After 5 years of Equity Mates, Bryce has figured out that diversification works

Speaker 1: [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 end. My name is Bryce and as always, I'm joined by my equity buddy Ren. [00:00:29][13.9]

Alec: [00:00:30] I'm very good. Bryce. Good to be back for another Monday episode. The countdown is on to so many things. We are well as we're recording this where four days away from the AFL grand final. Yes, we're nine days. Ten days away from your wedding? [00:00:46][16.0]

Speaker 1: [00:00:46] Yes. [00:00:46][0.0]

Alec: [00:00:47] Where what? Less than 30 days away from Finn Fest. [00:00:50][2.8]

Bryce: [00:00:50] It's all happening around the three. [00:00:52][1.3]

Alec: [00:00:52] The big three, three day, the big three events that tell us that spring is just around the corner. [00:00:58][6.2]

Bryce: [00:01:00] That's it. And super excited when this episode airs. I will be getting married at the end of this week. I cannot wait. It's going to be another big party. So it's all happening. Hopefully the cats will have won a flag. I don't know. I don't want to jinx it. And Vinfast fest tickets are selling fast when I. [00:01:19][19.1]

Alec: [00:01:19] Will have everyone know the price. If you watch the replay of Swan's Collingwood on Kayo, you can see Bryce in the crowd. That's it. He was supporting the Swans. [00:01:29][9.4]

Bryce: [00:01:29] I was supporting the Swans and I was in the middle of the Collingwood crowd. Which crowd? Which takes some balls to do. [00:01:34][5.4]

Alec: [00:01:35] There were so many Collingwood fans they. [00:01:36][1.2]

Bryce: [00:01:37] They were, they're great. Anyway, that's it. We're hitting a big show today. Ren will start off with what we've learnt this week. Sparky McKay returns, which we're super excited about and then we've got a new type of episode over on the dive that we're super keen to show you guys and give you a bit of insight. So stick around for that. [00:01:51][14.3]

Alec: [00:01:51] Spooky. McGee was just relentless on the forum on our Equity Mates Community Forum asking to come back on. So we figured, ah, we have to get our thirstiest guest back on. [00:02:01][9.5]

Speaker 1: [00:02:01] Yes. [00:02:01][0.0]

Bryce: [00:02:03] He's been singing for it. Byron, just quickly, first release tickets are running out at Fin Fest will soon be moving to our last release. They're going to be 67 points. So if you want to grab one at $47, now's your chance. Firstly and best dressed for some of the best merch in the business as well. If you come early programme and Speaker is on the website, it's all happening. A massive thank you to Steak who are our headline sponsors as well as Magellan coin spot and when all major so couldn't have done it without them. [00:02:30][27.3]

Alec: [00:02:30] Yeah well we haven't done it yet. That's true. So let's not speak in the past tense because who knows what happened. [00:02:36][5.1]

Bryce: [00:02:36] Couldn't be doing it without. There we. [00:02:38][1.6]

Alec: [00:02:38] Go. But Bryce, let's start as we've been starting the last few episodes, what we've learnt this week. Yeah. And all I can say in our shared Google doc from you is just diversification works good that you've learnt that after five and a half years of doing this podcast. Tell me more. [00:02:56][18.5]

Bryce: [00:02:58] Before we jump into that insightful comment from me. I did I did want to actually chat about what I what I genuinely learnt this week was a little bit more about the insurance industry from a fascinating conversation we had with Maroon and James from Fidelity. But I don't want to go into that too much because the episode is actually coming out this week, so stay tuned. That's a bit of a teaser and if you're interested to know why they're interested in the insurance industry at a time like this, it's a fascinating industry. And then maybe next week I'll touch on it because it's not an industry I often are. You invested in insurance. [00:03:32][34.7]

Alec: [00:03:33] I mean through ETF. [00:03:34][0.6]

Bryce: [00:03:34] Through Bourke Shire. [00:03:35][0.5]

Alec: [00:03:36] Through the side. Yeah, yeah, yeah. One of the world's biggest insurers is outside of Bourke Shire and ETFs. No. [00:03:44][8.5]

Bryce: [00:03:44] Yeah. It's not even something that really interests me. I've never really looked into it, but yeah, it was interesting to hear their take on it. [00:03:51][6.3]

Alec: [00:03:51] For me it's like you need to understand insurance, like you obviously need to understand whatever you invest in, but like you have to be in the weeds of how everything moves on that balance sheet. Yeah, I can say that I'm not. Yeah, it's an interesting one though, like Andrew Brown has spoken a bit about of insurance in his time as well. Um. [00:04:09][18.3]

Bryce: [00:04:11] Ah you know, no. And something that doesn't really interests me so it doesn't kind of I don't know. It's not, nothing's on my watch list. It's to your point as well, listening to the guys speak about it, there's multiple layers to how they make money and and how their balance sheet works. [00:04:26][15.7]

Alec: [00:04:26] Yeah, well, James spoke about that. This feels like such Tay's given the interview now for a couple of days, so we should stop talking about it. But he spoke about like that the three ways for profit. Yeah, yeah. But for me, whenever I think about insurance, I just think like there's a lot of issues at the moment, like floods, fires, like all these weather events. It feels like a bad time to be in the insurance business, but I guess that's why they have actuaries that figure that out, figure out. [00:04:53][26.1]

Bryce: [00:04:53] Why they just stop insuring. [00:04:53][0.6]

Alec: [00:04:54] Yeah, yeah. It's a whole other issue. [00:04:55][1.3]

Bryce: [00:04:56] Anyway, the diversification works. Where and why do I say this? Why did I learn this? This week I logged into my superannuation account. [00:05:02][6.8]

Speaker 1: [00:05:03] Okay? [00:05:03][0.0]

Bryce: [00:05:03] And the way that I have my super set up through super hero is. [00:05:07][3.5]

Alec: [00:05:08] Not sponsored. [00:05:08][0.2]

Bryce: [00:05:08] Not sponsored and not advice, but I. The set up where I can control, I think, up to 75% of my investments, 25% automatically goes into a diversified, balanced index. [00:05:20][11.8]

Speaker 1: [00:05:21] Okay. [00:05:21][0.0]

Bryce: [00:05:22] And that 25% return versus my 75% return. [00:05:26][4.4]

Alec: [00:05:27] Oh, you're getting blitzed by the. [00:05:28][1.1]

Speaker 1: [00:05:28] Time I'm. [00:05:29][1.1]

Bryce: [00:05:30] Getting blitzed in my investment. [00:05:31][1.3]

Alec: [00:05:32] You have the. [00:05:32][0.2]

Speaker 1: [00:05:32] Numbers. [00:05:32][0.0]

Bryce: [00:05:33] It's under it's it's I'm getting blitzed. I do have a fair bit of leverage in my. [00:05:38][4.7]

Alec: [00:05:39] I've done. [00:05:39][0.4]

Bryce: [00:05:39] Investments. I've got Jerry Garcia. Yeah. [00:05:41][1.9]

Alec: [00:05:41] Yeah. What advice? [00:05:42][0.4]

Bryce: [00:05:43] I'm not advice, but I had a look at how to look at because when we'd spoken to our mates about the offering that should be here. It does. It is. There was a lot of nervousness from our mates around. Do I know what I'm doing? Do I have enough experience to take control? All of those sorts of things. And we kind of felt like we did. But this this ETF that is there invested in has done its job. It's only down 10% year to date. [00:06:05][22.8]

Alec: [00:06:06] And it's it's not just diversified across stocks. It like owns property and bonds and stuff like that as well. [00:06:14][8.2]

Bryce: [00:06:14] Yeah. So it's the underlying index. Is that a vanguard diversified, balanced, indexed, v they they a is the is the ticker. And you're right, it's across multi-asset multi-country. [00:06:26][11.7]

Alec: [00:06:27] It just owns a whole bunch of other Vanguard ETFs. It's like an ETF of ETFs. [00:06:32][4.7]

Speaker 1: [00:06:33] Yeah, yeah. Yeah. [00:06:34][1.0]

Bryce: [00:06:35] So really the it's. What's the learning here. [00:06:38][3.0]

Alec: [00:06:39] Versus the. [00:06:39][0.4]

Bryce: [00:06:40] Diversification? [00:06:40][0.0]

Alec: [00:06:41] No, no, sorry. The learning here is that you suck at investing your own money and that your retirement fund has suffered as a result. [00:06:47][6.2]

Bryce: [00:06:47] Yeah, it's it's suffered. But let me let me tell you this. I'm pleased when we hit a bull market. My, my, my super is going to rip. If he's going to write something, I'm going to come back. Being like diversification doesn't work. [00:07:02][14.4]

Speaker 1: [00:07:02] Yeah. You get this balanced option out of here. He wants this. I mean. [00:07:08][5.8]

Alec: [00:07:08] The thing is, you can allocate more to the diversified balance. You can. [00:07:12][4.3]

Bryce: [00:07:13] You can. But look, I have such a long term horizon on this that I'm I'm super comfortable with the the strategy that I've got. And I just recognise that we're in a cycle in the market where something like a Vanguard diversified balanced index should be performing the way it is. And my other investments are probably performing the way that you would expect in a, in a, in a market like this. [00:07:36][22.7]

Alec: [00:07:36] The portfolio is exactly where you want it to be, exactly down 20%. [00:07:39][3.2]

Speaker 1: [00:07:40] So a billion a year. [00:07:41][0.8]

Bryce: [00:07:41] I'm actually a really good investor. [00:07:42][0.8]

Speaker 1: [00:07:44] Well, I. [00:07:44][0.2]

Alec: [00:07:45] Think I mean, like, as much as we joke about it, it's like understanding how assets should work at different times and being okay with that is the hallmark of a investor that we have to sleep well at night. Yeah. [00:07:57][12.3]

Bryce: [00:07:57] Yeah, sir. And just to close out before we move on to a very small second learning and for those that are interested, the fund that I'm talking about is just a mix of underlying Vanguard funds. So they have a bond index which is their largest holding Australian shares, fixed interest international shares and you know, small cap in emerging markets. [00:08:17][19.9]

Alec: [00:08:18] I surprise you learn that diversification works I mine was less about a concept but it's actually something that I've done which is have you noticed that more and more brokers are offering auto invest now? So for people who are unfamiliar with the term, it's basically you tell the broker that you want to set up, you know, invest X amount of dollars a week into Y assets for Z period of time and then it will just continually execute that order. It's basically automating dollar cost averaging. Yeah, more and more brokers have set it up. So if you want to find a broker that does it, simply Google it. It's not about there being a particular one that's best. It's functionality, it's the same. But I've set my brokers up so, you know, so I have four brokers, must be nice. And now I'm clearing everything out of one and just setting it up as my DCA Index ETF. [00:09:17][59.4]

Bryce: [00:09:18] Hang on, so you're selling everything. [00:09:19][0.9]

Alec: [00:09:20] I only had two stocks in the one that was up. One that was down. Not that that matters. Okay, but clearing those out and then making that just an index. DC I never need to check it. [00:09:34][14.3]

Bryce: [00:09:34] Broker Okay. Does that mean all of the index and ETFs that are in other brokerage? Are they getting yours? [00:09:39][5.2]

Alec: [00:09:40] They're getting sold. [00:09:40][0.4]

Bryce: [00:09:40] Really? Yeah. Why? [00:09:41][1.0]

Alec: [00:09:42] Well, I. [00:09:42][0.2]

Bryce: [00:09:42] Recognised the capital gains. [00:09:44][1.4]

Alec: [00:09:44] I recognised some capital losses this year, some of the indexes I've only bought recently. And so they're down well, you know, like in the last couple of years. But it's just like I just want to set myself up for like ten years from now. Everything being easy and having like different ETFs in different brokers is annoying me. Okay. You know, like I've got. And also, like the. Relapse. Getting a bit silly, like having S&P 500 ETF in one broker, having a Nasdaq 100 ETF and another broker is just silly. And then also owning like Google and Microsoft as individual shares. It's like, what am I doing here? So it's just like a couple of weeks ago I got on the podcast and spoke about getting my savings sorted. Now I'm sorting out the brokerage accounts as well. [00:10:30][46.2]

Bryce: [00:10:31] Hey, financial year 23, big year for you. [00:10:33][2.1]

Alec: [00:10:33] I know, I know. It's great. Well, now that we're doing this full time, I don't have, you know, other things distracting me so I can think about it. BECK okay. [00:10:40][6.9]

Bryce: [00:10:41] So you going to have one broker set up with dividend sorry, set up with dollar cost average into just a bunch of ETFs. Away you go. Yes. [00:10:50][8.5]

Alec: [00:10:50] So right now I've only set it up with two, an S&P 500 ETF and an ASX 300 ETF just to get the functionality, understand if there's any nuances or anything that I need to be aware of. But over time I want to have like my core portfolio just automated. Yeah, yeah. And then if I want to add more to it, I can send extra money to that broker and put it in on top of that. But just like a consistent core taking over. Yeah. And then I can do satellite stuff in these other brokers that give me access to other markets and stuff like that. The question becomes, and I don't expect you to give me an answer, but the question I'm considering now is what's the right set of core ETFs? Because it's like, do you just go, you know, you were just speaking about how much you love this balanced index one and like you could. [00:11:42][51.8]

Bryce: [00:11:43] I just I didn't say I love it. [00:11:44][1.5]

Speaker 1: [00:11:45] True. [00:11:45][0.0]

Alec: [00:11:46] You said that it's outperformed your superannuation fund. That's factual, that's opinion. [00:11:50][4.3]

Speaker 1: [00:11:50] Yes. [00:11:50][0.0]

Alec: [00:11:53] Or is it. But then, you know, like in if you just do one, then you're going to be overweight the U.S. because all those international ETFs are like 70% US stocks. So then it's like did the US, Australia did a Europe one Asia, but then Asia is overweight, China or Japan. So you're like, Anyway, I'm just trying to figure out like what the right mix is. [00:12:13][20.7]

Bryce: [00:12:14] Well, there's no right answer to that. [00:12:16][1.2]

Alec: [00:12:16] No, I know. [00:12:17][0.5]

Speaker 1: [00:12:17] Yeah. [00:12:17][0.0]

Alec: [00:12:18] But it's like, you know, the way. [00:12:19][1.0]

Bryce: [00:12:19] I approached it was, went and did research on how a lot of the, a lot of the stock spots and a lot of these auto advisors and a lot of that and the way the vanguard and stuff like set up like what are they classify as high growth and then I'll look at like the split between property because I have this, I've got like a property index, I've got emerging markets, blah, blah, blah and have the same sort of thought like how much should I be putting in eight I. [00:12:42][23.3]

Alec: [00:12:43] Put in emerging market ETFs. [00:12:44][1.1]

Bryce: [00:12:45] Why not? [00:12:45][0.1]

Alec: [00:12:45] Oh, this is a whole separate conversation. But like the market cap weightings in emerging market ETFs are not problematic. But it's not great because you get a lot of the like old school industrials that are like really high market cap but low growth, you know, like, but what you actually want when you want emerging market is you want exposure to like the thematics of like an emerging middle class or an emerging local tech sector and stuff like that. And a lot of the times the market cap weightings don't account for that. It's a little bit different depending on the emerging market index because some have like TSMC and Samsung is the biggest holdings. But yeah, that's always been the that's always been the criticism of emerging market indexes. [00:13:26][41.0]

Bryce: [00:13:27] Interesting. Yeah, yeah. Fair call. But anyway, to close that out right now, I think the way I sort of thought about it was just getting a sense of how others allocate and build a portfolio. And then I kind of just did, but I've got things in there like the like I'd rather not. It's controversial because I have both, but I'm starting to lean much towards like the FAANG plus, which is just equal way to top ten Nasdaq instead of rather than Nasdaq because like the returns come from those companies anyway. And I'd rather have equal weight to all of them than. And so that's how I kind of think about I'm now like 208, the Nasdaq one. [00:14:02][34.3]

Alec: [00:14:02] Yeah, yeah. It's interesting. And then like all the thematic conversation as. [00:14:06][4.3]

Bryce: [00:14:06] Well, do you want to try. [00:14:07][1.2]

Alec: [00:14:08] Do you want to separate into thematic ETFs? But then it's like you just then your core portfolio becomes too much. Yeah, yeah, yeah. So anyway, that's, that's what I'm doing now. But I guess what I wanted to bring to the table in what I've learnt this week is just about using the functionality to invest more and more brokers wherever you are in the world. More and more brokers are offering this functionality, so it's worth giving it a Google and then thinking about how you can automate your portfolio and get on with your life. [00:14:36][28.2]

Bryce: [00:14:36] Yeah, it's awesome. [00:14:37][0.7]

Alec: [00:14:38] Yeah. [00:14:38][0.0]

Bryce: [00:14:38] I. Irene Well, it is that time of the episode. We're really excited to get in spec. McKay, who returns hot from a trip in Europe. [00:14:45][6.9]

Alec: [00:14:45] And if people don't know whose Becky Mackay is, let's take a quick break and collect ourselves and then we'll introduce him when we call the spiky hot line. [00:14:53][7.8]

Bryce: [00:14:55] All right, Renoir. We are. We're lucky to be joined by Sparky McGee. He's returning to Equity Mates, who has his finger on the pulse for all things spooky stocks. [00:15:04][9.0]

Alec: [00:15:05] Yes. He runs the Sparky Hotline, which has been a great source. I was going to say of information, also a great source of fun and an okay source of information. [00:15:16][10.7]

Speaker 1: [00:15:17] Over the years. [00:15:17][0.4]

Alec: [00:15:18] Let's call the Sparky Hotline and see what's coming across his desk. [00:15:21][3.3]

Speaker 1: [00:15:22] Okay. 200,000 shares, Bluestar 19. Position in one of your equity funds. Blue Marsh loves Blue Star Airlines. Got it. Reach the stuffing hotline. [00:15:32][10.1]

Speaker 4: [00:15:33] Yes. Happy birthday, Bryce. And congratulations on the superior. I have read this. [00:15:39][6.7]

Alec: [00:15:40] That doesn't have an original stock in his life and doesn't have an original segment opening in his loss. Making me gay. Great to have you with. Yep. [00:15:50][9.7]

Speaker 4: [00:15:50] Great. [00:15:50][0.0]

Bryce: [00:15:51] If you're listening, we recognise that was a full rip off, so. [00:15:54][3.1]

Alec: [00:15:55] We had nothing. [00:15:55][0.2]

Speaker 1: [00:15:55] To tell. We had nothing to do with it. [00:15:57][1.4]

Alec: [00:15:57] All right. Spooky. How's it going? You told us that there's some hot things coming across your desk. [00:16:01][4.2]

Speaker 4: [00:16:02] Yeah, a lot of coming across my desk lately. Thanks for calling the spooky hotline. It's been a while since you've called. So good to hear you guys voice again. Where have you. [00:16:09][7.8]

Bryce: [00:16:10] Been? [00:16:10][0.0]

Speaker 4: [00:16:11] I've been prepping for fan fest. [00:16:12][1.0]

Speaker 1: [00:16:13] Oh, nice. [00:16:13][0.2]

Speaker 4: [00:16:14] Yeah, yeah. I've bought my first ticket and hopefully looking forward to seeing some spec images is there on the day to the strongest and loyalists currently in investing. [00:16:23][9.4]

Speaker 1: [00:16:24] Okay. And speaking, we get. [00:16:25][1.0]

Bryce: [00:16:26] Your if your identity is to remain anonymous, how will we know. [00:16:30][3.8]

Speaker 4: [00:16:33] To say. Let's just say we've got something in the works. [00:16:35][2.4]

Speaker 1: [00:16:36] That. [00:16:36][0.0]

Alec: [00:16:36] There was there was Q anon obviously and then I. [00:16:39][3.0]

Speaker 4: [00:16:40] Associate maybe Q and on here speaking has nothing to do with you. [00:16:43][3.6]

Alec: [00:16:44] In NFL there's now two unknown which are people that are believing this quarterback Tua Tagovailoa maybe we need like spec Ian on or something like that. [00:16:52][8.6]

Speaker 4: [00:16:52] Okay, interesting. All right. Well, I have come with a with a stock today, guys. I know you've been asking. Well, that's why you've called the speculation. [00:17:03][10.3]

Speaker 1: [00:17:04] So. Yeah. Yeah. [00:17:04][0.7]

Speaker 4: [00:17:04] You want some insight. Yeah. So, like, I'm going to turn it back on you guys and ask you a question. What's something you've done more of in 2022 that you didn't do much of in 2021? [00:17:13][8.6]

Alec: [00:17:14] Go outside? [00:17:15][0.2]

Bryce: [00:17:15] Oh, good question. Yes, socialise. [00:17:16][1.4]

Alec: [00:17:18] Make good podcast content socialising. [00:17:19][1.3]

Speaker 4: [00:17:20] Yep. Similar to partying. So okay. Well, Warren Buffett said, you know, you wanna invest in what you know and nothing more. So I know you guys both love partying. [00:17:30][10.1]

Speaker 1: [00:17:32] Yeah, that's very bright, you know? So. [00:17:35][2.9]

Speaker 4: [00:17:36] Yeah, price has been spotted by the Equity Mates community partying in Kings Cross, so I know that. [00:17:41][5.6]

Speaker 1: [00:17:42] No, I was spotted at markets, which indicates party. [00:17:45][3.6]

Speaker 4: [00:17:47] Post partying and party. I've read of friends obviously gearing up for a big party this Saturday. Potentially. [00:17:53][6.1]

Speaker 1: [00:17:54] Potentially. Yeah, yeah. Yeah. [00:17:55][1.0]

Bryce: [00:17:55] And this is being recorded. [00:17:56][0.8]

Speaker 4: [00:17:57] Will be. [00:17:57][0.1]

Bryce: [00:17:57] Pre grand final. Yeah. Which is what you're referring to. [00:17:59][2.1]

Speaker 4: [00:17:59] So either congratulations or commiserations. Either way, you should probably party. So where am I going with this time? [00:18:05][5.8]

Speaker 1: [00:18:07] Yeah. [00:18:07][0.0]

Speaker 4: [00:18:08] Okay, so the company is called Party City. Okay, okay. Party City. It's been touted on some Reddit communities as being the next main stop. Right. Next big name. [00:18:21][12.7]

Bryce: [00:18:22] Too. [00:18:22][0.0]

Speaker 4: [00:18:22] So New York Stock Exchange ticker party, relatively small. We got 211 million market cap trading at $1.87 at the current time, down from 52 week highs of $9.21. So it's dropped off. [00:18:38][16.0]

Speaker 1: [00:18:39] It has dropped. [00:18:40][1.5]

Speaker 4: [00:18:40] Off a fair bit. [00:18:41][0.5]

Alec: [00:18:41] So just for context, about 80% down. [00:18:43][2.0]

Speaker 4: [00:18:44] It's about 80% down. [00:18:45][1.0]

Bryce: [00:18:45] Yeah, it was trading at 22 points about eight years ago. [00:18:48][3.1]

Alec: [00:18:49] Damn American stock partying, I guess. [00:18:51][1.8]

Speaker 1: [00:18:51] So what is it do? [00:18:52][0.5]

Speaker 4: [00:18:52] It's not that they just stopped partying so like quite a bit has happened to this stock. Like if you look at the chart it's all over the show it's that's Becky. Yeah. So what's happened is there was a helium shortage in 2019. [00:19:04][11.5]

Speaker 1: [00:19:05] Oh, really? [00:19:05][0.3]

Alec: [00:19:06] Before all these supply chain issues get. [00:19:07][1.7]

Speaker 4: [00:19:08] Covered in 2022. Obviously rocked it. Not much partying going on interest rates this year hikes. And then again, there's currently another helium shortage. [00:19:18][10.7]

Speaker 1: [00:19:20] Yeah. Why are we seeing parties here? Yeah. [00:19:23][3.7]

Bryce: [00:19:24] So what does Party City do? [00:19:25][1.5]

Speaker 4: [00:19:26] Good question. [00:19:26][0.2]

Speaker 1: [00:19:26] So they vote. Yeah. Well, the next question. [00:19:30][3.7]

Speaker 4: [00:19:32] So they sell party goods like balloons, costumes, decorations for parties. Almost a thousand stores across the US, Canada and Mexico online store as well. They also do wholesale distribution across the globe. I read that their online website only accounts for 80%, 18% of sales. So there's like a bit of a growth opportunity. [00:19:53][21.4]

Alec: [00:19:53] We're not here for the fundamental analysis. We want to know. [00:19:56][2.5]

Speaker 1: [00:19:56] Why this is going to be a meme. So yeah. [00:19:58][1.8]

Speaker 4: [00:19:59] You know, I did a bit of a deep dive into it and then I was like. [00:20:02][3.5]

Alec: [00:20:02] Oh, you sell. [00:20:03][0.5]

Speaker 4: [00:20:04] It today for I drove the less I like the colonial. [00:20:06][2.4]

Speaker 1: [00:20:06] Like they've. [00:20:07][1.1]

Speaker 4: [00:20:08] Got. [00:20:08][0.0]

Alec: [00:20:08] But you could say the same thing about GameStop. About AMC. Yeah. BlackBerry. What are the other meme? Stocks Hurts Bed Bath Beyond. [00:20:16][7.3]

Speaker 4: [00:20:16] Yeah, he's got something like $2 billion in debt. There's a whole lot of, like, threats, like a lot of people on Reddit saying it's. On the verge of bankruptcy, but like a lot of these big companies are, and that's why they're shorted so heavily. But people back them, you know, in the off chance that, you know, they can turn back. [00:20:34][18.5]

Alec: [00:20:35] So is that the story, that this is the next short squeeze? [00:20:38][3.3]

Speaker 4: [00:20:40] I looked at the short charts and didn't really find it like high up the rankings in terms of short. So I'm not sure if it's a short squeeze. [00:20:47][6.9]

Alec: [00:20:48] On sort of meme stock because it's got. Do you think that. [00:20:50][2.7]

Speaker 4: [00:20:51] Has a lot to do? A lot to do with the. No. So I did did a bit more research like what are people saying on on different online communities? And there were a few posts that stood out to me, like on small street bets, someone, someone said. [00:21:06][15.3]

Alec: [00:21:06] What? What's more? [00:21:07][0.7]

Speaker 4: [00:21:07] So you've got wallstreetbets, then you've got small street bets and the title is Party is Slowly Mooning and we're being silenced. So is the theory is the mods are shutting down party and not like not letting it build the traction people are really hyping up Halloween coming up. Okay so this could this could be timed. Well, maybe it's priced in. Maybe not. They just hired 20,000 new employees in the lead up to Halloween. Yes. Yet. [00:21:34][26.8]

Bryce: [00:21:35] So and they're about to go bust. [00:21:36][1.4]

Speaker 4: [00:21:37] They pay their debt for my favourite post. So it's own subreddit called Party House where they talk about it. And the post is this is a shit post. But today a pink balloon landed on my front lawn, not a single other balloon in sight. I'm quite a superstitious man, so I took it as a sign from the stunt gods to stay long. [00:22:00][23.2]

Alec: [00:22:02] Nice ride. I just went to the Reddit party house and there's no post party. [00:22:06][4.7]

Speaker 1: [00:22:08] Oh, okay. I'll do. [00:22:09][1.6]

Alec: [00:22:10] You know. [00:22:10][0.4]

Speaker 1: [00:22:12] Yes. [00:22:12][0.0]

Bryce: [00:22:13] So as an arrow r a I a rocket emoji indicator, the zero out of ten. Where do you feel like this is sitting at the moment? [00:22:22][8.7]

Speaker 4: [00:22:22] So I think it's around three or four RBI, but with potential to increase because it hasn't quite infiltrated the Wallstreetbets sub yet. It's sort of on the ancillary small investing penny stock subreddit small straight bats. Yeah, but the theory is once it builds traction and starts, you know, reaching the 3 million subscribers on Wallstreetbets, then it's a really good idea. [00:22:46][23.7]

Speaker 1: [00:22:47] You know, I think any three or four says, Yeah, this. [00:22:51][4.3]

Bryce: [00:22:51] Is why we call the spec. [00:22:52][1.0]

Alec: [00:22:53] Hotline. Done some due diligence on wallstreetbets though. Done a search. So what? [00:22:57][4.2]

Speaker 4: [00:22:57] There's no one's talking about it. Yeah, yeah, absolutely. No one's talking about it. Well, you should start. [00:23:01][4.0]

Speaker 1: [00:23:02] Yeah, you should start getting it's a game of. [00:23:07][5.7]

Speaker 4: [00:23:09] Yeah so we'll see. Like it'll be interesting to see what happens in the lead up to Halloween. Yeah, my prediction is probably nothing will happen but Alans coming up. [00:23:19][9.4]

Bryce: [00:23:20] Yeah a lot could happen. [00:23:20][0.8]

Alec: [00:23:21] Should start a subreddit spec Mickey's. [00:23:23][2.0]

Speaker 4: [00:23:23] Is true actually. [00:23:24][0.9]

Speaker 1: [00:23:24] Maybe well. [00:23:26][1.2]

Bryce: [00:23:27] So that's why we call the spec a hot line. A hot reminder though that anything that comes out of spec is analysis and due diligence should not be taken in any way as financial advice. [00:23:37][9.9]

Alec: [00:23:37] Let's just say there's an inverse Cramer tracker that tracks Jim Cramer stock picks. Yeah, that's done very well. I think inverse Becky might have done better. [00:23:46][8.5]

Bryce: [00:23:46] That's it. Well, if you want to keep keep up to date with what's going on in the world of spec McGee The spec hot line and spec images is make sure you follow spec on Instagram. What's the handle. [00:23:57][10.4]

Speaker 4: [00:23:57] Is spec e mcgee s.p.a cci. Maggi AA. [00:24:01][3.7]

Bryce: [00:24:01] Love it. Yeah. Thousands of join. [00:24:03][1.9]

Speaker 4: [00:24:04] The thousands of loyal. [00:24:05][0.9]

Speaker 1: [00:24:06] Strong supporters in the market. And if you. [00:24:09][3.0]

Alec: [00:24:09] He's on the Equity Mates forum a lot he might make this subreddit. He might not. [00:24:13][3.9]

Bryce: [00:24:14] So do you have a closing or shall we just hang up the well. [00:24:18][3.7]

Speaker 4: [00:24:19] How about you guys? Have you come across any speeches lately? They fell back on you. [00:24:23][4.4]

Speaker 1: [00:24:24] Oh, we're hanging out there for a while. I was. [00:24:27][3.4]

Bryce: [00:24:28] Out with you second. [00:24:28][0.4]

Speaker 4: [00:24:29] Ago. I saw. I did mention Digital Wine Ventures last time I was on. So this is six months ago, you might recall. [00:24:36][7.1]

Speaker 1: [00:24:37] Yeah, we should. We should keep. [00:24:38][0.9]

Alec: [00:24:38] A track of everything you've mentioned. [00:24:39][1.3]

Speaker 4: [00:24:40] I think I track it. I didn't recommend digital wine when I came on. I just thought it was interesting. The guy was making bets. Yeah, it's. It's Bond. It's. [00:24:49][9.7]

Speaker 1: [00:24:50] No, I'm pretty. [00:24:51][0.5]

Alec: [00:24:51] Sure you were defending it. And Bryce and I were saying, we've looked at this one. Yeah, we think it's a dog. [00:24:56][5.4]

Speaker 4: [00:24:57] Yeah, but I told you about Microsoft. [00:24:58][1.0]

Speaker 1: [00:25:00] And you got Microsoft. [00:25:01][1.0]

Alec: [00:25:02] Pre wolves. [00:25:03][0.5]

Speaker 1: [00:25:03] From the history. Anyway. Anyway, so. [00:25:05][2.2]

Alec: [00:25:06] Some of the other ones we had eye candy was that one. [00:25:09][3.5]

Speaker 4: [00:25:09] Eye candy. [00:25:10][0.2]

Alec: [00:25:11] But yeah. [00:25:11][0.2]

Speaker 4: [00:25:11] Banana bean. That's it. Yeah. Good memory, eye candy Bonano, Digital Wine Ventures. Yeah. [00:25:16][4.9]

Alec: [00:25:16] What was the first one though. Was it. I can I can do here. Yeah. [00:25:19][2.7]

Speaker 4: [00:25:19] Yeah. So yeah. Thanks for having me on guys. Can you come back on again soon. Can't wait for. Best spec if 15 if you want 15% off. Nice little bonus. And yeah, just the final bit on party. I did read a bit of analysis by Andrew W.K. 95. [00:25:36][16.9]

Speaker 1: [00:25:41] Nice work. Great chatting to thank you will live. What do you do. Sorry to audio. We'll leave it there anyway. Around. Let's keep moving. It's great to hear from you as. [00:25:53][12.2]

Bryce: [00:25:54] Always looking forward to hearing him come back on. [00:25:57][3.0]

Alec: [00:25:57] I don't know how we can move on after that. [00:25:59][1.5]

Bryce: [00:25:59] We have to move on. We've got one more segment to go in and that is the dive. News headlines. If you're not listening to the dive already, which is our business news show. Make sure you go and subscribe. What we've been doing is a deep dive on one interesting business story three times a week Monday, Wednesday and Friday. And now we're adding a sweetener on top, which is the business headlines. [00:26:22][23.1]

Alec: [00:26:23] That's right. A companion episode under 5 minutes, three of the biggest business news headlines around the world. A fun fact, just something to keep you updated with the stories we can't cover on the dive. [00:26:36][12.7]

Bryce: [00:26:36] That's it. So here's a taste of what it is. If, as I said, if you're not already following the dive, make sure you make sure going to follow it. [00:26:44][7.2]

Alec: [00:26:44] So here's an episode we released last week with three business headlines. Obviously, they're going to be a little bit out of date by the time you're listening to this. The good news is, if you want three business headlines from today, go and listen to the latest episode we've released on the Dive Fade. [00:27:00][16.1]

Bryce: [00:27:04] Here's what's making business headlines today. I'm Bryce joined by Ren. It's wednesday, the 21st of September. So Ren, where are we heading today? [00:27:10][6.8]

Alec: [00:27:11] Well, Bryce, we're going to start with a comparison of news out of China and Sweden. Then we're going to stay in Sweden before finishing up in the United States. [00:27:19][8.2]

Bryce: [00:27:20] All right. Well, let's start with the comparison between China and Sweden. Both countries had announcements around interest rates. [00:27:26][6.2]

Alec: [00:27:27] That's right. Interest rates are the story of the year. And let's start in Sweden, where their central bank announced their biggest interest rate rise in three decades, one full percentage point chase. They raised interest rates from 0.75% to 1.75%. Now, this gives Sweden the joint owner or whatever the opposite of an honour is as having the single biggest rate rise this year by a major Western country actually equal first tied with Canada, who made a similar increase in July. [00:28:00][33.8]

Bryce: [00:28:01] So you might be wondering why take such a big swing? And the answer is inflation at 9%. [00:28:07][5.4]

Alec: [00:28:08] So that's Sweden. Now let's turn to China, where this central bank also made a decision around interest rates, but they chose to leave interest rates unchanged. [00:28:17][8.6]

Bryce: [00:28:17] That's it. Ren The biggest difference between Sweden and China is inflation. Inflation in Sweden is at 9%. In China it's a happy just 2.5%. [00:28:26][8.3]

Alec: [00:28:27] Must be nice. [00:28:28][0.4]

Speaker 1: [00:28:28] Must be nice. [00:28:28][0.4]

Bryce: [00:28:30] But China is facing other problems. On one hand its currency, the yuan is struggling and that is adding pressure to increase interest rates. And on the other hand, its real estate market is in a slow moving collapse as property developers struggle with debt and property buyers refuse to pay mortgages, adding pressure to lower interest rates. [00:28:48][18.0]

Alec: [00:28:48] So instead, China decided to walk the middle path and leave them unchanged. [00:28:51][3.3]

Bryce: [00:28:52] It seems that even in countries where inflation isn't a challenge, it's not easy being a central banker. [00:28:57][4.7]

Alec: [00:28:57] And now interest rates continue to be the biggest story globally. Later this week, central banks in the United States, United Kingdom, Switzerland and Norway are all expected to announce interest rate increases as well. But Bryce, let's move on to our second story. [00:29:12][14.1]

Bryce: [00:29:12] Let's do it again for our second story. We are going to stay in Sweden, where Spotify are making a play in audiobooks. [00:29:17][5.5]

Alec: [00:29:18] It was only a matter of time. I feel Spotify are already dominant in music streaming and podcasting. It feels like audiobooks are the real audio trifecta for them. [00:29:29][10.3]

Bryce: [00:29:29] That's it. But their push into audiobooks is going to look a little different. When Spotify was founded in 2006, the music industry was still in the if you want to listen, you can buy it. Era of CD and iTunes sales they pioneered the monthly subscription all you can listen model. [00:29:46][17.3]

Alec: [00:29:47] Yeah and with audiobooks Spotify will be returning to the if you want to listen you can pay for a model they'll be offering 300,000 audio book titles to begin with on a paper book. [00:29:59][12.5]

Bryce: [00:30:00] Model. I wonder if get started investing will be part of that. But the audio books are a fast growing market. The industry grew 25% last year, bringing in $1.6 billion in revenue. Amazon owned Audible is the biggest player in this space. [00:30:15][15.3]

Alec: [00:30:15] So on one hand we have Amazon going after Spotify market with Amazon music. Now Spotify is going after Amazon's market by adding audiobooks. Spotify have a habit of taking on the big tech players they took on Apple and Apple Music and held them off. Now let's see if they can hold off Amazon as well and remain the dominant audio player of our time. [00:30:40][24.8]

Bryce: [00:30:41] Well, in theme of keeping with digital content Ren, our third and final story, let's head over to the states where we've got an unlikely player getting into digital content. [00:30:50][9.5]

Alec: [00:30:50] Yeah, that's right. Everybody seems to be getting into digital content these days. And this week it's therabody. Yes. The makers of the Theragun massage device that you're probably seeing everywhere. [00:31:02][11.6]

Speaker 1: [00:31:03] Yeah. A lot of. [00:31:03][0.5]

Alec: [00:31:03] The it looks a bit like a drill with a ball on. [00:31:06][2.5]

Speaker 1: [00:31:06] The X. Yeah. Yeah. [00:31:06][0.7]

Alec: [00:31:07] They've just raised 165 million in venture capital and have announced plans to invest in digital content. [00:31:13][5.8]

Bryce: [00:31:14] In 2020, Therabody brought in $224 million selling those massage guns. Not bad. Last year that was up 77% to 396 million. Now the company has announced their capital raise, which includes investments from comedian Kevin Hart and model Karlie Kloss. [00:31:32][18.1]

Alec: [00:31:32] There you go. Good business to be in the massage gun business. They've also announced eight new products, including smart goggles, to help relieve facial tension and headaches. They've announced plans for a whole body wellness centre named Reset. All I'm imagining is just heaps of massage, guns pumping you at the same time. And they've also announced their plans to get into digital content. Now the company hasn't offered an idea of what digital content they'll be producing, but I'm here. For the message content. I'm here for the product placement in Netflix shows, or maybe just a ten minute podcast of people getting hit with their massage guns. [00:32:10][37.9]

Speaker 1: [00:32:11] Same here for it all. [00:32:12][0.9]

Alec: [00:32:14] Anyway, right before we get too far down that rabbit hole, let's get to our fact of the day. [00:32:17][3.8]

Bryce: [00:32:18] Let's do it. So end today. $2 billion a day. That is how much a rail strike in the US would cost the economy. Staggering amount. One third of US freight moves by rail. It is second only to trucking and rail workers are close to striking. [00:32:33][14.9]

Alec: [00:32:33] And it's not just in the United States, in Australia and the UK, we're seeing rail strikes at the moment as well. So on today's episode of the dive accompanying these headlines, we look at these rail strikes happening around the world. Unpack what's happening and importantly, ask, are they all related? Why is it that we're seeing rail strikes in three different countries at the same time? [00:32:54][21.0]

Bryce: [00:32:55] Another fascinating story that you can listen to now on the dive in your feed. That'll be us for today. Thanks for listening and have a great day. So there you have it. Business headlines from around the world. Ren. It's always great chatting stocks. Plenty happening in the Equity Mates network as always. Can't wait for Fin first and we'll pick it up next week. [00:33:12][17.3]

Alec: [00:33:12] Sounds good. [00:33:13][0.3]