Bryce v Ren: 2022’s Stock of the Year

Bryce: [00:00:15] Welcome to another episode of Equity Mates, a podcast that follows our journey of investing, whether you're an absolute beginner or approaching Warren Buffett status. Our aim is to help break down your barriers from beginning to dividend. My name is Bryce and as always, I'm joined by my equity buddy, Ren. How are you going? 

Alec: [00:00:30] I'm very good, Bryce good to be here, but I can't say that I'm excited. Oh. If there was one episode thrown everyone. If it was one episode a year I could take off. It would be this one. 

Bryce: [00:00:43] Take off.

Alec: [00:00:43] Every year we start the year with such hope. Little do I know that I'm setting myself up for the giant fall. What ruined Christmas? Once again, we're talking stock of the Stock.

Bryce: [00:00:59] Of the Year. We are in the final stages of 2022. We are wrapping up the year and looking back on what has happened in 2022. And of course, that must start with a review of our Stock of the Year that we did right back in February, whenever it was at the start of the.

Alec: [00:01:15] Start of the year when we came back from the summer. 

Bryce: [00:01:17] Series. This Thursday we've got an interview with Oliver Axel from Fidelity on Demographics. But then next week we really close it out. Bold Predictions Review on Monday. Andrew Browning On Thursday for bold predictions as well. And then Friday we've got a crypto year in review episode, so plenty happening to close it out. 

Alec: [00:01:34] Speaking of, don't wait. Speaking of crypto on Tuesday, tomorrow or depending on you and listening to this over on get started investing we wrap the top five and bottom five ETFs of 2022. 

Bryce: [00:01:45] You wouldn't want to be in crypto. 

Alec: [00:01:46] So you can guess which one was the bottom. 

Bryce: [00:01:50] All right. Well, let's start with what we've learnt this week before. We do have a look at how our stocks of the year have performed and then we'll close out the episode with a final book Bonanza with none other than our producer Sascha, who will be joining us. Can I finally get a win on the board? I came in hot and have been beaten ever since. 

Alec: [00:02:09] Oh, no. All if you get another win on the board, the narrative going into Christmas is just going to be Bryce beats up on his employees. You beat Simon in the first guy and if you beat Sascha in the last four, but he can't beat anyone. He doesn't pay us a salary to show trade show. 

Bryce: [00:02:25] All right. Well, we're going to kick off with what we've learnt or of something. 

Alec: [00:02:29] Bryce, before we talk about what we learnt this week, let's talk about the Equity Mates Awards, something we're very excited to be bringing back for the second year. We want to celebrate the people, the platforms and the products that are building for the retail investor that are making it easier, cheaper, more accessible for us to invest. What are the categories that were we got this year? 

Bryce: [00:02:53] We've got nominations and now open for Expert of the Year podcast guests that inspired and shared their knowledge and helped us become better investors. We've got products of the year. Think ETFs. Any investment products that has captured your imagination helped you get started on your investing shirting. 

Alec: [00:03:10] Captured your imagination and your dollars.

Bryce: [00:03:12] And you tell us, yes, platform of the year and Stock of the year. And that doesn't have to be the best performing stock. It's just whatever's lived in your head throughout the year that you classify as your stock of 2022. Kind of timely given that we are about to talk about our Stock of the Year 2022. 

Alec: [00:03:29] So I'm pretty confident I know which one's going to win that one. 

Bryce: [00:03:33] Zip. 

Alec: [00:03:34] Yeah. 

Bryce: [00:03:34] So now nominations are now open. There's going to be a link in our show notes. There is a link on our website. There is also a link in our bio on our social media platforms. We're accepting any nominations for any of those categories and then awards will be 22nd of December. 

Alec: [00:03:50] Yeah, so nominations are open now. They close on the 13th of December. We'll shortlist the five finalists based on your nominations. 

Bryce: [00:03:58] They're closed Tomorrow. 

Alec: [00:03:59] They closed tomorrow. Depending on when you listening to this or shortlist the finalists based on your nominations, then we'll put it to the Equity Mates community for a vote. And as Bryce said, the winners will be announced on the 22nd of December. So get on it. 

Bryce: [00:04:13] Love it. All right. Some interesting economic news came out during the week around the Australian economy and last week you started the episode saying life is good at ASX. A year to date is up, you fit, you're feeling great and. 

Alec: [00:04:28] How life changes in one way. Yeah now I've come in dower and sad to this episode. 

Bryce: [00:04:35] And yeah, well the economic growth numbers for Australia have been pretty good, so I'm just going to whip through a couple of them. The economy this year, over the past year has grown 5.9%. To put that in context, I reckon China now we know China is in the depths of a COVID lockdown, but China is expected to grow 3.3%. So I think this has got to be a record for the first time that we've outstripped China's GDP growth in quite a while. 

Alec: [00:05:03] You know, in all.

Bryce: [00:05:04] Of our lifetimes. So that's that's interesting. Our economy is $2.2 trillion and. It is 6.4% larger today than it was before the pandemic hit. Wow. Yeah. So we went we went through the pandemic. If you look at coal, coal, if you look at the from 1960 through 2020, the drop the dip of GDP activity during COVID is tiny, minuscule. 

Alec: [00:05:32] Love, love. 

Bryce: [00:05:33] To say. 

Alec: [00:05:33] It long term investing. 

Bryce: [00:05:34] The unemployment rate is near a five decade low of 3.4%. Yet smaller states are now now starting to outstrip the larger states in terms of economic growth. Northern Territory Act, Western Australia, South Australia all now abating. New South Wales and Victoria and all over 10% growth rate. 

Alec: [00:05:52] Really?

Bryce: [00:05:52] Yeah. Northern Territory 18.4%. 

Alec: [00:05:55] That's that coal. Lithium bump. 

Bryce: [00:05:56] Discretionary spending. We've had inflation this year. We've had interest rate rise this year. Discretionary spending continues to grow at a rapid pace. 

Alec: [00:06:06] But we know that the consumer had heaps of savings because they couldn't leave the House during COVID.

Bryce: [00:06:11] Discretionary spending before COVID was $109 billion a year COVID hit, it went to 80 billion, so 20 billion drop. It is now $120 billion a year. Well, 10 billion more than before COVID. Anyway, the long story short is that it's walls of worry. 

Alec: [00:06:30] So let me ask you this, then. Economy is good. Unemployment down. People are spending. Why is the sentiment so low?

Bryce: [00:06:41] I think it's because of what's potentially to come, all of this hot, hot economy. 

Alec: [00:06:49] But sentiment is always driven by what's to come. 

Bryce: [00:06:52] Yes. Yeah. And but I think what's to come is probably more dire than what has been over the last five years. Yeah, if that makes sense. It's a hot economy and now the RBA is reacting to a hot economy in a pretty aggressive way. And also we're being influenced by overseas sentiment. 

Alec: [00:07:12] Yeah, this is my big takeaway that lost that last point. Like there's no doubt that America has had a shocking year and this and the share market over there has sold off meaningfully and even their economic data is actually not too bad. You know, they had a pretty strong jobs report recently, but it felt like, well, we feel I feel I reckon we feel more negative because of we look to the US for everything. Yeah. 

Bryce: [00:07:36] Yeah. I mean, they're certainly flagging a recession far more than Australia is flagging a recession. And on Tuesday the RBA lifted interest rates by 25 basis points, 0.25%. They don't mate now for two months. Which is, which is good. I don't know. They take a bit of time off. So the next meeting I think is I think yeah, 60 days or so before the next decision will be made. So a couple of months, which should be decent time for the RBA to say, you know, what impact the latest rate rise has had. But it doesn't feel like Australia is heading towards a recession as much as people think that the US is and we know that there's differences in Europe. But yeah, it does feel that looking at numbers, economy is pretty, pretty hot and strong. 

Alec: [00:08:21] Yeah, we might have a recession, but it's like it may not be as bad as people. Oh, it's feel like it feels like it's going to be. 

Bryce: [00:08:30] Yeah. Anyway, I.

Alec: [00:08:31] Mean, maybe we're wrong, but. 

Bryce: [00:08:33] If you want to have a look at some numbers, there's a there's a great article over on the IFR called Australia's Overheated Economy in Ten Charts, and it actually gives you ten charts to to have a look at everything. So check that out. We'll we'll put it in the show notes. What did you learn, Ren?

Alec: [00:08:50] Not much. You know, winding down for Christmas. We're getting our summer series ready. We've done 12 deep dives on 12 different companies listed here and overseas. And the big takeaway from that is just how cheap some of these US companies are becoming. It's pretty amazing. 

Bryce: [00:09:12] It got me thinking when we were preparing for the stock of that sorry, looking at Stock of the year that this coming stock of the year that we do next year really opens up some of. 

Alec: [00:09:21] The think about that. 

Bryce: [00:09:23] Everything's down the last few years we've been doing it it's just been like everything's been at record highs but now we're an opportunity if you could if you get it right, there could be some serious rebounds. 

Alec: [00:09:34] Spotify did 11 billion USD in revenue last year and its market cap is $14 billion. Wow. Yeah. I won't talk about interactive court because that'll tip my hand. It's not going to. Yeah, there's just a lot of unprofitable companies like Spotify that are great businesses have, you know, strong brands, millions of users, hundreds of millions of users, and they look cheap if they can. 

Bryce: [00:10:05] Get it going.

Alec: [00:10:07] And so Bryce, I guess the first thing I learnt this week is spend the time you have over Christmas researching outside the big FAANG stocks and Australia's BHP, CBA and CSL because there is opportunity there. 

Bryce: [00:10:22] Absolutely. 

Alec: [00:10:23] Although most stock of the year performance might not indicate that. Second thing, just quickly, I've been loving what I'm learning over on The Dive. It's just been so much fun to do some of these episodes. Last week we did will finally be fully autonomous by 2030. We actually dropped on on this Equity Mates feed the car company subscriptions episodes. Yes, but one that I was particularly excited to get off the board and into the podcast. Have you ever wondered why there are so many Thai restaurants? 

Bryce: [00:10:56] No.

Alec: [00:10:57] Well, I'm sure you would have after you listen to this episode. The Thai government has a 20 year programme to roll out Thai restaurants around the world. Just a fascinating story, one that Alf in the office was calling my conspiracy theory. But it is true, I promise you. And we explored it on that episode. So much fun. So I just you know. 

Bryce: [00:11:20] It is a fascinating story. Culinary diplomacy, as you call it, or as they call it. But anyway, let's keep moving. It is time for Stock of the Year. Who wants to go first? I'll go first. All right. I'm pretty. I'm pretty sure my stock of the year was Macquarie.

Alec: [00:11:40] Oh, here we go. I actually think it was block. 

Bryce: [00:11:43] No, it was definitely Macquarie. So I chose Macquarie at the start of the year listed on the on the ASX. The ticker is M-Q-G Macquarie Group. 

Alec: [00:11:53] The most vanilla. 

Bryce: [00:11:55] That's the idea of this game is to win and it's to win and the idea is to win and not only. So context ASX 200 down 5%, S&P 500 down 17 and NASDAQ down 30% year to date. Macquarie is down for the year so that no surprises that it's down 17%, so it didn't outperform the ASX. Full disclosure, I do own Macquarie and I have actually been buying this stock throughout the year. 

Alec: [00:12:28] Full disclosure, so do I. 

Bryce: [00:12:29] So I did own it at the time of doing Stock of the year as well. My my general thesis at the start of the year was that I thought it would do okay in an interest rate environment. Their commodities business was booming and they do really well with volatility as well on their trading desks. And that's kind of played out. They are the kings and queens of constantly under estimating or at least under telling the market what they're going to do and constantly over delivering and outperforming. And I think that just drives price performance every quarter. When they report, they do it every time. I always outperform what they're are what the estimates are and what they tell the market they're going to do. So I don't know if it's incredibly good PR and comms, but it is what it is. 

Alec: [00:13:17] I know. I think it's that they're incredibly good at making money. 

Bryce: [00:13:20] Well. There's that part of the business as well, but they're very good at communicating and always outperforming. Bit of a volatile, rocky, rocky year from Jan through March. They were down 17%, then they rebounded 18 from April through to June they were down 24%, then they rebounded to 13 and from September three and now they're up 14%. Pretty impressive, impressive half year report that just came out. $8.6 billion in revenue up 11%, $2.3 billion in profit for the half, up 13%, spitting out a $3 dividend. And they like almost they're getting close to that trillion dollars in assets under management they have $795 billion in assets under management. A true global asset manager. Love to see it in from our our own backyard.

Alec: [00:14:11] Yeah and they really are taking on the world like they're building a reputation in the US, putting themselves alongside some of those big financial institutions and investment banks over there. I'm pretty sure they sponsor one of the college basketball teams. I'm pretty sure I saw a meme actually about that, like University of Pennsylvania or something. I can't remember the exact the exact university, but yeah, there was a meme about it and we have a mate over there over in the States who was saying that Macquarie is saying they're getting a job at Macquarie, is saying in the same league as like the AJ Pais and Goldman's. Yeah, that's just one person's anecdotal view. But like it's pretty cool that an Australian financial institution is really building a global reputation. 

Bryce: [00:14:56] Absolutely. Well, 38% of net operating income comes from Americas, 24% from Europe, almost 30% from here in Australia, 10% from Asia. So they do, yeah, truly are global business. So yeah, love to say it, doing it and they just keep churning it out. 

Alec: [00:15:13] I guess my after report. So like I own Macquarie and I think it's an incredible business and it's been an incredible story. I guess my question always with these like PayPal driven businesses because it is a people driven business, it requires the best people and right now, you know, especially in Australia, they sort of pick the university graduates that they want. Paper driven businesses rely on having the right people with the right incentives and the right controls to manage risk and to make people think long term and all of that. And so that's always that the thing that you've got to be wary. 

Bryce: [00:15:51] Of, I know what you're saying, that they're like the creme de la creme of investment banking, which no doubt Macquarie is in there. Like they just a self-fulfilling you just Always going to have the ability to choose the best. 

Alec: [00:16:06] Like the creme de la creme de la creme of asset. Managers in the late nineties went to long term capital management and then they blew it up because they were too smart by half. Like, you know, it's yeah, it's just, you know, the creme de la creme five years ago of asset managers in Australia were probably going to Magellan creme de la creme 15 years ago, were probably going to platinum. And I know, I know I'm talking about asset managers, not yeah, investment banks, but like better example the creme de la creme were. A number of the investment banks that blew out. 

Bryce: [00:16:36] Yeah, but you've still got the creme de la creme more broadly that have survived and is still the creme de la creme. Yes. 

Alec: [00:16:44] So I'm just you know, it's just one man's opinion. But that's always my concern. It's not like, you know, a business like Apple. Like if Tim Cook left and or he took all of his executives with him and went to start orange. Like, you're probably not going to be able to repay what Apple has because it was like the product and its IP and all of that. If Shamar left and took all of her executives, she could create a rival investment bank. Well, that's right. That's right. Yeah, yeah, yeah. And like, obviously, Macquarie owned a lot of good assets. Oh, it's just, just my thought around my long term. You need to find an extra is what I'm saying. 

Bryce: [00:17:25] Yeah. Well I think we've heard it from multiple people that they not only are they good at making money, but they're incredibly good at developing their people as well. 

Alec: [00:17:34] Yeah. Look, to be honest, I'm just nagging you stuck at the because I don't want to get to mine because. 

Bryce: [00:17:39] Well, hard to neg a winner, so let's let's go to yours. 

Alec: [00:17:45] Well, is there anything else you want to say about it? Like, I know you got knocked off. 

Bryce: [00:17:49] Every one. 

Alec: [00:17:50] Of those off year numbers. Yeah, right. 

Bryce: [00:17:51] Oh yeah. 

Alec: [00:17:52] Went through all of it. Oh, right. 

Bryce: [00:17:55] Yeah. But you're obviously looking at your your stock trying to say how you can position this as a winner. 

Alec: [00:18:01] So I told you I did inverse mind. All right, let's take a break and then we'll get to mine. The approach that I took after being in my own head about how am I going to beat Bryce? How am I going to pick a stock that doesn't lose a third of its value in the year that I pick it? And I was like, Oh, do I just do the S&P 500 index? And then I was like, Nah, that's boring. Like that one. That won't be a good episode. And two, it's not in the spirit of the competition. And then I was like, Do I just pick a super safe, you know, like an alphabet or a microsoft, like a company that just plugs away or just plugs away? I was like, no, you know what? I'm going to bring to the table a company that I just find interesting and then I would enjoy talking about for 15 minutes. Because let's be honest, I can't do any worse than I've done. 

Bryce: [00:18:56] Alright, Ren. Well, it is. It's that time, your Stock of the Year. What do we have? You pitched IAC?

Alec: [00:19:04] Yes. Its name is, IAC previously called Interactive Corp. Nasdaq ticker. You can guess it. IAC

Bryce: [00:19:12] Fascinating company.

Alec: [00:19:13] Yeah. I think what I've done the last couple of years with my Stock of the Year is just pick a company that I find fascinating. And next year I'm going to pick a company that will. 

Bryce: [00:19:24] Perform. 

Alec: [00:19:25] Well. The range of outcomes will be narrower.

Bryce: [00:19:28] Yeah. 

Alec: [00:19:29] Yeah. 

Bryce: [00:19:29] I think that was your goal this year? 

Alec: [00:19:31] Was it? Well, I mean, this company isn't. 

Bryce: [00:19:35] You actually you were tossing around with a should I just go. 

Alec: [00:19:38] Yeah, I think I was. I think I was talking about that. Yeah. If I'd picked Google, I would have been down 35% year to date and I still would have lost. So I'm going to say the way that I lost this year is a more honourable loss.

Bryce: [00:19:49] Google 35%, geez. 

Alec: [00:19:51] Down 65% year to date.

Bryce: [00:19:56] Okay. 

Alec: [00:19:57] So rather than talking about well, let's just remind ourselves about what this company is and why it was so interesting. So I say is the anti conglomerate. So a lot of companies, especially with high profile leadership. So IAC is led by American billionaire Barry Diller. A lot of these companies and these high profile CEOs and chairmen try and build empires and they try and bolt on and acquire and, you know, create sprawling conglomerates. Ala Rupert Murdoch's empire pre splitting it off in 2013. Barry Diller is the opposite of that. He doesn't build a conglomerate. He tries to spit out different public companies. Over the past 25 years, Interactive's Corp have spun out 11 public companies. And so as a shareholder of Interactive Corp, you then get shares in these other companies. And so then you have Interactive Corp and the other company, then it spins out another one. Then you have three companies at your own. It's the anti conglomerate and the companies are meaningful. Tell me if you've heard of them. Expedia. 

Bryce: [00:21:07] Yeah. 

Alec: [00:21:08] TripAdvisor. 

Bryce: [00:21:08] Yeah. 

Alec: [00:21:09] Match group. 

Bryce: [00:21:10] Yeah. 

Alec: [00:21:11] AKA owner of Tinder and Hinge and all of that in some series Vimeo. 

Bryce: [00:21:15] Yeah. 

Alec: [00:21:16] LendingTree. 

Bryce: [00:21:17] I'm surprised Vimeo still is going to be honest, but yeah. LendingTree, no. 

Alec: [00:21:20] Ticketmaster, which was then subsequently acquired. 

Bryce: [00:21:24] Yes. 

Alec: [00:21:24] And then a few others that aren't as exciting if you are as an investor. If you had bought ten shares of IAC, then it was known as Silver King. In 1995, when Barry Diller took it over, it was $39 a share. So you would've spent $390 by the start of this year. Those ten shares of IAC, you would still have ten shares of IAC. You would also have ten shares of Expedia, four shares of QVC, five and a half shares of Live Nation. 0.6 shares of LendingTree. 21 and a half shares of Match Group. Ten shares of TripAdvisor. 6.6 shares of Marriott vacations, and $59 in cash from an acquisition of a company called Interval Leisure. So that.

Bryce: [00:22:11] Totalling what? 

Alec: [00:22:12] So like 2020, that was worth $7,170. Which was a 12% compound annual growth rate, 390 into to 7170. By comparison, these numbers are from the start of the year 12% compound annual IAC, 10% compound annual growth rate for Burke Shire, 7% compound annual growth rate for S&P 500. So it's a fascinating story. And the reason that I pitched it as the Stock of the Year in the start of this year was because it looked like they were turning their interest. So they've got a number of so what they do is they like acquire random Internet companies, roll them up into a meaningful company and then spin that out. And so they did that with, you know, ticketing, with online ticket buying with Ticketmaster. They did it with travel booking with Expedia, they did it with online dating, with match group. They own like 39 different. Dating apps all in one company. Then they spin that out. And so they're doing that with digital publishing. They're doing it with a few other things. But the thing that had me really interested at the start of this year was they were doing it. It looked like they were doing it with online gambling and as gambling and sports betting gets legalised and more and more US states. It looked like IAC were trying to make a play there. They owned 12% of MGM Resorts, which has, I think it's one of the biggest sportsbooks ever in the U.S. Bet MGM. And they were looking at a number of other things. Safe to say whatever they're looking at, the market didn't love it because they're down 65%. 

Bryce: [00:23:55] Yeah, well, it's interesting. That's kind of like tech number down. But they Were profitable.

Alec: [00:24:02] They're not profitable. 

Bryce: [00:24:02] Are they not?

Alec: [00:24:03] I mean, they have been profitable in previous years and they're obviously trying to be profitable. But the story here is like a value creation story through. So yeah, like creating valuable businesses and spinning them off and stuff like that rather. 

Bryce: [00:24:17] Than building internal getting profit. 

Alec: [00:24:19] Yeah, yeah, yeah, yeah. So I think some of the bigger businesses that they own today, so the sports betting stuff is like longer term, they own ANGI, which is kind of like an Airtasker rival. They connects home owners with with tradies, and that's an online platform business. Online platform businesses haven't had a good year. But the real kicker, the one that I mean, we didn't know how bad this year was going to be over in the US, but the one that has bitten me, they owned a lot of digital publishing businesses, right? Yes. Let me name some. So let me name some of the titles that you will be familiar with that they own better homes and gardens, all of a sudden living a number of other home ones, food and wine. Simply recipes. All recipes. No one in it? 

Bryce: [00:25:14] No.

Alec: [00:25:15] They are an investopedia. Yeah, I heard of them. Yeah, they are in people like People magazine and a couple of other entertainment ones. They're in Travel and Leisure InStyle Brides. Did you guys look at that when you got married? No, fair enough. And a few parent ones, though, anyway. So they own a number of different online publishing businesses, 174 million unique online monthly viewers. They in terms of their digital content presence, they have a chart here, you know, like Google is number one, obviously, Microsoft number two, Facebook number three. But they're right up there amongst Walt Disney, WarnerMedia, Paramount, they're massive in. 

Bryce: [00:26:00] Terms of what reach. 

Alec: [00:26:01] Us unique online monthly viewers. Yeah yeah. Not a great business to be in in 2022. Yeah, yeah. 

Bryce: [00:26:07] Well, not a good business. Yeah. Yeah. 

Alec: [00:26:09] IAC not a good business today so yeah. So just to close out what they are, so we spoke about ANGI, their home services platform, their publishing business. They also own, oh, 27% of terror. Oh yeah. The peer to peer lending, which Bryce and I did some videos for yesterday they own ask okay I think was asked going to today so you know they own a lot of assets which maybe aren't great and they try and turn them around.

Bryce: [00:26:40] Yeah. Nice.It is an interesting business. 

Alec: [00:26:42] It is a fascinating business. The antique conglomerate. But this is all just me putting because here I lost you lost. 

Bryce: [00:26:51] You lost, you lost. But that's okay. There's always next year rents are down 65%. I was down 17, the market down about 17 in the states, 30 Nasdaq 5% here and in know so we've both. 

Alec: [00:27:03] Hold on hold on but are the fair comparison to account for market risk is I was exposed to Nasdaq market risk. Nasdaq is down 30%. I was down 65%. So my alpha was -35. Your market was the ASX. Down 5%, Macquarie down 17%. 

Bryce: [00:27:28] Still wins. In whatever way you look at it, it is what it is. All right. Well that's it Macquarie. I see we're I stocks of the year we will be back next year made fab without 2023 stocks of the year and bold predictions just after we get through our summer series, which is 12 episodes back to back each episode, a deep dive on a company listed here in Australia or over in the US. And each episode also has an expert joining us to help us unpack the investment case for some of those companies. We've got Nike, we've got Coke, we've got BLOCK, we've got core lithium. There are some great companies in there and we've had an awesome time recording that content. Of the summer. But it does bring us to the end of this episode, Ren, where we're closing out with book Bonanza and bringing on our producer, Sascha, to. To close it out. You've got the questions. Do you have the books? 

Alec: [00:28:26] Yeah. 

Bryce: [00:28:26] So we've got Sascha. Sascha, welcome. 

Sascha: [00:28:29] Nice to be welcomed. Yes. It's a hallowed, hallowed air that I'm venturing into. I'm often in the background, but not online. 

Bryce: [00:28:38] Well, if you recognise the voice, Sascha is the host of our gold medal winning business podcast of the year, The Dive. It's our business news podcast Monday, Wednesdays and Fridays with with Ren and Darcy. 

Sascha: [00:28:50] So that's how I get introduced from now on.

Bryce: [00:28:53] Most of the time. 

Sascha: [00:28:55] Yeah, the full title of the award. Before I walk into any room. 

Alec: [00:29:00] I also find it interesting that Bryce excludes himself from talking about it. Just does anything he can to weasel out of helping with the script. Yeah. Dive also. Bryce also appears on the dive from time to time. 

Bryce: [00:29:12] Yeah, very loosely. Very loosely. All right, Ren. Well, we've got book Bonanza. I did say it was our last one last week, but it's back again. This is our list we've got. 

Alec: [00:29:24] This will more than likely. They also said that last week, I'm running out of books. I'm going to need to bring more to the office. 

Bryce: [00:29:30] So what have we got? 

Alec: [00:29:31] So, Sascha, you've heard this game before, so you know the rules. But for people who are tuning in for the first time, I've got three books here and a number of questions you are going to leave with a book that is a guarantee. If you can beat price in this game, you get to choose the book. If Bryce beats you and he hasn't beaten a lot. no response. 

Bryce: [00:29:57] I've put forward my case each time that I've answered correct. I've answered correctly. I ever get the points.

Alec: [00:30:04] I guess I'm just salty from this stock of the year thing. So, Sascha, if price does win, he chooses the book you leave with. Let's get into it. Holding them up to the camera if you're watching on YouTube, the three books, the first one, The Ethical Investor by Nicole Haydel. Sascha, have you read it?

Sascha: [00:30:22] I've flipped through it when I'm in the office, but I haven't read it cover to cover yet.

Alec: [00:30:26] Okay, nice. Well, this could be your opportunity. Second one, get started investing. It's easier than you think to invest in shares. $19 on Amazon. The Perfect Christmas gift.

Bryce: [00:30:40] Written by us. 

Alec: [00:30:41] Written by us. Sascha, have you read it? 

Sascha: [00:30:43] This was my Christmas present from Bryce last year, so it might be the second year in a row that I get to look at an investor for. 

Alec: [00:30:53] Let the Record show that Sascha didn't actually answer the question. 

Sascha: [00:30:57] Yes, I did read it. I read it.

Alec: [00:31:00] And then the third book I decided to include a bit of a Holiday Bay trade, not finance related, something that is a real page turner that I actually picked up in the airport as we were flying back from Brussels box. 

Bryce: [00:31:16] Oh, hell, yeah.

Alec: [00:31:18] Just nice little memento from that trip. Matthew Riley, The Australian author. His latest book, Cobalt Blue.

Bryce: [00:31:28] Hardcover, is a. 

Alec: [00:31:30] Hardcover.

Sascha: [00:31:30] Wow. 

Bryce: [00:31:32] Yeah, it looks good. 

Alec: [00:31:34] Sascha, have you read it? 

Sascha: [00:31:35] No.

Alec: [00:31:36] Bryce, have you? 

Sascha: [00:31:37] No, that's probably the one I'm angling for. I'm going to going to be honest.

Alec: [00:31:42] When you have to say you're going for Get Started Investing. 

Sascha: [00:31:46] But I already got a copy. Pride of place on my bookshelf. I don't want to look like I. 

Alec: [00:31:52] Fair enough. Fair enough. All right. So the theme of the game this week, everyone was sharing on social media their Spotify wrapped. So the theme is Spotify, the business behind Spotify. But before we get into it, what were your Spotify raps? What was the what was the number one song? 

Bryce: [00:32:11] So I don't have Spotify to start with. So a bit hard for me. 

Alec: [00:32:14] To hear tidal. 

Bryce: [00:32:15] It's hard for me to do this, but I do. I do occasionally use my wife's and log into hers. And hers was the shout out to Harriet at No Surprises from Paris to Berlin from Paris, but is confidential. And then do you just want the top one? 

Alec: [00:32:37] Yeah, let's. We don't need to drag this too long. Sascha, what about you? [00:32:40][2.9]

Sascha: [00:32:41] Our minds are really embarrassing, but I'm going to say it anyway. It's Texas Men by the Chicks, formerly known as the Dixie Chicks, which is really unexpected. I thought I was going to get some Tyler. [00:32:50][9.4]

Alec: [00:32:52] Well, okay. [00:32:53][0.8]

Bryce: [00:32:54] No, I don't know that song. I'll have to look it up after. Or maybe we can just quickly play. It is a. [00:32:58][4.5]

Alec: [00:32:59] Yeah Bryce. [00:32:59][0.2]

Bryce: [00:32:59] Seconds in this production. [00:33:00][0.9]

Alec: [00:33:01] Bryce told me that he would never listen to the chicks after they did that George W Bush protest and got cancelled. All right, well, let's get into us. Five famed book Bonanza. First question, there are multiple choices, but I'm going to give you guys a chance to just get it outright first. What was the most streamed song on Spotify this year? ANTIHERO Sascha has locked in anti-hero by Taylor Swift. It was released late in the year that might come back to bite her. Bryce Leskey, you do have to guess? The four options to choose from stay by Australian kid Le Roy and Justin Bieber. Cold Heart Panel Remix by Elton John and Dua LIPA as it was by Harry Styles and Heatwaves by glass animals. [00:33:55][54.4]

Bryce: [00:33:56] Well, I really only know one of those three, which is cold hot, so I'm going to have to lock that in. [00:34:00][4.6]

Alec: [00:34:00] Sure. Okay. Bryce, showing the pop culture knowledge. Maybe you should get Spotify. [00:34:05][4.6]

Bryce: [00:34:08] I may have heard of them, but I couldn't tell you this. Like, if you were to play me those four, I may be like, Hey, I. [00:34:13][5.7]

Alec: [00:34:15] We don't need to go. Sascha, what would you like to guess? [00:34:19][4.9]

Sascha: [00:34:20] Well, my second choice is going to be as it was so before you stop me, so that I'm going to lock in Harry Styles. 

Alec: [00:34:27] Sascha, you have got it right as it was by Harry Styles. Number one point on the board for Sascha Kelly. Second question in book Bonanza, this is a closest to the PIN question. Whoever is closer to the correct number gets it right. How much is Spotify share price down year to date?

Sascha: [00:34:46] No, I earn Spotify and this one might be. 

Alec: [00:34:50] Full disclosure. So do I. And I'm pretty confident. 

Bryce: [00:34:53] I do so. Yeah, yeah. I something inside me tells me that it, it, we know it definitely bombed hard like 70, 70% vibes. Something tells me it's bounced a bit over the last couple of months, so I'm going to say down like 55%. 

Alec: [00:35:11] Bryce is locked in 55. Sascha, what are you going to say? 

Sascha: [00:35:13] Oh, it's over on the year, isn't it? It's not since I bought it. Obviously, I'm going to say 68. 

Alec: [00:35:24] Sascha was so close to the pin, she almost got a hole in one 69% year to date. 

Bryce: [00:35:30] I was going to say 70. Who would have won then? 

Alec: [00:35:32] I would have had to look at the decimals. All right, Sascha, you two up. It is a five question quiz. So you haven't won it. Yeah. 

Sascha: [00:35:40] Okay. 

Alec: [00:35:41] From a cursory. So Spotify have three key audio channels, music, podcasting and audiobooks from a quick Google search on each of them. Which of those three channels is expected to have the highest compound annual growth rate up to 2030? In other words, between audio books, podcasting and music streaming, what is expected to grow the fastest for the rest of this decade? [00:36:07][26.1]

Bryce: [00:36:08] Red herring question So I'm going to go audio books. [00:36:10][2.0]

Alec: [00:36:11] Bryce is going to go audiobooks. Sascha, what are you going to go? [00:36:13][1.8]

Sascha: [00:36:13] Oh, well, then I would pick audiobooks too. But am I allowed to pick the same answer? [00:36:16][3.2]

Alec: [00:36:16] It's less fun for the game. [00:36:17][1.1]

Sascha: [00:36:20] Well, I'm going to get my podcast. [00:36:20][0.8]

Alec: [00:36:21] Okay. Coming in at third place. Music streaming 15% forecast compound annual growth rate. Surprise me. That's meaningful. Second place audiobooks at 26%, leaving podcasts in first place at 31% or in the right industry. Guys. [00:36:42][20.5]

Bryce: [00:36:42] Nice. [00:36:42][0.0]

Sascha: [00:36:42] That's good. Yeah. [00:36:43][0.2]

Alec: [00:36:43] It does mean Sascha has three. [00:36:44][1.0]

Bryce: [00:36:45] 31% compound. [00:36:46][0.6]

Alec: [00:36:46] Notes. Let's play for pride. Bryce fourth question in 2021, Spotify earned 11 billion USD in revenue. How much did a payout to rights holders i.e. record labels, artists, composers, those that own the rights to the music? That was straight give me to the closest billion. [00:37:05][19.1]

Bryce: [00:37:07] It can't be a I don't think it's a lot. [00:37:08][1.6]

Alec: [00:37:09] So 11 billion in revenue. How much did they pay out? 

Bryce: [00:37:11] Like two. 

Alec: [00:37:12] 2 billion. Sascha, what do you think? 

Sascha: [00:37:15] 1 billion. 

Alec: [00:37:17] 7 billion. 

Bryce: [00:37:18] Nice. 

Alec: [00:37:20] Wow. So, Bryce, you are close. Yes. So three one. And final final question. The top. But we're looking at the peak of the day era compared to last year, which is the highest point in the digital streaming era. In which era? The sad error or the streaming era? Did the top 50 US artists capture a bigger share of the total music pie?

Sascha: [00:37:48] What's it.

Bryce: [00:37:51] Like to. 

Sascha: [00:37:51] Definitely be.

Bryce: [00:37:53] Like nineties? How are you saying? 

Alec: [00:37:54] Yeah. Like mid-nineties or now? Yeah. Did the top 50 U.S. artist capture more of the total revenue in music then or now? 

Bryce: [00:38:03] Okay. 

Sascha: [00:38:06] I would say now. 

Alec: [00:38:07] You would say now, Sascha, top 50 are taking more now or Bryce. Are you going to take. 

Bryce: [00:38:12] I'm going to have to take the other. 

Alec: [00:38:12] Side of the game. Yeah. Well, Bryce Lasky, you had to take it, but you were right to take it because you are right at the peak of the say they are the top 50 artists in the U.S. took 25% of total music revenue in the U.S. in the streaming era, it's 12%. 

Bryce: [00:38:31] More people getting cash. 

Alec: [00:38:32] Yet as a longer Title. 

Bryce: [00:38:36] A lot more. Congratulations, Sascha. Taking home the. 

Alec: [00:38:39] Oh, yeah. Sascha, which book do you wanna choose? 

Sascha: [00:38:42] Matthew Riley.

Alec: [00:38:45] Matthew Riley. Shout out. 

Bryce: [00:38:46] Matthew Riley.

Alec: [00:38:48] Sascha I'm sorry to say, I actually don't think it was one of his best ones. But you've locked it in and you're taking it on. 

Bryce: [00:38:53] I love it. Well, thanks for joining us. Thanks for joining us, Sascha. And that does bring us to the end of today's episode. We've covered a lot, but as I said, next week we're closing out with our bold predictions review and with us. Then we've got Andrew on Thursday and then a crypto review on Friday. So plenty going on. 

Alec: [00:39:09] And if you haven't been able to play, Bookman ends up but you would like a copy of get started investing the perfect Christmas gift. Absolutely. Amazon $19 booktopia, a little bit more than $19. But that's a good Australian company. Head over and pick it up now. 

Bryce: [00:39:24] Love it. Well, we'll leave it there. Sascha, thank you. Ren will pick it up next week. 

Alec: [00:39:28] Sounds good.