Bonus: Let the games begin! CVE takes on the ASX

Adam: [00:00:26] Hello and welcome to a special bonus episode of comedian versus economist. We demystify the world of money and help you get a handle on the bigger picture. And today we're going to try and demystify share trading a bit, and I say it's a special bonus episode rather than just your regular run of the mill bonus episode, because we're lucky enough today to be joined by none other than Alec and Bryce from Equity Mates. How are you going guys? Bryce: [00:00:52] Adam, thank you for having us. Alec: [00:00:53] Great to be with you guys. It's been it's been a while since we've connected and what a great reason we're connecting. Adam: [00:01:00] Oh, welcome to the CVE bunker. Nice to have you. Yeah, absolutely. It's I think this is going to be a lot of fun. So we're teaming up today to talk about the ASX share market game, which where we've partnered with the ASX to to put together some content and really run with this game and hopefully have a lot of fun and also learn a lot along the way. So perhaps, Alec, for people that might not be familiar with the game, could you explain a little bit about what it is and what it's about? Alec: [00:01:30] So the share market game is a great way for people to learn about the share market without putting real money on the line. The ASX give you a dummy account with 50 grand and let you practise trading with real stocks following the real market. And it's a great way to learn to invest without putting some money on the line. Adam: [00:01:52] Nice and Bryce have you played the game before? Are you? Are you coming into this as a seasoned campaigner looking to dominate? Absolutely. Bryce: [00:02:01] Yeah, I mean, I don't know about looking to dominate, but seasoned players with really poor results. So that's there's a lot of upside for me. We started playing back at school, which was a lot of fun. There's a school sharemarket game, which we're also participating where we're not participating in. But the committee of the economist Equity Mates are supporting but have been playing the game for a while. And it's actually how Alec and I started, I think getting into stocks together, playing when we were back at uni. I remember trading Qantas and all the other really dull semi boring stocks on the ASX 200, but plenty, plenty of opportunity out there. Plenty of long term Bryce. Adam: [00:02:41] Probably they were thinking it was a long term strategy. Bryce: [00:02:43] So, yeah, so yeah, it's a it's a great resource. And particularly if you're looking to understand a little bit more about the markets in the ASX 200. It's a great way to sort of get started. Adam: [00:02:53] Yeah, nice. I was actually talking to a principal friend of mine, and he said that I really teach economics in high school anymore. So there's some high schools that teach entrepreneurship. There might be an alternative to economics now. So I was curious, Thomas, are you happy that maybe no one's coming for your job? Or you would be sad knowing that nobody wants to do what you do? Yeah, we've been. We've been workshopping ways to rebrand and make economics sexy for a while now. You know, I think entrepreneurship since the latest fad could be the go. If there are any teachers out there, by the way, who are interested in getting involved, wanting to know more, we can. Certainly, Thomas is going to put together some, some content and written material to help out with the ASX game and getting involved in schools. If there's stuff that you want to know that you want included, if this stuff that Thomas can help out with and reach out to us via email at Equity Mates dot com or on the website Equity Mates dot com forward slash CV. And every fortnight we're going to be including a bit of a wrap of of what's happening, where we're where we're tracking, how much profit I've made, how far behind Thomas and Bryce and Alec are. And and we'll we'll we'll track it that way on the show and have a bit of fun. So I think we're going to set up some legs and stuff, but you won't get into now, but we'd just love you guys out there to be involved and come along on the journey with us and learn about the ASX, learn about share trading. But before we get started, of course, every game needs its roles. Bryce you're a stickler for the rules. Yes. Can you give us a quick, quick run through on what the rules of the game are? Bryce: [00:04:33] Yeah. Well, for those that are listening and at school age, there is a sharemarket game for schools. So this game is for 18 years and older. And if you are like one of our team members in Equity Mates has multiple email accounts, you can't use multiple to try and sign up for many different accounts and play the game that way. One game per person, so Adam: [00:04:53] don't try to get into strategies later, but that was literally my number one strategy. Bryce: [00:04:57] Well, I just busted that, so I'll give you a Covid may give you a couple of minutes to think about it, but I think there are some important things to consider. Alec said at the top of the episode that this does follow the actual ASX 200, the ASX market. So what happens in real life will happen in the game. You're you're able to invest in the top 300 companies. There's a range of ETFs available, if that's the type of investing that you want to do. And there are a selection of small and mid-cap companies as well. So all the normal rules that are on the ASX apply in this game. The game, it runs from 10 a.m. to 4:15. And there are a bunch of rules around how you can invest. So, for example, if Ren wants to put all his 50000 on one stock. Unfortunately, that is unable to happen. You can only put a position worth 25 per cent of your portfolio to help you understand what diversification means. Was that also one of your strategies out to go all in? Adam: [00:05:58] Yeah. But then I read somewhere that you can't buy stocks that are valued at less than a dollar a share. So that kind of rolled out a lot of that strategy as well. Penny stocks or all in on the penny stock strategy. Bryce: [00:06:09] So Plan C Alec: [00:06:10] Bryce needs to start writing out rules. Otherwise Adam will have no strategy left. Bryce: [00:06:14] But just like real life, there is brokerage, so brokerage brokerage will be included when you trade $20 brokerage up to 10000. And just like real life as well, various corporate ActionScript dividends are paid by companies. They will be added when announced and where feasible as well. So for more information will include show notes to a comprehensive list of the terms and conditions and the rules because there are a lot to get through, but there are prises on the line, so it's important to understand if you're eligible and not first prise $2000 second one and a half thousand and third is $1000. So if we perform well as a late L.A. guys, we're looking at some cash in the Adam: [00:06:55] pocket and I reckon if someone can, if someone tops the league, then surely Equity Mates can come to the party with maybe some prises to perhaps Bryce. Can you give away one of your Teslas? Maybe with that? Bryce: [00:07:07] Yeah, just one of my fleet of Teslas absolutely have. Right now, I look, we will come to the party. We've got some merch, we've got some books. Kva, you guys can, I don't know, take it to your next stand up. Yeah. Adam: [00:07:18] And the bragging rights that go with winning the league, of course, will live on in perpetuity. All right. Well, look, let's talk strategies. I thought we'd go through the four of us in alphabetical order, which coincidentally is also one of my strategies. I'm just going to pick the top 50. So in alphabetical order, starting with me and I've had a lot of I had a lot of thought about this. I wasn't sure. Thomas suggested one strategy was finding the sea with the best hairstyles in ASX, which I quite liked, but I thought that involved too much research to find photos of all the CEOs. So look, I I've gone with. I love my sport and I've gone with a sporting strategy, and I'm just focussing in on companies which sponsor national sporting teams. No. So I think it gives me good, good diversity across a range of different industries. Obviously, big brand awareness. So we've had the ashes. We've just finished the Australian Open, you know, so we're talking safety culture. Bondi Sands ANZ disappointed to learn that Dunlop Sports, which is the home of the Dunlop volleys, unbelievably a British company that was that was painful to read. So cricket, we have to go. You got Woolworths, Alinta Energy, CommBank, some big names in there. So I figure gives me access to some of the big, the big, heavy hitters. You're obviously doing well if you sponsoring the Aussie cricket team, let's be honest. And so I figure that's you. Just that should stay in good stead, epic. Any thoughts on any thoughts on my approach, guys, any any, any warning signs or or things to look out for? Alec: [00:08:55] Adam, you're down, you're down in Adelaide. I'm guessing you're an Adelaide Crows supporter in the AFL. Adam: [00:09:01] No, I'm actually I'm actually in Essendon Bombers supporter, which is Bryce on team bombers as well. Alec: [00:09:07] Well, I was going to say Crypto.com just became the major sponsor for the Adelaide Crows or one of the Jersey sponsors, so maybe that's a sign that you need to be looking right the cryptocurrency world. But I have no idea who the bombers are sponsored by Fujitsu. Bryce: [00:09:21] I think because something Adam: [00:09:23] know you're not Alec: [00:09:24] listed in Australia, so you'll have to keep looking at the Sydney Swans. Adam: [00:09:28] And it's tricky because some of the companies that sponsor the the the national teams are not necessarily Australian companies not listed on the ASX or they're owned by their parent company, someone else. So I think that'll sponsor the cricketers, you know, that bolt at all, but that's owned by one of the big Johnson and Johnson or someone like that. I don't accept them. Someone like them. Alec: [00:09:48] Well, for someone who wanted a strategy where they wouldn't have to do much work, you've certainly given yourself a lot of work now that you've got to figure out who's sponsors and then who owns those companies. Where are they listed? Adam, if you want to shortcut, are the major sponsor for Australia's greatest sporting team. The Sydney Swans is ASX listed. That's QBE. Insurance may not be the sexiest of industries, but that's one you should add to your watch list. Adam: [00:10:20] All right Thomas: [00:10:21] Effectively, your strategy is to go all in on consumer discretionary. But in some financials, like that's the other screen you could you just get like a consumer discretionary ETF, you're going to get pretty close to the same thing. Adam: [00:10:34] Well, not that normal. We've got ample like we've got. Fuel commodities. I'm sorry, Adam on eBay. I have a wholesale commodity. Bryce: [00:10:47] I have a question. Is this something that? Are you going to buy all of them in one hit on day one? Mind you, the game kicks off on the 3rd of March. So are you going to be there in March? Yeah. Are you going to be buying them all at once or is this an active trading over the period of time? How are you going to approach it? Adam: [00:11:06] Now 50 grand straight on the nose all up day one. Drop it in, and because the game, the game, you know, we talk about a long term, long term horizon. The games is only 15 weeks Bryce. You gotta make your money. You're getting the and three Bryce: [00:11:23] one finishes on 16th of July. Yeah, that's an important actually important to you and say you can't wait until the second last day and put all your money in and hope that it goes up. You have to have made. I'm pretty sure you have to have made a transaction by like mid in mid April 28th of April. Alec: [00:11:41] Honestly, that would be a pretty bad strategy if you waited until the second last day anyway. Bryce: [00:11:45] Yeah, but then it wouldn't. Well, everything could. You know, something might pull something. Adam: [00:11:49] But the only consideration to that probably is that I wouldn't mind reserving maybe five grand just for spec and hot tips that anyone might have that might want to email them through to CBA at Equity Mates dot com. Good strategy. I like Covid because I am quite partial to tests of inside info, so if anyone has got any tips for me, then feel free to send them very nice. But that's it. All right, so moving right along, Alec, you're next on our on our alphabetical order list. What do you got for us? [00:12:22][33.0] Alec: [00:12:22] All right. Well, this is a competition to learn about investing, but you've only got 15 weeks. So some of the rules go out the window. So two big rules go out the window for me straight away. First of all, no diversification. I'll be buying four things. And that's it. Twenty five percent each across four things. If I could put 100 percent into one thing, I would. You know, normally you want to diversify your assets, you want to have lots of different investments. So if one thing goes really badly, it doesn't hurt your overall portfolio too much, it reduces it. So it's called reducing the volatility in your portfolio. But in 15 weeks, when you want to win that prise, volatility is your friend. I'm going the all or nothing strategy of buy for things. Hope they will go up. So that's number one for me. Number two is cash is trash. I normally you want to keep some cash on the sidelines as an investor, you know, as an emergency fund in case you need it. But also if opportunity strikes, you know, at the start of 2022, we've seen a lot of stocks fall, which means they're cheap and they might be a good buying opportunity, especially some American tech companies. Very cheap. You want to keep some cash on the side so you can take advantage of an opportunity like that, but not in this ASX share market competition. I'll be putting all my cash in on day one. I'm in it to win it. No cash on the sidelines from a Adam: [00:13:52] nice fast and the furious you've been. We've been very cagey there. Use you've said for things, which is giving me really nothing to go on. What are the four things Alec: [00:14:01] or what four companies will I be investing in that? Adam: [00:14:05] Or even sectors? What do you what are you thinking? That's to be determined. It's going to explode. Alec: [00:14:09] It won't be. It won't be any of Australia's big companies, though. No, no banks, no supermarkets, no insurance companies. Sorry, Adam. Maybe it may be a minor, but I think you want to. You want to look at the smaller companies, which may be a little bit riskier, but may also have the chance of, you know, jumping up 20 percent in a day. I couldn't tell you the last time Woolworths jumped 20 per cent in a day or so. So that's that's where I'm going to be looking. But honestly, I've got Adam: [00:14:44] school scores going back on Officeworks or something like that. Alec: [00:14:47] Yeah, Officeworks owned by Wesfarmers, they also own Bunnings, which is Australia's greatest. Yeah. So we'll say, we'll say, but I think and I think Bryce is going to talk about this, but so I won't steal is thunder. But there's some key events coming up in the 15 weeks that I think will affect where I money. Adam: [00:15:09] Nice. Segway. Interesting. Right. Bryce over to you. What's your what's your strategy? Yeah. Bryce: [00:15:15] Well, Adam, we're starting the game at a time where we're probably going to be smack bang in the middle of Australian reporting season. And that is always a time where, you know, if companies are going to surprise the market, that's an opportunity to hopefully get in early and say some 10 15 per cent double digit growth in some stocks. Alternatively, if they're underperforming, you know, don't hit estimates, then we could see the market go the other way. But normally it's a period where there's a bit of volatility and a lot of movement and activity in the market. So that's one thing to be aware of as we kick off this game. We've also got all this stuff coming through with inflation, which I'm sure Thomas is going to talk about and a lot going on overseas. And we tend to say the Aussie market sort of follow the US in some way. So I've got my eyes closely on the US over there. The way I'm going to approach it is start off on. A bit of a negative note and 25 percent of my portfolio is going to be a ASX listed bear ETF. It's going to be negatively Adam: [00:16:14] geared, Bryce: [00:16:15] so I'm anticipating just is an interesting yeah, I'm anticipating that we're going to see a bit of a slide in the ASX during a reporting season, and I'm going to start my portfolio with a position that will benefit that. Then I'm going to take a look at some of the unloved or really some of the companies that have been hit really hard the Magellan financials, for example. It's really down leading into reporting season. Is it going to surprise the market? If it does, we might see some good results. I'm unsure. So I'm going to be looking at some companies that are right down the bottom and hoping that over the next 15 weeks we can see a bit of it's Adam: [00:16:53] just the way your eyes were darting around. And Bryce, as you're talking about Magellan is almost like you had some inside info. Bryce: [00:16:58] Now I've got some money in it, though, and it's pretty bloody, painful. Alec: [00:17:04] That was is Adam: [00:17:04] the nervous to I on from being invested in. Bryce: [00:17:08] It's hard, it's hard. It's just hard about it. Alec: [00:17:10] Well, that's that's all this game is, isn't it? Yeah. Bryce: [00:17:13] Well, that's why. And I just want to point out that if this game isn't all about individual stock picking nice that the ASX have now enabled you to invest in ETFs and listed investment companies as well. So if you want to back a thematic or an index, you can do so as well. So that might be an approach. Adam: [00:17:30] Is there a national sports team ETF? I could just save myself a lot of racism. Bryce: [00:17:34] I think there's an e-sports, but maybe you could pitch it to be one of the ADF providers. Alec: [00:17:40] I'm not sure. I'm not sure if they're in the game, but there is actually a national sports team listed on the ASX, the Broncos, the Broncos, the Brisbane Broncos and the rugby league ASX listed. So maybe you could load up on them? Bryce: [00:17:51] Unfortunately, not top 100. Adam: [00:17:54] Long, long Broncos. Yeah. Bryce: [00:17:57] So that's me. And looking forward to checking in and seeing how that strategy is probably not playing out at all. Adam: [00:18:03] So, yeah, absolutely. All right. And last but certainly not least. Thomas, are you applying your macro lens to this or is it not? Is it not just not long enough? Thomas: [00:18:13] Yeah. Macro at 15 weeks is pretty, pretty short to see a macro trend play out. Adam: [00:18:19] I don't know what the last commodity supercycle was was started and finished about a fortnight. So yeah, Thomas: [00:18:28] it's you know, I think, look, if you're going to play macro trend, you're looking for somewhere where you think the consensus is off, where you feel like you've got an edge and you can sort of play that. So thinking about that, I think. I think the reopening is going to be quicker and stronger than we expect. I reckon people are sort of bit negative in the over, overly pessimistic about on the Cronin what's what effect that's having? So I'm looking I think it might be checking reopenings plays early in the early in the game. I'm going to stay away from. So the growth stocks early on, I think inflation's going to get a run on. I think we'll get a strong wages print next month and that'll sort of feel fuelled. The fear about further rate hikes from the RBA, I reckon, by about midway through the game. That'll start to turn. And I think right now, markets are giving a 100 percent probability of a write, a single rate hike by June. I think that's I think that's I think that's right. And I think that that will start to shift as particularly if rate hikes in the US start to derail the US economy, particularly if the property sector continues to crash land over in China. I think the outlook for the Australian rate cycle is probably overcooked. And so I think if things start wobble around the world, which is what I'm expecting, which is my sort of difference from consensus, then I think we might see a softening there and we expect more money coming into the Aussie economy and that might still feel some of the growth stocks. I might look to pick some up round middle of the game. I think that's sort of the data points. I'm looking to sort of try and get on the right Alec: [00:20:07] side of Adam. I don't I don't know why you went in alphabetical order. Thomas definitely should have gone from Bryce: [00:20:14] turning a kind of wraps it all up Alec: [00:20:15] nicely. Adam: [00:20:17] Yeah, I just think, no, I think I think the one thing we can we can be sure of is that Thomas might have put exactly the same amount of thought and preparation and research into this. Certainly, yeah, I'll be. I've got some data points to tell him, don't worry, I'll be. I'll got mine. Thomas: [00:20:33] The others, the other one, just one of those that I've I reckon the Aussie dollar is going to tank. Oh, wow. Yeah, it's well. It's like if if the the US Fed remains hawkish and RBA stays dovish, which they are right now. So the markets are currently expecting them to turn up to hawkish and they'll stay dovish. And I reckon that that will push the Aussie dollar lower, which might help some miners in some place like that. Alec: [00:20:55] So, Thomas, just for people who. Well, we should, first of all, say, if you didn't follow anything, Thomas said there go check out Canadian economist back catalogue. But you so you mentioned that you mentioned there, the Aussie dollar gets weaker, we can't invest in currencies in this sharemarket competition. So how would you how would you play that? What would you look to do if you're right and the Aussie Aussie dollar does get wake up? Thomas: [00:21:23] Typically, exporters benefit from a weaker Aussie dollar. Yeah. So yeah, and your domestic account domestic producers suffer because they got high iron ore prices, low cost them order to produce stuff and and they're already struggling with higher import input costs. We're seeing that in the business survey data. I would expect to see that in the reporting season. Early on, companies that are dependent on on imports are really going to struggle, I would expect. So you commodity exporters, though, like you just exporting commodities every, you know, as the Aussie dollar depreciates, that's just money in your pocket. So whether that's baked in? Yeah, it's going to depend a little bit on how strong the headwinds like if China is property sector does sort of crashed, it is crashing. If it if it gets, if it is messy, if it doesn't unwind nicely. That's not a good news story for iron ore. So that might be a problem. But this other commodity is even agricultural exporters like wheat and grains and the food sector that that could that could benefit quite well as well. Milk talking about unloved companies? Yeah, so export exposed companies would be the ones to look for. Adam: [00:22:27] All right. Very good. All right. Well, we better wrap it up there. Guys, thank you so much for joining us on comedian versus economist. We look forward to getting more involved. We're going to be sharing more and more information about this as we go. So keep your ears out across Equity Mates media for news and information regarding the ASX share trading game regarding the leagues regarding how, how you can get involved yourself, how you can follow our progress or lack thereof. And I think it's just going to be I think it's going to be a really a really fun time and hopefully we'll all I know. I would definitely let a lot out of it and hopefully I'll I'll win and and we can just sit back and laugh at, says the analytics. Alec: [00:23:07] Honestly, it'll be a travesty of Thomas doesn't win, but I bet I can't wait to say it. Bryce: [00:23:13] And I just want to say for those listening on the Equity Mates feed at the moment, and if you're not subscribed to CBA, make sure you do. Because as you said, Adam, you're going to be giving app updates and you've hit you've heard how, I guess in tune with the macro state of play that Thomas and anatomies as well. So. So make sure that Adam: [00:23:33] you have to say that Bryce thank you was. It's fine. Bryce: [00:23:36] And also keep an eye out. Make sure you sign up to the to the email as well the ASX email, because Thomas will be giving a macro update fortnightly as well, which will be some great ratings, some good shots to help you in the game as well. So. Alec: [00:23:51] So to clarify, if you signed up to the game, you automatically sign up to the game. Adam: [00:23:55] Yeah, so yeah, stay tuned. Don't forget, guys, check out the ASX website for a list of great resources to help you along. You can find an advisor. There's broker reports, charting tools, lots of things to get you started and keep you going throughout the game, so make sure you check that out. There'll be a link in the show notes and thanks guys for joining us and we'll see you next time on comedian versus economist Chase