Moats & Meme Stocks ft. return of Speccy Magee

Bryce: [00:00:53] 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 Mate Ren. How are you going?

Alec: [00:01:09] I am very good. Bryce. I got to say we had a full five minute run up and then we realised we weren't recording. So getting a bit of deja vu. But to kick us off today, I have to start with how about this stock market? How about it. You count it out? You turn your portfolio off. You walk away from your phone and your computer. You delete your apps because you don't want to see what's going on. And then all of a sudden it turns itself on a dime, gets up off the mat and starts throwing haymakers. I'm mixing metaphors, but what else can you say? How about these last few weeks?

Bryce: [00:01:45] Yeah. Well, in particular parts of the market, it has been amazing. How do you turn your portfolio off? 

Alec: [00:01:50] I don't know. 

Bryce: [00:01:54] I look at this. It is an exciting time, as we've been saying over the last few months, and we're going to unpack it a little bit later in this episode. Plenty to cover today. We're going to do a bit of a segment on moats and have a look at some frameworks to consider there. Then we're going to chat about meme stocks and what's going on in the tech part of the market. The ASX share market game, we're going to reveal who's currently winning between the two of us and what our strategies have been. And then really excited because Becky Magee returns to close out the episode first time in 2022. 

Alec: [00:02:28] Now Bryce before then, a few quick bits of housekeeping. I'm going to keep you honest here because you like to drag on with housekeeping. So first of all, the dive are the latest and greatest show from Equity Mates are our eighth podcast and our first tackling broader business news. Three times a week, we're going to be looking at one story, putting it in the broader context, revealing why it matters. Head over search. Subscribe to it. Listen to the trailer. Ride it, reveal it. Tell your friends about it and See what you think. All right, Bryce second piece of housekeeping Fin Fest The Train Keeps Rolling, It 

Bryce: [00:03:05] absolutely keeps rolling. Ren We are excited to announce that the Fin Fest Finance Festival will be held at the cutaway in Barangaroo, a massive below ground, super sized concrete space just outside of Sydney's CBD. If you haven't been there, it's amazing, and we're really excited to be able to hold Fin Fest in such an iconic venue, so tickets will be on sale very soon. Make sure you head over to Equitymates.com/contact Fin Fest to register so you don't miss those early bird tickets and stay tuned as we start announcing guests and some of key entertainment and then Ren another exciting development here at Equity Mates. A job well, 

Alec: [00:03:47] the podcast train keeps rolling. We've got an eight podcast. The Fin First Train keeps rolling with our location reveal and Bryce. The Equity Mates hiring spree keeps on going. Yes, we are looking for someone to join our content team. We've been looking for a little while and we haven't found the right person. It's like, you know, the Honey Badger and The Bachelor. Sometimes if it's not right, you don't choose anyone. That's it. But look, if you feel like you love finance, if you feel like you want to join the Equity Mates team, if you've got a knack for riding experience isn't as important as enthusiasm. Yeah, we can build knowledge. We can't teach well, we can teach skills as well. We're casting a pretty wide net here, but we are being discerning. Bryce has final veto power on anyone I bring to him. Not sure, but if you want to throw your hat in the ring and feel Bryce wrath, oh, aimless careers with an s and Equity Mates dot com. And let's start a conversation. The Bryce do it. That's enough housekeeping. The house is well and truly kept. Let's get into the upside now. 

Bryce: [00:04:48] We're going to start the episode with a conversation around motes. We speak about motes a lot. I think last week we spoke about Morningstar's best global ideas, and they have a key rating or metric as a moat, whether the company has won, if it's narrow or if it's wide and Ren, you want to bring forward a new framework when thinking about moats. 

Alec: [00:05:11] Yeah, that's it. I've been thinking about it a lot because the market's been down and there's been buying opportunities galore. And you know where you're all about buying long term great businesses. Yeah, and a lot of that comes down to moats. And for people who are unfamiliar with that term, it's really just shorthand for a long term. Sustainable, sustainable is important. Their key competitive advantage. The reason why your business won't get disrupted. It can continue to grow. It can reinvest. It can raise prices if it needs to. It can be a really good long term compound. And you know, so many investors speak about the importance of Moat. Buffett is, you know, O.J. for this. Yeah, it's been one of the concepts that really. He characterised his career. But in our book, we we included a bunch of other quotes, one that really stood out for me. Christopher Begg, a name that I wasn't really familiar with, but his quote stood out at their fund. They devote 90 per cent of their intellectual horsepower to understanding whether the competitive moat around a business is narrowing or widening. And Thomas Ruso, another investor, said the best long term margin of safety comes not from an investment's price, but from the value of a company's competitive advantage. Forget valuation. Well, don't forget it, because it's obviously very important. But this analysis is so 

Bryce: [00:06:30] critical understanding where these companies sit in their competitive landscape, but more importantly, how long they can hold off and continue to beat their competitors and remain at that number one 

Alec: [00:06:41] position. And so we often talk about moats and we give a few examples, but that's sort of where the conversation ends. And I came across a couple of frameworks. One in particular that I think is relevant and I think can be useful for the Equity Mates community, how to find new concepts that we hadn't spoken about before. But look, if you're doing an MBA, Bryce was doing an MBA before we ripped him away from Woollies to make him sign work at Equity Mates would 

Bryce: [00:07:08] love to go back and finish it, to be honest. Well done. 

Alec: [00:07:10] When we have some financial security, we can discuss that. If you're doing an MBA and you're talking about competitive advantages and moats, you'll often hear like five factors. Yeah, you learn about that. Yeah, yeah. Well, tell us about it then.

Bryce: [00:07:23] So there's five five factor framework that now not all of these apply to every company, but if you have one or a few, then you could say that yes, you have some sort of competitive advantage. The first is low cost production, and that's a company that's able to produce at low prices. Essentially, that will allow them to outperform their competitor, give them a pricing advantage. And this is where they can sort of capture more margin as well. Second is higher switching costs, and this is where companies make it difficult for a customer to switch to a rival offering the deeper the moat that's created, you know the, the more difficult it becomes. I could think of one, you know, like or what would be. 

Alec: [00:08:09] Well, it used to be telcos were unsustainable because if you wanted to switch your telco, you had to pay like that contract. I don't think I don't know if I do that anymore. Maybe they do. But yeah, that was the classic example. Your phone contract had incredibly high switching costs. Yeah. But these days, there's also things like if you want to switch from Netflix to Stan or Netflix to whole other Netflix has a really knows you with all the data they know about you. And so it's not a financial switching cost, but there is a switching cost because all of that recommendation algorithm juice that they have at Netflix is lost if you move. So that's a switching cost as well. Yeah. 

Bryce: [00:08:45] Could one another of these five factor frameworks is network effects. Now this is one we've spoken about plenty of times, but a network effect is really where the user of a platform gains more value from that platform. The more people that use and come into that ecosystem. A classic example that we always talk about is like social media network and Facebook. If it was just Ren and I on Facebook, it's pretty good to be pretty good, but it wouldn't be as valuable to us as a platform if you know the other two billion people weren't on it. 

Alec: [00:09:19] The ultimate network effect a monetary system? 

Bryce: [00:09:22] Yes. If only I use the Australian dollar, it'd be pretty pointless. And then there's intangible assets. So this is, you know, where businesses and brands build elements of their businesses that are hard to replicate. So patents, trademarks, branding, for example, those intangible assets that go into building a business that are really hard to replicate and then scale efficient scale. And this is where you essentially start talking about monopolies and businesses that can have geographic advantage and those sorts of things. 

Alec: [00:10:00] Yeah, the classic example is like an airport. Yeah, if you build a second airport, it doesn't mean you're going to be able to double the amount of travel and passengers. Sometimes one airport is all you need, and so as long as that airport operates efficiently, it's very hard to disrupt. 

Bryce: [00:10:14] Yeah, yeah. So that's a traditional or not a traditional, but one of the sort of key theoretical frameworks that's taught in business schools and has been a way that in over the past 20, 30, 40, 50 years, people have assessed moats and competitive advantages. 

Alec: [00:10:29] Now what I want to bring to the table is a similar but a little bit of a build. And if you listen to Venture Capital podcast, so you read books in that space, you've probably heard this concept, but I haven't really heard a lot about it in public market content, so I thought, let's bring it to the table and talk about it. Harrison Helmer, who is a business strategy professor at Stanford, wrote this book. Seven powers, and it talks about seven long term strategic advantages, seven potential moats a company could have. And for me, it's a really good framework. It overlaps with a lot of the stuff that you just spoke about that you want in the MBA business school. So we won't talk about that again. But there are some powers that I think were quite interesting. So the seven network effects as you spoke about, you know, the classic example being a LinkedIn or a Facebook switching costs as you spoke about another great one. There is like if you've got enterprise software, it's really hard to move your company like we are pretty locked into Google's. 

Bryce: [00:11:29] Yeah, it's just that when we're talking about is accounting software, for example.

Alec: [00:11:32] Yeah, yeah, exactly. Locked into that. Yeah. So switching costs are going on scale economies you spoke about and that's, you know, as businesses leverage their scale, they can lower their cost per unit and then they can outcompete their competitors. A classic example that's often given is in the semiconductor market, a big company like Intel can often compete with, like an AMD. I think that example might be a little bit out of date these days, but anyway, we keep moving. The fourth power again that overlaps with what you spoke about was brand. That's the 

Bryce: [00:12:03] intangible assets, 

Alec: [00:12:04] intangible assets. Yeah, so that's well, brand, you know, Tiffany's dipole. Yeah, they can charge stupid amounts for products that others can't because of their brand. Yeah. So then there are therefore that overlap. There are three that I want to speak about that I think are pretty interesting to put on the table and for people to think about when they're analysing companies. This one is my favourite counter positions, so a business that leverages counter positioning adopts a new superior business model, which the incumbent does not mimic or in some cases cannot mimic due to anticipated damage to their existing business. And this counter positioning, I think you can say some really interesting examples of recently. Vanguard is a classic example of counter positioning and building a moat around counter positioning. Vanguard came out with low cost index funds, and they attracted serious interest and serious assets under management. They now have like $7 trillion dollars in assets under management, but their competitors, the high cost actively managed funds the Fidelity's and Perpetual's of the world couldn't like adopt their business model, couldn't compete because it would sabotage their existing business. And so Vanguard built their moat through this really effective counter positioning. And now, by the time that you know, everyone is now doing low cost products, Vanguard have two unassailable lead and they've really built a brand another. And when I think about counter positioning, the other really good example that comes to mind is electric vehicles. Yeah, so Tesla built a business on electric vehicles and the internal combustion engine car makers were so slow to respond and were so resistant to that new technology because it would disrupt their existing business. So Tesla staked out a really effective counter position that gave them an incredible headstart. 

Bryce: [00:13:53] It's interesting. It's just like a business that takes on high disruption really and against sort of big established businesses.

Alec: [00:14:04] I guess the distinction being, in some cases, disruption is very easy to adopt. So like Facebook, is a classic example of being disrupted by a tik-tok or a Snapchat and just copying. Yeah, that's not an effective counter position because the incumbents can just copy come in and yeah, yeah. But if Facebook was disrupted by a company that they couldn't copy because it would kill or kill Facebook, yeah, yeah. Yeah. So that's one that I really I just really enjoyed thinking about, and I think it's useful to share with the Equity Mates community. Another one that I want to share process powers. And so this is where a business has a process within their organisation that enables lower costs, a superior product, more efficiency and can't be matched or can only be matched by like an extended commitment that the rival doesn't want to, I guess, commit to. And so the classic example that's given is Toyota and Toyota. You know, how they have the production system, like the manufacturing system is sort of studied in business schools for being just so unique. They were able to take so much market share from the American car makers because of their internal processes that the Americans just couldn't match. So they can make better cars at a lower cost and they just eight market share from from the Americans. That's another interesting one. Like looking inside the business and their internal processes as a source of long term competitive advantage. 

Bryce: [00:15:26] Could you relate that to like the workforce as well? You know, those big companies that just get the best pay PhDs in the door that literally you just can't match that from a intentionally, you know, an email like all these software companies that if

Alec: [00:15:41] all, like we talk about, Macquarie is like just a magnet for talent. 

Bryce: [00:15:44] Yeah, you get the talent, it top talent all the time in the door, like the Ray Dalio's of the world. 

Alec: [00:15:51] Yeah, yeah. Well, that leads nicely to the lost power, the seventh one that is a little bit new as well. Cornered resource that's where a business has preferential access at attractive terms to a coveted asset that can independently enhance value. And so there are some which overlap, which would what you were talking about. Intellectual property stuff. You know, patents, trademarks. They have access to a resource that no one else does. But there's a really interesting example given which is Pixar. And Pixar is said to have had a cornered resource of its people. And the three co-founders of Pixar, Steve Jobs, the yes yes, Ed Catmull, who was a pioneering CGI computer scientist, and John Lasseter, who was an animation genius. And people talk about that was the engine behind Pixar. And, you know, others tried to compete in the animation space. Disney, in particular, tried to compete in the animation space, but they ultimately realised that they couldn't match because Pixar's long term disruptive competitive advantage was its cornered resource in its people. And then they bought Pixar. Disney bought Pixar for seven and a half billion dollars. And so that's another really interesting one. I think when and like obviously, people can move. But if you can corner those people, if you can, if they're the founders of the business, they're unlikely to leave if they have meaningful skin in the game. In terms of equity, they're unlikely to leave. 

Bryce: [00:17:18] You like having Elon Musk on your team? 

Alec: [00:17:20] Yeah. 

Bryce: [00:17:20] If you can't find him, anyway, let's 

Alec: [00:17:22] put it this way if Elon Musk works for Equity Mates Bryce meaningful source of moat. Yes. So look, that's it. We could talk about this for full episode, but I think that's enough. I just wanted to bring those three final powers to the table because conceptually, I think they extend the discussion of moats a little bit and give us some other things to think about. 

Bryce: [00:17:43] Love that Ren. I think it would be great if in a couple of weeks time we come back and actually have thought about this framework and some companies that have a cornered resource or accounting position or processing power, 

Alec: [00:17:59] or do we just go deep on Equity Mates and figure out which ones we have and which ones we don't know? 

Bryce: [00:18:03] We're just like, Oh, we don't have any. Yeah, well, 

Alec: [00:18:09] actually, here's a good one for Equity Mates, and I don't want it hijacked. But radio was slow on podcasting because of the counter position. And this isn't unique to Equity Mates, but radio have this big base that they need to fill. They need to get advertising slots in. They need to pay Kyle Sandilands for the Bentley or whatever car he drives. And so podcasting, I eat a lot of their lunch, and they didn't respond because of the counter positioning because if they were to respond, it would, you know? Yeah, radio. Yeah. And they've they've responded recent like the last couple of years, but they were slower than they should have been nice.

Bryce: [00:18:44] So Tic TAC toe against one of the seven? Well, let's pick this up in a couple of weeks time after we've had to think about some of the stocks. 

Alec: [00:18:54] Yeah, let's do it. There's a quote from Elon Musk that I just want to finish with because moats are not the be all and end all, at least, according to Allen. Quote, I think Mozilla. If your only defence against invading armies is a moat, you will not last long. What matters is the pace of innovation that is the fundamental determinant of competitiveness. 

Bryce: [00:19:13] Yeah. But I think I think a few of those seven powers that you've mentioned feed into the ability for your business to innovate. 

Alec: [00:19:22] Sure. Makes you and I like to take 

Bryce: [00:19:23] a long time out right now. All right. Let's move on. So we you said at the top of the show, there's plenty going on. What a good time. How good are markets? Meme stocks, tech stocks. Something happened on March 14. Yeah, we don't know what it was. We went out to the community. Yes, we've had a few people sort of come back with what they thought might have happened. 

Alec: [00:19:45] Well, hold on before we before we get too deep into what the hell happened, let's talk about what we saw happen. Sure. So what we saw happen is all around the world. 14TH of March seemed to be a little bit of an inflexion point after a soft end to the year and a weak January and February and start of March. Stocks were down meaningfully. Yeah, we were talking about. We ended up in the Nasdaq. We were talking about a correction in around the world. Here's the numbers here in Australia or at five percent over our friends in the UK, up five percent. Not bad for half a month, but the US, the S&P up 11 percent and the Nasdaq 100 up 17 percent. 

Bryce: [00:20:24] This is from the 14th 

Alec: [00:20:25] from the 14th of March a couple of weeks. We're recording this on the 21st of March. We're getting a week ahead because we got something big next week and we can't be in the studio. Oh yeah. Watch this space, you'll hear more. Yeah, crazy, crazy numbers. 

Bryce: [00:20:37] It is. It was only last week I think that I was doing a market update on Instagram and was looking at this because I'd been so I had my head in inflation. I had my head in oil prices, I had my head in what was going on over in Ukraine. I had my head in commodity prices and then on my hands. 

Alec: [00:20:51] You hadn't a lot. 

Bryce: [00:20:52] Yeah, I know, and then it's like, oh, I wonder what's going on in over in tech? And I'd like to have like, it's flying. 

Alec: [00:20:58] Didn't even look at it over. But if you think tech is flying, let me hit you with some meme stocks hit me since the 14th of March, GameStop up 130 percent. It's unbelievable. AMC the cinema chain up 117 percent. Bed Bath and Beyond. Yes, it is a meme stock, up 42 percent. BlackBerry Bryce favourite phone maker up 32 percent. 

Bryce: [00:21:23] My favourite berry out of all the berries cure it. 

Alec: [00:21:27] Yeah, I'm a blueberry. 

Bryce: [00:21:29] It's a delicious berry anyway. Yeah. Look, I mean, meme stocks are flying some of these tech stocks that were hit as well, bouncing back a bit. Spotify jet lag. That's all I can name right now. 

Alec: [00:21:40] Tesla. Tesla is up more than 20 percent. These aren't just the small companies they're all flying. 

Bryce: [00:21:47] So if you had been like me and looking elsewhere, it was a surprise to see. So we reached out to the community to ask why? 

Alec: [00:21:55] Yeah, what? 

Bryce: [00:21:56] We didn't really get a definitive answer. Some people were 

Alec: [00:21:58] coming in like saying 

Bryce: [00:22:00] interest rate rises from the Fed, but that was the Fed didn't announce until the 16th. Yeah, from memory for the 10th to the 16th was their meeting. Oh yeah, yeah. Our good friend Andrew Brown commented that it's a gamma squeeze resulting from retail option buying and lower liquidity, explained Andrew. Shout out, shout out to you, but I'm not going to pretend that I know it again. 

Alec: [00:22:19] It's crazy. Yeah, yeah, yeah.

Bryce: [00:22:21] Anyway, look, it's one of those things that markets are a funny thing. 

Alec: [00:22:25] I have no idea. I think that's been made abundantly clear in this episode and in other episodes. But there's this concept that George Soros, he didn't author it, but he's sort of famous for adopting. He says it's how he's made a lot of his money. George Soros, for people who aren't familiar, is known as the man that broke the Bank of England and is a billionaire investor. He talks about this concept reflexivity, and it's basically how price action creates action and then that creates action. And it's like, you know, we are reflexive to what happens. And so and then things can get very divorced from the economic fundamentals because, you know, the stock market is psychology and we respond as things happen. And then that can compound that can have the sort of compounding effect is ActionScript ActionScript actions. That's a massively oversimplified explanation. But first, for these meme stocks, it kind of feels like they this is a case study of reflexivity is prices move and then people respond to those price movements, and that creates more price movement and then more people respond. It feels like that is the only way you explain GameStop being up 130 per cent in two weeks. Yeah. Maybe there was a gamma squeeze and stuff as well, but at the end of the day, it's just it is mass psychology playing out in stock prices 

Bryce: [00:23:44] by the freaking dip that's just happened. That's what's happened. Yeah, it's it's fascinating. I love it. And if you have been fortunate enough to take some of the opportunities that were out there, kudos to you. 

Alec: [00:23:58] One other theory that is spoken about a little bit is the bond market is getting massacred at the moment. Yeah, yeah, yeah. The five year and 30 year bond yields inverted the two in the June 10. If people don't really understand what that means, there could be another episode. But honestly, bonds are boring. We probably went to an episode, 

Bryce: [00:24:16] and every time that you had the 10 year and the two year spread has inverted. Yeah, and every time this happens, it's followed with this commentary that leads to a recession and a recession leads to an inversion and vice versa. And it's like every time this has happened. But I think there's been I think there's been a couple of exceptions. But yeah, that rhetoric is now starting again.

Alec: [00:24:37] Yeah, yeah, yeah. And people are like, Oh, because inflation expectations are high and people are getting out of bonds, they're moving back to the stock market. But for me, it's like people aren't selling bonds and moving into meme stocks. Know like that. Sure, that might explain, you know, large liquid stocks moving up and that might explain the overall market. But this meme stock thing, I feel, is you can't say the most conservative investors getting two percent yield on a bond decided. Screw it, we're going GameStop. 

Bryce: [00:25:09] Yeah, now the meme stock thing's crazy. But anyway, Ren, let's let's keep an eye on it. But we do have a couple of other things to to get to. So after the break, we're going to take a look at how our ASX share market game portfolios are performing. Compare the pair and then going to close out with Spec Camaguey joining us, so we'll just take a quick break to hear from our sponsors. All right, Ren, we are deep in competition at the moment. One on one. Well, it's actually more than one and one. The rest of the team in Equity Mates HQ are also playing. 

Alec: [00:25:42] Yeah, and about 150 Equity Mates and savvy listeners. And you're in good company listeners. 

Bryce: [00:25:48] Yes, playing the ASX share market game. We're all in a league together, but it's time that we check in on our portfolios and say how we're going, 

Alec: [00:25:54] yeah, we're in a mano a mano battle. I think we're like 80th and 90th, respectively. So and not exactly shooting the lights out. But look, if you ever needed a reminder that we are not experts, we are just two guys trying to figure it out and give it a go. Then this sharemarket game is that, yes, we are low middle park. Yes. 

Bryce: [00:26:19] So shout out to everyone in the Equity Mates League. You can join us when we're playing through until June. Thomas Perry is currently leading Ren with a portfolio value of fifty eight thousand five hundred. At the time of recording, we start with some thousand in cash, up 16 percent. Yeah, absolutely shooting the lights out, but well done. 

Alec: [00:26:39] Not as good as GameStop, 

Bryce: [00:26:40] not as good as GameStop, but you and I Ren where we're down the bottom have have you been going? 

Alec: [00:26:46] Honestly, I'm feeling really good about my portfolio. I'm setting myself up for a retail game, a squeeze and the liquidity will drive me up. Well, what does that mean? Yeah, I'll ask Andrew Brown now. Look, I I am proud to say the two things that I wanted out of this competition are so far playing out. I'm above fifty thousand, so I haven't lost money and I'm baiting news. And everything else is just noise. 

Bryce: [00:27:15] We do talk about investing goals, and that's great. So can you just quickly talk us through your cash savvy stock position and what you've done? 

Alec: [00:27:25] Yes. Yeah. Well, OK, so I'll tell you a little. I'll take you on a journey when the share market game kicked off, I I think I, like everyone, was focussed on the Russia Ukraine situation, and obviously a lot of the chart at that time was oil prices, commodity prices. So I went all in on that. I bought the Oil ETF and the Oil Price ETF, the Oil Majors ETF, the two biggest oil producers in Australia. Not a lot of diversification there. And then I bought GrainCorp, the big commodity trader wheat trader, because I figured higher wheat prices they could capitalise on. And then I also bought the Bitcoin ETF because, ah, the bitcoin price jumped. My theory being a lot of Russians got out of the ruble and into crypto, and that was how I set my portfolio up and I was down. I don't know why I was down. But that's the market that I was up. And then the oil price fell like 30 percent in the day. And so I panicked and got out. And now I think my portfolio, I have GrainCorp, I have that crypto ETF and I think I bought a levered ASX ETF as well. Interesting. So I'm about 50 50 invested in cash. Oh, really? Now? Oh, yeah. 

Bryce: [00:28:43] Yeah, right? Nice. Okay. 

Alec: [00:28:45] So so I'm going macro trend, 

Bryce: [00:28:48] macro trends and more buying and selling than I thought you would do. 

Alec: [00:28:51] I am not capable of doing the work and trying to figure out what is going to be up in 12 weeks. Like, I am not a great investor by any means, but like I like to think I can think long term about like competitive advantage and strategic position and all that stuff. But trying to look at like volume flow, like volume, order flow, you know, like I had an automated calls who would sit on CommSec all day and watch the buy and sell all the level, and he would make money and not do a lot of work for coffee. Yeah, and it's just not me. Yeah. Well, it's 

Bryce: [00:29:28] a completely different investment approach. 

Alec: [00:29:30] Yeah, it requires like a discipline and a patient. Definitely that. I just I have. 

Bryce: [00:29:35] Yeah, it's it. It's also not what excites me about investing. Yeah, exactly. Like, it's the competitive advantages the the the the getting into the company and understanding the company and those sorts of things that excite me, not what's the order flow and what's going to drive the right price action. 

Alec: [00:29:50] And when you're a long term investor, you can. It takes a lot longer to show that you're wrong. 

Bryce: [00:29:55] You guys want to Ren. All right. So what about you also? Yeah. So I think you yes, you are just beating me, but this is where I wanted to be at this point in this competition. I wanted to be behind you so that I could really come home with a wet sail. I am just below the 50000 portfolio value that we started with 50000 forty nine thousand two hundred. I haven't changed my strategy. I've held tight. We're on the same page. When we started, we didn't discuss our strategies, found out that we had the same strategy. I went long oil as well. So I've still got my oil positions. I also went into the semiconductor ETF, and I then took out a short position on the ASX as well, which surprisingly is pretty flat from the point that I bought it.

Alec: [00:30:45] I was going to say, if you bought the short position on the 14th of March, that might explain why everything is up. 

Bryce: [00:30:50] Yeah, well, I so it's it's flat. So overall, I'm relatively flat and I'm going to reconsider that short position, but I haven't sold anything since buying and I've got about 10K in cash. 

Alec: [00:31:06] Look for me. My biggest takeaway is the competition is a lot of fun. It is just a reminder how hard it is to make money in the short term. But how many ways to automate money? Comedian V Economist had a look at some of the different portfolios that are leading our league and the different strategies there are pretty phenomenal. I think one of the top portfolios is day trading, and then another one took out some big positions and hasn't touched their portfolio since. So plenty of ways to make money in the stock market, if you're Bryce are plenty of ways to not make money in the stock market as well. It's a lot of fun and good practise, and I've been getting DMs from people telling me they're baiting me. Appreciate that. Keep that coming. My sister's boyfriend telling me that he's baiting. He's baiting me. Shout out to my. Well done. 

Bryce: [00:31:55] Well, there's a comment in our league here saying Brick is falling behind. Ren could finally be a year, so that's in reference to other competitions that we hold here at Equity Mates. But anyway, let's move on. It's time to bring in Speccy Magee for his take on what's going on in markets and 

Alec: [00:32:11] we should say, Speccy Magee beating both of us in the ASX comp.

Bryce: [00:32:16] I also should say, being the sneaky guy that he is, has two accounts. So that's why 

Alec: [00:32:22] oh, well, now people are going to start really deep. Diving on who SPeccy is 

Bryce: [00:32:26] As if they don't know. 

Speccy Magee: [00:32:39] Too thrilled to be here.

Bryce: [00:32:51] So what have you what have you got for us? We know. 

Speccy Magee: [00:32:55] That's a good question. So I've done a little investigation this time. I haven't come prepared with a stock tip. Not that I have in the past. 

Bryce: [00:33:05] because we're not we're not doing stock tips. 

Speccy Magee: [00:33:06] so. So I've done an investigation this time into the ASX Bets subreddit. OK. I would have thought you were a moderator of some. Not not yet working towards that, but you guys are obviously and your listeners would be aware of WallStreetBets. 

Bryce: [00:33:23] Absolutely. The community that led to many of the meme stocks over in the states 

Alec: [00:33:30] who celebrate losing 99 per cent of their money on Robinhood options. Yeah, that's right. Yeah, very aggressive investing on those subreddits. Anyway, so I had a look. And so, yeah, ASX Bets is the Australian version. So I thought, Okay, let's have a squeeze here, and let's see how some of these most hyped stocks have gone. I got a bit of a date. So you may have heard of some of these. So some big winners, brain ship holdings. Yeah, writing about that stuff for the past couple of years. Someone's shredded us on our emails last week because we spoke about Neuralink and brain chips, and they were like, Neuralink has nothing to do with brain chip holdings. Anyway, it was a really aggressive email 

Bryce: [00:34:10] that I don't think we conflated both of them did, which I 

Speccy Magee: [00:34:13] don't think, though we just said the word brain chips nearly anyway complete for the game. Yeah, it's in contact. It was as brutal. There's some similarities there, though, because friendship holdings do neural computing technology, right? So it's that sort of that sort of tech. up 85 percent over the past year or so. So whoever was holding that, it's done well. Lake Resources, so lithium exploration focussed, company focussed on, you know, producing sustainable lithium. That's the thing. Yeah. Hundred percent over the past month. Five hundred and forty eight percent over the past year. OK, so there's a lot of people that are posting there, like big screenshots of their gains on the site, right? But it's not all sunshine and rainbows. There's some big losers as well as I have to balance it out. So a lot of the ones you guys are aware of zip down 79 percent, IAU pay down 54 percent. There's a cancer treatment, one in OVK, down 76 percent. You guys, wherever there's the stock's l'oeuvre zip an IOU. Yeah, yeah. But the one I wanted to dig a bit deeper on was D-W.Va. Digital Wine Venture. Oh, we have a long and storeyed history. It's still one 

Bryce: [00:35:30] venture for context. We're a stock that we spoke about, I think on our very first, 

Speccy Magee: [00:35:35] very first on the series 

Bryce: [00:35:36] and really kind of shredded

Speccy Magee: [00:35:38] it, shredded it, 

Bryce: [00:35:39] and it's done really well. It's done well. 

Speccy Magee: [00:35:41] A lot of people in the community are fans of it. Yeah. So talk to me, Jack, talk to me. So it's done a lot. Yeah, it had a rapid rise. I think it got up to 18 cents and then it's had a big plummet. It's down to three and a half cents ish at the moment, down 77 percent over the past year. So did you guys actually figure out what digital wine ventures do? Yeah, yeah, yeah. Yeah, it was a distribution I want. It wasn't his 

Bryce: [00:36:03] distribution business 

Alec: [00:36:05] partner with Winemaker's and basically the digital e-commerce platform. Yeah, yeah. Deliver a warehouse. Yeah, help them sell it. 

Speccy Magee: [00:36:15] Yeah, that's right. Yes, I looked into it, the CEO said. Basically, they're about bringing the supply chain, kicking and dragging into the 21st century with technology and releasing a whole lot of value wasted in inefficiencies. Yeah, yeah. Okay. Yeah, I think that's a good summary, but I looked into it. Okay. And what one of the users on Reddit, his user username is alewife fish. He made a bit of an ASX bet. Or maybe it's more of a forced impacts, if you will. He said that every week he is going to drink and review a bottle of wine until the share price hits 10 cents. Wow. Okay, what is it? 

Bryce: [00:36:59] What was it? 

Alec: [00:37:00] So it's currently three point six cents. OK, how long do you think he's been doing this for? Well, hold on. Hold on. You said it was 18 cents a year ago. Yeah. So it would have had to got meaningfully below then for him to make it. So I'm going to say six months.

Speccy Magee: [00:37:14] Yeah, you pretty much suppose about five or six months. So he's reviewed 21 bottles of wine. He even did a Christmas Day review. Isn't that just bizarre? 

Alec: [00:37:24] Like, honestly, I love it. Like that is that is internet content creation? No money? He's not getting paid for it, he's just putting all this effort into doing something, yeah, that's right. Yeah. Vets are like, Yes, I actually didn't realise like ASX vets isn't like this whole Wall Street bets as well. It's not about, OK, I'm in. I suggest, you know, buying this Becky Stone. Yeah, I see where it goes. They make bets with each other

Speccy Magee: [00:37:50] like this. Yes, I think I read about someone drinking their own urine. Someone got a tattoo. That's true. That's based on on what? 

Bryce: [00:37:58] Market action 

Speccy Magee: [00:37:59] insane. Yeah, exactly. 

Bryce: [00:38:00] So he's just betting against himself. Yeah. 

Speccy Magee: [00:38:03] I don't know. It's like it's like a derivative market off the stock market. So random bets. Yeah. It's like, 

Bryce: [00:38:10] how about with Facebook? I can't. I can't even remember what the outcome was. You have to 

Speccy Magee: [00:38:16] drink. You're in Europe. No, I know. 

Bryce: [00:38:20] So yes, I was getting a tattoo.

Speccy Magee: [00:38:23] Yeah. Get a tattoo of you drinking. You're on your 

Bryce: [00:38:26] own. Well, I'm going to win the bet, though, so 

Speccy Magee: [00:38:28] well, anyway. So I thought, Yeah, I'll come on and make a bet. OK, OK. So so I own Microsoft. So my bet is I'm going to make an appearance on the Equity Mates Investing podcast every week until the Microsoft share price hits $400. What is it? It's it's just about three hundred fifty three four. Oh, oh, really? 

Bryce: [00:38:54] And so you're going to come on here every week. Yeah, you want to take my spot.

Alec: [00:38:59] All right. I'll make that bet. I'll say you wont come on. And what are we putting on the line? 

Speccy Magee: [00:39:07] I didn't expect it to go this way. I thought you guys were just having a puzzle, but I actually won't be on the show. It will say, Yeah, we'll take that offline. 

Alec: [00:39:14] OK. Yeah. Look, I appreciate the correspondence from the land of Sparky's. I think it's useful inside. I feel like we will get and maybe not every week, but we'll definitely get you on again to tell us what's trending in. Maybe we can also get you to jump across the pond and do we call it across the pond? Anyway, don't go over to the states and tell us what's trending on Wall Street bets as well. 

Speccy Magee: [00:39:38] But yeah, I'll just add one more thing. So it's it's not all negativity that you get coming out of the subreddit. So for instance, the WallStreetBets cumulative donated three hundred and fifty thousand to a gorilla conservation charity. ASX Bets did something similar. They all started adopting koalas from the Port Macquarie Koalas manoeuvre. Well, I've been, I've been. There's been a lot of time in Port Macquarie, so it's good. Yeah, I thought I'd mention that. So they're donating money to charities as well. But just to close out on that. So I did want to play some d. I heard from equities analyst Jay Bonds. Okay, so he's contending that we might be seeing three days of growth 

Bryce: [00:40:21] for DWI, which three days, 

Speccy Magee: [00:40:24] but I'm sorry, say in three days, growth is the ability to sell cheap wine and to unlock the inefficiencies in the supply chain. So yeah, we might be seeing as a result of the cheap wine, some three days growth. So I'll I'll play the the data here. 

Bryce: [00:40:51] Thank you for coming on entertaining, as always. 

Alec: [00:40:55] Well, look, to be fair, the way that tech is ripping at the moment, it might only be a couple of weeks that you're on the show. 

Bryce: [00:41:01] starts. Good. Thanks, Becky. Well, Ren, as always, it's great to chat stocks and we'll be picking it up next week. But a reminder? Make sure you head over to Equity Mates dot com slash vinfast to register. Subscribe to the divx. And if you're interested in joining the Equity Mates contact team, email us at Corea's at Equity Mates dot com.

Alec: [00:41:22] And if you've made it this far in the episode and you're looking for more Equity Mates content, I've got to give a shout out to comedian economist if you want to know why Twiggy Forrest is Elon Musk's dad and why higher rents lead to higher house prices, but higher house prices don't lead to higher rents. Head over and listen to their latest episodes. It's very rare that a show can thread the needle and get those two topics in the same episode, so shout out to them. They're making some great content, and it's well worth a listen. 

Bryce: [00:41:51] Love it, will Ren. We'll pick it up next week.