Phil Muscatello’s Top Beginner Tips for Investing in Shares

Bryce: [00:01:10] Welcome to Get Started Investing feed in this podcast, we cover all the basics that you need to start your investing journey. We unpack all the jargon, the confusing bits here, your investing stories with the goal of making investing less intimidating. And we want to have a good time along the way. So my name is Bryce and as always, I'm joined by my Equity Mates Ren. How's it going? [00:01:29][18.6]

Alec: [00:01:29] I'm very good, Bryce. Very excited for this episode. We we have a philosophy here that we want to try and break down the barriers to investing, you know, make it all very understandable. And we're joined by a guest who has a similar philosophy. [00:01:43][13.8]

Bryce: [00:01:44] Yes. Phil Muscatello. Welcome to the show. [00:01:46][2.0]

Phil: [00:01:46] Gidday. Thank you very much. I'm really excited. Can I say Equity Mates? [00:01:49][3.1]

Speaker 4: [00:01:50] Can I do. Absolutely. Equity Mates. [00:01:52][2.3]

Alec: [00:01:54] I think that might be the first. Yes. We've had. That's not it. [00:01:56][2.6]

Speaker 4: [00:01:57] I was just very exciting. [00:01:58][0.9]

Alec: [00:01:58] We might have to clip that and use it in our interests. [00:02:00][1.4]

Speaker 4: [00:02:01] That was actually better than I do it. I'll bet you [00:02:03][2.3]

Phil: [00:02:04] it's because I'm half Italian, so you know the accent. [00:02:07][3.3]

Bryce: [00:02:09] So Phil, you are a producer, host, I guess, owner of Shares for Beginners, Stocks for Beginners over in the States. Yes. You've got another few podcasts in the States. [00:02:21][12.2]

Phil: [00:02:22] I've got Equity A.S.A. with the Australian Shareholders Association and I also have AGM watch where I talk to company monitors from the Shareholders Association about upcoming AGM voting intentions. You know, whether they like the directors or not, whether they like the company's strategies moving forward. And there's a couple of other ones that I'm just keeping under wraps at the moment, you know, and I think we've like we've all got all big media plans. [00:02:48][25.8]

Bryce: [00:02:49] So the structure of this episode is going to be a bit of an open ended conversation. We're going to find out a bit about you and your investing journey. And likewise, you're going to find out a bit about our investing journey. [00:03:00][10.6]

Phil: [00:03:00] Oh, I've got some questions for you. [00:03:01][1.0]

Bryce: [00:03:03] I'm used to being on this side of the question, but and then we're going to release it across both feeds and. Yeah, looking forward to it. So should we start by pinning down and finding that? [00:03:15][11.8]

Speaker 4: [00:03:15] So let's do it. Yeah. [00:03:16][0.9]

Alec: [00:03:17] This is a more comfortable situation, asking the questions. [00:03:20][2.3]

Speaker 4: [00:03:20] So it's OK. [00:03:21][1.3]

Phil: [00:03:23] Yeah, it's it's uncomfortable for me then. [00:03:24][1.6]

Speaker 4: [00:03:25] Yeah. [00:03:25][0.0]

Alec: [00:03:26] So I guess we just heard for podcasts at the moment, but I guess if you can take us back, why did you start shares for beginners and what was the sort of journey. [00:03:37][11.1]

Phil: [00:03:38] I've got a long background in media production and radio and I think it was just I was interested in podcasts because I did start working on podcasts. A few years ago, I worked with Kruschen Kruszelnicki on one of his podcasts and then with a couple of other podcasts, just throwing some ideas around. And it was really basically the thing was that I thought, OK, it's something that I can do. I've never been a presenter, so I've always been behind the scenes. So getting in front of the microphone has been an interesting part of it as well. And I've always been I've always been interested in investing in the share market as well. I've done it for a very long time, poorly. I've got most of the time and I don't know, I just it was almost like coming to me in a dream one day I just had shares for beginners. That's a great name. And then I started getting some guests on and it just took off really, really quickly. So, yeah, I think the first few episodes I was really lucky actually with the first episode where I got this local financial planner who was just a great person at explaining things, you know, and it's still the most downloaded episode of the podcast. I think it annoys him as well because he doesn't want new clients. [00:04:47][69.4]

Speaker 4: [00:04:48] So he still gets [00:04:49][1.1]

Phil: [00:04:49] enquiries all the time. Sorry about that, Rob. [00:04:51][2.3]

Bryce: [00:04:53] So just to to clarify, you're not an expert investor. Not at [00:04:57][4.1]

Phil: [00:04:57] all. Not by any means. Well, I thought I was an expert. It's not like we all do. Isn't that the Dunning Kruger effect? It is so [00:05:04][7.4]

Bryce: [00:05:04] similar to Ren and ICE. Seems like he started the show purely for your own investing journey, really into. Yes. To get access to the bright minds in the investment landscape and, you know, I guess help others on their investing journey. So. [00:05:20][15.2]

Phil: [00:05:20] Well, I was hoping what I wanted to do was learn myself. I mean, my my slogan, I guess, is let's learn together. And I just want to learn myself and share that that experience with listeners as well. Yeah. [00:05:33][12.6]

Alec: [00:05:34] So when did you start the first podcast? [00:05:37][2.1]

Phil: [00:05:38] February 11. Two years ago. [00:05:39][1.7]

Alec: [00:05:40] Two years ago. So two two years later. Yes. Three more podcasts. Yes. So what's the journey been and and maybe what are some of the biggest lessons you've learnt from the experts you've spoken to? [00:05:51][11.5]

Phil: [00:05:51] Oh, I got so many lessons. But what's been amazing to me is the well, how quickly it's gone and how accepted we are. I think all of us as podcast is in the industry. So many people are just happy to come on and share and talk. And I think they like to. In a natural way, rather than having to do a formal presentation, you know, they're so used to doing the PowerPoint and then standing up and being very formal and wearing the suit and putting out the glossy brochures. And I think what we both tend to do is we're very natural with people and we get them talking naturally. So there's been a lot of lessons when I get my list here. Um, one of the main one of the main things, I guess, is that to think long term about investing, I've always had this idea and I've made so many mistakes over the years because I thought the stock market investing was a little bit like a casino where you go in, you make again your bank that gain and then move on to the next thing. And really, that's that's a mug's game. And the biggest thing the main thing is about the long term nature of investing. I learnt a lot from going to Australian shareholders meetings where there's a lot of very elderly people talking about their investment portfolios. And one person told me that it was like growing a garden and that you just tend the garden and you look at the plants that you like and you plant the plants that you like, take out the weeds, you know, maybe once a year, go out and take out all the weeds, which are underperforming stocks. And it's been a great analogy. And I think that's the main thing that I've really picked up. And I'm hoping because, as you know, the audience for podcasts is a lot younger than that. And I just really hope that I can share this with as many young people as possible, that it's a long term journey. And not to think that they can just go in, because I think a lot of listeners, they start thinking about stocks and shares because they've suddenly heard about some item of news and they've learnt a bit ahead about Tesla or they've learnt about, I don't know, Afterpay. That's like, oh, how do I get in on this? And they have to be shown that they know that there is another way of investing. [00:08:06][135.2]

Alec: [00:08:07] Mm hmm. I like that analogy. The gardening one. Yeah. As someone who does not have a green thumb, I can be a better investor than I am a gardener. [00:08:17][10.1]

Speaker 4: [00:08:18] Yeah, that's right. [00:08:19][0.9]

Bryce: [00:08:21] So I guess has there been I mean, we've spoken about guests, but do you have any coming up in the pipeline for 2021 that you're really excited to speak with? [00:08:30][9.8]

Phil: [00:08:32] Oh, okay. Well, I'm talking to Scott Phillips tomorrow. I know we're going to be out of sync with the timings and that. And again, he's another one that's great in terms of talking about we're going to be talking about his don'ts. He's got five five don'ts. I can't remember them off the hand. But don't don't try too often, I think is one of the main things. So we're going to be covering that. Kylie Persil from 500. You know Kylie. Yeah, yeah, yeah. Who's a great, great advocate for investors and for investor education. We're going to be looking at how not to lose money. Nice. I just think that that's just something because I remember when I first started the podcast, that was one of the things how do you not lose money? And I've lost sight of that this year. I'm coming back to that in a big way. Even if the answer is you're going to lose money, how do you mitigate mitigate against that risk and protect yourself against that? [00:09:22][50.7]

Speaker 4: [00:09:23] Nice. [00:09:23][0.0]

Alec: [00:09:25] Well, I think we've we've grilled Phil enough, at least for the moment. He should we should we flip it around and give. [00:09:33][8.3]

Speaker 4: [00:09:33] Yeah, yeah, yeah. [00:09:33][0.3]

Phil: [00:09:34] I'll give you a chance. Well, I wanted to talk about when we had our chat previously before this episode. I think you were talking about not investing solely on the ASX. [00:09:44][10.4]

Speaker 4: [00:09:45] Yeah, yeah. Tell us about that. [00:09:46][1.7]

Bryce: [00:09:48] I mean, that pretty [00:09:49][0.8]

Speaker 4: [00:09:49] much sums it on the also why [00:09:51][2.3]

Alec: [00:09:51] the Australian the Australian stock market is two percent of the global market for every great Australian company I can name. Well, with a few exceptions, but for most great Australian companies, I can name an even better international equivalent. Yeah. And when Bryce and I started investing, I mean, Bryce started a lot earlier than I did, but international shares were difficult. Um, you know, the there were really expensive if you were going through CommSec, but most of the time you just couldn't access most markets. And what we've seen over the last even just five years is accessibility and cost have come down so much. And it's now just as easy to buy an American share or European share as it is an Australian share. And so put those two things together. It's no more difficult to buy outside of Australia and the quality of the companies in many cases is better. Yeah, it just for us then feels like a no brainer. And then I think the third thing is really if we look around, you know, in this room what we're using, but more generally what we use in our lives. [00:10:49][58.0]

Speaker 4: [00:10:50] Australian microphones are not publicly listed. [00:10:53][3.1]

Alec: [00:10:54] But, you know, it's Apple computers. We search on Google. We use like Microsoft products. Um, so for us, it's just, you know, we want to invest in what we know and more and more what we know overseas listed companies. [00:11:06][11.6]

Phil: [00:11:07] And how would you look at a. I mean, you can do it with directly or ETFs or Trace's, is that how it's pronounced Trace's trekkers tonight? You don't have choices now? Oh, no. Talk to sharks, OK? You can actually their stocks on the Australian share market that you can actually buy directly on the market and they represent Apple. [00:11:27][20.2]

Speaker 4: [00:11:28] All right. If I go, [00:11:29][1.2]

Phil: [00:11:29] I think there is just an interesting product here. [00:11:31][1.6]

Bryce: [00:11:31] One more point on that, though, before we go into the how is the you look at what's going on in the different economies around the world. It's a great way to diversify your risk. If you're solely invested in Australia, you're relying on what, you know, government decisions, the macroeconomic environment here. And should the market tank, then you have nothing else that is going to sort of, I guess, net out that job in the market if other countries are performing well. So spreading your your risk around around the world is a great way to to diversify our portfolio. I mean, Ren in Europe, [00:12:07][36.1]

Speaker 4: [00:12:08] Croatia wants to get in on [00:12:11][2.6]

Alec: [00:12:11] a lot of big things happening, happening in the Ukrainians, [00:12:13][1.9]

Speaker 4: [00:12:14] the emerging markets, politics. [00:12:17][3.5]

Bryce: [00:12:18] So say, I think that's an important thing to remember is, you know, as Ren said, two percent of the global stock market is us. Yeah, but yeah, think big. And it's never been easy to do so through ETFs, as you said, fuel. You can buy them domestically. You don't have. Yeah. You don't have to buy them in America or in Ukraine. You can get access to many different, I guess, countries just through ETFs listed on the Australian Stock Exchange. And then once you feeling a bit more adventurous. Yeah, I find those brokers that do allow you to buy overseas and buy directly, and you do then have to think about currency and that sort of stuff. But yeah, yes. Certainly worth thinking about. [00:12:58][39.6]

Alec: [00:12:58] What about you? Do you invest overseas? [00:12:59][1.0]

Phil: [00:13:00] Just basically S&P 500 ETF is the main thing at the moment. Again, that's the thing that doing this podcast, it scared me off direct investing. I'm just about all ETFs now. Where and then I've got a few tiny, tiny stock picks. You know, like the bulk of the portfolio is ETFs. And then I'm talking about one per cent of my portfolio in individual stocks just to manage that risk. [00:13:24][24.3]

Bryce: [00:13:25] And I mean, there's absolutely nothing wrong with that. Yeah. You know, a lot of beginner investors come into the market or journey and think that they need to come and pick individual stocks and try. Yes. [00:13:36][10.7]

Speaker 4: [00:13:36] Yes. [00:13:36][0.0]

Bryce: [00:13:36] And just throw cash at them. But if you think about the average return for the stock market over the last 40 years or whatever has been roughly 10 percent or thereabouts, there is nothing wrong with a 10 per cent return year on year. You don't have to. And many, many managers, professional managers don't even beat that. So that's right. Yeah. To say that, you know, there's something wrong with just having a portfolio of ETFs is wrong. Yeah. I mean, we interviewed Loz Kriya, who was over in London, and he said the only portfolio you need is the Old World MSCI ETF. That's right. Yeah. And a couple of bonds. [00:14:14][37.9]

Alec: [00:14:15] I don't even think it was that [00:14:16][0.7]

Speaker 4: [00:14:17] well, some sort of. Yeah, yeah, yeah. [00:14:19][2.9]

Bryce: [00:14:20] And just put all your money into the all world index. Eight and a half thousand stocks or so that tracked. [00:14:24][4.7]

Speaker 4: [00:14:25] Yeah. Yeah. And that's it. That's it. Yeah. Let it go. [00:14:27][2.5]

Phil: [00:14:28] Let's come back to that because diversification is a big thing. But I didn't ask about your guys, you guys and you know how it all came about. [00:14:35][6.2]

Bryce: [00:14:36] Well Equity Mates [00:14:36][0.6]

Speaker 4: [00:14:38] I believe that's what we're working on. [00:14:40][1.4]

Bryce: [00:14:41] So similar to you feel. I like and I met a university and, you know, soon realised that we both had a pretty strong interest in business and finance and that sort of stuff. And I'd been investing for a while. And I was, I guess, smart enough, including to know that he should be doing something more with his money and made his first investment. But that that sort of led to us wanting to find more resources in the investing space for beginners. And at the time, there were no real podcasts that were Australian focussed. And, you know, I spoke to a beginner level, so we used it as an excuse to go and speak to fund managers and say I was knocking on the doors. Hey, we've got a big [00:15:21][40.1]

Speaker 4: [00:15:21] podcast that's all about us. It's not about the listeners. [00:15:26][4.5]

Alec: [00:15:27] It's easy to say Australia's biggest one. There's not many competitors. [00:15:29][2.3]

Speaker 4: [00:15:31] Yeah. [00:15:31][0.0]

Bryce: [00:15:31] And really, just from there, it has grown and we've learnt a lot and I think have been able to create content that is sort of relatable to a lot of other people in their investing journey. And, yeah, [00:15:44][12.7]

Phil: [00:15:45] we've, [00:15:45][0.0]

Bryce: [00:15:45] you know, probably struck it. Lucky with what's happened over the past couple of years and what's gone on in the States with the rise of the retail investor. But still, I think this market is still underserved with this sort of stuff. [00:15:57][11.9]

Alec: [00:15:57] So the rise of the retail investor and the rise of podcasts, it's. Yeah. Entertainment for [00:16:03][5.8]

Speaker 4: [00:16:04] yeah. [00:16:04][0.0]

Phil: [00:16:04] I don't know about you guys, but one of the things for me, when I first started I was thinking. What am I going to do for content? I was really worried, [00:16:12][7.6]

Speaker 4: [00:16:13] and now this is the number one question my dad asked. It's a torrent of good and I was [00:16:17][4.7]

Bryce: [00:16:18] never concerned because sometimes you just can't stop Ren talking. [00:16:20][2.9]

Alec: [00:16:23] I think the thing for us and this is this is when Dad is like, how do you how are you going to do more shows? Like, you don't have enough content? Well, yeah, it's like it's just incredibly interesting. And that is. Yeah. And it's investing isn't a study of finance like there's obviously financial aspects, but you're investing in companies that are doing all these really interesting things work and all these big problems across all these different industries. And the best skill in being an investor is being intensely curious. And, you know, Bryce and I have done deep dives on things like the renewable energy industry. I'm fascinated by the waste industry, like an industry that you wouldn't otherwise think of. And it's just that's the thing about investing in your bingo ball. [00:17:05][41.5]

Speaker 4: [00:17:05] No, no, [00:17:06][0.6]

Alec: [00:17:07] I Binga doesn't have a great reputation and I'm not going to go too far. I think there's, again, the earlier point around Australian companies compared to their overseas peers in Australia. You're looking at bingo or Cleanaway. Cleanaway is an interesting company in that. But, you know, you compare that to the Suez and Veolia is in Europe or the waste management in the US, just bigger companies with more assets, more infrastructure and [00:17:39][32.5]

Speaker 4: [00:17:40] more people [00:17:40][0.3]

Phil: [00:17:41] power. Yeah, but this is [00:17:42][1.1]

Bryce: [00:17:42] another point for the get started. Like, if you are just you know, a lot of people will often think that they need to know everything before starting. Yeah. And through your podcast, through our podcast, we've proven that it's a consistent journey that is lifelong. I would challenge you to find a professional investor who has gone. [00:18:01][18.8]

Speaker 4: [00:18:02] I know it all and [00:18:03][1.4]

Bryce: [00:18:03] I'm just, you know. You know what I mean? They go to work every single day. And what Alec was saying, finding out more and more information that is curious to them. And they continue digging and refining their strategy and learning new ways to do things better. [00:18:17][13.7]

Alec: [00:18:19] So, yeah. Well, yeah, we just interviewed an expert who we've had on the show a few times, and he was telling us about five companies. He's found recently that and he was like, they're all owned by like reclusive European billionaires. And like he just he found them all just because he was just doing heaps of reading and writing about these families, writing about these companies in Europe. And they were all like really compelling stories, all with really interesting things. But he just read and he read and he read and he read and he just stumbled across these things. Yeah. [00:18:50][30.9]

Phil: [00:18:50] Yeah. I think one of the you've had Doug Morris on, haven't you, from site. And one of the great things that he said is just to learn when you want to learn is to buy a share, just buy a company, someone that you know, you know, he talked about his first one being Disney because he was a school kid and it was a school project. And, of course, Disney. I love Disney, but that's a great bit of advice where you just get your 500 bucks together by Woolworths. And then if that's a company that you know or are interested in, then do as much research as possible on that particular company and really focus on it, because unless you've got real money on the line, you're not going to do it, you know? Yeah, absolutely. [00:19:33][42.9]

Alec: [00:19:34] I just want to I want to bring it back for a second, because I'm sure there are people listening who are like, I don't want to do all this writing like that. [00:19:40][5.6]

Speaker 4: [00:19:40] Because another point [00:19:41][0.6]

Phil: [00:19:41] I was going to make about this [00:19:42][0.7]

Alec: [00:19:42] I'm interested in. And I think for those people, there's nothing wrong with them buying an index and not thinking about investing. They're not reading about it. Like, you don't have to do all that writing because ETFs and index funds are there no. [00:19:56][13.7]

Phil: [00:19:56] Yourself. Yes. That's another thing. No yourself. Are you going to be interested? Are you going to be wanting to look at company reports? I don't want to be doing all the research. Or are you going to go on this journey and go hand? I'm not really interested in that. But now I know about ETFs and there is a way of sitting back drinking mai tais and not even worrying about my portfolio. [00:20:15][18.8]

Alec: [00:20:16] Yeah, or if you've got a nine five job or a you know, you work longer hours and nine to five and you just can't you don't have the mental bandwidth to think of anything else. You can still you can still invest now. [00:20:26][10.3]

Bryce: [00:21:43] So, Phil, you mentioned then knowing yourself, you also said that you started out investing in individual stocks and now you're in just ETFs because you've found yourself. [00:21:56][12.1]

Speaker 4: [00:21:59] I found shit scared. I am allowed to say that. Yeah. [00:22:04][5.2]

Phil: [00:22:04] Um, I think, again, this is part of the journey is sort of stripping back to the basics again and going, okay, ETFs is long term and you don't have to worry about it. And then just at the side, start chipping away. Like I said, one per cent in each individual shareholding that I'm doing my own research in and trying to build my own and my own conviction in. And also a bit of technical. I mean, I know a lot of people sort of don't like technical analysis, but I can see some of the theory behind it. At this stage. I'm more looking at the technicals rather than the fundamentals of what I'm buying. Yeah, with moving averages crossing over, very simple technical analysis, you know. [00:22:46][41.3]

Bryce: [00:22:46] So in terms of portfolio construction, that is what we call a, I guess, satellite and core portfolio. Yes, yes. We've spoken about it on the show where you go to a portfolio known as the core, which is potentially 80 per cent of your total investment. That is passive. You're just building a portfolio of ETFs, potentially listed investment companies. However, you kind of build that just sort of passive stream of money going into a regular interval. And then your satellite is those smaller individual stocks that you might be taking a little bit of a punt on or hoping that you're going to get an outsized return and that might be 20, 10 percent of your portfolio. So that's one way that you can manage your risk. And, yeah, I would encourage beginners to sort of have a look at that and think about the core satellite approach. Ren and I both sort of have that philosophy, same as you feel, you know, build out, build out the ETFs and then throw paper money at what's [00:23:44][57.6]

Speaker 4: [00:23:44] what's your [00:23:45][0.3]

Alec: [00:23:47] Bryce as a core satellite and crypto [00:23:48][1.4]

Speaker 4: [00:23:49] strategy. [00:23:49][0.0]

Alec: [00:23:51] What's your core and satellite breakdown like? What percentage would you do for each? [00:23:55][4.2]

Bryce: [00:23:56] Yeah, I try to stick to I'm trying to build towards the 80-20, OK. Two years ago I took a very similar approach. I was very heavy individual stocks. And through this I've realised that there's, you know, building up that really long term focus with that core takes out a lot of stress of having to find individual stocks, bonds, losing less money and say you just can chip away, chip away, chip away. So I reckon I'm close to the 80-20. Well, yeah, but still got some work to do because I keep buying the satellite [00:24:28][31.9]

Speaker 4: [00:24:30] because that's my business. Yeah. Like what's yours. [00:24:36][5.6]

Alec: [00:24:37] I'll probably be 50 50 I think. Yeah. Um, but I think in my satellite approach I'm not trying to, I'm definitely not trying to do technical analysis. No. No offence to you. It's a very [00:24:47][10.6]

Speaker 4: [00:24:47] it's a very [00:24:48][0.2]

Phil: [00:24:48] basic it's a very basic form of. Yeah. And that can be turned into a complete dark art art. [00:24:53][5.2]

Alec: [00:24:53] But yeah. Yeah. I mean a lot of people made a lot of money from it, but I will never be one of them. Um, but in my satellite portfolio it's individual stocks, but it's really trying to be those just the best quality businesses around the world, those unbelievable businesses that will be able to take their profits, reinvest them in the business, grow and, you know, for decades to come. [00:25:15][21.9]

Bryce: [00:25:16] The question that we get often then is if you and you're talking about, you know, the Apples, the Microsoft, the Spotify, et cetera, et cetera, why [00:25:24][8.3]

Alec: [00:25:25] one of the three or [00:25:26][1.0]

Speaker 4: [00:25:26] one of the three? [00:25:27][0.5]

Bryce: [00:25:28] Why not buy just an ETF that has all the best companies in the world? [00:25:31][4.0]

Alec: [00:25:32] Uh, a couple of reasons. One, because an ETF also has a whole bunch of companies that I'm not interested in. Yeah. So in this satellite approach, it's really about getting exposure just to the things I want to get to. But don't get me wrong, like I own Microsoft. That was the one of the three in the satellite, but I also own an S&P 500 ETF. And so there's there's overlap there. But I'm comfortable with that overlap because it's like I want more exposure to Microsoft. [00:25:59][27.0]

Speaker 4: [00:26:00] Yeah. Yeah. [00:26:00][0.3]

Phil: [00:26:01] I just wanted to say in terms of diversification and another thing that I've learnt is about asset allocation and not just being invested in equities by having some sort of exposure to bonds, having some exposure to gold, real estate investment trusts. And, you know, if you're going to a financial planner, they're not going to put all your money into equities. And there's also going to depend on what your stage is in life. If you're in your 20s, yeah, you're going to be all equities. But as you get older, you want to start drinking and start going into safer things like bonds, even though they're not returning. I know bonds are not returning much at all, but they provide a ballast to your portfolio, as does gold as. Possibly crypto will, but it hasn't been stripped of stress tested. I was just having a chat with Jordan Allessio from the Perth Mint, who is a recent guest, and we're talking about, you know, gold and bitcoin. What are the differences? And he says he's quite bullish on Bitcoin, but it hasn't been stress tested in an actual catastrophe like gold has for 6000 years or more if [00:27:08][66.8]

Bryce: [00:27:08] the market drop in March wasn't a catastrophe. I would like to know what they're expecting. [00:27:13][4.9]

Phil: [00:27:15] It wasn't like the GFC. The GFC was like the banking system was on the verge of collapse. That's a catastrophe. [00:27:21][5.9]

Speaker 4: [00:27:22] Yeah. [00:27:22][0.0]

Alec: [00:27:23] Bitcoin fell then, didn't it. When? In March. [00:27:26][2.7]

Speaker 4: [00:27:26] Twenty twenty. Yes. Yeah, it [00:27:29][2.7]

Bryce: [00:27:30] yeah. Was correlated with equities. Yeah. Yeah. People were surprised about. Yeah. Yeah. But it's not. And now it's correlated with equities again. [00:27:38][8.2]

Speaker 4: [00:27:39] Yeah. Both are running hot. Yeah. [00:27:41][2.0]

Phil: [00:27:42] But getting back to that diversification, I think it's really got to understand the true diversification is not just being invested in equities, it's maybe having some of these other asset classes. It's worthwhile having a look at these and you can invest in these asset classes through ETFs as well. Another one of my guests was Graham Hand from First Link. So we had Graham on. No, no, I saw him do a presentation. I just thought, get him on the podcast and we'll talk about it, where he put together an ETF portfolio that was based on the Future Fund. Okay, so really, you can just mimic what the Future Fund is doing. [00:28:20][38.0]

Bryce: [00:28:20] And for those that are unaware of what the Future Fund is. Yes. [00:28:23][2.5]

Phil: [00:28:23] What is it? The Future Fund is it's a go. I should know the definition of it. It's run by Peter Costello. [00:28:29][6.4]

Speaker 4: [00:28:30] It's Treasurer, Australian Australian [00:28:32][1.8]

Phil: [00:28:33] Sovereign while a sovereign wealth fund. Yeah, I think it's there to pay for the superannuation, for the public service, I think in the desert. [00:28:41][7.4]

Speaker 4: [00:28:41] Yeah, I think overall. [00:28:42][0.7]

Phil: [00:28:42] Oh, I could be wrong. [00:28:43][1.0]

Speaker 4: [00:28:44] It's massive. Yeah, yeah, yeah, yeah. [00:28:46][1.6]

Bryce: [00:28:46] And pension, that sort of jazz [00:28:48][1.8]

Speaker 4: [00:28:49] I think it's just [00:28:49][0.5]

Alec: [00:28:49] isn't isn't it. Just for like the future because it's like a separate super fund for the public service. [00:28:55][5.4]

Speaker 4: [00:28:55] Yeah. Yeah, yeah, yeah. [00:28:56][0.7]

Bryce: [00:28:57] Independently managed sovereign wealth fund established in 2006 to strengthen Australian government's long term financial position. [00:29:04][6.9]

Alec: [00:29:04] Yeah, just just if we can we ever want to draw on it, I think. Yeah. Yeah. But then you never do because it's like. Yeah, yeah. Well the [00:29:10][6.0]

Speaker 4: [00:29:10] government, the Future Fund [00:29:11][1.1]

Phil: [00:29:12] anyway if anyone is interested, I've got a blog post and an episode where he discusses that and and but the interesting thing about it is how much the Future Fund is in cash at the moment. [00:29:22][9.8]

Bryce: [00:29:23] Yes. Oh, well, that was going to be my next question is, Howard, are you thinking about cash in this environment as an asset class? Are you all in the 100 per cent invested? Do you have some cash on the side now? [00:29:36][13.6]

Phil: [00:29:37] I've got some cash on the side, and that's what I'm using to go into those little satellite holdings in the portfolio. Yeah, not a great deal of cash, I have to say here. But I do have a quite a lot in a bond ETF like an Australian government bond ETF. I'm a bit older than you guys. Yes. I think they are having the ballast for me. You know, your old inmates serving in my twilight years. I want to preserve and I know it's only giving that one per cent or just under one per cent, but, you know, it's preservation for me. I'm over the capital and it's there as a ballast. And if we get another I was too scared last year to sort of go all in back in the share market. So I sat in the bonds and that just sort of sat there and it held held up the strength of my portfolio. But then I wasn't I didn't really participate in the the uptick since then. [00:30:32][55.2]

Alec: [00:30:33] Yeah. So we've we've spoken a little bit about what you can invest in. You know, that there's a bunch of different assets out there, um, all of which you can actually access through the the stock market. I guess you can buy property through a real estate investor. That's right. You can buy gold or, you know, gold ETFs. Yeah. So that's what you can invest in. I want to ask you about when, um, do you have you spoken to your guests much about, you know, like when how people should be investing, you know, things like dollar cost averaging and stuff like that. [00:31:03][30.5]

Phil: [00:31:04] Yeah. Oh very much so, yeah. Just and there's a lot of services now obviously arises and your [00:31:08][4.7]

Speaker 4: [00:31:11] space concept, [00:31:11][0.6]

Phil: [00:31:12] space ship and so forth. Pearla is a new one. Have you heard of the Pilliga. [00:31:16][3.9]

Alec: [00:31:17] They've chosen an unfortunate name because wasn't that that right wing social policy. [00:31:20][3.8]

Speaker 4: [00:31:21] Oh that was Paul. Yeah. I know they've [00:31:23][2.4]

Phil: [00:31:24] done a lot of social media posting about recently to try to distance themselves. No, I think they're using the the Aussie term of pearlers. She's she's a playmate, you know. Um, but, yeah, it's it's so easy now to do that where you can just sort of put in a little bit of money each week and just keep it there. But you've got to. This is it, that's the psychology of it as well, when you have your real money on the line and you see markets diving, that's when people sell. You know, I'm sure you've seen those names on Twitter, you know, way you know, you see a graph and it's sort of like bye bye bye as the graph is going up, sell, sell, sell as you go down. And it's what people do. Well, one, it's being having the strength to hold against that. And yeah, that's another part of the learning. Sorry. [00:32:08][44.9]

Alec: [00:32:09] One thing I was really pleasantly surprised with in March of last year, um, when the markets really started to fall, the Equity Mates community just there was no there was no panic selling in our Facebook discussion group. There was a lot of, you know, once once the right time to buy the debt. But it wasn't like, you know, it was chaotic. The world was chaotic. But the Facebook group was really calm, which I thought was was pleasing. And, yeah, I think people I definitely think people learnt from 2008. I mean, we we were growing up then and what was a catastrophic moment turned into an incredible buying opportunity. And so I think our generation saw that and learnt from that. [00:32:50][40.9]

Speaker 4: [00:32:50] Yeah. [00:32:50][0.0]

Phil: [00:32:50] That Jim Dale, you know, Jim, from your Wealth podcast at NAB Trade, she's I've been on her podcast. She's been on mine. And we were having a chat about it and she was showing the data because I've got data on what they're the brokerage accounts are buying and saying that she was saying that a lot of young people were making very sensible decisions and buying banks and buying Woollies and buying, you know, the big name Australian stocks during that time. And they were using it as a buying opportunity. Unfortunately, I [00:33:21][30.6]

Speaker 4: [00:33:21] didn't. [00:33:21][0.0]

Phil: [00:33:24] Well, I just wanted to talk about Claude Walker from a rich life as well. [00:33:29][4.5]

Speaker 4: [00:33:29] Okay. Yeah, yeah, yeah. [00:33:31][1.8]

Bryce: [00:33:31] Active on Twitter. [00:33:32][0.5]

Speaker 4: [00:33:33] Yeah. Yeah, I know. I spoke to him. [00:33:35][1.8]

Phil: [00:33:35] Yeah. You haven't spoken to knocking on his grave. Yeah. But one of his great things, it's become a mantra for me. I'm going to write a song about it. Match your risk to your experience. [00:33:46][11.3]

Speaker 4: [00:33:48] You're going to write a song. Yeah, yeah, yeah, yeah. [00:33:50][1.6]

Phil: [00:33:50] I've decided I've got to do it. I'm working on a death metal. I had a guest on in the US version, Enrique Abeta, and he's got a tattoo magazine and a heavy metal magazine. He he's a Wall Street guy, but he's now buying up digital assets. And he's his thing is value investing is a death cult [00:34:10][19.9]

Speaker 4: [00:34:11] that [00:34:11][0.0]

Phil: [00:34:12] unless I'm making a death metal song about that. [00:34:14][1.7]

Alec: [00:34:14] Hopefully this album released twenty twenty two maybe. [00:34:18][3.2]

Speaker 4: [00:34:18] Yeah. Yeah that's right. [00:34:19][0.8]

Phil: [00:34:21] No I think the Tik-tok video thing that's, that's, that's a strange amazing thing isn't it. Yeah. [00:34:26][5.5]

Speaker 4: [00:34:27] Yeah. [00:34:27][0.0]

Phil: [00:34:28] Can I ask you about Bitcoin because I was having a conversation with a guy last night who was evangelising to me a bit about Bitcoin and I've kind of avoided it because even though, you know, I've had it explained to me, I've talked to Fred Bestor about it. He's trying to explain it again. They went through how how it works. I think you've got to just accept that it works. You know, you don't want to get tied up in the technical details of Bitcoin, but he believes and I would be interested to know your guy's view that there is long term growth and wealth being created in Bitcoin as we speak, even at the prices that it is at today. [00:35:03][35.4]

Bryce: [00:35:05] Yeah, look, I'm absolutely no expert on this topic. [00:35:08][2.8]

Speaker 4: [00:35:09] Are you going to say you're absolutely bullish? [00:35:10][1.6]

Bryce: [00:35:11] But I am very yeah, I am very bullish on on where it can go. I mean, I'm following a lot of people in this. You know, he's pretty, I guess could be biased given some of the rabbit holes I've gone down, but I've actually tried to find the alternative argument. But a lot of good investors that and very smart people that I've been following for a while have put forward some pretty convincing arguments as to why this may be. I'm not saying it will be and they're not saying it will be either. But why it has a strong probability of becoming an asset class. It is worth a lot more than it is today. And given that probability, it's something that I want to have some sort of exposure to, because if it does take off and go to the places that these guys are suggesting, it could be quite significant. That's where it comes down to that. What you just said in terms of, you know, your risk needs to be matching your experience. We talk about the 80-20 core portfolio, and this is an even smaller portion of that 80-20. It'd be stupid to go and put in 20 percent of my portfolio into an asset class that I don't really know anywhere near enough about to make those sort of informed decisions. But for me, it's a I want to be in it and I can understand how these prices move. We're down to USD thirty, and I think the highest I got in was forty six and I've been in a lot lower at this, so this might be an opportune. You need to buy some more. I don't know, personally, my opinion only Dollars. [00:36:45][94.0]

Speaker 4: [00:36:46] Yeah. [00:36:46][0.0]

Phil: [00:36:47] This is not a this is. [00:36:48][0.9]

Bryce: [00:36:48] Yeah, but it's pretty, it's called. And look, if it if it goes to where I think it's going to go, then good time to get in. Hmm. [00:36:56][8.3]

Phil: [00:36:57] So in terms of what you guys have learnt for me, talking to CEOs of companies and then digging deep into a particular company and suddenly realising what's going on and how a particular company industry sector works, it's been so fascinating because you're really getting through the the whole of capitalism and seeing how it works. If you got an example of someone that you've met and talked to and learnt so much about from the particular industry, [00:37:22][25.5]

Alec: [00:37:24] I mean, we have there's a there's a bunch to immediately come to mind. One wasn't a CEO, but we actually spoke to Malcolm Turnbull, um, and we had a chat to him about his years as an investor. So after he was a lawyer, before he was a politician, he started an investment bank, did a whole bunch of interesting stuff, including to some of the stories that he had, you know, he was investing in like Soviet gold mines and stuff like that. And just a really fascinating story about how this guy sort of came into finance with no financial background and and just did some pretty amazing things. So in terms of guests and obviously the fact that it was a prime minister, it was pretty cool. But in terms of guess where we've really had a better understanding of an industry and I've walked away from that conversation thinking differently about a company that I walked in. We spoke to the deputy CEO of TOPIA recently. And honestly, we've spoken to him now. So I can say it. I guess I walked in thinking Book Type is a company that's listing because it's about to get disrupted by Amazon and, you know, aerators are coming in and they're selling physical books like they're they're they're a relic in some ways. Yeah. But they're there are more interesting companies than I thought. And then more technology led than I thought. And whilst I'm a Kindle user and you know, I rarely buy physical books anymore, I walked away thinking that there might actually be something here I didn't invest and I don't think I will. But just a really interesting way to think about a company that I didn't think much of. [00:39:04][100.2]

Phil: [00:39:04] Did they list recently is that. [00:39:06][1.5]

Alec: [00:39:06] Yeah, I listed end of last year. [00:39:07][1.2]

Phil: [00:39:08] Okay. Yeah. Mm hmm. [00:39:09][1.2]

Alec: [00:39:10] What about you anyones from you. [00:39:11][1.1]

Bryce: [00:39:12] Um. No, I think what you've kind of Covid is, yeah, I think from we want we want to speak to more CEOs to you. That's sort of one of our ambitions is, you know, almost every single fund manager who we've interviewed have said that one of the most important parts of their research research process is to understand management. Mm hmm. The next question is then, OK, well, how do you do that? And they go, well, we get on a plane and go and speak to them. Speak to the management. Yeah. As a retail investor, you just can't do that super hard to actually understand the management. And so we're going to try and speak to more CEOs, CFO, CEOs, founders, you name it to actually. It's good, isn't it? [00:39:53][40.8]

Phil: [00:39:53] Yeah, it's really good experience in talking to people, [00:39:55][1.9]

Bryce: [00:39:55] get more exposure to the managers of these companies so that we can, I think, help our audience in that podcast community more broadly to get closer to some of these people. [00:40:05][9.9]

Phil: [00:40:05] Because do you think listeners are interested in this kind of thing? Because I've kind of experimented a little bit just to, you know, try it out. And I've talked to a few CEOs and a CTO of Hazor about hydrogen technology and stuff. [00:40:19][13.7]

Bryce: [00:40:19] And I think so if it's framed in the right way, then there's certainly some value [00:40:23][3.4]

Phil: [00:40:23] to if anyone is listening and wants to let us [00:40:24][1.3]

Speaker 4: [00:40:24] know if they're interested, please let us know. Yeah. [00:40:27][2.3]

Alec: [00:40:27] I think, um, if if you especially if you give people a chance to share the questions that they have, um, that that then becomes a really compelling thing for your listeners to get a chance to ask questions. Yeah. I was going to ask, um, but, you know, I imagine that if any of us had Nick Molnár from Afterpay on our on our shows, it would be our best writing episode because so many people love Afterpay. Yeah, it would outdo the Malcolm Turnbull episode, would bet my whole share portfolio on it. So I think if it's the right CEO and people feel like they have a chance to ask the questions, then it can be, you know, does Bryce said something that previously hasn't yet been available for retail investors, but with [00:41:10][43.1]

Phil: [00:41:10] that whole BNP, BNP oil sector, I just wonder why Afterpay is the one that's done? Because it's a simple business. There's nothing to it. It may be it's marketing. So why I guess my question is, why is an open paper forming like an Afterpay or any of the other [00:41:25][15.1]

Bryce: [00:41:26] first to market [00:41:26][0.4]

Speaker 4: [00:41:27] first mover to know you say this annoys me. [00:41:29][2.0]

Alec: [00:41:29] They weren't first to market. Zipp was founded a year before. That's year before them. Yeah, I think it's just they were not a first mover but they were the fastest mover and they just got they've got more customers, more retailers other than flexi pay, which is now hum. But that's a legacy business. Um, but yeah, I think, you know, there's always one hot stock that leads the Tesla the electric car trend and dragged workhorse Nayo Niccola before it all fell apart along with them. And I think that's you know, Amazon drives the online retail trend, but there's a whole lot of online retailers that get swept up in its wake. I think it's probably psychological for people to all congregate around one, [00:42:12][43.0]

Phil: [00:42:12] but I think it's also becomes a name that's used. It's the brand itself. Yeah. And so it's used and it's got this critical mass of people who want to use it and recognise the name. And that's what they associate with buying now and paying later. [00:42:25][12.7]

Alec: [00:42:25] But I guess forget the investing side, like when you're just walking around the shops or whatever. I know personally I definitely noticed Afterpay before I noticed any of the other ones. I mean, it was at the same for you. [00:42:38][12.3]

Phil: [00:42:39] Yeah, definitely. [00:42:40][0.3]

Alec: [00:42:40] Yeah. Yeah. So I think that's probably part of the reason why as well. Like in our minds, even though they weren't actually the first founded that were the first that we realised were, you know, stuck on shop windows and stuff like that. [00:42:50][9.8]

Speaker 4: [00:42:51] Yeah. [00:42:51][0.0]

Bryce: [00:42:52] We feel we might have to leave it there. [00:42:53][1.3]

Phil: [00:42:54] It's great talking to you guys. It was meeting [00:42:55][1.6]

Bryce: [00:42:56] Bryce. We've got a few more podcasts together in the barrel. Sounds like there's a lot more to talk [00:43:02][5.6]

Speaker 4: [00:43:02] about, [00:43:02][0.0]

Bryce: [00:43:03] a lot more to discuss. But it's been great having you on Equity Mates. [00:43:07][3.7]

Phil: [00:43:07] Oh, thank you for the invitation and thank you for coming on. Cheers for beginners as well, because this is a dual double. [00:43:12][4.8]

Speaker 4: [00:43:13] Yeah, yeah. Well, well, first [00:43:16][3.7]

Bryce: [00:43:17] for our community, I'm sure similar for Fifield's. But you know, this podcast, Get Started Investing feed is all about helping the beginner Investa and breaking down the barriers. So one of the best ways to work out what those big hurdles are is to actually hear directly from you guys. So please, as the as a beginner, if you are on your journey, we would love to hear from you and your story come on the show. And we can sort of help break down those barriers and have a good conversation, just like we have had today. So hit us up at Equity Mates dot com forward slash contact leave details, a voice message. Ren has been coding on that website, insolated voice message and we will get in touch but feel. Thank you as always. It's been fun and good luck with thanks Bryce. Thanks. Dogs for beginners, chefs for beginners. And looking forward to seeing what those two. [00:44:05][47.4]

Speaker 4: [00:44:05] Yeah, those. Think about [00:44:06][1.0]

Bryce: [00:44:07] the second one and the album [00:44:08][1.5]

Speaker 4: [00:44:08] debuts. I'll be dropping anytime soon. [00:44:13][4.2]

Bryce: [00:44:14] They are looking forward to seeing how it all goes. Thank you. [00:44:17][2.4]

Phil: [00:44:17] Thank you. Thanks very much, guys, and thanks for coming on shares for beginners as well. And remember, we've both got Facebook groups as well. And you want to ask questions and continue the discussion there available, as well as shares for beginners at [00:44:28][11.0]

Alec: [00:44:30] Equity Mates Discussion Group. Yeah, yeah, yeah. [00:44:32][1.8]

Speaker 3: [00:44:32] Also on this podcast, proudly brought to you by Equity Mates Media. Always remember all information contained in this podcast is for education and entertainment purposes only. It is not intended as a substitute for congressional financial label or tax advice. The host of Equity Mates and not financial professionals. And I'm not aware of your personal financial circumstances before making any financial decisions, you should read the product disclosure statement and if necessary, consult a licenced financial professional. More information. Head to our disclaimer page, where you can find resources to search for a registered financial professional. You. [00:44:32][0.0]

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