ASX week: Anthony Doyle – Is this time *actually* different?

HOSTS Alec Renehan & Bryce Leske|8 November, 2021

Meet your hosts

  • Alec Renehan

    Alec developed an interest in investing after realising he was spending all that he was earning. Investing became his form of 'forced saving'. While his first investment, Slater and Gordon (SGH), was a resounding failure, he learnt a lot from that experience. He hopes to share those lessons amongst others through the podcast and help people realise that if he can make money investing, anyone can.
  • Bryce Leske

    Bryce has had an interest in the stock market since his parents encouraged him to save 50c a fortnight from the age of 5. Once he had saved $500 he bought his first stock - BKI - a Listed Investment Company (LIC), and since then hasn't stopped. He hopes that Equity Mates can help make investing understandable and accessible. He loves the Essendon Football Club, and lives in Sydney.

It’s ASX Week! In today’s episode, Bryce and Alec talk to Anthony Doyle, who has over 17 years’ experience in global financial markets, working for some of the largest investment management firms in Australia, Europe, and the United Kingdom. In this chat, he expands on his ASX presentation, where he explains how the Post-Covid market is different to the Post-GFC market, and the effects of different policy settings as Australia reopens. To learn more about ASX Investor Week On Demand, and watch all the presentations and information on demand, visit

If you want to let Alec or Bryce know what you think of an episode, write to them here

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Bryce: [00:00:16] 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 Mates Ren. How are you going?

Alec: [00:00:30] I'm very good. Bryce. I'm very excited for this episode, and for this week we're back with another instalment of ASX Week. It went so well earlier this year that we're doing it all again. We're going bigger this time across Equity Mates podcast and Get Started Investing podcast. But to kick it off today, we've got a returning favourite from the last ASX week. 

Bryce: [00:00:53] That's right, a friend of Equity Mates and a guest that we've had a lot of people asked to return. And it is a pleasure to welcome Anthony Doyle from Fidelity. Anthony, welcome.

Anthony Doyle: [00:01:03] cheers, gents. 

Bryce: [00:01:05] So today we're going to be discussing really everything that's going on in markets. You're a cross asset specialist at Fidelity. So we're going to ask you all the hard questions. Nice. Yeah, right. Fingers. Fingers crossed you are. You're across it all. I'm sure you are. For those who are joining us for the first time, the ASX week is now spread across a full month. So to get access to the videos that are available for a month. Head to We'll put it in the show notes. Yeah, yeah, yeah. I need to sort it out. 

Alec: [00:01:42] You need the two in the link. 

Bryce: [00:01:46] Let's get stuck in because there's plenty to cover with you, Anthony. And let's start with this the magic of this time is different. In your presentation, you mentioned the four most dangerous words in markets, which is this time is different. You were using that to explain how the post-COVID market is different to the post GFC market. So can you explain some of the key differences that we're seeing here?

Anthony Doyle: [00:02:11] Yeah, I mean, we've had two once in a lifetime events within the space of 12 years or so. And I guess I was referring back to the GFC is despite it being in 2009, 2008, 2009, it still looms large in a lot of investors minds because of just how uncertain and volatile the environment was back then. So I had a lot of fun times working on a bond and currency desk in Dublin with exposure to Lehman bonds and exposure to a whole heap of leverage loans and going in to talk to clients and explain why their fixed income funds were down 20 30 per cent over the course of a couple of months from what so-called defensive assets. And it's only when you look back at these seismic events that occur when you look back and analyse what had occurred or what has gone on that you realise that there are some significant institutional changes and it can be quite difficult for us to assess that real time as we're living through it. So if you if you cast the minds back to 2008, 2009 and the decade that followed, when I talk about is this time different or this time is different, I'm talking from an institutional standpoint so very much the name of the game in 2009. The recovery, the recovery phase that the world went through. There was so much focus on debt and concerns around government debt to GDP, and that flowed on through the middle of the last decade into the European debt crisis and the ability of sovereign nations to repay their debts. This time around. There's no concerns around that at all. So, you know, the name of the game last time was austerity from governments, fiscal austerity. And when I say austerity, you know, tightening the budget, tightening your belts, trying to move into an area where you can start to service that debt and actually retire some of that debt, get the debt to GDP levels lower from the government this time around. Globally, you're looking at fiscal expansion, you're looking at governments stepping into the void that has been caused by lockdowns and this pandemic stepping into it to support their respective economies right around the developed world and the emerging world to some extent. Now this is really being led by the US that are doing huge amounts of fiscal stimulus to the tune of almost nine trillion dollars by 2025. But it's also followed on from Europe, the UK and, of course, bringing it closer to home. When I returned to Australia in 2018 2019, there was this fixation from the coalition government on a balanced budget that's really out the window, right? So we've got an election next year and it's going to be lots of goodies for everyone, I'm sure, because there's there's not this fixation on having a balanced budget living within your. Means the government has rightly stepped in, and one of the key policies of the last couple of years has been JobKeeper, for example, in order to support the Australian economy through this extremely difficult time. And so when I say this time is different from a fiscal stance, we've moved from austerity to one where the government is expanding its balance sheet, but also on the monetary side. So we talk about monetary policy interest rates in terms of looking at what the RBA did in the last crisis. They only had to reduce interest rates a couple of times before they started increasing them again. This time we're at the party with everyone else in the zero interest rate world and we're drinking from the Kool-Aid widget. We're drinking from the punch bowl of quantitative easing of yield curve control of money printing, which is quite a different environment to moving traditional interest rates up or down, depending upon whether inflation is rising or falling or the economy is expanding or contracting. And you're seeing some. What we've seen I see from quantitative easing is financial asset price inflation. And I'm sure you know you gents are very aware of what's going on in the housing market. But of course, this has impacts right throughout all equity markets, risk markets, corporate bond markets as people look to generate returns that they once enjoyed simply from saving right, the online savings accounts, which had a five percent interest rate or a six per cent interest rate. That's the environment we lived in after the GFC, heavily below four percent those days of term deposits generating any sort of return close to what inflation is a long gone as well. So on the monetary policy side, we've seen an evolution from a fixation, a focus on inflation targeting to one where the RBA is now very much focussed on the labour market generating a strong labour market. So unemployment rates fall. So wages begin to pick up. They want people to enjoy real wage growth and make this recovery as inclusive as possible, as opposed to the post GFC world, where the people that did well out of policies like quantitative easing are those that own assets and the people most impacted by the current COVID environment pandemic environment. Typically, people on lower incomes that maybe don't own their home, maybe don't have big equity portfolios or superannuation funds and and, you know, have been put at home because they haven't been able to work in hospitality or services. So they want the RBA wants to make this recovery as inclusive as possible, so they're really focussing on wage growth. So that's how the environment is quite different this time around, as opposed to to what the status quo was posted GFC. 

Alec: [00:08:02] So I guess the red flag that comes out of that or the concern that comes out of that is poster of say, we saw a decade long bull run in the stock market from 2009 to 2019. It was great to be in equity markets if this time is different. Does that mean we're not going to see a decades long bull run out the back of Covid? 

Anthony Doyle: [00:08:23] Now I'm quite I'm quite bullish on on risk assets long run more generally and have been consistently since we saw the pandemic hit, you know, even in March, April last year. Long run, you know, I was I was telling clients and talking to clients saying, you know, it's 50 50 if the Aussie equity market is up or down this year. But I can tell you, in seven to 10 years time, the Aussie equity market will be much higher than where it is today. Now, the danger that we're in today is that as the world has become increasingly leveraged as the work, the world has become increasingly financialized and as we rely upon rising asset markets so much to fund our retirements and fund our lifestyles is that when you get any sort of whiff of the monetary punchbowl being removed from the party, investors have a tantrum, whether that's in bond markets, the taper tantrum or in equity markets, the volatility that you experience and inevitably because of the impact that falling asset prices can have on people going out to consume and they become more worried, more concerned, they tighten their own household finances, they don't go out and spend. You see, the central banks are really forced into a corner and they don't act out on their preference to raise interest rates. And we saw this in 2019 from the US Fed, which was called the Powell Pivot, and we saw this from the RBA, where they were telling us in 2018 2019 they're going to hike rates. And they ended up actually cutting rates after we had the election result of the last election in 2019, they came out. The election result was on the Saturday. They came out on the Wednesday and said that they wanted to to cut interest rates. So I think. The conditions continue to be fertile when we have so much liquidity in the global economic system, while central banks are as dovish as they are. And whilst we have this technical what we call a technical shift out of cash, money market funds, term deposits this money looking for a home and to use an acronym at Taina, there is no alternative because what essentially central banks have done, what the RBI has done to all of us is remove the power of compound interest, the eighth wonder of the world. Reputedly, Einstein said that they remove the power of compound interest from savings defensive assets like government bonds because yields are so low. And additionally, they were more willing to accept higher inflation. So what's the point of parking my money in a savings account yielding nothing and inflation is averaging three per cent a year for the next decade? I'm going backwards when I take my money out in 10 years time or I'm saving for a home or I'm saving for retirement or I'm saving for a car. So essentially, investors are looking at where are those asset classes where I can generate a return above inflation and they move into corporate bonds and they move into equities. They like the income that you can generate from from hybrid type assets or from equities, you know, the franking imputation benefits of that as well. So it's really quite an interesting environment and essentially the tail wagging the dog today because economic growth, we've we've got this fixation of continuing to drive economic growth. Well, 60 percent, 55, 60 percent of our economy is consumption. If you cast your mind back to to uni or high school now GDP consumption plus investment plus government spending plus net exports, 60 percent is consumption, 60 percent is us going out, you know, spending, consuming, going to cafe, getting a haircut, all that good stuff. And this is what they're trying to generate is why they want higher asset price. They actually this is what they want. You'd be worried if we were going the other way and asset prices were declining. 

Bryce: [00:12:21] I remember the last time we spoke for the ASX day, you mentioned the Taina. There is no no alternative and it's really stuck with me when I think about, you know what? You know, my investing decisions and when to enter the market or where to put money. And it just, yeah, it feels like this is just going to keep going. 

Anthony Doyle: [00:12:39] Yeah. I mean, it's it's the same sort of anecdotes that you were hearing post GFC, where inflation was rising. Commodity prices recovered quite quickly and central banks were expected to raise interest rates and they never got there. And don't forget, the legacy of COVID 19 will be debt, whether it's government debt, whether it's corporate debt or whether it's household debt. So if the RBA wanted to tap the brakes and cool the Australian economy, it would. They wouldn't have to raise interest rates by too much to have a very large impact because of the leverage that we now have on our balance sheets as a as a collective. 

Bryce: [00:13:14] So Anthony, you've mentioned inflation a fair bit there. You spoke about the need for the RBA trying to bring in white wage growth, and there's certainly a debate around inflation being transitory or is it structural? So where does Fidelity sit on that side of the debate? 

Anthony Doyle: [00:13:29] Yeah, so transitory is definitely the buzzword around inflation at the moment from central banks and economic analysts and commentators. And then, of course, as you mentioned, is it more structural being more more persistent? And definitely, I would suggest that what I'm saying at the moment is an increasing debate that potentially this is more persistent than what central banks initially accounted for. Given the constraints on the supply side, so what we've seen is demand has recovered very quickly because of the great work that scientists did on the vaccines and rolling out those vaccines. Of course, we have this pent up demand as Australians couldn't go out and spend to the same extent that they would if the economy was open. Having experienced lockdowns in Sydney and Melbourne, for example. In terms of the work that our analysts have done and our macro team have done in London and beyond. We think that potentially this inflation may be a little bit more persistent and we had originally anticipated. And what you tend to see is that commodity prices recover quite quickly as we exit out of a recession and tend to appreciate in value before supply comes back on stream quite quickly. Now, the difficulty this time around is that whilst the developed world has had great success in rolling out the vaccine, the emerging world is generally the dominant provider of commodities globally, and they're still grappling with this pandemic. So there are still continued supply shortages in commodity chains in particular, but we're seeing that broadened out to other areas as demand has has recovered so quickly. So my neighbours doing renovations on their. Like the rest of Sydney and you talk to the builder and he's just like, you know, Bunnings is run out of lumber, run out of timber. You know, the cost of materials. You know, I'm not making money on this job because the quiet I put in was predicated on this cost of materials and the costs are rising so quickly. And it's not just a Australia phenomenon, it's the rest of the world as well. So now what I want to see if I expect inflation to rise more materially is like the RBA wages growth, because essentially what happens if if inflation is rising, consumers will do will have a substitution effect where they will substitute out one item for another item. You might like Mars bars and they're inflating. Well, that's too. That's too expensive. I'm going to buy Snickers now. If you do have that wage growth coming through consumers, companies can pass on rising costs to the consumer. That's when you really start to see inflation ramp up. So this is what we call demand. Pull inflation demand is pulling inflation higher rather than cost push inflation, which is what happens when commodities rise appreciably and you see petrol prices and so on rise quite quickly. So I mean, you know, the construction of the consumer price index is dominated by food and energy prices. So central banks tend to exclude those when they think about what the overall level of prices are doing. But it is a huge debate going on in the markets because essentially central bank's target inflation. And if inflation is more sticky, more structural than they originally anticipated, well, they are what we call behind the curve. So the yield curve has shifted on them, and they're trying to slow down the economy by raising interest rates. And that has implications for all asset classes, right from fixed income to equities and particularly those growth stocks that that everyone loves and their valuations predicated on low interest rates forever, for example. 

Alec: [00:17:14] So if we start with inflation, then the conversation moves to interest rates as you just touched on and then what that means to bond and bond markets. And then I guess what that means to equity markets. It's all a big interrelated chain. And I guess for a lot of investors, especially new investors, it's difficult to get your head around how that's all connected and what it all means. So you're across us asset specialists. So we're going to try and pick your brains and try and understand it all. So if we start with the first link in that chain, inflation to interest rates, if inflation is more structural, you know, if wages rise, it's very hard for employers to push wages back down like that. Yeah, that becomes very sticky. What will that mean for interest rates? And then, yeah, what is it sort of go from there?

Anthony Doyle: [00:18:02] Why inflation is so important is obviously it's what central bank's target. Not despite I think that they've evolved their mandates to looking at at generating full employment now as well. But why it's important is because you're trying to generate in your investment portfolios a return above inflation. Otherwise, inflation acts as a stealth tax. It acts in eroding your standard of living because you're spending more money on items and and you obviously have less capital to deploy elsewhere in your consumption habits. The RBA will tell you, you know, we've cut interest rates because inflation is low and we're worried about meeting our inflation objective. But if you talk to your friends, even your what your own experiences are you probably saying, Look, I don't know what they're talking about inflation. We had we had the numbers out recently, you know, three per cent year on year, three per cent no way. Yeah, inflation's way higher than that. And it comes back to how the statistician the ABS constructs the consumer price index. It's not a cost of living index. Everyone has a different cost of living. It's a measure of the overall level of goods and services in the economy, and twenty five per cent of that index is new housing costs. So when's the last time you built a new house? 

Alec: [00:19:18] Yeah, yesterday. Yeah, so twenty 

Anthony Doyle: [00:19:20] five percent that index, right? Yeah. Yeah, it's it's the largest white within the CPI for for investors. You know, you can't really rely upon the CPI as a measure of of how prices are rising. You need to construct your own cost of living somewhere, maybe three kids. My cost of living is going to be very different to a university student, to a retiree, you know, to the different cohorts of society. And not only that, you know, the ABS, what they also do is they don't actually adjust items within the consumer price index. So they will say that tech is 90 per cent cheaper than it was in the year 2000. Well, I'm not sure if you see what my friends are doing, but yeah, and that's because they're getting better. Yeah, right. The quality of the camera 

Alec: [00:20:05] or yeah, yeah, 

Anthony Doyle: [00:20:06] the advancements in motor vehicles. 

Alec: [00:20:08] Yeah, one megabyte of storage might be 90 percent cheaper than it was in 2000. Yeah, the actual final. 

Anthony Doyle: [00:20:15] Yeah, so when when you're an investor, you're thinking, right. I'm trying to develop a portfolio that's diversified that will generate a return above the level of inflation so that I'm not suffering the impacts of higher inflation. And I can, you know, protect my standard of living from that. As I mentioned, not only does the statistician, you know, heavily manipulate the consumer price index, which is know it is what it is, it's not right, it's not wrong. But the Reserve Bank of Australia also have their own measures of inflation called trimmed mean and why the median which cuts out all the volatile stuff, essentially. But you still have to pay, you know, to fill your car. They're going to cut out food and energy. You still got to pay for groceries. You still got to pay for the petrol. And that generally shows a much more muted rise in inflation pressures within the Australian economy. So I mean, the market is getting all excited at the moment really led from offshore factors that interest rates are going to rise. To tell you the truth, over the last 20, 30 years, the market always thinks that interest rates are going to rise. And you know, if you're looking at that past history, it never happens. Interest rates only go lower. And this time around, the RBA and Governor Phil Lowe has been very clear that they want wages growth and they want inflation as they measure it by the CPI. And they call measures to be in the middle part of their two to three percent inflation band for around six months before they raise interest rates. So what that means is when you do see interest rate hikes coming through and the RBA is telling us they don't expect that to happen until 2024 at the good times roll. If that's the case, and even then, as I mentioned, because of how much leverage is in our economy, I don't expect that they're going to be raising interest rates to five per cent in the next decade or anything like that. It might be 25 50 basis point seventy five tops, depending upon how the global economy recovers from from this pandemic. But what that means is for those investors that own fixed income assets like government bonds or corporate bonds. Rising rates generally represent a headwind to performance for those assets, and we've had quite a big bear market in the Australian government bond market since August, where investors in Australian government bonds have lost three per cent since August 31, which is doesn't sound much as an equity investor, but for an asset that's meant to be uncorrelated and to give you some context. Any time the fixed income market loses, money is a bear market. And the reason for that is the income the yield on government bonds is so low now that it doesn't protect you from rising rates. And if you're a German investor, you can lend to the German government for minus 45 basis points and you can pay for the privilege. And this is the way it will be arraigned. And of course, the RBA is the huge bar in the market as well. So they're in the market buying government bonds, too. So it's just a really strange way. And investors, like I said, I was looking at term deposit rates and things like that. I don't see, you know, apart from the safety of having your money in a bank, you're getting the same return, putting it on the mattress. And if it's a negative deposit, right, like there is in parts of Europe, well, you're better off having your money in cash and putting it in a safe than paying for the face for the World Bank

Alec: [00:23:45] on that, because people are probably hearing negative and negative yielding bonds and thinking, why is anyone lending their money to like a German government? What would the logic be for an investor to say rather than putting this under a mattress or, you know, another government bond around the world? Like, why would I lend it to the German government and get less back? 

Anthony Doyle: [00:24:07] So there's a few reasons. Firstly, the European Central Bank could have or they have a stance of minus 50 basis points in terms of depositing with the ECB. That's their interest rate, as is 10 basis points point one of a percent. So if I invest to the German government, well, that's minus 45 basis points, so I'm making a five five basis point pick up. The other reason is I might be mandated to do it. I have to own government bonds if I'm a bank or an insurance company, and I need to own that safety in terms of my balance sheet, the capital requirements that are regulatory. Additionally, I might have to liability match if I'm an insurer or a pension fund. So I have, you know, it's a fixed bit fit for Triple-A safe haven assets. The other reason is comes down to, well, I think that someone will buy this bond off me for a more expensive price in the future. So there's a few reasons it's not totally nonsensical. Yeah, depending upon your outlook, if you thought there was a recession on the horizon, the best asset to own would be long dated, say, 30 year maturity. Australian government bonds the very high credit quality, very low yield. But you know those yields could go to zero, representing a substantial total return if that eventuality was to play out, which is, you know, in the low probability in our estimation. Yeah. But yeah, in a deflation recessionary world, that's what you want to own government bonds. 

Bryce: [00:25:41] You've mentioned that the easy money has been made and we want to pick your brain on that. But before we do, we're just going to take a quick break to hear from our sponsors. So, Anthony, you've in the presentation, you mentioned that we're in a marathon, not a sprint, and you said the easy money has been made. Markets are now in a marathon race to deliver returns. What do you mean by this? 

Anthony Doyle: [00:26:04] Yeah. So in terms of investor psychology or the history of markets, what you tend to find is that the markets equity markets in particular accelerate out of a recession. This is when the best performance is generated as the cycle bottoms and that investor psychology coming through, you know, oh hell, I'm selling, you know, and and everyone's sales. Eventually there's a bottom. And the market can recover very quickly from you. Sometimes the best thing to do is actually to turn off the financial media. Turn off the news. Close your eyes. I'm trying to sleep well at night and, you know, maintain that long term preference of investing, you know, extending your time horizon. Essentially, if you invest in the ASX 200 on any given day, there's a fifty four percent probability that it's going to be up on that day because market's trend higher over time in total return terms if you invest with a horizon of five years or more. Historically speaking, you've never lost money in the ASX 200 internet centre. 

Alec: [00:27:11] Right start. Yeah, yeah, that's a clip that make it the top of the show notes and put it on the page of the website. 

Anthony Doyle: [00:27:18] Yeah, yeah. So, you know, even if you invest the day before the sell off of COVID 19, obviously the market is much higher now and then you get that income coming in as companies have begun to issue dividends as they recovered. Even the banks have also been issuing dividends because they've been having quite a good time as well with the rise in house prices. But you moved from that early cycle to mid-cycle, where you start to move into a trending market and it starts to sort of flatline a bit. And those accelerated accelerating gains begin to slow because of concerns about rising interest rates or inflation or the prospects for particular sectors or particular companies. So you have to be a lot more discerning with the construction of the portfolio and identifying which companies are likely to do well in a slowing growth, slowing economic growth environment. If you were to come from Mars, land down in Sydney or Melbourne or Brisbane or wherever you are in Australia, and you know, the only information you had was the ASX 200, a chart of the ASX 200. You know, the price point, let's say, on the first to Jan 2020 and the price point today. And look at those two numbers, you would have thought things are going great and you look at the Australian economy and growth been pretty strong, particularly given how much success we had at initially containing the spread of COVID 19. The unemployment rate has a five hand or four handle on it. At the moment, inflation is only three per cent. You think the things are pretty rosy? You wouldn't even know that we've all lived through such a seismic event over the last couple of years and continue to live through it with, you know, our borders aren't even open yet. So when I say that early money that that sprint money that's been made, we think we're moving into an environment where the gains will be tougher to come by. And we call this a sort of mid-cycle type environment. We still think that the global business cycle has a lot longer runway ahead of it, further growth to come. But certainly, there are some storm clouds on the horizon, which suggests that volatility for equity markets may pick up. And we've seen that in the last couple of months, particularly with concerns around some things that are going on in China, some things that are going in the US, concerns around the Fed tapering its asset purchases. We've seen central banks begin to raise interest rates. The Reserve Bank of New Zealand hiked rates. The Bank of Norway hiked rates and concerns around inflation as well. 

Alec: [00:29:49] Well, Anthony, it feels like everything in equity markets is is a sprint these days. You know, we had the fastest decline in history. We had the fastest recovery. Everything just seems to be going so quickly. It might be nice to just take a breath and settle into the slow pace of a marathon rather than a sprint. But I guess the question that comes out of that is how do you approach that as an investor? You know, the the easy money from the immediate recovery has been made, but you know, it sounds like you're still relatively bullish. You're definitely bullish long term. So Bryce and I are trying to figure out what the hell to do with the money that we're saving. You obviously, fidelity runs hundreds of funds, so there's not a one size fits all answer. But what are some rules of thumb that we can take and apply to our portfolios?

Anthony Doyle: [00:30:33] Yeah. I mean, I write a paper on this in April last year, just when there was so much volatility in markets and for financial advisors to use with their clients, but also for our direct investors and, you know, really comes back to the old rules. I mean, I guess it'd be quite dull. And the exciting thing is. Chasing clean or chasing that quick win, and you're looking for those double bag as triple bag is, I think James and Marie until they have five hundred bag is good luck. You know, if you can find that type of thing and that's really doing, you know, your homework, your due diligence, but importantly being very patient what we call patient capital. But it comes back to the the old chestnuts of diversification, you know, thinking about how you can structure equity portfolios, that there's not too much embedded risk in terms of correlations. So if one sector or one company is doing poorly, hopefully that's immune from the rest of your portfolios in your risk of companies in your portfolios and academic literature suggests that you can diversify appropriately with as few as 12 to 16 companies, 12 to 16 stocks, so it doesn't take much. 

Alec: [00:31:41] Importantly, that doesn't mean the 12 buy now, pay later. Exactly. 

Anthony Doyle: [00:31:45] Yeah, yeah. You know. Yeah, exactly. So people come in or Amazon have come in, you know, and what's that going to do? And you know, obviously the news, for example, the other day that hurts have put a big ordering with Tesla. And, you know, get those sort of short term NOI short term volatility. That brings me on to my second point, you know, extending your time horizon from a day a week a month a year to, you know, thinking about long term capital accumulation. Sorry. And you know, this is really how the very wealthy think. Family offices that I meet with endowments, long term capital, you know, thinking 50 years. Yeah, generational wealth. Yeah. And building that and using that power of compounding in your favour. And the great thing and I come across many investors and they'll say I'm a long term investor, that their investment time horizons go from years to months, two weeks to two days in the most volatile market. And they see the value of their portfolios down in the ASX in 30 per cent like ARK. And they normally sell at precisely the wrong time behaviourally. So, you know, diversification also extending your time horizon. And thirdly, I would say you can expect this from someone that works for Fidelity International, but being active and being what we call active, you know, doing triathlons and doing about nine.

Bryce: [00:33:12] nine Ren Bryce 

Alec: [00:33:14] Bryce investor 150k bike.

Anthony Doyle: [00:33:17] But would I say be active? Obviously, looking after your health is probably the best investment you can make. Second is education, but you know, when we're talking about investment portfolios and we talk about what is describe active fund management rather than passive fund management, and that's being highly selective and not allocating capital to every company in the index, which is generally the index is constructed to some arbitrary rules about how big a company is or various other ways and means. But we think that there are areas of markets which are inefficient and we're doing bottom up where due diligence, fundamental analysis, you know, all the good stuff that James and Maroon spoke about a couple of weeks ago. The stuff that they do with our analyst team is one way to identify the winners and potentially avoid those losers, whereas opposed to buying a passive index. So we've got we've got no issue, you know, we have passive funds as well at Fidelity Offshore, they can be definitely very appropriate for investors as well and particularly given the low fees that they charge. But there are parts of this investment world where you want to take a more active approach and good luck for the 150k. 

Bryce: [00:34:27] Paul Ryan, thank you. Now, Anthony, to close out the conversation, we want to touch on demographics briefly. You mentioned in your presentation that it's going to play a very important part in, you know, how the investment landscape is going to shape up over the next few decades. Are you able to expand on what you mean by this? 

Anthony Doyle: [00:34:45] The next decade or so for Australians will be characterised by investors looking further afield for returns, and they've historically had to look. We've been very spoilt by having a relatively high interest rate in Australia. We've been pretty spoilt by how well the ASX 200 has performed. And we've also been spoilt because we have the fourth largest pool of savings in the world in our superannuation industry, and that naturally has quite a high bias to Aussie equities as well. So you've seen this every time you get paid your salary and the necessary nine and a half 10 per cent goes into your super fund. Inevitably, a balanced fund will buy some portion of Aussie equities with that as well. That's a very strong technical bid for the market going higher. Now, I think going forward, Australians looking further afield, they'll be looking at emerging market equities, they'll be looking at Asian equities, they'll be looking at global equities and potentially some more niche style funds. I also think that thematic funds will also be appealing to Australian investors. You've seen that in the ETF space, but also fund managers like Fidelity provide. Access to products that tap into some of these themes as well, and I think the demographics is a very powerful theme because I can talk to you now. We'll come back in two years time and everything might have been right more likely. I've got some things right. I've got some things wrong. Hopefully I haven't got everything wrong, you know? And that's the beauty of publishing views in black and white, writing them down. But also, you know, talking in podcasts these days or doing interviews with those short term factors, they are very difficult to predict despite them being closer in the time horizon. Sometimes it's far easier to predict the long run, long term and demographic trends are actually quite easy, not easy, but we can be quite accurate with our predictions. And with that, you know, we think we're living longer, we're living better, and there's going to be more of us in this in this club going forward. So we think about how can we construct a portfolio that will tap into some of those themes living longer, living better and living and living healthier. There's more of us, of course. And we think that this is a trend, a demographic trend that certainly companies can look at, but also investors in providing capital to these companies to benefit and generate those long term sustainable returns that will help them make their investment and savings goals going forward. So again, I guess I've spoken a lot today about extending your time horizon. I think allocating to something that potentially taps into those themes of demographics, which are predictable and seeing which are the innovative companies that are likely to potentially benefit for some from some of these trends is one way that investors could potentially generate those returns that they require forward. 

Alec: [00:37:34] Yeah, I mean, the impact of demographics can be seen in the very short term. If you look at like Coles and Woollies in their commentary around population growth and immigration and what that's going to do to like their top line. And, you know, because there's going to be less immigration, it's going to affect them this year, next year. But then if you extend that over decades and you extrapolate that, you know, some of those population trends, you say just how important that will be for a company's fortunes. 

Anthony Doyle: [00:38:02] Yeah, especially in the emerging world as well, right, where they're still developing and they're still moving up in terms of their standards of living to what we enjoy here in developed markets. Yeah, whether that's online penetration or access to the internet or access to simple insurance products, access to health care, you know, there are companies all along this way that could stand to benefit from some of those, those trends that are more predictable, like demographics. 

Alec: [00:38:27] Yeah. So Anthony, we have come to the end of our time. We want to thank you for joining us today. If people want to hear more from you, they should head to the ASX website and listen to a full presentation. And I'm sure if they jump on the Fidelity website, they can read a lot more of what you've written.

Anthony Doyle: [00:38:44] Yes, and access to webinars and all sorts of things where I interview portfolio managers and analysts. But yeah, look at the ASX presentation. It's a cracker. If you say so, you should enjoy it. Yeah, if I say so myself, please give some client feedback. No, I will not be. They'll be nice. My boss will like that. 

Alec: [00:39:03] Yeah, yeah, yeah. Well, we'll get stuck into these final three questions we have asked you before, but you've told us you've come with new answers. So if they want to go back and listen to your old interview, they can compare the pair. Yes. But we'll start with the first one. Do you have any books that you consider? Must read? 

Anthony Doyle: [00:39:20] Yes, I've got two for you and stepping outside of the finance world a little bit because I know that you get a lot of finance book recommendations and you know, my job is reading a lot. So I like to tune out from then some time. So you probably had shoe dog fill not recommended before. So I thought that was just a fantastic story. But the one the my other book that I just finished and this is for Bryce is a book called Iron War The Greatest Race Ever Run. Have you ever had that one recommended to go? So this is Jenson Buttons favourite book, and I heard he might be good for your podcast as well. So I heard him on a podcast. You know the F1 race? Yeah, yeah. And this is a story of these two gun athletes in the 80s, Dave Scott and Mark Allen. And it was the early days of the Ironman triathlons and these two guys just going at it and this story or their background, and they basically don't want to give it away, but they were neck and neck. This whole ironman, which is, I think, yeah, it's a marathon at the end. I think it's 

Bryce: [00:40:28] a 190 K by

Anthony Doyle: [00:40:29] bike, it's 

Bryce: [00:40:30] a 5K swim or something 

Anthony Doyle: [00:40:31] with definitely pretty inspiring for your bike ride. Yeah, I'm I really, 

Alec: [00:40:36] really enjoyed close to that. 

Anthony Doyle: [00:40:38] So, yeah, Jenson Button recommended it or it was really, really good, a really good read and really well written. So you have a look at that. For those of you that want to be like Bryce,

Alec: [00:40:47] love that love that real exercise thing should. Yeah. So second question, what's the best company you've ever come across? 

Anthony Doyle: [00:40:59] Yeah, so last time I said my dad's company and he told me not to say that again. So I thought about this. Got another book? Sam Walton? Yeah, yeah, yeah. Which is made in America. Yeah. So I thought that, you know, I thought about a great company. You know, whether you're thinking about an Amazon, but Wal-Mart, you know, I think it's like almost half a trillion dollar market cap starts from a small convenience store in the early 60s. And what an amazing story I think employs over two million people today. When the pace of research came out from our macro team in London, they were highlighting minimum wage increases in the US. And there are a number of large firms that have as subscribed to the $15 an hour minimum wage, and Walmart is one of them. So that can actually have a rising impact on inflationary pressures in the US, too, and the US being how important they are in capital markets. You know, the Fed, obviously a lot of central banks will move their monetary conditions depending upon what the Fed is doing too. So, you know, the Wal-Mart effect? Yeah. So all you've heard that book before, I didn't think you'd hear was 

Alec: [00:42:09] so Bryce and I both came up in retail like he was always I was at Coles. All right. I remember, you know, that's the book I suggest you read when you say, Oh, nice. I remember reading it and you just so inspired for retail, even reading the techniques he had.

Anthony Doyle: [00:42:23] You know, you said it just he went against the grain, obviously. And I guess that's how a lot of start ups happen. You know, if they look at what the incumbents do, what they are. What can we do differently? And you know, even something as simple as buy now, pay later. You know, that Laybuy are, let's do that. You know, it's like a room. I'm going into target and buying stuff, you know, Teenage Mutant Ninja turtle shirts and stuff.

Bryce: [00:42:47] So you think Coles and Woollies are big retailers, but then you look at the revenue that Walmart generated was almost 600 billion or so. You know, there's two million people. 

Anthony Doyle: [00:42:56] It's just like, like what? What a story, right? Right? 

Alec: [00:42:58] It's crazy. Yeah. So good company. Yeah, good company. And the American operation was run by a New Zealander X Woollies Greg Foran. We have tried to get him on the show many times and no luck. 

Anthony Doyle: [00:43:11] So if we're listening to this, if 

Alec: [00:43:12] he's listening to 

Anthony Doyle: [00:43:14] us tonight, I give you a cup of water. Yeah. 

Alec: [00:43:18] Can you also? He's now the CEO of New Zealand, so he's pretty busy. But. 

Anthony Doyle: [00:43:23] Well, yeah, borders are coming down.

Alec: [00:43:26] Yeah. And then, Anthony, final question. If you think back to your younger self getting that Teenage Mutant Ninja Turtles from Target online by. What advice would you give to your younger self? 

Anthony Doyle: [00:43:38] I was thinking about this coming in today and my first job was at Macquarie Bank. I remember working on the floor with the equity investors in the fixed income investors, and I remember it just annoying a lot of people just asking them lots of questions, but also generally making myself a bit of a pest. In those days, the brokers used to send all their reports physically rather than send them via PDF or email, and I used to go over to the equity desk and read the reports and ask them questions about companies and things like that. So the next piece of advice I'm gonna give you your first piece. You know, you can listen to the other podcast, but this podcast, it would be go and ask lots of questions of more senior people within your organisation and build up a strong network. Because I think half the game in investment management is being enthusiastic and putting your hand up to do things. And I still have, you know, lunches and catch ups with people that I worked with at Macquarie in twenty to twenty three. So I think that that's a really great way for you to get into the industry, know the industry and you never know what opportunities might develop from having a very strong network of of peers. And that enthusiasm, you have enthusiasm. You're halfway there, I think, to being successful. 

Alec: [00:44:53] Yeah, love that. 

Bryce: [00:44:54] Love it, Anthony. Well, as always, it's been incredibly insightful chatting with you. I know that a lot of the big questions and debates around at the moment, you know, certainly playing on the mind of the Equity Mates community safe hopefully helps us unpack and understand it more so, as always, a pleasure. A reminder If you want to check out Anthony's presentation, head to the link in the show notes or the ASX website search investor day and you can follow what he's doing at the Fidelity website as well. But Anthony, thank you very much is thank you. Hey, thanks for listening to this episode of Equity Mates. We love hearing from you, so drop us a line at or even better, go to your podcast player and leave a five star review. Also, a reminder that the Equity Mates content train doesn't stop when you've run out of episodes to binge. We've got a brand new website, a Facebook discussion group where on Instagram, YouTube and slowly making our way as an influencer on Tik-tok. Well, that's Ren. So come and say hello and join the community. We'd love to welcome you. Until next time.

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