goes, why not have both? And how do soft shells, it doesn't matter. It's still a taco at the end of the day. And you can have both because they value or growth investing, they're one in the same. Again, it just comes back to what we're buying it for versus what we get back. 

Alec: [00:11:46] So based on that, let's move to what you were saying before the art of value investing or the art of value plus growth investing, whatever we're going to call it, how do we actually execute it? 

Owen Raskiewicz: [00:11:58] Yeah, sure. So one of the things that and you guys have experience with is starting your own business, right? Let's call it an empire. Mine is maybe just a small minnow next to yours, but you would know, right? There's a lot of stuff that goes on behind the scenes. We have our own balance sheets, like when I do my numbers in Xero every month or every quarter, I that's the only time I check the profit and loss, to be honest. Like other than making sure that we're running okay. The reality is that businesses aren't just spreadsheets and they're not just financial data. 

Alec: [00:12:28] Don't tell me. Put it. Don't.

Owen Raskiewicz: [00:12:36] But at the end of the day, there's a lot that goes on behind the scenes. And so I heard this really, really good investor, an educator out of us. Brian Feroldi Basically say that over the short term, like one day, stock prices might be driven by by news flow over a year. Statistics show that it's maybe multiples like price earnings ratios and that sort of stuff. But over five and ten years, what you're actually getting when you buy a stock is you're getting you're getting the value of people creating new solutions to problems and you're betting on people innovating. And if you think about that, there's no number that couldn't necessarily tell you which team might innovate better than the next. You've got to actually understand what they're working on and how they're solving that problem. And that has, again, nothing to do with the spreadsheet. And so that's where the art of value investing comes in. It's estimating what will be in the future. And that's, you know, that's a qualitative stuff. It's the stuff we build on from our experience and philosophy now. 

Bryce: [00:13:28] And we've spoken a number of times with you on the show and on Oz Bears, and we talk about it in the courses as well, and that's around the biases that we often faces as investors. So before we move to the hidden software company, do you want to just chat through, you know, your thoughts on some of the biases that we may need to overcome as an investor? Yeah. 

Owen Raskiewicz: [00:13:52] Sure. Well, already brought up one, which is this false choice. My portfolio actually, as I reveal in the Value Investor Programme, my portfolio, having done this for over ten years now, is actually not what I want it to be. So let me just say. 

Alec: [00:14:06] Okay, it's not that's not enough. Zero. Yeah. 

Owen Raskiewicz: [00:14:09] Yeah, yeah. Well, that's the first thing. But second of all is that, you know, the way I invest today is very different to how I started investing. And that's okay. But what I what I articulate in the course is that basically we have that core and satellite approach to portfolios and oftentimes you have a fund manager on your podcast or some or a commentator and they'll say you need to invest in index funds. And then the next one will say by individual stocks. And it all sounds really great when they talk and then you're influenced by that. And that's an example of like your biases coming out. You hear this news, it's a recency bias, it's confirmation bias. It's whatever you internally believe. Now, we don't have to make that choice. We don't have to make a choice between active or passive. We don't have to make a choice between ETFs or shares. You can have both. You can have all of them like it's okay. And that's one thing that I've realised and the way we combat these things is basically having, you know, a toolkit of mental models and one of the, one of the most powerful that I've come across is basically this, asking yourself what sucks? So when ever you make an investment, invert the logic. Why would I not buy this? What sucks? Just having that is super powerful and it combats a lot of those biases that you might be thinking. There are many others. There is a whole there are many, many websites that deal with this. One thing I might just call out quickly in how to combat a lot of these is just writing down your thesis. You've got to talk about this. Write down why you own a company or an ETF or anything, why you're building wealth in the first place. Anything that you write down will help you because it will help guide your future self, make better decisions. And that's just a way to combat these biases. 

Bryce: [00:15:41] Yeah, that was a game changer for me. I think writing down the thesis would also make, you know, I think I would have I've bought a lot less by forcing myself to write down theses because then then you would answer that question, what sucks? And you go, Actually this sucks. 

Alec: [00:15:55] I was writing like doing handwriting science. 

Bryce: [00:15:58] Yeah. Yeah. So I go to the computer. 

Alec: [00:16:00] Yeah. It's such an easy thing to do, like once or twice and then just never do again. Yeah, but like that habit of doing it every time, the discipline of doing it every time is such an important skill.

Bryce: [00:16:12] So own. It's that time. We love specific stock chat and you've been kind enough to always share your time and some of the stocks that are on your watch list. But I guess keeping in mind what we've just discussed about value investing and and the evolution, what's the company or this one hidden software stock that's coming across your screens at the moment and really ticking a lot of boxes for you?

Owen Raskiewicz: [00:16:34] Yeah, sure. So this is actually one company that is in my top five holdings. So full disclosure, I actually own this company. And the reason that it has got there is because I've held it for quite some time. So I didn't just go in all guns blazing. I think that's really important because this is a smaller company. It's about $400 million or just just over when you if you have the market cap, the market capitalisation. But if you exclude the cash that it has on its balance sheet, it's around about 400 million AUD. This is a company called APM Global. Now, it's really important we shut it off ever about this. Please do not get confused. There is a company which trades under the ASX ticker symbol APM. It is not that this is APM Global trades under the ticker symbol U. L and what does it do? APM Global is a mining software business now. It sometimes gets caught up in the mining services and mining consulting because that's where it started in the 1970s. It started as an advice giver to mining engineers, to mining owners, all these different types of players in the resources sector. And over time what it did was it realised that software is going to play a bigger part in the way we manage mines, the way we optimise mines, the way we plan for mines. And so it started to build its own software, it started to buy software, but it wasn't really into until 2012 when it really changed gears behind the scenes. I guess an IT professional, an enterprise professional. Then Richard MATTHEWS took the helm of APM Global and he comes from an I.T. enterprise background. So he saw all of the challenges in mining that could be solved with software that talks to other software. And it basically he set about building the software that could be sold on subscription to help miners plan to help them design. Imagine those big things that look like Tonka trucks. Every time that takes an ineffective wrap around the mine, it's wearing down the tyres and those tyres aren't cheap and maybe take a day or two to replace every one of those, you know, routes that it takes during the day with a full load could be minimised and then ultimately save money. So this is like what we call asset maintenance. Tracking is one of the pieces of software that IBM Global is known for. And that's basically what's happened is the business from there has taken it in its stride to increase its spending on mining and increase a slight increase in spending on software and create a full suite of software that can talk to other pieces of software at the mine site. And this is a a really interesting business and it's still early in that journey.

Bryce: [00:19:02] Is this a company that is has its software being used at some of the big miners in Australia, like the Rio's, the BHP days, or is it smaller in town. 

Owen Raskiewicz: [00:19:12] Yeah. So all of those that you mentioned, Rio Tinto, Glencore, BHP, I think Anglos in there too. Basically all of the biggest miners in the world so used some of like some of its software, it's some mined somewhere in the world. And so the really interesting thing about mining software and Richard MATTHEWS talks about this is miners tend to be what we call fast followers. So they don't want to be the first one that uses the software because if something goes wrong, it's a pain in the backside to get it out. So what they effectively do is they it's like they they have foundation partners for this software. They say we're going to build this software and we want we think it's perfect for you. But here we'll build it together. We'll work with you to build it so you don't have to take the risk. And then what we'll do is we'll then take that as a case study and then sell it to other miners who want to follow in your footsteps. It's a fantastic way to think about selling the subscriptions because miners are often averse to subscriptions. So so it's a really it's a really interesting concept coming and selling this software into mines but that. Got a really good job since 2012. What we've seen is the software. If you look in the segment report, in the annual report, this is in the notes to the financial statements. You'll see it. The software division has been profitable for many, many years, but it's the advisory and the consulting side of the business which has been ebbing and flowing with commodity prices. So we're seeing it take over now. 

Alec: [00:20:32] Well, I was going to ask you about that, because for the last four years, it's made about $70 million a year. Every year, 73, 79, 78, 66. And it was it hasn't turned a profit for the last couple of years. When we think when you know, when we started here, we spoke about companies that are growing quickly. That revenue line doesn't doesn't look like it's it's going in the right direction. Can you talk to that? 

Owen Raskiewicz: [00:21:01] Yeah, sure. So that's a great question. And I like the harder question. So about I think it's about off the top of my head, about 90% of its software is now sold on subscription. And this is a classic, I guess, shift to software as a service. So what happens is typically when you sell software historically, when you sell software, you might you know, you'd be familiar with this. If you've got the old Microsoft Office disk, you'd pay 100 bucks and you'd get it for life or whatever. And then they shifted to Microsoft 365, where you pay a bit every month. And what actually happens in that process is you actually cannibalise your revenue because you're effectively taking future years revenue and you're taking it in monthly or quarterly or yearly blocks. And so what we can see, if you dig into the presentations, you'll see that IBM Global's the predominant timeline or I guess amount that's left on the contracts for software is 3 to 5 years. So they're effectively saying don't pay us all of that upfront. So our revenue is not going to grow today, but we'll take it in the future because you're contracted legally to us, and that's why you don't see that budging. And that's where we're seeing that shift in the mix. I'll give you one statistic which I found really interesting, and I made an update to the market in February 2022, and what they said was, we've sold 31, I think it was $31 million of subscription software revenue or so, some software this year, this financial year. So that was for like seven months. Right. They now have $81 million banked for the future. So that shows you how quickly they're moving, 31 just in seven months versus 81 overall. And so they're growing that future pipeline very quickly. 

Alec: [00:22:35] Nice. And then one other question for mail. And I don't want to be the guy that's asking all the hard questions, but, hey, someone's got to do it. So we obviously are living through a great commodity cycle at the moment. In Australia, iron ore has done well, coal did really well last year. Some of Australia's big commodities were hot around the world. How much is this company exposed to the commodity cycles and how do you think they would go if iron ore coal fall from here? 

Owen Raskiewicz: [00:23:09] Yeah, I think it would be volatile and I don't think that investors would like that. So that's part of the first thing. The other thing to keep in mind, though, is that as they bank more of these subscriptions, they're getting that annuity like income. So it's not, you know, immune to those experiences. What we see is that when commodity prices fall, we see that advisory and the consulting revenue, which is still a big chunk of that revenue, fall away because that predominantly works in like the M&A space or when they give consulting advice, it's to people that want to merge or start your mines or whatever and that we'll see that fall away pretty quick. And that's a pretty ugly side of the business. But we should see that software continue to grow. The other thing to keep in mind is that launching new products are becoming more valuable to existing customers. And the final thing is a lot of people lump this business in with other mining exploration companies. It's not that they don't necessarily do as much work in that. They're more in the scheduling and maintenance side and optimisation side of mining. So more like existing mines, mines that have already been committed to. So they've got those 3 to 5 year plus contracts that should stay in good stead through the ebbs and flows of commodity prices. 

Bryce: [00:24:15] So and we've just we've just spoken about writing down a thesis and asking yourself, what sucks? So you've given us the bull case for for the stock. What's the what's the bear case? What's the part that sucks about this? 

Owen Raskiewicz: [00:24:29] Yeah. So the business has to keep growing. I think they're on track to do about $80 million of revenue in the financial year. It's a $400 million business and it's expected to revenue of about 80 million. So that's five times sales. The businesses, as Rand pointed out overall, is not profitable from like a total consolidated profit and loss statements perspective. So it's important to keep in mind that valuation is pretty rich. And if we do see sentiment shift away, we're seeing all of these tech stocks kind of get whacked. Dell thing is, I think the business, while they probably wouldn't say this is pretty dependent on their CEO, Richard MATTHEWS is a very if you see him present, he's a very charismatic and a very optimistic leader. And I think he does a really good job of attracting and inspiring engineering talent to come into mining, which is typically not where they want to be. And so I think he's kind of like this visionary. Fortunately, when he became CEO, he actually bought a heap of stock in the business so that the chance of him leaving is pretty low, but it is a risk. And the other the other thing that I just want to highlight is that it has to grow. It basically has to grow to justify the valuation, as you guys have alluded to, it hasn't at the top line. So we really want to see that growth pick up and go forward. And one more thing is acquisitions. They've made a lot of acquisitions over the years to complement their internal R&D and they've made some divestments as well. But fortunately the acquisitions have been small and have complemented the existing infrastructure. If they start to get the kind of I don't know if they get a bit too heavy handed in the acquisitions, we could see that go badly. So those are some of the things that I'm watching.

Alec: [00:26:02] Hmm. So, Owen, I'm just scrolling through the the IBM Global's website and looking at all the different software systems they have there. And it is so that some of them are so specific. There is one software solution, which is the underground potash solution software. So and it just got me thinking about moats. Like it feels like these guys have a pretty solid head start in a pretty niche industry. When you think about Moats for this business, what comes to mind? 

Owen Raskiewicz: [00:26:35] I'd say the stickiness. So the stickiness of existing customers means that it's like mission critical software. The other thing is the mining industry, they are kind of a leader. I'm not going to say that they leader. They they do work with like the likes of SAP and integrate with like big enterprise resource planning software. And so the more I guess in bed they get with those big ERP systems, the better and more sticky their software becomes. So I would like to say that in time they have pricing power. The true sign of a moat, regardless of what type of moat it is, is the ability to attract customers and increase prices or at least retain customers. If you can do both, that's the sign of a moat. And so I would suggest that we will see them incrementally have those prices increasing over time while also retaining customers, which is the key insight there. And I think that's going to come from the fact that once you've installed the software, once it's working with the designers who are offsite, you know, all of the project managers who are on site and everyone's using it and familiar with it, it's pretty hard to get rid of project management software and any one would tell you that. 

Alec: [00:27:38] Yeah, the switching costs are very high. So look, even if it's got a moat, if it doesn't have a big market to grow into, it can still not be a great investment. It can be raising prices on a small number of customers and be limited. So I guess my my final question about this company is, is it is it primarily Australian or is it does is it servicing miners around the world? Like when we think about total addressable market for a company like this, is it every mine in every country in the world or is it more limited than that?

Owen Raskiewicz: [00:28:14] Well, it's traditionally focussed on things like thermal, coal, copper and those types of things. So those are, you know, in themselves they are multibillion dollar industries. And you're right, like the software is somewhat specific. I think if you exclude exploration software too, it becomes a bit more narrow. So software for exploration, I think off the top my head when I went back and did this a few years ago, I think it's about $700 billion a year. That was the estimate of the TAM for that. And this is you know, this is more I guess, more niche, as you say, but it's still got a TAM, I believe that's in the hundreds of millions of dollars. They're not going to get all of that. There's no way that they'll get all of that. There are incumbents. They are one of the leaders in this space. And what we've seen recently is there's also strategic value in these businesses. So we've seen a couple in there's one here in Australia actually that was a big mine design and scheduling software provider that actually got taken over. So and it got taken over for pretty hefty multiple. And so they even made comment on this in the in the most recent report to say that there has been a lot of our competitors being consolidated into bigger enterprises. And that's something that's in the back of my mind too, is that even if they don't realise the full potential, they could be strategic acquirers for this business. 

Alec: [00:29:24] Yeah. 

Bryce: [00:29:25] Well, love it, Owen. Well, as always, you've delivered us a stock that we didn't know about, which is what we love here at Equity Mates. Finding new inspiration and new ideas. So thank you so much for that. And just sitting there wondering how Owen is currently this thesis and done, the DCF then think no further because it's now that time the episode where we really discuss the value investor programme. If you are listening on Get Started Investing, it's worth shouting out that we do have a free get started investing course that Owen spoke about at the top if you've bought the book. Thank you so much for the support. This course really I think complements the what we've spoken about in the book. 

Alec: [00:30:04] So and it's not wherever you're listening it's always worth re covering the best. 

Bryce: [00:30:09] Absolutely. 

Alec: [00:30:10] And having a strong foundation so. Absolutely yeah I think it's free. Owen has put a lot of work into it. We've put less work into it, but still some work into it. Yeah.

Bryce: [00:30:22] So it's support we've supported. 

Alec: [00:30:24] We've supported it. Yeah. Yeah, yeah. We are the sous chefs in this age. 

Bryce: [00:30:27] Yeah. Big time. 

Alec: [00:30:29] But I think it's, it is a worthwhile course to do even if you're Geoff Wilson or Hamish Douglas.

Bryce: [00:30:37] That's it. So it's, it's free and available on both of our websites and the links will be in the show notes and we'll give a bit more information right at the end of the episode. But Owen, let's chat about the value investor programme. Why should someone who's listening the community at Rask Australia and hear, ask, invest, why? Why should they take this course?

Owen Raskiewicz: [00:30:59] Yeah. So as we mentioned at the top of the show, you know, investing is somewhat of a black box for a lot of people. You kind of approach investing and you think, I don't know this thing called valuation. I don't understand how to build a portfolio, don't feel confident. And then there's some people that are confident that probably shouldn't be as concerned. I was one of those people. And so this programme, it's the Value Investor Programme has been around for a while. It was around with this 1.0 version and basically what they were, what it was, was a way for people to learn basically this consolidated knowledge around how. How to value companies, how to find companies, how to research companies, and basically do that from start to finish yourself. Now what I think we'll get like to what's included in the course, but if we just focus on like what's going to happen if you take the course, I think what you'll find is that you'll go from feeling unsure but somewhat knowledgeable to very sure and able to take on other, you know, bits of your curiosity, which you haven't kind of scratched yet. So there's parts of your knowledge which you need to fill in will give you the tools to feel confident enough to go and get them and to put them in your wheelhouse. 

Bryce: [00:32:08] Love it. So it's not just it's not just, you know, go online, log in and read through a bunch of materials. What what are we actually going to get from this course? 

Owen Raskiewicz: [00:32:20] Yes, sure. So one of the big things that we know is that our students love downloads. Like there's no point, just, you know, watching a presentation or whatever. You can just tune into some webinar for that. What you get is you get the written form of it, which is, you know, probably, I don't know, guessing 100 pages, 150 pages, somewhere like that. That's what the equivalent of what it probably would be. But then there's hours and hours and hours of video and then there's a heap of like me screen sharing and showing you. This is how this discounted cash flow analysis works. This is how this checklist works. And then you can download all of them in Excel or Google Sheets form. Yeah, we even have we use this thing at rest code notion for all of our investment research. It's where we put all of our notes from companies. So you'll get all of the, the templates for that as well. There'll be workbooks where you can keep your notes like Google Docs is all this stuff that comes with it. But one of the things that we're keen, the three of us are keen to do is also to make it a bit more real and a bit more interactive is actually have a few live sessions. Yeah. So we're going to have, we're going to have three online sessions, three live sessions to talk through. Some of them will be about companies. The first 1 to 3 of us will sit down and talk about investing generally and interact with everyone that all the students learn as they take the course. But then the next two will be the community can vote on which companies we look at and we'll do a full case study on both of those. Awesome. So when we do that together. 

Bryce: [00:33:37] So if there's nothing other than wanting to sit down and have a chat to own myself and then then this course is the way to do that. So I'm really excited about that. You said it is for early adopters, so it's for those that sign up to the course within the next seven days or so. I think we're running that through until about the 8th of May or thereabouts. So yeah, those lucky enough, or those who take the action to get on that course now will be able to join those three live sessions, two of which will be with you all. And as you said, actually going through some case studies live, which would be really, really helpful, I'm certainly looking forward to tuning into those to sharpen up my DCF skills, that's for sure. 

Owen Raskiewicz: [00:34:20] Yeah, that's one thing that I was just to quickly say that that's one of the things that I just really wish I had when I was starting investing and wanted to learn more is to go, Hey, this is the problem that I have. Is this the right thing? Like we talk about in investing, once you get into the way you talk about cash flows, you talk about different formulas to calculate free cash flow and you get confused. It's so easy to get confused. So to have someone to say, No, that's not right. Here's what you got to do. This is invaluable. So that's what we're trying to get out of everyone in those live sessions. 

Bryce: [00:34:48] So some of the awesome parts to the course that I think are incredibly valuable is, you know, you build out an approach to finding, researching and valuing businesses. Like it's just the core essence of value investing and really helping us, no matter how you learn, if it's visually, if it's watching, you know, videos as you said, or cracking into the workbooks, everything around portfolio construction, ETFs, growth stocks, it's all in there. Super exciting. Anything, anything else that we can we're going to be taking away from the course? 

Owen Raskiewicz: [00:35:19] Yeah, I think this is not designed the course is not designed to tell you exactly how to do it in terms of like what's right for you. It gives you the skills to build a portfolio that is, in your opinion, right for you. So what I mean by that is we'll tell you how to value companies. We'll tell you how to invest in this or invest in that, like would tell you those skills. But it's up to you to then take that and make it your own. Like one of the workbooks that we've offered as a download is basically what we would call investor policy statements or an IPS. And this is what you would do if you're, you know, doing level three of the CFA programme or you are even just seeing it. I see it in Financial Advisor, although it's no replacement for that personal advice. You should always get personal advice, but what it does is it gives you like self reflection questions. Do I want to invest in an ethical way? Does that not really matter to me? Do I want to invest in global stocks? If so, how much? And so we'll give you skills, but then we'll also give you the application. And that's really, really important to do that yourself. You know, it's I think that's save your time money and it just makes you feel more confident. 

Bryce: [00:36:18] Yeah, absolutely. And just briefly, what won't we learn from this course? Because it feels like you're trying to cover everything in here. 

Owen Raskiewicz: [00:36:25] Yeah. So this is like the classic Charlie Munger counterpoint. You're not going. This is not an encyclopaedia. It's not Investopedia, it's not a replacement for any of those things. It's not a textbook. It's actually like real world application. So it's it's how do I do it? What are the tools do I need and what do I need to know? Like, if you if you want to know how to value companies, if you want to know how to construct a portfolio, we're going to we're going to tell you that we're not going to teach you modern portfolio theory. I'm not going to teach you how to calculate a beta to four decimal places. I'm not going to do all that. I'm going to teach you exactly what I think I use every day or what I use in an average set year when I invest and what I think industry does as well. And so I think that's that's the key difference. 

Bryce: [00:37:08] And I think something that is very important to stress here and this is sort of a common ethos. And between the two of us, it's that we want to make markets accessible and that sort of carries through to this course as well. We're not expecting anyone to know anything about investing, accounting, the stock market, how businesses work. You will be able to start from almost scratch and work your way through this course. If you're curious enough, you're going to get a lot out of it. And people, you know, private investors, new investors looking to learn about business, the economy, markets, you name it. All you need is a bit of curiosity and sort of passion to improve your own investing skills. And yeah, this course will help you along the way. It's don't feel put off by the fact that there's already some jargon being thrown around. So yeah, I think you've done a great job with making it accessible for anyone at any stage in their investing journey. 

Owen Raskiewicz: [00:37:59] Can I give you one example of someone? I won't mention his name, but he'll know you'll be listening and he'll know who he is. Okay. When I did these workshops in person, we. We went to Melbourne, Sydney, Brisbane, and we did small workshops around value investing. And I then took that and I put that course online and someone reached out to me, said, Hey, can I take that course? And I said, Sure, go for it. And this was probably 1 to 2 years ago. This person is a physiotherapist. No financial background at all. But it was really curious. Listens to your podcast. Listens to our podcast. Wanted to take this course. He took the course and then it just kind of ignited what he'd already been passionate about. And it turns out that he's actually written five of the topics within the course. He's shared his notes on those topics. So within, you know, 1 to 2 years, he's got to the standard where really confident and really knowledgeable in these topics, and he can do it himself. And I think that's just I'm not taking credit for that. It's more so just I'm just humbled that we could play a part in that journey. 

Alec: [00:39:02] You should take a little bit of credit on. Yeah. 

Owen Raskiewicz: [00:39:05] That's a little bit maybe. Yeah. But you know, if you've got the curiosity, it will help you along your journey and we'll be able to propel you over that journey. 

Alec: [00:39:13] Yeah, look, I think I think that's I think we've said a lot about this course. I think the that's the concluding thought like that no one is going to give you the answers. And investing in that is both its beauty and its drawbacks. For some people, there's no perfect portfolio and there's no subscription or advisor or anyone that you can say that will do all the work for you and make you a millionaire. You got to put the work in if you want to be a great investor. But the biggest point of confusion is I don't know where to direct my efforts. Like I don't that that confidence of not knowing like am I learning the right things or do I know everything is the stuff that I'm missing? And I think for me, the value of this course is the confidence that there's been a lot of thought and a lot of effort put into this by people who know what they're doing. Okay. You and your team owned not so much pricing. I think that this is this is pretty comprehensive. And like there won't you know, you're never going to cover every aspect of investing. You're not going to learn to be a day trader by doing this course. But if you want to be if you want to find long term growth stocks, that will compound. If you want to understand how to buy them at a price that is reasonable, if you want to understand moats and, you know, financial analysis and all of that stuff, this is a really comprehensive course. And so there is a price tag which we will get to. But for me, that confidence, that peace of mind, I'm getting something that's had effort put into it and is comprehensive is that's the value in the value investor programme. 

Owen Raskiewicz: [00:40:46] I was just going to say that. Yeah, right on like that. I guess the value of the course won't be immediately apparent because even though we give you heaps and heaps of downloads, heaps and heaps of resources like unbelievable amounts, and it's all kind of pushing you in one direction, you probably won't realise the full value of this course until many years down the track. One of one, one really good investor here in Australia, Joe Major, he is now back in the United States, but I reckon he's one of the best investors in Australia from the past ten years. I was bitching and moaning to him about this having to do the CFA programme while I was studying, while I was trying to start the business and whatever. And he turned to me and he said, Oh, and you have to know the rules of the game before you can play it. And that for me was just that one sentence was enough to be like, okay, this is what I've got to do and I know it now, and that's going to make me better. And I didn't realise at the time because I was really struggling with it, but years later I look back on that. I think, Wow, that was so valuable to me and I couldn't have quantified that at the time. 

Bryce: [00:41:44] Awesome. Well, yeah, now's the chance with the course is live. The course is $499, but plenty of value in there. There's something for everyone. So don't don't feel like this course is not for you. It is a joint venture, but obviously it doesn't matter if you don't enrol. There's plenty of podcasts between the two of our businesses as well, plenty of content to listen to. However, if you do enrol within the next week, as I said, by the end of this week, 8th of May or thereabouts, you will have access to three live 60 minute webinars with only one of which ran and I will make an appearance and just bring some vibe. 

Alec: [00:42:21] I guess maybe it would be a surprise. Which one as well?

Bryce: [00:42:23] Yeah, yes. Yes. And that will be hosted after working out and in a time where it's accessible for everyone and you can just jump on, hang out with your own and really go through some practical case studies with him and ask questions to do with the course. Now, if you do apply a coupon code Equity Mates is the coupon code, you'll get a discount on that for 99. I think it comes down to 399. So pretty good discount already. And look, we're really excited, as I said, first time doing something like this and couldn't have sort of thought of a better partner to have. Done it with Owen. So thank you so much for all your effort and time that's gone into this. And yeah, I love it. 

Alec: [00:43:04] So I just think we should be clear that there are two courses. Yeah, there is a basics of investing. Get started investing three course. Yeah. That'll always be free. Yep. Looking at you guys in case either of you have plans to slap a price tag on.

Bryce: [00:43:17] No, no. Always be proud before.

Alec: [00:43:19] So that's. And then there's the value investor programme which is for 99 use the discount code Equity Mates all caps one word and it comes down to three.

Bryce: [00:43:29] That's it. We'll put all the links in our show notes so you can head to our website Equity Mates dot com click on the resources tab and the landing page will be under their own. I'm not sure if there's anything different on your end, but we'll have notes on link links. Insights on our.

Owen Raskiewicz: [00:43:42] Show. In the show notes, yeah. Just click on the link, use the coupon code. And I think the free course to be honest, we both stand for this. I think I speak for both Equity Mates community and the rest communities that we want to help people invest better, whether you pay us or not. We want to help you on your journey just like we want to. We got help on our journey. And so that that gets started investing course is brilliant. That's a good complement. So the book is probably not a replacement for the book is what I'd say, because the book is much more comprehensive, but both resources fantastic. Whether you choose to pay us or not, we just love your loyalty and really appreciate you being part of our communities. 

Bryce: [00:44:17] Absolutely. Well, it's been fun doing Australia's first four way crossover episode, so thank you. Thank you for your time, Owen, as always, great to chat and we look forward to jumping on one of those live webinars with you in the next few weeks. So thanks. Thank you so much. 

Owen Raskiewicz: [00:44:32] Thanks, guys. Really appreciate it.