We’re back with live events in 2024 - get your tickets to Equity Mates Live – Ask An Advisor here.

Expert Investor: Marcus Padley – No Bullsh** Investing

HOSTS Alec Renehan & Bryce Leske|21 May, 2020

In this week’s expert investor interview we speak to Marcus Padley, the founder of Marcus Today and a market veteran with over 30 years experience. Marcus founded Marcus Today because of his frustration with the ignorance of everyday investors, which drove him to create his independent stock market research and insights newsletter.

In this interview Marcus unpacks the lessons he’s learnt from his time in markets and shares his views on markets today.


*******

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

*****

Some of our favourite resources and offers to help you during your journey:

*****

Make sure you don’t miss anything Equity Mates related by signing up to our email list. And visit this page if you love everything Equity Mates and want to support our work.

*****

Equity Mates Investing Podcast is a product of Equity Mates Media. 

All information in this podcast is for education and entertainment purposes only. Equity Mates gives listeners access to information and educational content provided by a range of financial services professionals. It is not intended as a substitute for professional finance, legal or tax advice. 

The hosts of Equity Mates Investing Podcast are not financial professionals and are not aware of your personal financial circumstances. Equity Mates Media does not operate under an Australian financial services licence and relies on the exemption available under the Corporations Act 2001 (Cth) in respect of any information or advice given.

Before making any financial decisions you should read the Product Disclosure Statement and, if necessary, consult a licensed financial professional. 

Do not take financial advice from a podcast. 

For more information head to the disclaimer page on the Equity Mates website where you can find ASIC resources and find a registered financial professional near you. 

In the spirit of reconciliation, Equity Mates Media and the hosts of Equity Mates Investing Podcast acknowledge the Traditional Custodians of country throughout Australia and their connections to land, sea and community. We pay our respects to their elders past and present and expend that respect to all Aboriginal and Torres Strait Islander people today. 

*****

Have you just started your investing journey? Head over to Get Started Investing – Equity Mates 12-part series with all the fundamentals you need to feel confident to start your investing journey.

Want more Equity Mates? Subscribe to our social media channels (@equitymates), Thought Starters * Get Started Investing mailing list and more, or check out our Youtube channel.

Equity Mates Investing Podcast is part of the Acast Creator Network.

Bryce: [00:01:08] Welcome to another episode of Equity Mates, a podcast where we help you learn to invest in 45 minutes or less. We break down the world of investing from beginning to dividend so that you can hopefully make some returns. My name is Bryce and as always, I'm joined by my equity buddy Ren. How's it going, bro? [00:01:29][21.0]

[00:01:29] I'm very [00:01:30][0.4]

Alec: [00:01:30] good. Bryce very excited for the next instalment of our interview series. We've had some big names recently and we've got another big and exciting night today. [00:01:38][8.4]

Bryce: [00:01:39] We do very much looking forward to this, so we'll jump straight into it. Our guest today has a master of applied finance from Macquarie University, a bachelor of law from South Hampton University, originating from Yorkshire, England, but now living in Melbourne. He started his career in institutional stockbroking back in London in 1982 and has been a stockbroker for 38 years before, I guess feeling a bit frustrated with the ignorance of investors towards the industry, which has led him to create markets today, which is an insightful, honest, straight up independent stock market research and insights newsletter. So without further ado, it's our pleasure to introduce Marcus Padley to the show. Thanks for joining us, Marcus. [00:02:22][42.5]

Marcus Padley: [00:02:22] My pleasure, guys. Mates, Equity Mates. [00:02:26][3.3]

Alec: [00:02:29] So, Marcus, we're keen to unpack some of that background and get some of your thoughts on markets and investing today. But before we do, we like to start these interviews with a bit of a game, just to give a sense on how you're thinking about markets and investing and some key indexes at a time like this. So the game's called overrated or underrated. We'll throw something out and we'll get your opinion on whether it's overrated or underrated. Are you up to play [00:02:52][23.6]

Marcus Padley: [00:02:53] overrated or overpriced? [00:02:54][0.9]

Alec: [00:02:55] Yeah, it's a good it's a good call out that a few guests have made. It probably could be overvalued or undervalued. [00:03:00][5.2]

Marcus Padley: [00:03:01] Redefine the question. [00:03:02][0.8]

Marcus Padley: [00:03:04] It's a time that's very important [00:03:07][3.5]

Alec: [00:03:10] to kick it off will start with an Australian index, overrated or underrated. The ASX 200 [00:03:16][6.4]

Marcus Padley: [00:03:17] overwrites is an index. It's about stocks and sectors, not indexes. [00:03:21][3.4]

Bryce: [00:03:22] Interesting. So then I assume that would flow through to overrated, underrated. The S&P 500 [00:03:27][4.7]

Marcus Padley: [00:03:28] always overpriced at the top of the market. They had 27 trillion dollars worth of stocks priced at 23 and a half times. If you were to go into the real world and offer any businessman 23 and a half times his last year's earnings for his business, you would get hit in the rush to accept that offer. And yet you got twenty seven trillion dollars worth of stocks in the US trading on a PE of twenty three and a half times, which tells you a lot of stocks are priced not on earnings that priced on hope and databases and future earnings and yet always overpriced. Even after the correction you've still got twenty three trillion dollars worth of stocks on twenty one times is still a fantasy multiple. [00:04:11][42.5]

Alec: [00:04:11] So I think that indicates your answer to the next question. But I'm going to ask it anyway. Overrated or underrated? Index investing, [00:04:18][6.3]

Marcus Padley: [00:04:19] massively overrated over marketed. It's not the eighth wonder of the world. It's just a very standard vehicle to get an average return. It does what it says on the box. And any of those index investing products like ETFs that start to stray from providing you with a passive investment over particular index commodity, whatever is dangerous life step beyond that level of competence. Some of those ETFs, [00:04:46][27.1]

Bryce: [00:04:47] Sir Marcus, you've probably just lost 98 per cent of our audience. [00:04:50][2.7]

Marcus Padley: [00:04:53] Well, they [00:04:54][0.6]

Marcus Padley: [00:04:54] all hold ETFs that. [00:04:55][1.0]

Bryce: [00:04:56] Yeah, I mean, it's something that is of interest. [00:04:59][2.8]

Marcus Padley: [00:04:59] It's absolutely fine if you want to hold an index or whatever, that's absolutely fine. But that being marketed as being something special, they do what they say on the boards. And and for millennials, the beautiful thing you've got is a what? Thirty five year run up on Super Super is a marvellous structure. It stops you spending the money you earn on your investments. So it compounds. So it's and that's what Keating designed it to do. And an ETF, why would you as a millennial be buggering about in individual stocks and all the stress and stupidity and risk and blow ups when you can just buy an ETF and if you've got a 35 year runway, which some of you guys have, the average return for the market's five point seventy seven percent plus dividends, 4.5 per cent plus a bit of franking takes it up another percent or so you can get if you can get a 10 percent return for the next thirty five years in super out of an ETF over an index. Brilliant. But as soon as these ETFs start to get smart, like there are some which you can always tell when a fad is going away and they create an ETF to cover it. [00:06:06][66.5]

Marcus Padley: [00:06:06] So whether it's [00:06:08][1.6]

Marcus Padley: [00:06:09] whether it's, you know, the desire for high income or for the higher yielding bonds. And you've got these unsophisticated plonkers who write these algorithms or Excel spreadsheet and algorithms, a big bloody word for an Excel spreadsheet formula, right. And someone will write this ridiculously uninformed algorithm to try and get you a 10 percent yield out of equities. And all they're doing is destroying your capital. I will guarantee any of your listeners a 50 percent yield. If you give me a dollar, I'll guarantee you a 50 percent yield for towelled for two years. At the end of that is nothing. But that is what some of these ETFs are doing. They're just paying you back your capital. The messages stick with the obvious passive ones, the ones that have got some marketing thing behind them who are doing something active just don't even bother. [00:07:07][58.4]

Bryce: [00:07:08] And so we'll unpack that a little bit later on. [00:07:10][2.5]

Marcus Padley: [00:07:10] We'll continue with the game. Sorry, rant. I am a renter [00:07:13][2.6]

Marcus Padley: [00:07:15] like we've [00:07:16][1.4]

Bryce: [00:07:16] had Henry on the show, Henry Jennings, our audience. You know, they also love that episode and have a great time. You know, he's also a bit of a rant, but [00:07:24][7.7]

Marcus Padley: [00:07:25] it's not quite as ranting as me. These kinds of drugs have done that to [00:07:31][5.9]

Bryce: [00:07:35] overrated or underrated the financial media news cycle, [00:07:38][2.9]

Marcus Padley: [00:07:38] possibly overrated because everybody watches it, thinks they're going to find some news. It's reactive. It's always too late. It doesn't have a lot of value in it. It's an entertainment [00:07:46][7.7]

Alec: [00:07:47] as to people that are cutting their teeth in financial entertainment, it's you know, well, I think it's fairly right. It's always [00:07:54][7.4]

Marcus Padley: [00:07:56] on a [00:07:56][0.3]

Marcus Padley: [00:07:57] you know, if you sit, as we do with the it's just a bit of entertainment. Sit with CNBC. What a CNBC talking about today. They're talking about the bounce in the oil price or whatever. It's just happened. By the time they're talking about it in the price, then you're not going to make any money listening to it. So you might as well be entertained. So stick someone on who's funny, who's got a stupid hairstyle, a nineteen eighty suit and a bow tie, you know that entertain me. But don't think for a moment that you need to listen to that drool 24 hours a day to make money. It's the baseline of what's already happened is already in the price. It's not, it's not going to make you any money. [00:08:37][40.0]

Alec: [00:08:38] Now Marcus, this next one has caused a bit of interest in our community recently since our Sydney Live Show, where we had a few experts, including Henry, talk about this concept and talk about using it while you're young. So overrated or underrated leverage in your investing portfolio. [00:08:54][16.3]

Marcus Padley: [00:08:55] Brilliant. If you get it right, that makes sense. Now, there you go. And that's the point. A lot of people don't know what they're doing in the stock market. For instance, with the market down where it is, I can see a million opportunities around this. The time to leverage up. You always do the opposite of what is logical. All the market's horrendous. The headlines are terrible. That's the time you take a mortgage out. You don't take a margin loan out when everyone's driving. Porsches and mobile phone salesmen are highly paid hedge fund managers. You know, that's not when you take a margin loan out. You take a margin loan out when you get down to shotgun's and barbed wire and baked beans. And that's sort of where we are. So now you take a margin loan out because your odds are a bit better of getting the major tide right. What the hedge fund do? Well, he's basically borrows money and there are people who think they know what they're doing and they take a punt and leverage it up. And that's what people who know what they're doing do. And so I would say to you, if you, the average punter who is pretty uncertain about how this whole thing works and what you should be doing, don't go near leverage when you're a smart, know what you're doing, confident in your process. Keep getting it right. I think you've got an edge. Get yourself a margin line, but don't. [00:10:16][80.7]

Bryce: [00:10:16] Otherwise, we might change the title of this episode to Markus's one million opportunity ideas and just get you to list them out for the next couple of hours to close out the game. Overrated or underrated? [00:10:28][11.9]

Marcus Padley: [00:10:29] Diversification, massively overrated. It is a and unimaginative financial copout promoted by people who this whole industry is about doing administration and pretending you're adding value. If you look at the industry funds that run billions, they now have spent lots of money on these very great websites which allow you to go into the back end and choose what your allocation is conservative, balanced, cash, aggressive, whatever it is. What they are doing these days is earning millions and the way they write some of the events these these companies have, that's your money when you see. This advertising, all the rest of it all there doing these days is administering your exposure to the stock market, which is a service, which is a valuable, valuable service, and it's in a trustable way. But they're still charging fees that imply some sort of value. Add is if a fund managers, they're watching your money and making decisions, we need to be in the oil, out of oil. We need to be in the infrastructure of most of them. If you look at the top 25 funds over the last five or 10 years, you can go to the Money magazine and look at that. There's two percent between them per annum and they're all doing the same thing. And they're incredibly laughable to me. Thing is, they've now provided you a website where you do. Yes, let it go. Pay me one percent tickets. [00:12:05][96.5]

Marcus Padley: [00:12:08] And here you are with them running billions and billions [00:12:10][2.2]

Marcus Padley: [00:12:11] and driving their BMW and having their big splash parties and all they've really end up being at the end of the day is administrative platform's very valuable, very useful. You need to know your money's trusted. You need a government structure and a structure. They've got to make sure that they're trustable. Your money doesn't disappear, all that sort of thing. You know, they've taken the cowboy out of it. But what they have done is they're still, in some cases, charging fees, which suggest you're actively managed when they're not. So diversification is something that is promoted by people who want to pretend that's how it's done because they're not adding any value. So you've got a huge groups of money managers who are not getting any value. And then there are these people who live and die by performance. And I'm one of those you can name a whole host of boutique fund managers. But diversification is for the people who want to pretend that this is the sensible way everyone does it. It's not you can get average for next to nothing these days, and that's what diversification is. So it's a concept to dumbed down the herd and the billions to make make it look like this is clever stuff when in fact there's nothing happening. [00:13:24][73.2]

Alec: [00:13:24] Now, Marcus Bryce did say that was going to be the last one, but I've loved listening to your opinion on some of these things. So I'm going to throw one more into the mix. Overrated or underrated Bitcoin, [00:13:34][9.9]

Marcus Padley: [00:13:35] a hilarious joke and a great way to play the herd. No integrity. [00:13:39][4.2]

Bryce: [00:13:43] So, Marcus, before we jump into a bit about markets today and some broader market themes going on, we'd like to just understand a bit more about your background. So are you able to tell us the story of your first investment and perhaps some of the major lessons, if there were any that you took from that that have shaped how you invest today? [00:14:00][17.2]

Marcus Padley: [00:14:01] I wouldn't give you first investment. I'll give you most recent bloody mess I made trying to look after money, which was in the correction in 2018. And this is a lesson everyone should know. In 2018, the market fell 15 percent. My fund fell 23 percent. It destroyed me. And December the 24th there I am sitting about to go on holiday with the family and the funds down twenty three percent. The market's down fifteen percent of underperform by eight percent. And I had to work out why. And the lesson the great lesson in hindsight was I had done the right thing. I'd gone to sixty seven percent cash in my fund, which people rarely do, can't do, aren't mandated to do, but I can do. And the market fell over. I looked brilliant for a couple of weeks and then I got reinvested and took the second and third leg down. The lesson was when I got back in I thought I'll be OK. I'm in CSL, Aristocrat Leisure, Treasury, Wine Estates, Cochlear. I was in all these quality stocks, ResMed that I knew would see me through in the end. But what happened was that they massively underperformed because they were high p e stocks coming off a market high and they massively underperformed. They underperformed like thirty five to forty five percent, underperformed the market and dragged my performance down. And yet I was in quality stocks, entirely defensible. And the lesson from all that, I don't want to let my secret herbs and spices out, but the money that I do. But the lesson from all that is that there are moments where you have to look up from the trees and notice the whole wood is on the move and you have to focus on your asset allocation, which for for a millennial is am I in the market, out of the market? One hundred percent cash or you're either one hundred percent cash or one hundred percent in you and you don't have to make these decisions. But once in a decade or maybe once a year or once every three years to get out and then get back in and you have to protect yourself like in the Korona crash here. And the experience from twenty eighteen taught me sometimes you just got to go forget what bloody stock come in. It's not relevant. What quality it is or how much what their sales numbers are, anything like this, you've got to look at and go get out of the market. That's the lesson I would tell your guys, is that sometimes you just got to press cash on your industry fund or your ETF. You've just got to sell it and then get back in later on because the market takes control sometimes and the stocks are irrelevant. [00:16:34][153.0]

Alec: [00:16:35] So, Marcus, as I said in the intro, you did 38 years as a stockbroker. You run markets today. You mentioned there that you held a bunch of quality stocks. But I guess from your time in the markets, have you developed an overall investing philosophy? [00:16:49][13.8]

Marcus Padley: [00:16:50] Yes, of course. There are all sorts of elements to it. What could I tell you about these secret herbs and spices? So I'll keep it. General, play the herd. Don't be the herd. I have to pick up some of my colleagues on this occasionally. When you see headlines about coronavirus, for instance, they will join the herd and start telling you about how terrible it is and how many hundreds of thousands of people are going to die or when the oil price falls over the oh, you know, this is disastrous. It's too much oil. There's oil everywhere. And they'll send you pictures of oil flooding out of something. You can't be in the herd and make decent decisions. The real money is made out of exploiting the herd, and you won't do that by being part of it. So one element of the investment philosophy is not, listen, prompt for for information, but don't bother passing an opinion. You don't want an opinion. What you're doing is watching everybody else and the moments of losing their heads and exploiting that. So part of the investment philosophy is having no opinion and watching everyone else. And the moment people form an opinion, if you say, oh, he's a bull or he's a bear, well, he's not. He's an idiot. If he runs, money is needed because you can't afford to have a set view. I'm a bull or a bear. And there would be 95 per cent of people who claim to run funds or invest. Make this mistake of thinking. They've got to guess about the future. No, they don't. What you're going to do is watch the herd and exploit them and try and pick the pivot points where the whole sentiment on the market would be one major decision or then individual stocks changes. And you have to know whether you're dealing with a volatile, fast moving market. There are only certain times you have to worry about the market. This has obviously been one of them this recent period where it moves fast and you have to act fast. But it's the same for stocks as well. There's some stocks taken Afterpay to use a unimaginative example. It's a fast moving stock, not a lot of liquidity, a lot of institutional interest, and it moves fast. You have to know you're in a fast moving stock and you then have to pick the pivot points, not be faithful, not say I love Afterpay forever. You've got to pick the tops and pick the bottoms. For instance, the day the regulator said, we're going to have a look at buy now, pay later. You know, mark the top for two or three months, the thing fell. Forty per cent. What you can do. Oh, no, I'm Afterpay faithful. I think it's long. You know, this is a game to make money is not a game to get faithful about stocks. The only people that can do it the Warren Buffett way are people so rich they can take the bits where the market falls over. And the only people that can do that are the people who don't have mortgages, don't have kids at school, don't have any financial responsibilities, have everything paid off in the worth billions. Of course, Warren Buffett can shut the market for ten years and not worry about it, but we can't. So we have to pick the tops and the bottoms and we have to do some timing and you have to learn how to do that. Sorry, Wittering, I'm so good. I can't let it all out. But there there's a lot there's a lot to learn. It's not easy is hard. And I would say to any of the millennials out there, your jobs make the money, don't invest the money. If you want to invest the money, stick it in the thirty five year run way in an ETF, if that's where you want to put it over the US, you know, why would you be in Australia when you got the US market in the US market and the Australian market. I mean and go out and make your money, don't you know, save it. The market is for looking after money. It's not for making money, looking after money. Put your money in there, look after it and go and make it somewhere else. That's the one Millennial's I think you should be doing is recognising this fabulous thirty five year compounding runway you've got keep chunking the money in. But that's not where you're going to get rich. You're going to get rich doing whatever you do. [00:20:42][232.9]

Bryce: [00:20:43] So Marcus, you were Stockbrokers Association Tipster of the Year in 2009 and we're wondering, what were your big tips that actually landed you that award, particularly given what was going on at the time? [00:20:54][10.5]

Marcus Padley: [00:22:18] I am a bit famous for this and it is rather hilarious that my tip was the first person ever to put cash down. [00:22:23][5.1]

Marcus Padley: [00:22:26] So there [00:22:27][0.4]

Marcus Padley: [00:22:27] you go. Everyone's trying to pick crap dot com, you know, and Mark has cash and blew them all away. So that was it. I was actually famous for selling in December 2007 right at the top of the market. And and everyone thinks I'm brilliant for that. And I start writing a newsletter for a year with no stocks. And this sort of thing is only so, so much patients people can have. But the business survived. But the reason I sold is because I'd been on holiday in 2001 with my wife and two young kids and it was 9/11 and an aeroplane hit a building. And I had a client who held 85 grands worth of Qantas warrants. And the bugger walked away from from the deal without settling because you had three days to settle. And I thought, oh, my car, I don't hold any particular stocks. And this turned out I had ninety five grand hole in my pocket, which was okay, except it was three times what I earned at the time. And my wife said to me, if you ever, ever I ruined this holiday because I was on a mobile phone the whole time and stressed and my wife said, If you ever, ever bring your job on holiday again, I'll leave you or don't bother coming up. Think that's what she meant? She said. So in December 2007, I went on holiday Christmas holiday with Emma. And I mean, you could still have been three or four and thought I'd better sell everything. So I wrote about it in the newsletter so I didn't have to worry about anything on holiday. I wrote about it in the newsletter, went on holiday, came back. The whole market was collapsing. And so I made a big fuss about the fact I'd sold everything at the top [00:23:56][89.3]

Marcus Padley: [00:23:58] wasn't [00:23:58][0.0]

Marcus Padley: [00:23:59] done out. The judgement was done out of fear of Emma. But there you go. You've got to you've got to make the most of whatever breaks you get. [00:24:05][6.9]

Alec: [00:24:07] So did you have any inkling that things were going to go wrong in 2008 or was a purely to just have a good holiday [00:24:12][5.7]

Marcus Padley: [00:24:13] now and have a good holiday? But there were there were always things in hindsight. And I think I was working at Pederson's and Pederson's put there, this is a second tier broker in W.A., put their name on Subiaco. You know, there are things you look back and you go, that was the top, you know, stockbroker naming Subiaco Oval. There were there were also three stockbrokers at the time that year who listed no on lists, the stockbroker, the stockbrokers, like accountants and lawyers. Anything that's run is a partnership. You never get any money out of it because the directors and the partners all carve it all up before it gets to shareholders. And they're not naturally companies that you'd list. But three of them listed in 2007 who says brokers can't time the market. They all listed it around two bucks and ended up below twenty cents. And I thank you very much. So there were signs in hindsight that things were wrong. But no, I don't think any of us really foresaw the GFC. And that was the amazing thing about it, is the kings and queens and central bankers, brokers, financial planners, accountants, even the taxi drivers didn't predict the GFC. You have to register that that things happen in the market that you can't predict. And consequently, you have to have an open mind and you have to be prepared to react. Is far more useful in thinking. You have to predict. [00:25:32][78.3]

Bryce: [00:25:32] Well, speaking of reaction, no one obviously saw the covid-19 coming the way it did. But I'm interested to know how you were sort of feeling about the markets, I guess just before Covid did what it did. And how did you react to it? [00:25:46][14.0]

Marcus Padley: [00:25:47] Well, do you know what we do know? [00:25:48][1.7]

Bryce: [00:25:49] Okay, I'm about to find out. [00:25:51][1.5]

Marcus Padley: [00:25:51] I know you are, because I taught myself, but we absolutely bloody nailed it. And we have outperformed by over 20 per cent in six weeks. Some fund managers will celebrate one per cent outperformance during the year. We have outperformed by over 20 per cent in the last six weeks and this is with forty million dollars. We've effectively saved our investors eight dollars million of real money. Let all my bloody secrets out. But the way we did it was last year we actually cashed up. If you remember the Overtreat talks, trade talks looked like they could cause a precipitous collapse in the markets and the. The Chinese delegation was in Washington and they said, we're not going to go and see the farmers and it looked like all the trade talks were going to fold up. The market had dropped quite savagely twice. It dropped two or three per cent in the night. And that's a sign to someone like myself, things are going wrong. This is a correction. Start fast. This is a precipitous moment. And we went to one hundred per cent cash. No one does that. So we went to 100 per cent cash. And then a week later, you know what happens? It turns into a member turned into a love fest. Oh, really? One minute we're on the point of collapse. The next they've got to trade talk love fest. I suppose that's that's dealing with Trump. You never know what the bloody hell you're going to get the next day, which is good. It's entertaining, but we had to get reinvested again. But we were ready to sell. And the reason we were ready to sell, because we could see the overpriced market, we could see the US market trading on twenty three and a half times with twenty seven trillion dollars worth of stocks. And we could see all sorts of other things that were potentially folding up. Bond yields were telling you that the outlook for the economy was awful, you know, inverted yield curves and all this stuff. And there was a list of things. And so we went one hundred percent cash because we saw a precipitous moment. And that actually taught us that we might get it wrong. But we're still we're still going to be right some time. And my accountant saying to me, it's coming it's coming in one of my meetings with him as we tried to hide billions from the taxman and we didn't don't chase me around. Even the accountant, like the taxi driver was saying, it's coming. It's coming. The correction he meant and when the covid-19 thing, everyone ignored it for a while and then then the Italy, South Korea start and the market started to precipitously fall. And we saw those two big down days and we went right where 40 percent cash. And within two days we were 70 percent cash. And we rode that down. And the reason wasn't a view on coronavirus. The reason was knowing the market's overpriced and then watching the start of a precipitous correction and then reacting. And that's what you've got to do. And we're now we're very aware of these precipitous moments being set up and then wait for them to happen. And it's the same as the eighty seven crash we were in, the eighty seven crash. Everyone says what started the 87 crash? I'll tell you what started the crash. It was 100 per cent rise in the market in the year ahead of the 87 crash. That's what stopped the first stop get sold. Yeah, everyone goes to analyse the first drop of a waterfall. So why did that stop? No, relevant. There's a whole load of water up at a big height and massive pressure. That's why the waterfall started. That's why the dam broke. And in the same way, it's not what causes the brake. So the coronavirus was the excuse. You can't get that right by assessing coronavirus. It's going to be this. What you're actually doing is looking at the herd suddenly getting seriously fearful from a position of high prices. And that's that's how we reacted. And at the bottom, we did the opposite. We just noticed everybody is absolutely Armageddon obsessed end of the world. There's got to be a moment here. And then the market popped for one day, two days, and we went one hundred percent back in and absolutely timed the living daylights out of it recently. And this is the point. You've got to watch these pivot points on fast moving things when the market is fast moving, you've got all stocks at all stocks in when it's one stock, one stock and one stock. But these pivot points very important. That comes from watching the herd not doing fundamental analysis that it's cheap and it's knowing you're vulnerable to overdoing it in both ends, saying sorry, which we're only going nuts. [00:30:00][248.4]

Alec: [00:30:00] We're trying to get all your secret herbs and spices. So we want you to take explaining it all. I'm interested in unpacking something. You just said that. So are you saying the market was long term overvalued or overvalued in relation to its long term average? And that was a key reason why it fell, even if coronavirus was sort of the, you know, the big news story that potentially catalysed it. If you look at how much it fell and the fact that it's recovered so much and it's still trading, you know, well above its long term average value, do you think that this recent market rise was a bit of a bull trap and there's further to fall? Or how are you thinking about the market now and how you positioning yourself? [00:30:39][38.8]

Marcus Padley: [00:30:40] Even though the US may be over, it's been permanently overpriced. So it's not a question of the US market being now overpriced again. And so you must sell it or anything like that because it can lose its head again. You know, look who's running the country. This is marketing. It's not priced anyway. No, I don't think it's a bull trap. We've recently cashed up to 40 percent again in the last two weeks just because we saw the market turning over and we do scans of the market. And when you see 10 per cent of the All Ordinaries has sell signals on it in the morning, you realise and you've got a sell signal on the market itself, you go, well, maybe we'll just cash out and you cash up, not because you're worried about losing money. You cashed up because you want to have a load of cash ready to buy stuff when it bottoms again, the volatility settling down. So I don't imagine we'll do this big asset allocation stuff much anymore. We're doing it at the moment, but that'll settle down. We'll get back to stockpicking. And as far as the general overview, I would say to you to get back to March twenty third the low, something really bad's gonna happen because that was all out panic. And we're not going to lose our heads like that unless something we really can't see at the moment happens. And we don't have to worry about that until it happens. So for the moment now, I think we've probably seen the bottom on that basis. I think we although we're not in the business of making a long term grand prediction, no one could do that. We'll wake up in the morning. We have a morning meeting and the Bryce blokes I work with and girls, we come up with a conclusion, but we wake up every morning, make decisions. At the moment, our decision is 40 percent cash looking to buy again. If you were to ask me to guess, I would guess that we are seeing one of the once in a decade buying opportunities at the moment. Yeah, certainly March. Twenty third was hopefully we'll get another one. Be nice. If everybody got in a panic again, maybe coronavirus will recur or something. But at the moment it looks like the market is assuming coronavirus is going to be defeated in two months time. We're going to be back in the office, if not in a month. I'm going to be giving a speech at our end of financial year party talking about how fabulous it is to be back at work. I'll be lying and what lovely people I work with more lies and they're all fabulous. And by then all the market will have bottomed. I mean, you can't wait. You've got to be ahead of the headlines and ahead of where we're going to be. And just look out. We're going to get on top of coronavirus clearly, and we're going to be back to work. We're going to be in traffic jams. We're going to be booking out, not being able to book restaurants because everyone's dying to get back in. We're going to be watching Top Gun two in a crowded cinema. It's all going to happen in the next two or three months. At the moment, we're still fearful. So I think we've seen the bottom. If it's a guess, it may be wrong and we'll change our minds if we wake up in the morning, find me wrong. But at the moment, if I was to guess, I'd say we're probably seeing the bottom. We're going to come out of this. And this is a long term buy option. [00:33:35][175.2]

Bryce: [00:33:36] So there's a lot of chatter in our community at the moment about people worried that they've missed the bottom and then also in the same breath, fearful that there might be another further drop to come. So they're kind of confused or a bit cautious about when to enter the market. What would your advice be for them? [00:33:52][16.4]

Marcus Padley: [00:33:53] They clearly don't know what they're doing. The idea that you have missed the bottom, it's irrelevant where the market's been. There's question of what you're going to have regret. That's an emotion you need to be spok you can't have regret and be an investor. Oh, I missed the bottom. Where are you going to do. Oh wait, wait till we get down there again. You'll never put any money, just irrelevant things. It's called anchoring where you probably know that. But where you look at previous prices and go oh it would be nice if but it's gone. So you're only left with what you've got now and you have to make decisions on that. Fearful it might fall over. Well, go with the trend. The trend is well short term. It's down again. But when the volatility drops off again and the confidence starts to build and the trend builds again, get invested because we're still way off the top. And it's about running with what you've got in front of you at the moment. And looks like the bigger trend will be up if we just time this little sell off we're having at the moment. The bigger trend looks like it'll be up, wake up every day and assess that. Don't look back at March 2013. Go missed the bottom. Don't look ahead. Something on Guessable and go Oh, I'm fearful the market fall over when the trend is up. Go with it and when the market starts to fall over, wake up in the morning, make decisions, go oh it's falling over, falling on it. And when your spreadsheet or your CommSec account or whatever you've got has poked you in the chest five days on the trot going, idiot, idiot, idiot, you're getting it wrong, do something about it. So it's not a question of guessing the future or regretting the past. It's a question of looking at the cards you've got in your hand at the moment and playing them. And the moment our cards would say short term where we don't want to be buying, but we're looking to buy, we think the next turn up we'll get fully invested again. [00:35:39][106.0]

Alec: [00:35:40] So, Marcus, he said in that answer that the the long term trend is up. And if you really broaden out your time horizon, you know, over multiple years or over decades, even the long term trend is definitely up. But you have some pretty strong thoughts on buy and hold investing. So I'm interested if you can share those thoughts and then we can unpack them from their [00:36:00][20.6]

Marcus Padley: [00:36:01] buy and hold is blinkered bullshit born out of buying the intelligent investor or as I call it, the unintelligent investor book written in nineteen fifty four and believing that's how it's done. That's not how it's done. You can't buy and hold the only stocks that you buy and hold of the ones that people tell you about in hindsight because it worked. But they don't tell you about ABC Learning in Babcock and Brown that were buy and hold each their own right. Managing funds is ninety nine. S. marketing for most of these people, so they will tell you about the philosophy and the high brow stock analysis and how they pick stocks and give you examples in this sort of thing. But at the end of the day, this game is about making money out of the market. However, you do that each to their own. I do it my way. My way is having an open mind at all times about every stock price that we're dealing with. It's not about forming a fundamental opinion about a particular stock. And assuming that that is going to persist for 10 years or 20 years, that is arrogance in the extreme. You have to do the research. You have to do the work. You have to understand that that's a baseline. That's minimum. You have to do the research to understand what you're putting your money into and maybe you decide to buy it. And this is what fund managers do. They've got analysts buy two, three hundred thousand dollars, going to look at one stock, Afterpay for a month and decide to buy it. All they're really doing is saying on the facts in front of us at the moment, this looks like we should buy. It looks like it's is going to grow and the price will go up and it or it's undervalued or something like that. And that is absolutely fine to do that on the understanding that tomorrow that may change. And that's where Buy and Hold gets it wrong assumes the research done on a particular date in the past persists. It might not. It may change. You talk to the CEO of Afterpay and he will have 10 things in his head that no investor knows that could come off, may not come off a risky, not risky, disastrous or hilariously fantastic. And they're in these head, you know what they are, but they will reveal themselves over time. And you have to be prepared to change their buy and hold is just an absurd, unintelligent concept used by people who are trying to probably sell you their skills as investors. And they only works in hindsight when you look back and with the benefit of hindsight and pick out the ones that are winners. But it's just a ridiculous concept that you should expect to buy and hold. You should do your best to to buy cheap or buy at the right time or buy when it's undervalued. Why wouldn't you? But it's all about narrowing the probabilities. It's not about prediction. And tomorrow's going to be a different day and you have to have an open mind to whatever you worked out changing. [00:38:51][170.1]

Alec: [00:38:52] Yeah, I think that's a really good explanation. And I think it's an important distinction that a lot of people, when they're starting out, get wrong, that buy and hold isn't set and forget. It's not as you said, you do the research when you buy it and then you're not interested in the stock. It's not like Warren Buffett bought Coca-Cola in the fifties and hasn't checked their annual reports since. Absolutely. Yeah. Yes. I think I think that's a good clarification. I think in a quote that we have from you is it shouldn't be set and forget it should be set and watched like a hawk, but unfortunately, it doesn't rhyme. So no one says that. [00:39:23][31.5]

Marcus Padley: [00:39:24] Yeah, I know. I sell in May and go away, you know, sell in June and I feel like a prune in prime time. Or you may actually selling Goa is statistically correct, I have to tell you, but only in hindsight. But the thing about having to watch like a hawk or whatever is, is another message to people that do want to invest. If it is the millennials, which this is work set and forget is trying to pretend to you it's not work, this is work. And unless you love it, don't bother with it. Really don't bother with it. Go off and make your millions doing something else. Yes. Superannuation, yes. Compounding returns. Yes. Chunking money into super where you can't. Touching and having faith that it's going to compound at the same historic rates it's done in the past. That's fine. But when it comes to stock picking, no, it's not about buying Afterpay and forgetting about it. That takes vigilance, takes work, and you'll only do that if you enjoy it. There's no party going on here, no money making party going on here. That's easy to access. It's all hard work. Some people love that fabulous hobby. Can be a great social thing as well as you guys are turning into a social thing, which is brilliant. People love listening to your stuff and love being interested in the stock market. That's brilliant. But if you're doing it out of necessity or because you need money, not this is this requires effort. [00:40:46][81.9]

Bryce: [00:40:47] So Marcus, given strong opinions on the buy and hold and also ETFs and diversification, if you were to tell a 22 year old who's just starting in the markets now what the key pillars of an investment portfolio are, what would you say [00:41:01][14.0]

Marcus Padley: [00:41:02] this is assuming when you say portfolio, this is assuming that they're going to have, what, twenty stocks or something? Is that what you mean? [00:41:08][6.1]

Bryce: [00:41:09] Well, yeah. Like if someone was to come to you and be like, how should I think about constructing a portfolio given I'm twenty two years old, what would sort of be some basics that they might need to at least understand before doing so? [00:41:20][11.4]

Marcus Padley: [00:41:21] I would say to them, find your own path. There are too many people who will tell you. I'll tell you how I do it and you may adopt that. Oh, that's how I'll do it as well. But you don't know what I know. And you don't have the systems I use and have the routines I've got and all that sort of thing, so the advice, I would say find your own path, find what works, and don't do it out of emulation of anybody else. Work your own way out because you'll only believe it if you've found it out, not if you've been told. So find it out. And what I would say to you is start small, start on paper if you want to. But for young people, I really would say you've got this fabulous 30, 35 year run up on super keep chunking money in there. But, you know, there's nothing wrong with those industry funds despite the fact I'm so criticise their lack of activity. That's fine. Keep checking the money and it doesn't matter which one either. I don't think just keep checking the money in because it will grow soon. We're not going to have a 35 year Armageddon, but if history repeats, it will grow and that will serve you very, very well. And that's a run up most of us didn't have or don't have any more. So do that. But if you're going to do stock picking, perhaps what I would say is keep an open mind, do your own thing and be open to all approaches. We use everything. Everything that works. Anything that looks intelligent. Be a mix of technical or fundamental. We definitely use both in a big way and it's all good. There are no shortcuts. Use everything but work it out for yourself. Even noted down. I think this works. I think that works and keep working out for yourself. We've got a client who tells and you can read this on our website or I can make it available to you guys. A member of ours who was divorced living on his mum's sofa and he had 30000 dollars left in the margin loan, I think was the margin loan that caused the divorce because he burnt all his money in the margin. Anyway, he sent his portfolio last year. And this is ten years later and it's worth three point three dollars million. And absolute if you had picked in hindsight, a portfolio of stocks, everything from wise, take a nap. And in Altium and zero and Afterpay, he had every one. He'd made a fortune and he did it with a supreme cynicism about our industry. In other words, he'd worked it out himself so you can do it. [00:43:47][146.2]

Alec: [00:43:48] So Mark is building on that question about the, you know, the person in their mid twenties who's earning a bit of money for the first time and thinking about what to do with it. Obviously, a lot of financial media, especially in the last decade, have spoken about index investing. There's been a massive inflows into ETFs. I'm interested in your thoughts on if people aren't looking to pick stocks themselves, they don't have the time or the inclination or they don't back themselves to make those individual stock picks. How do you think people should think about putting money away for the long term in the market? Know, would you go down the passive route or would you be looking at more active managers? How would you think about decades to come in getting exposure to the market? [00:44:30][41.9]

Marcus Padley: [00:44:31] I would be happy to start with if you had a significant level of ignorance, not so much ignorance, but a lack of expertise. I'd be very happy just putting it in industry funds because what they're doing is providing you with an exposure to asset classes in a fairly cheap. Some of them aren't that cheap, but they are reasonably cheap way. And what I would be doing and I'm not allowed to give advice, but if I had the amount of money I want after tax after tax is very important. Anyone who's run a business will tell you after tax dollars is very different from Dollars. If had after tax dollars, the amount that I wanted in a bank account, I would probably for an easy life, stick it in a fund that was fairly bland, maybe an industry fund. I probably wouldn't that I'd hand it to a few fund managers I know who are quite good. But you might just to get an industry fund and make sure, you know, you're log-in be able to go in and get to that page that says cash balance, conservative, aggressive. And I'd sit there one hundred percent aggressive the whole time because even aggressive through one of those structures is quite passive. You probably find aggressive with 70 per cent equities, you know, where 100 per cent equities people and quite aggressive anyway. So an industry funds aggressive options, never going to be aggressive enough for me. So I would sit aggressive pretty much the whole time. Then once every five years, ten years, two years, one year, I might hit cash moment. I got a bit worried I might hit cash. So obviously in hindsight, Covid coronaviruses with cash the moment they tell you to in the Marcus Today newsletter and cash, that's how I'd be doing it. Probably that's the easiest option and not a bad option as far as the fees are concerned, you know, for whatever they charge you compared to having a passive ETF, MSR of point one, point three or whatever it is. Ibukun in charge point five or seven in an industry fund other than what you're charged, but for that money you're paying peace of mind, you're paying to have every weekend free, every evening free, you get you can log in and have a look at how much your money is grown. But basically you're paying not to have any investment admin at all. And that's a value. So I would say that's what I would be doing, is sticking it in some fund and just keep chunking the money and just keep thinking about that 35 year run away, keep drinking the money in. And if at some point you you find I say I would actually find a few fund managers I like and put my money with them, but even some of the ones I like are pretty useless. They're great guys. Afterpay volatility. Once you get boutique, the volatility, you know, some of the some of those guys are very smart, sell you a great story. And in fact they're very smart, but they still they still miss basic things. They still think it's about stock picking. They allow their funds to get destroyed in situations like this because they don't exit the market. And I'd be doing it myself, basically putting it in my own fund because I need to manage the big market risks occasionally. But for 22 year old, you know, 35 years, you've got just stick it away and stick it somewhere you can't spend it. So Soopers the spot. [00:47:53][202.2]

Bryce: [00:47:54] So let's move to markets today, as I said in the intro newsletter with stock market research and a whole bunch of awesome insights. And you also write on the likes of Livewire and all over the place. What was the driving force behind starting markets today? [00:48:08][14.0]

Marcus Padley: [00:48:09] Well, I spent how many years, 16, 18 years or so talking to institutional fund managers. So I was a stockbroker and my job was to entertain fund managers and make sure they dealt through us as a stock broker. Now, that involves a whole different level of skill, and I have to be able to order the right French wines. And all the stock broker is really is a is the grease in the pipeline between a big broking house and a big institution. And I just had to make sure it was all smooth running. But the research was really good and and we would market pieces of research around two institutions and some smart, highly paid people with some great ideas. And then when I got into retail broking, I was working for ABN Amro and we we listed Telstra and made a fortune. And because I didn't like the fact ABN Amro got the Telstra contract, so they bid for us and I was offered seventy thousand dollars redundancy or go and work at DFW. So I took seventy thousand dollars. And when I did, Andrew Bell from Bell Securities came across the corridor and said, Why don't you come and work retail broking? So I went to bells, started my own client base. I can tell you a few stories about that, but started with one client, my brother in law, who had ten grand and it was the beginning of a tech boom. We made him a small fortune, then lost it again. But what I realised going across there was that this was when the Internet was just starting might sound ridiculous to you. The Internet was just starting, an email was just starting. And I realised there and there was an information around. You had to read books. And I realised, goodness, these these retail investors don't know anything about the stock market. And I'd known the stock market existed to raise money. It's all about capital raising. And here we are doing deals in institutional sales. And these retail investors just had no idea, believing everything they heard. And so I started through this daily email where the subject line was Marx's ideas, today's ideas, Marx's ideas today and in the end just went markets today and in capital letters. And the newsletter was born. And I discovered the book box on Outlook, which in those times is high technology with six clicks away. And I realised I could send emails to more than one person without anyone knowing who are sending it to. And so I send you trading ideas out in the morning. And these guys at Bell said, can I get that email as well to send to my clients? Because it was creating trades to the cleverest thing I've ever done. And there aren't many, which was to say, you give me your clients email addresses and I'll send it to them, but I'm not sending it to you to send Don. So I built this database. I had thousands of people on it. And then one day I sent an email saying, if you want to keep getting this, you're going to have to send me two hundred dollars. And I remember walking down the street with one two hundred dollar check a week later thinking to myself, if I don't get another one of these bloody cheques, I'm writing for this Plunker for for a year for two hundred dollars. Anyway, the next week there were five cheques and the next week there were ten. And before I knew I was, it completely overtook the broking and that's where Markus Day came from. And it really got spawned out of the idea that I had to tell my brother in law how the market actually worked. And I see it's a little bit. And so I'm wittering now, but I say it's a little bit like the Wiggles because the Wiggles started because they I think one of the nieces or was ill in hospital and they decide to go and entertain them. What were they? Called the cockroaches or something, a rock band, and they decided to go and entertain in the hospital. I thought, well, we better dress up a little bit. And so they put black trousers on and so. Well, we should wear coloured shirts. Oh, we all wear different colour shirt, Jeff. You can have the purple one and off they went to hospital to entertain the kids and called themselves the Wiggles. Now they went to entertain kids. Do you know who the wholy Dooley's on Google. [00:51:52][223.5]

Alec: [00:51:53] Who literally. Yeah, I've heard of them. I've heard of them early. [00:51:58][5.6]

Marcus Padley: [00:51:59] I'm not allowed to swear. And Dooley's you know, they set out to make money. The Wiggles set out to entertain children. And that's why they succeeded. And so many people came after them trying to make money out of entertaining children in the same way. And we started out or I started out trying to educate my brother in law and anyone else on that database, how the stock market worked and give them some good ideas. And so I feel like we started with a pure that we didn't start, as many people in MySpace started to make money out of selling newsletters. We didn't do that. We started with a very pure tell it as it is motto. And that persists to this day. Sorry, that was a very long answer to I can't even remember what the question was. [00:52:40][40.8]

Alec: [00:52:40] No, it's it's an it's an interesting story. And I'm interested in picking up on you said when you moved over to the retail broking side, you were surprised at the lack of knowledge in a lot of retail investors. Do you still see that today? Do you still see sort of, I guess, worrying lack of knowledge with a lot of retail investors? [00:52:59][19.5]

Marcus Padley: [00:53:00] Absolutely not. You got to understand, the Internet wasn't around in those days. The it only just started in ninety eight, I think. And I just started email and just started the level of information out there, you know, and brokers were trusted individuals. You had to have a used a broker to put on an order, that sort of thing. Online broker was only just getting going. So the level of knowledge since then has exponentially improved. And we've we obviously see that in the newsletter because we have to add value. We can't just we used to just provide information. You know, now we have to add value and now we run a portfolio and now we're telling people what to buy and sell. And when we you have to add value. But the level of knowledge now is hugely enhanced compared to what it was. And I would say no from our men. Most of our members are quite sophisticated. And those those that we have to bring them up to that level and we do that through education. But no, I would say the level of expertise or education or skill is is really quite high. [00:53:59][58.8]

Alec: [00:54:00] It feels like it's almost gone the complete other direction. And now there's so much financial information and financial content out there because of the media. The challenge is really to separate the signal from the noise. And so I guess when when you're thinking about the content that you include in markets today and how you how you really add value to subscribers, how do you think about making sure that the financial content that you're providing is not just more noise and it is actually, you know, really valuable information [00:54:28][28.8]

Marcus Padley: [00:54:29] to add value information is everywhere. So we can't just provide information. You have to educate, tell people they what things they don't know. And there's plenty people don't know, just bring them up to speed on everything. So, for instance, if I was to write PMI index in the newsletter in brackets, I'd put Purchasing Managers Index is a survey of manufacturers how much activity they've got. You just constantly explain that. So there's always an educational element, but ultimately it boils down to telling people what to buy and when. That's the peak level of value add and getting that right, you get that right, you will. We'll have a business rest of our lives and we reckon we're pretty good at that. But it's also becoming like Equity Mates is becoming a community. And we now have a quiz in the weekend email and you know, Sarducci. So it goes beyond stock market to community and we're developing that community. And we've got to ask an analyst session where you can ask Hamri about some unknown stock and try and catch him out and, you know, Facebook group and also things. So so we're developing a community of people who feel comfortable and safe and looked after and to some extent protected and educated about the stock market so much that has gone well beyond passing information or some newsletter survival and putting a spreadsheet of what stock tips they've given and the annualised return. That's no less. Not no, I'll tell him that is what it's about. You keep doing that. You keep doing that. That's what it's about. It's not about that. You know, it's about it's just as you have realised, it's about pulling people together and having a community and trust and a lot of mutual handholding them to us and us to them. And we'll we'll make it through. Hopefully we'll make it through with a dollar as well. [00:56:23][113.1]

Bryce: [00:56:23] Because before we move to our final three questions that we ask all of our guests, we just like to. Touch on a bold prediction from you that will let us know how you're thinking about the end of 2020 at the start of each year, Alec and I do an episode where we throw down a bunch of bold predictions. And, of course, they've all been blown out of the water because of covid-19. But that's OK. If you were to make one bold prediction for how markets will end in 2020, what would that they regret? [00:56:52][28.3]

Marcus Padley: [00:56:53] Oh, everybody will [00:56:56][3.4]

Marcus Padley: [00:56:56] regret getting so upset about coronavirus. That's my bold prediction. All right. We will not back down, which in which case they'll look they'll look back and go, oh, my God, we should have been buying [00:57:09][12.5]

Marcus Padley: [00:57:10] yes or [00:57:12][1.8]

Marcus Padley: [00:57:13] no. Trump will still be in the show, will go on. [00:57:17][3.3]

Alec: [00:57:17] And I want to show it's been for the last four years. And if you're right, it will be for the next four. [00:57:22][4.7]

Marcus Padley: [00:57:22] Yeah, I would guess so. [00:57:23][1.0]

Alec: [00:57:24] So, Marcus, as Bryce said, we like to finish with the same final three questions. But before we get into that, if people want to read more about you or follow your work, where's the best place that they can find you and find markets today? [00:57:35][11.0]

Marcus Padley: [00:57:35] Just go to markets today, dot com, where you sign up for a 14 day trial and see what we do. The newsletter business is about Ren subscriptions. It's not about subscriptions. You'll find some newsletters ring a bell when they get a sale. You know, their game is to sell you something for a dollar today. Ours is a relationship thing. We've got over 80 percent subscription level. That means everybody stays on basically, unless they have got some individual circumstances, get them out of the market. It's about subscription. So we don't want people to come on and buy a subscription and then feel it's wrong. Just take your 14 day trial. If you love us, you'll be happy to pay and we'll be chatting to you for the next. Well, until your investment cycle comes to an end, when you spend your last dollar, in which case you'll be useless to us. [00:58:25][50.1]

Alec: [00:58:27] On that positive note, we'll jump into the final three questions. So the first one is, do you have any must read books? [00:58:33][5.9]

Marcus Padley: [00:58:34] There's a fantastic book called Stock Market Secrets by this bloke called Marcus Padley. It's getting a bit long in the Tooth Now is written in 2008. And I think I've got how many books behind me. I think I've got about twenty seven books left. Then then I will have sold the 10000 that I printed, in which case I'll be a best seller. So I just need twenty seven of you on the book. I've always loved market wizards because that is a bunch of traders being interviewed. Famous book and there are books that have followed it and some pathetic books that have copied it. But it's about people like hedge fund managers telling you how they do it. And what you take away from that is everybody does it differently. Develop your own method. One, not one method works in investment, lots of different people. So Market was it's the other book, which is a bit weird and you probably struggled to find it is a guy who is very like me in the US. He was on the radio. He wrote newsletters called Dick Davis, and it sounds like he should be a Superman, really. Dick Davis. And the book's called the Dick Davis dividend. And he writes Absolutely boldly, honestly, as I do. All brands tell it as it is. He tells it as it is about all sorts of things that, you know, that's true. But nobody says it. But Dick Davis says it's called Dick Davis dividend. [00:59:55][80.6]

Alec: [00:59:56] Great. Well, we'll try and find that one. I've never heard of the Deep Dive dividend before. My second question, what's your go to source for investing information? [01:00:05][8.8]

Marcus Padley: [01:00:05] Information? I'm afraid you can't copy this. There are two terminals in the world, Reuters and Bloomberg. If you watch where we were watching billions at the moment. Fabulous. Every every desk at Bloomberg on it. Yeah, we've got Reuters. So I could look up any stock in the world to every bit of information you want to know about. It is on there. And the very clever. They're very expensive. It's twenty three grand a year. I think for two subscriptions that we've got is probably more than that actually. But that's where we go. Otherwise you don't need to do all that because all you need to subscribe. The markets don't use this. We do. We save people time. We digest God knows how much information every day and just give you the relevant stuff. So apart from Equity Mates, which I think is fabulous, where else would I go? I love reading the newspapers, read the newspapers. It's good. I read the newspapers with a big highlighter pen. I love doing that. And I think it's under underrated and but the idea of sitting with a coffee in a cafe overlooking the beach and reading a newspaper is undervalued. It's a fabulous pastime, saying, yes, they've thinned out, but there's only so much you can read it and die anyway. So there's still some good stuff. [01:01:12][66.7]

Alec: [01:01:13] And then final question, if you think back to your early days when you just starting out as a stockbroker, just starting out the finance industry, what advice would you have for your younger self? [01:01:23][9.9]

Marcus Padley: [01:01:23] I was best man to my best man. He was my best man three times, actually, Martin. Martin used to hunt and through his hunting in England, he got to make all sorts of people and one of them was the richest man in England. And we went out for a night with him in his chauffeured cars to his clubs. And he said something which is very interesting, which was if you go and do a degree, you should only go to get any education degree. If you're going to do a degree, you should only go there if you're prepared not to do the exams, if you follow that. And what he was saying was that you get educated because you want to learn how to do something, not because you want the qualification. And that is something I would say to myself. I did law university. I had no interest in law. It was actually a good degree of those sorts of skills from it. But what a waste of my time. And I would say to anybody out there, do education, because that's what you want to learn to do. And these days, I'm not sure universities really kicking the goals for people to these institutions seem to be wanting to make money out of teaching rather than really having an integrity of teaching. So it may well be you don't need to go to university because you need to learn to do something that you're going to love and be passionate about. And it's going to be part of your life forever. Don't do it because you need the qualification to impress someone and interview and get a job. I would be learning how to do something because I wanted to learn how to do it. And yes, obviously doctors have to get my degrees and accountants, Dollars professions and that sort of stuff. But to get educated in things that you want to learn about, not things that you think you should go through the process, I employ people who've got degrees and three or four different subjects. By the time you've got honours in law and commerce and marketing, what do you want to do here? You know what you want to do and go and get educated because you love it. And if you love it, you will absolutely kick the lights out. [01:03:31][127.7]

Bryce: [01:03:32] Nice markets will. Great piece of advice to finish on. It's been an entertaining and fascinating conversation and we've enjoyed reading you for a while now. And I hope our listeners can go and check out markets today if they're interested. And I think, you know, on behalf of Alec and myself, just a massive thank you for your time today. Really appreciate it. [01:03:52][20.6]

Marcus Padley: [01:03:53] Well, thanks, guys. Sorry, I know I've probably gone over. You'll have to chop the trump the bejesus out of that. There will be no shopping and anything I can do for you guys be content or education or free trials or do favours. You know, just fuck when I know you millennials aren't going to buy subscriptions. You just don't seem to be interested in that stuff. But one day we'll get you. So if we can suck up to you until then, then we'll do that. [01:04:22][28.8]

Bryce: [01:04:23] Awesome. Well, we look forward to keeping in touch and following up in that bold prediction at the end of the year. Yeah. Thank you very [01:04:29][5.4]

Marcus Padley: [01:04:29] much. All right. Fabulous. Having fun. [01:04:29][0.0]

More About

Meet your hosts

  • Alec Renehan

    Alec Renehan

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

    Bryce Leske

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

Get the latest

Receive regular updates from our podcast teams, straight to your inbox.

The Equity Mates email keeps you informed and entertained with what's going on in business and markets
The perfect compliment to our Get Started Investing podcast series. Every week we’ll break down one key component of the world of finance to help you get started on your investing journey. This email is perfect for beginner investors or for those that want a refresher on some key investing terms and concepts.
The world of cryptocurrencies is a fascinating part of the investing universe these days. Questions abound about the future of the currencies themselves – Bitcoin, Ethereum etc. – and the use cases of the underlying blockchain technology. For those investing in crypto or interested in learning more about this corner of the market, we’re featuring some of the most interesting content we’ve come across in this weekly email.