Expert Investor: Robert Francis – eToro MD talks zero commission US trades

HOSTS Alec Renehan & Bryce Leske|15 June, 2020

Meet your hosts

  • 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 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.

At Equity Mates, we hate fees. This makes us big fans of any company looking to reduce the cost of investing for everyday investors. Which is why we were excited to get the Managing Director of eToro Australia, Robert Francis, on the podcast.

Robert has had a long career in finance. Before Robert joined eToro in June, 2017, he worked for 13 years in retail currency trading and CFD markets. Robert also worked for Australia’s leading online stock broker, Commonwealth Securities, where he ran the Exchange Traded Options desk as well as the International Trading Desk. He has also worked for leading companies in the financial market, such as TD Waterhouse, Astley and Pearce, and Exco International.

eToro have recently announced zero commission trades on all US stocks, and in this show we unpack what that means for Australian investors. In particular we hear what effect zero commission trading has on investor psychology and whether we’re seeing a price war in the retail brokerage space (similar to what the US went through a few years ago). We also unpack the recent coronavirus-affected markets and the investor behaviour that Robert has observed at eToro during this period.

If you’re interested in finding out more about eToro’s zero commission US trade – check them out here.


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Bryce: [00:00:57] 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 Mates Ren. How's it going? [00:01:11][14.8]

Alec: [00:01:12] I'm very good. Bryce. I'm very excited for this next instalment of our expert investor series. Yes, we often talk about hiding fees on the podcast. We do. And we're speaking to someone who manages a business that shares a similar philosophy. [00:01:28][15.5]

Bryce: [00:01:28] I feel that is correct. We have Robert Francis joining us on the show today, who is the managing director of ITRA Australia. Before we get into a bit of a background on Robert. Robert, welcome to the show. [00:01:39][11.4]

Robert: [00:01:40] Thank you, guys. Thanks for having me. [00:01:41][1.0]

Bryce: [00:01:42] So before Robert joined Atauro in 2017, he worked for 13 years in retail currency trading and CFD markets. He's also worked for Australia's leading online stockbroker, Commonwealth Securities, or CommSec, where he ran the exchange traded options desk, as well as the international trading desk. He's worked for leading companies in the financial markets such as TD, Waterhouse, ASIC and Pearce and ExCo International, and he holds a Bachelor of Business from Curtin University in Australia. So huge wealth of experience and we're very much looking forward to unpacking some of that, as well as what's going on over at ATRA. So really get stuck in it, Evandale. [00:02:23][40.9]

Alec: [00:02:23] So Robert, we like to start with a bit of a game and we've got a bit of a twist on it. Given that the managing director of Atauro and we're doing a bit of research on Atauro before this episode, we read that ATRA has over 5000 assets to trade on their platform. We want to play a bit of a game with some of the assets that can be traded on it, or are we calling the game overvalued or undervalued? We're going to throw out one of the assets and we want to get your thoughts on it. If it's overvalued or undervalued currently and potentially why you think that. So are you up for playing [00:02:55][32.1]

Robert: [00:02:56] Suranne or [00:02:58][1.1]

Speaker 3: [00:02:58] give it a go? [00:02:58][0.2]

Alec: [00:03:00] We'll start local and we'll start with the major Australian index. So overvalued or undervalued, the ASX 200 index. [00:03:07][7.8]

Robert: [00:03:08] Oh, I want to say overvalued, but I think it's undervalued. I only say one want to say it's overvalued because of the simple fact that I think that we're heading somewhere along the line that's going on internationally, where you've got an increase in covid-19 numbers now starting out of the US, which I think is going to to see some of those markets fall away a little bit. And we know that the ASX tends to follow what's happening internationally. However, I think that given the current circumstances here in Australia, the way we've managed to control our environment around covid-19, I feel that it's not going to fall away very much. So as a result, I think it's undervalued. [00:03:51][43.0]

Bryce: [00:03:52] So moving overseas, overvalued or undervalued, the Nasdaq 100 [00:03:56][3.8]

Speaker 3: [00:03:57] oh, again, I want to say overvalued. And this is [00:04:01][4.1]

Robert: [00:04:01] crazy to say, considering that they hit record highs. I think it's still undervalued and for the same reason. I mean, we saw what happened in March when covid-19 hit the states and then we saw the equity markets take a tumble in the US. The stocks that kind of rebound first were those that were the bank stocks, the Facebook's, the Amazons, the Apples, the Netflix, the Googles, the Microsoft. I think that we have another occurrence like this, not a second wave in the US, but just a continuation of the first wave there. The stocks that people are going to jump into because they've got a lot of cash behind their growth stocks and it really shouldn't be the case. But the reason behind it is they got a lot of cash for context. [00:04:44][42.7]

Bryce: [00:04:44] We're recording this on Thursday, the 11th of June. And Robert, at the start of the year, we always like to do a bold prediction episode where we throw out a bunch of predictions. And one of Rienzo Alex bold prediction was that we would see a two trillion dollar company by the end of 2020. And I saw today that Apple is zooming ahead at one point five, three trillion [00:05:05][20.4]

Alec: [00:05:05] and Microsoft at one point four nine three times as [00:05:08][2.5]

Speaker 3: [00:05:08] well. And going forward. Yeah, yeah. [00:05:12][3.6]

Robert: [00:05:13] I think your prediction may not be that far off. [00:05:17][4.1]

Alec: [00:05:17] Yeah, yeah, yeah. I thought it was extremely bold at the start of the year, but we might have to by the end of the year. [00:05:22][4.8]

Robert: [00:05:23] Yes, exactly. It's an Amazon to follow shortly. [00:05:26][2.6]

Alec: [00:05:26] Yeah. Yeah. And Alphabeat just ticked over a trillion as well. So there's a there's a [00:05:31][5.3]

Speaker 3: [00:05:32] lot of money out, particularly [00:05:32][0.9]

Robert: [00:05:34] if we're [00:05:34][0.3]

Alec: [00:05:35] moving to a different asset class, but one that has attracted a lot of money over the last few years and one that can also be traded on a torero, overvalued or undervalued, bitcoin [00:05:47][12.3]

Robert: [00:05:48] undervalued. And the reason why I say undervalued is, first of all, we're starting to see more acceptance in relation to Bitcoin. We've got. German financial authority, the announced in March of this year that they would officially recognised crypto currencies as financial instruments. We've now got the first cryptocurrency, the BTC. It is the crypto Bitcoin exchange traded product that's going to be launched on the German exchange very shortly. I think that there's a growing acceptance, particularly around Bitcoin. It's it's a limited asset like gold, you know, limited supply. So as a result, I think that there is still a lot of legs in Bitcoin and we can very well say 20000 again. Wow. [00:06:34][46.4]

Speaker 3: [00:06:35] Well, luckily, [00:06:35][0.1]

Bryce: [00:06:36] luckily, we both have the smallest exposure to Bitcoin. [00:06:39][3.2]

Speaker 3: [00:06:40] Last time last [00:06:42][1.3]

Bryce: [00:06:42] time Alec bought Bitcoin, he bought it right [00:06:44][1.9]

Speaker 3: [00:06:44] at the time. So maybe that's a [00:06:48][4.1]

Robert: [00:06:52] little bit of what you're selling and I'll [00:06:53][1.1]

Speaker 3: [00:06:53] buy. Now, Robert, [00:06:55][2.5]

Bryce: [00:06:56] you have some pretty extensive experience in the currency side of things. So overrated or underrated. The US dollar, [00:07:02][6.6]

Robert: [00:07:03] the US dollar at the moment accelerated around Ren. I think it's still got a waterfall. I think that given the conditions currently in the US, I see a declining US dollar for the next few. Well, for the next few weeks, possibly the next few months, we've got a trade war possibly coming up with China. Donald Trump is is looking to get re-elected in November. He wants to point the finger at somebody for what's happened in regards to covid-19. If you see a continuation of that in the US and what we're seeing now, a rise in Texas and some of the other southern states, because they reopen very quickly, then I can see some more finger pointing, some more name calling, and I can say a lot of problems. [00:07:43][40.1]

Alec: [00:07:44] I think if there's one extremely not bold prediction we can make is that US politics is going to have a lot more name calling and finger pointing [00:07:51][7.4]

Speaker 3: [00:07:51] before November 2020. A bit of [00:07:55][4.0]

Bryce: [00:07:56] a follow up question to that, Robert, because I know a lot of our audience who are very early in the investing journey, think about currency. Is a declining US dollar something that you should be concerned about or consider at such an early stage in your investing journey? Or is it something that you need to be considering when you're really playing with large sums of money? [00:08:16][20.5]

Robert: [00:08:17] No, I think at the end of the day, depends on where you're looking to invest. If you're looking to invest in the Australian market, you're dealing with stocks where they derive their revenue within Australia, then the US dollar is something that you're not going to be concerned about. If, however, you're you're investing in Australian shares that derive income from the US, you know, the CSL, the the West sales and things like that, or centre group rather notwist, then of course, that's something that you need to consider. And certainly if you're looking to invest offshore, like most of our investors or trading international shares are trading in the US market, I can tell you from my own personal experience, I bought Netflix, for example, when Netflix was declined over, Marcha started to come back up. I bought it in Australian dollars. I've got a profit in Netflix, but when you convert it back to Australian dollars, it's a loss. All right. So this is when you've got to be concerned about where the dollar is headed, because obviously a weakening US dollar is a strengthening Australian dollar or vice versa, depending on what's occurring. So in our particular case, if we're going to see a weakening US dollar, that's great, then the Australian dollar will continue to rise. It's not too much of an issue depending on how far you think it's going to rise. But if you look at where the the Aussie dollar was trading against the US back in March, because that was when it was a risk off event, everybody was getting out of shares. Everyone was getting out of currencies, particularly a currency like the Australian dollar. The Aussie dollar fell to fifty seven cents. It's now rebounded to, what, just below 70. That's what caused my last. I've seen a 13 cent movement in relation to my investment offshore, and it's resulted in the loss, even though I've got a profit in Netflix. [00:10:06][109.0]

Alec: [00:10:07] So, Robert, we've got a couple more asset classes that would as punch through really quickly. The next one is the historic hedge against uncertainty and against inflation. And we've obviously seen a lot of money printing going on by reserve banks around the world. So overvalued or undervalued, gold [00:10:25][17.8]

Robert: [00:10:25] undervalued for exactly the reasons that you just mentioned, a lot of money, money printing going on in the world. We've got a situation, I think, right now where especially if we've got a second wave coming in other parts of the world, a continuation of the first wave in the US, people will flock flocked to safe assets. Gold is one of those safe assets. I still think that there's a lot of legs in gold. I think that we can see at least another 10, 20 per cent increase in the value of gold over the course of the. This year, [00:10:56][30.9]

Bryce: [00:10:58] that's an interesting one, because it hasn't necessarily performed as you would expect it to, that's sort of the last 12 months or so. But yeah, keep watching, [00:11:05][7.9]

Robert: [00:11:06] to be frank. If you look at even Bitcoin and gold, what you just said it just then and you put those charts up against the S&P 500, they look as if they're in lockstep. Mm hmm. So I think that, you know, there's a lot of those situations that have occurred, but I think that that will change. [00:11:23][16.6]

Bryce: [00:11:23] Yeah. So to close this out, Robert, we have trawled through every single one of the 5000 assets on DETRO [00:11:30][6.3]

Speaker 3: [00:11:31] got [00:11:31][0.0]

Bryce: [00:11:33] nine and a bit of an obscure one that is available on the platform. And that is Kocho so overvalued or undervalued. [00:11:39][6.5]

Robert: [00:11:40] Coko overvalued. I'm going to say it was high at the beginning of the year. I think it was something like three thousand or two thousand dollars, I think per metric ton, three thousand dollars per metric ton. It's declined since then. I actually think that it's really depending on where it originates from, which is the Ivory Coast, which are the major producers, et cetera, weather conditions, player impact. But, you know, from a lay person's point of view, I mean, I'll be frank, I just not one of the assets that I look at a great deal. [00:12:12][32.3]

Bryce: [00:12:13] I was going to say, though, it sounds as though we could go through 5000 and you [00:12:16][3.2]

Speaker 3: [00:12:16] can tell us something about it. I could tell you the metric ton. That's what the hell. Yes, you're right. [00:12:28][11.8]

Bryce: [00:12:28] It's about two and a half thousand at the moment. [00:12:30][1.6]

Speaker 3: [00:12:30] So we'll be able to get this down. [00:12:32][1.7]

Robert: [00:12:34] So, you know, I think that just from a layperson's point of view, you know, if the chocolates is the things like that and people are [00:12:40][5.9]

Speaker 3: [00:12:40] moving away [00:12:40][0.3]

Robert: [00:12:42] from that, they're more into health and fitness. You'd be surprised. I don't know whether you've noticed it, but certainly we're all walking around. There's so many people out exercising nowadays. Yeah. You know, with with bands and all kinds of equipment that I didn't realise there were so many people into fitness. [00:12:56][14.5]

Alec: [00:13:01] So short chocolate. Long fitness is. [00:13:02][1.9]

Speaker 3: [00:13:03] What is the price exactly? Is there a product that will [00:13:10][7.5]

Alec: [00:13:10] move away from the game? And we like to start these interviews by asking people about the very first investment we find there's usually a good story or some good lessons that come out of it. So to kick us off today, can you tell us the story of your very first investment? [00:13:25][15.1]

Robert: [00:13:26] OK, I grew up in WA. I mean, the first investment I had was actually a gold mining share. Now I don't even remember the name of it. It was that long ago. However, it must have been a decent gold miner because it wasn't one of those penny stocks. You know, you bought a one cent hoping it's going to go to sensibly doubled your money. It was trading, if I remember correctly, somewhere in the two Dollars range to Dollars. Fifty to 60. And we're talking, you know, late 80s kind of thing. Anyway, this was I thought I knew everything about it. It was going up. And then, of course, we had the 87 crash and everything went pear shaped. The result was that I didn't learn to cut out my losses. I just thought that, you know, ride this through the gold money disappeared. [00:14:15][48.9]

Speaker 3: [00:14:17] And I think the [00:14:18][0.4]

Robert: [00:14:18] lesson the lesson for me was it was that I think four thousand dollars that I invested in there, which is my first foray into into investing, lost it all. And the lesson I learnt from there, the first loss is probably the best loss. At some point you need to make a decision when you're investing as to what point you say this is it, I'm not doing any further. I'm getting out of this because it's not making any sense and I'm taking this loss. And I think that's what I learnt from that experience. That's not to say that I haven't still made that same mistake since then. But every time I look back, it's just a reminder. Every time it's just reinforcement of that initial trade that I made, that initial investment. [00:15:01][43.4]

Bryce: [00:15:02] Yeah, it's a super hard thing to learn controlling that emotion and that attachment you have to stocks when they are losing, particularly when they're going down in a crash as well. It's hard to remain focussed on what you're trying to achieve. So, yeah, to your point, it is good if it can happen early in your investing journey so you understand what that feels like. So, Robert, do you have an investing philosophy that you that used to sort of try and stick to when it comes to finding stocks, or do you have a particular sort of theme that that you like when it comes to building your portfolio [00:15:35][33.0]

Robert: [00:15:36] other than buying and selling high [00:15:38][1.9]

Speaker 3: [00:15:40] class? A good mix question? [00:15:43][2.9]

Robert: [00:15:46] Yeah, look, the philosophy I look at is that the business to make sense, it needs to be something that I can say is making money. That's not to say that I haven't invested in. Companies that haven't produced the profit, but when I have, I've always known that it was a gamble, that I was taking a punt here and that I'd have to be prepared to lose my money if it didn't work out. But if you look at my portfolio, it's generally it's going to be in shares which are income producing strong balance sheets that in the long run, I believe, are good investments and for various reasons. I also am inclined to look around and see what is out there that might be a good investment. I remember when I was growing up, one of the first books that my father gave me to read was a book by or was co-written by Peter Lynch. One Up on Wall Street. Yeah, great book. And is about, you know, looking around you and saying, you know, what are the investments that you can find investments just by walking around and seeing what's around you. And I did that, for example. And you probably heard people tell you the same kind of story, whether it be down to the PAB or whether it be on on your show Afterpay or something that my wife first told and told me about. I've never heard of it. And she had mentioned to me about how she had bought this dress and she was paying it off in full equal instalments. And I was surprised there was no interest on these instalments. And then she told me what it was and I looked into it. And next thing you know, I was fortunately one of the early investors. I was also one of the first early exodus of the of the of the stock. I wish I'd held onto it longer, but that was just an example of why it is worthwhile. Just look around you. [00:17:33][107.0]

Bryce: [00:17:33] Yeah, absolutely. Something that we try and talk to our community about is there's a number of companies that probably you're engaging with on a daily basis that provide excellent investing opportunities. Afterpay being one of them. And I'm an absolute fan of the Afterpay. I don't think there's any investor in Australia that wouldn't know [00:17:49][15.7]

Speaker 3: [00:17:49] about it now. But now [00:17:52][3.0]

Alec: [00:17:53] Bryce has applied that philosophy into big investments in Aristocrat and Philip [00:17:58][4.5]

Speaker 3: [00:17:58] Morris also not true. No, it's not true. [00:18:03][4.9]

Bryce: [00:18:04] OK, that's good. So the reason we have you on today is obviously to discuss some of the great things that are going on over ITRA. As we said, we try to make markets as accessible as possible to our audience and brokers. Obviously, one of the first sort of decision points that our, you know, you get to when you're starting out. And there's a huge sort of offer now available compared to when even Ren and I started investing five or six years ago. Now we're starting to see a bit of a war on on price. And brokers are also offering differentiated, I guess, add ons, you know, social aspects and the ability to follow other traders and that sort of stuff. So if we were to say, give us the elevator pitch for Atauro, you've got sort of 30 seconds in in the elevator. Well, you say for those of our audience who aren't aware of what Azzara does, [00:18:55][51.0]

Robert: [00:18:57] OK, probably along the lines. [00:19:00][3.2]

Speaker 3: [00:19:01] Yeah, 30 seconds. I mean, you can take 60 on time. [00:19:04][3.6]

Robert: [00:19:06] So I think I'd probably say something along the lines of welcome to the world's leading social trading and investing network. Learn how to invest through the wisdom of the crowd. You're not sure what to do. Then learn from like minded individuals through our news feed. Or if you're a complete novice, then copy one of our successful investors with ITRA. You can trade stocks on US exchanges commission free. Nice. So probably be it short print. [00:19:34][27.5]

Speaker 3: [00:19:34] I'm sold. [00:19:34][0.4]

Bryce: [00:19:36] As I mentioned, the social aspect. It seems that Etat really prides itself on that part of the platform. And you mentioned that you know, the ability to copy other traders and Ren speaks on the show a fair bit about investing is not necessarily [00:19:50][14.1]

Alec: [00:19:51] are you going to put this coin? [00:19:52][0.8]

Speaker 3: [00:19:52] Yeah, we [00:19:55][2.6]

Alec: [00:19:55] like to say there's no points for originality. It's all about making money. Yeah. [00:19:58][3.4]

Bryce: [00:19:59] So can you talk us through what you mean by this ability to, I guess, copy all the traders in that social aspect of the platform? [00:20:06][6.8]

Robert: [00:20:07] I think the unique advantage that we have over a lot of other competitors in this space is the ability for people to first of all, it's not just about copying. First of all, you can have a look at we've got 30 million registered users worldwide. Now, you can imagine if you've got 30 million people, there's going to be a few successful investors in that in that group. It's not going to be a situation where there isn't anybody successfully trading. So the advantage you have here is that we obviously to highlight those individuals that we think have good risk management skills that have good financial nous, if you will. They understand how the markets work. They've got a proven track record of performance and then we can show them out to to our investing public, if you will, our client base. So people. We have the opportunity in which that they can first of all, if you're interested in one of these traders before you even copy them, you can follow them, which essentially means that you get a look every time that person buys an asset class, a stock commodity, whatever the case might be. And then if you have confidence after a period of time, you can have those trades copied. So when he makes a trade, say, to buy Apple at a particular price, the exact same trade goes on your account. You determine how much you want to invest to follow him or company. So you don't necessarily have to trade with the same amount of money that he's doing a trade for. You can do it for significantly less, which is obviously very useful when you're first starting out and to get comfortable and to build confidence in the person that you copy. Now, it's not simply a case of somebody just telling you this is what I do. Or we tell pointing out this person, you can go onto his page because what we do is that each client has the ability to have a public profile. And in that public profile, there'll be several pages that will be available. One is a news feed similar to like Facebook. So you can ask him questions or her questions and then they can respond and you can see what they're doing and how they train and the basis of their investment philosophy, etc.. Then there is a stats page which kind of shows things like, you know, the percentage return over the period of time that they've been with us, what stocks they like to trade or asset classes they like to trade drawdowns, percentage of profits versus losses. One of the frequently traded assets, things like that. So it gives you kind of all this information to decide whether this is what the person you want to follow. See if you're a person who's interested in trading US stocks, you're not necessarily going to copy somebody is trading currencies. Yeah. So you can see you can see what they're doing. Then, of course, the next page is their portfolio. You can see a percentage of what they're invested in. Are they invested in growth stocks, blue chip stocks, value stocks, etc. and make your decision from there. And finally, there was just a chart which kind of shows their performance. So there's a lot of information here. [00:23:10][183.5]

Bryce: [00:23:11] So Equity Mates could actually set up a portfolio and we could all have people following our different trades. [00:23:16][5.1]

Speaker 3: [00:23:19] I just want to pick on that. Would be good to pick [00:23:22][3.4]

Bryce: [00:23:23] up on something that you mentioned there in that you kind of vet the people that are visible to the public in terms of their financial nous and their ability to pick stocks and that sort of stuff. How do you actually do that? Is surely it's just not based on obviously the performance of their portfolio like you calling them? [00:23:38][15.3]

Robert: [00:23:38] No, no, no, no. The issue is whether I should rethink or or comment, but some narrative around what I said. Look, there are two types of people you can copy here. I mean, for example, Bryce could open up an account, put it as a public profile and start trading and Ren can start following you or copying you. Yeah, right. And that's something that, you know, he does [00:24:01][23.3]

Speaker 3: [00:24:02] that Equity Mates. Exactly. [00:24:04][2.1]

Robert: [00:24:06] So now you could do in a public forum. So that's one way. The second way is what we call a popular investor programme. Now, this is where we vet those clients. So what we're looking for there is those people that have a proven track record. So we will want to see your trading ability over a certain period of time, whether it be with us, whether it be elsewhere. You will then be given a rating depending on the amount of money that you're investing. So, for example, we consider you after a period of time to have the necessary experience and you're trading a sizeable amount of your own money in these transactions. Then you might be considered to be an elite popular investor. And in that case, that, again, is is a badge of honour, if you will, that people will know that, OK, this guy is not trading on some Demel account to make himself look good. He's got real money in this effort. And as a result, you know, I could say that whatever he's making or losing, it's really coming out of his pocket. So for us, we put everybody through a risk algorithm. So, for example, we do offer people the ability to trade with some leverage. So we feel trading. Say you want to buy Facebook, you don't have enough money to buy Facebook or you want to have more bang for your dollar. You can do, say, two times leverage or four times leverage. If you're a popular investor, we reduce that ability. So we don't want people who are going out there trying to make it big on Aristocrat Leisure [00:25:37][91.2]

Speaker 3: [00:25:38] and all of [00:25:39][0.9]

Robert: [00:25:39] a sudden say, look at me, I double my money, you should be copying me. It becomes no, no, no. It's all going to be properly managed. So the idea is that we're really promoting responsible trading. We're looking at those investors that we feel. Investing in a manner which fits in with what we think is most appropriate manner for our client base because we're interested in having clients from here till the year dot, [00:26:08][28.5]

Bryce: [00:26:08] are there any famous investors on the platform that, like, obviously Warren Buffett's got an account? [00:26:13][5.0]

Robert: [00:26:14] So I wish I did. But we do have we do have a portfolio which follows Warren. Oh, we have one. We have a portfolio that follows that Carl Icahn, for example. So we have different things. We have different fund managers that can come to us if they want to promote an offering that they have their ability to invest in stocks, but they're not going to be a big name, Warren Buffett, etc.. I mean, they they wouldn't be using us there. [00:26:44][29.6]

Alec: [00:26:46] I don't think Warren would do a lot of online trading. I think he's probably pretty old school, [00:26:51][4.5]

Speaker 3: [00:26:54] but, [00:26:54][0.0]

Alec: [00:26:54] you know, who knows? Maybe the next Warren Buffett is right now posting their trades socially on that news feed. [00:26:59][5.3]

Robert: [00:27:00] Yeah, he knows. I mean, that's that's the thing that we have got traders here or investors here who actually this is the way in which they make their living, because what they're doing is that if you are a successful trader and we're encouraging successful trading, responsible trading, then we will pay you two percent assets under management. Well, so essentially it's like a hedge fund manager, but you obviously have to be good at what you're doing because otherwise the money disappears. People say, thank you very much, but I'm out. So the idea is that we want we're breeding successful investors, stroke traders, Ren. [00:27:38][37.8]

Bryce: [00:27:38] We got to get our portfolio. [00:27:39][0.5]

Speaker 3: [00:27:40] We just got to be good. [00:27:40][0.6]

Alec: [00:27:43] So, Robert, at the start of this episode, I mentioned that we hate fees on this podcast, one of our few stances that we take and people are probably wondering why I mentioned that. So it's probably worth answering that question. Now, part of the reason we like it or is you have just introduced zero commission trade on US stocks. So, you know, making it cheaper and making markets more accessible for Australian investors to invest in the biggest market in the world. Can you tell us a bit about that, how you came to that? And I guess the follow up question is, do you expect a similar price war to what we saw in the US with Robin Hood and all of that? Do you expect that to take place in Australia in the coming years? [00:28:25][41.8]

Robert: [00:28:26] The first part of your question, we launched zero emission trading in Europe back in May last year. We actually wanted to launch it globally, unfortunately, due to licencing issues and and trying to get everything across the line here in Australia with ASIC, that wasn't possible. So it's been a year delay. What we've seen is from that launch in Europe is that there's been massive interest in regards to zero emission trading. And it's similar to what you saw when Charles Schwab initially started in the US, Robin Hood, TD Ameritrade, etc.. We know that most of our clients want to trade in the US market, 80 per cent of all equity trades are on the US markets. So for us, it was a no brainer to really bring it here into Australia because we also recognise that there wasn't that ability with a lot of companies or individuals, rather, to go to a company, whether it be CommSec or anyone else, and trade internationally because it was cost prohibitive. So for us, this was a great opportunity to bring this product. Is this opportunity to Australia, do I think it's going to have lead to a price war? Yes, definitely. [00:29:34][68.4]

Speaker 3: [00:29:35] I think eventually, yeah. [00:29:37][2.3]

Robert: [00:29:39] I think eventually it will be take time. It's not as if it's going to happen overnight. I think that people will look and see what happens here in Australia. They'll be monitoring what we do. We've certainly seen a couple of our competitors start to move in that direction, but they still have excessive fees with regards to other aspects of their business. And I'm not going to name who they are. That's not my place. But I think that there will be a movement towards a more competitive marketplace and not just for US shares. I mean, it's the next step will be for us to launch other equity markets in Australia. And then I think that's when you will see the change. [00:30:20][41.3]

Bryce: [00:30:21] I'd be interested to know what you're saying. Like, why is the Aussie market becoming a popular sort of destination for this sort of price war now? Is it because you guys and I guess other brokers are seeing more interest from the Australian population in investing? How are we different to perhaps the European in the UK and the US market when it comes to sort of retail investors in their attitude towards investing? [00:30:44][23.5]

Robert: [00:30:45] But I think you've kind of answered it yourself. [00:30:47][1.8]

Speaker 3: [00:30:48] Well, I'll emphasise that [00:30:52][4.4]

Robert: [00:30:54] I think Australia is. I'm more keen on investing. We've grown up in an environment where you're in your 40s or 50s and 60s, for example, whereby you receive stock because of de-mutualisation of an insurance broker or Commonwealth Bank, things like that. So as a as a saver, you got shares. People are used to it. And people also see it in the forms of their superannuation because most of the money is invested in shares. And if you keep track of your super, you can see how things are performing, how the how the markets are performing. So I think there's really a natural affinity for people here in Australia to invest, which is very different from, say, the UK market where we did a survey and most people are into credit products, term deposits, any kind of savings, bonds, etc., or even the US market where although you've got all these stocks available, let's be honest. I mean, I don't know how many people can buy Amazon shares in the US at two and a half thousand two thousand six hundred or Berkshire Hathaway over two hundred thousand dollars. So, you know, these are the kind of things that I think this incentivises people to get involved, whereas in Australia you've got reasonable stocks at reasonable prices, some of them leading the field in the areas like CSL, like Afterpay, etc.. So I think already there's a lot of interest here in investing and that's what we recognise. We can see that there is that interest and all we're doing is providing people with the opportunity now to trade outside of the Australian market, which only represents three per cent of the world equity market. [00:32:31][96.8]

Alec: [00:32:31] So once there are commission trading for US stocks is bedded down and people are trading that market for zero brokerage is their plans to expand it beyond the US. Where are we going to see Australian stocks through our brokerage or I'm [00:32:45][13.8]

Bryce: [00:32:45] hanging out for Cyprus [00:32:46][0.4]

Robert: [00:32:50] like we already of trading commission free on 14 exchanges already on various stocks. Australia is certainly on the cards. We know that being here, having an office here, a lot of interest here. That's certainly something that we're going to look at, unfortunately, is not something that can be done overnight because we're having to deal with having to pricing, having to change the way in which we hold currency for our clients here. There's a lot of development that needs to be done on our platform in order to facilitate this. But certainly we've already started discussions around Australian equities and possibly looking at the top 200 initially and then going from there. So I'm hoping that I'm going to be able to announce something in the next hopefully before the end of the year, [00:33:39][48.5]

Alec: [00:33:39] save that announcement and come back onto Equity Mates and do an exclusive [00:33:43][3.5]

Speaker 3: [00:33:44] Equity Mates analysis. I would be happy to do so. We've got that on record. [00:33:50][5.9]

Alec: [00:33:50] So I'm interested in the psychology of zero emission trading. I'm sure you guys have great data for when you're in a market in Australia or a bit overseas and you make that change to from a cost to trade to zero cost to trade. Do you see people's trading and investing habits change as a result of that? [00:34:11][20.7]

Robert: [00:34:12] Well, yes. I mean I mean, if you even look at the if you look at what's happened in the US market over the last couple of months, everyone saying that what's caused the market to rise is the retail investor. You know, all of a sudden people are trading and they're trying to find reasons as to why the retail investor, because if you speak to the hedge fund managers, they're all saying, no, no, no, no, we expect that this is a bear market rally and this is going to turn downwards and therefore we're staying out of it. You've seen Stan Druckenmiller, who's a big hedge fund manager, said that he's made a mistake by staying out of it. You can see a lot of people said the only rise has been from the retail investor. And there's various reasons for that. But I think that when you've got something like this, where it's commission free, when you've got the ability to buy fractional shares so that you can drip feed into your investment account every paycheque and have an investment, know, this becomes very powerful. So I certainly think that especially now when we're in an ocean of free money, in the sense that we're not going to see interest rate rise in the near future and people aren't going to be able to put money aside, hoping to get two, three, four percent interest. You have to invest. You have to put it into something that's going to grow. So this is where the opportunity is. And I think that this ability to trade where it's not costing you nine point twelve dollars, sixty five dollars and I won't name who that is, I wish to purchase something. It might only cost you five hundred dollars. This is where it becomes very, very important and key to investing. [00:35:52][100.4]

Bryce: [00:35:53] You mentioned there that there's been a big. In retail investors during the covid-19 crisis and discussed off air as well, Ren and I, that there's no sports betting going on at the moment other than still on the horses. So I guess everyone instead of is at the tavern now looking at Afterpay in and out in [00:36:10][16.7]

Speaker 3: [00:36:11] front of it. [00:36:11][0.4]

Bryce: [00:36:12] I don't know if you have access to see, but what have been some of the highest performing positions during the crisis or some of the more popular stocks that people pouring into [00:36:21][9.0]

Robert: [00:36:22] the popular stock, say, in February was Tesla and everybody was jumping into Tesla. [00:36:26][4.1]

Bryce: [00:36:27] I saw today it hit a thousand dollars today from like three ninety eight in March or whatever it was. [00:36:33][6.2]

Speaker 3: [00:36:34] So that's not [00:36:35][1.1]

Robert: [00:36:37] correct. These are the kind of stocks that they're well-known stocks. They've got charismatic figureheads. And I think that's what people are attracted to where they've been. Elon Musk, who are the big Jeff Bezos, whether it be Zuckerberg, Tim Cook, you know, they look at these individuals and they either see people who are very good managers got skin in the game like Bezos does, et cetera, like Zuckerberg does, and then they are more prone to investing with them, which is the same reason that when I look at investing, I look at the same thing. If the owners are still involved in the business, if the CEO has got shares in the business and he's buying shares that the company I'm interested in buying it. This those stocks that that people have been investing, [00:37:22][44.9]

Bryce: [00:37:22] if Trump was a stock, would be interesting to see how people poured into that, given his personality, if that's a trait. I think they are very short on that. That's for sure. [00:37:31][8.7]

Speaker 3: [00:37:32] They're volatile. Yeah. Yeah. [00:37:34][1.5]

Alec: [00:37:35] So, Robert, we mentioned earlier some of the non-traditional assets that Atauro offers. And I think I was looking before there's 94 different crypto currencies on a tauro. It feels like crypto is one of these assets that that had its bubble. It crashed, and yet it's hanging around still. And, you know, if you follow Bryce his Twitter feed, there's a lot of people on there who are, again, not betting on a big rally in crypto. What have you seen on your platform and from Atauro users in terms of interest and I guess money flowing in and out of the crypto space? [00:38:10][35.0]

Robert: [00:38:11] When we first started in Australia, most of the people who came to us, the crypto traders, and we saw a huge increase in our client numbers during twenty seventeen during the height of the crypto market. And everything was just going in one direction, especially Bitcoin going up towards 20 and people talking about REPL going up and what numbers, some ridiculous numbers that people were. Look, we still have probably around about twenty, twenty five percent of our clients that join us every month are coming here because of crypto. I'm very surprised that is changing. Ever since we started making this announcement around zero emission trading, there's now more interest there. But I'm still surprised, even as of this year that we're still seeing twenty five percent of our flight numbers. New acquisition is around crypto. It's not going to die. I think that there are people, particularly millennials, who believe that there is a place as an investment vehicle for crypto, as we ourselves believe that there is a place. I don't know whether all of these cryptos will be around, but I certainly think that something like Bitcoin, given what I described earlier with the German monetary authority, et cetera, and the more acceptance of Bitcoin as a financial product, I think that we're going to see continued interest in cryptos in the future. [00:39:32][81.4]

Alec: [00:39:33] I was getting some serious nostalgia scrolling through your website and reading some of those names like Ethereum, Ripple, Nayana, Litecoin, all of those names, and in 2017 were doing the rounds in such a big way [00:39:45][12.3]

Robert: [00:39:47] just yet, very much [00:39:48][1.3]

Speaker 3: [00:39:48] like Amazon. [00:39:48][0.3]

Bryce: [00:39:51] Now, Robert, before we move to wrap up the interview with final three questions that we always ask our guests, I guess it's obviously a pretty exciting opportunity for Aussie investors to be able to have access to a platform like this. Where can our audience go if they were interested in starting their journey with Atauro [00:40:10][18.9]

Robert: [00:40:12] started the website? I mean, at the end of the day, what we'll do is once you register with us, there's a lot of trading tools or education centres. You can reach out to us through our customer support line to ask questions. We're happy to try and educate clients. We do webinars. We're looking to do seminars very shortly. Once covid-19 is done and we feel comfortable going out there and meeting our client base, then we'll be doing that. Look, we're here to help. We have this vision of trying to help people grow their wealth. I mean, this the whole basis behind this ability to copy successful traders is for you to learn from them. And hopefully one day you're one of those successful traders. So good about where. Site Gordito dot com register is very simple, and then we can speak to you from there. [00:41:01][49.3]

Bryce: [00:41:01] Yeah, it's a great philosophy. You know, we're always about doing the best we can to educate, obviously, our audience and all sort of Australian investors just kicking off. So it's good to hear that you guys also share that sort of mentality and provide opportunity to to do so. One final question before the final three. [00:41:18][16.9]

Speaker 3: [00:41:21] As I said [00:41:21][0.3]

Bryce: [00:41:21] at the start of the show, we do a few bold predictions and we'd love to hear a bold prediction from you as to how you might think the ASX will finish in 2020 or perhaps a bold prediction to do with with a few stocks or a stock, perhaps Tesla is going to go bankrupt or [00:41:40][18.2]

Robert: [00:41:43] that Tesla will go bankrupt. Tesla is probably going to continue on its very high notes because Elon Musk is [00:41:52][8.7]

Speaker 3: [00:41:52] also considering, you know. Yes, exactly. [00:41:55][2.8]

Robert: [00:41:56] Yes. If anyone will bring Tesla's downfall, it'll be Elon Musk with some tweet. [00:42:01][4.8]

Speaker 3: [00:42:02] Yeah. [00:42:02][0.0]

Robert: [00:42:03] So my bold prediction would be at some stage over the course of this, well before the end of the year for the next six months, that Tesla will drop to four hundred dollars because of a tweet from Elon Musk. Nice. [00:42:15][12.0]

Alec: [00:42:16] I like that. [00:42:16][0.3]

Speaker 3: [00:42:16] That's a good thing. We've got [00:42:19][3.0]

Bryce: [00:42:19] that down. We're checking in, checking in December with you to see how that works. [00:42:22][3.1]

Alec: [00:42:23] So, Robert, as Bryce said, we do like to wrap the same final three questions. And the first one of those is, do you have any books that you consider must read? And I guess these can be investing or otherwise. [00:42:34][11.3]

Robert: [00:42:35] I mentioned one already, which was one up on Wall Street by Peter Lynch. I think another book certainly for somebody who is starting out in their investment learning book or books, rather, by Jack de Swagga Market with its new market wizards, stock market wizards. Basically what Jack has done is he's interviewed the top hedge fund managers from around the world to get some lessons as to how they invest, how they trade. I found this very, very good when I was first starting out in my investing journey just to get an idea as to what should be the mentality, having plans in place, knowing what you're going to do, particularly around trading plans when you're going to exit. Exiting a market is more difficult than entering a market anyone can buy. It's knowing when to sell. That's more important, whether that be the kind of loss or more importantly, take a profit, because people tend to cut their profits very, very early. So I think anything by anything by Jack, in terms of any other books, Ray D'Alessio, our founder, joining us there, has been advocating reading his books. And I've started doing the same. Ray is the co chief investment officer for Bridgewater Associates, which is the largest hedge fund in the world. And he's got several books that aren't about trading. It's actually about the world and how we should be viewing it and what's actually happening within the world. So I think there's a couple of really interesting books there by him that are worthwhile putting on your reading list. [00:44:08][92.2]

Alec: [00:44:08] Yeah, some great books there. Definitely recommend all of them. The next question is, what is your go to source for investing information? [00:44:15][7.1]

Robert: [00:44:16] All right. Well, depends on which markets I'm looking at. So if I'm looking at the local market, obviously, I read the AFAS. There's another great website that go like, why are markets, which I'm sure you guys put off? Yeah, I picked up a couple of really good I would tips and more investment analysts that I read and thought to myself, wow, that makes sense. I'm investing in that particular stock and it's paid off in terms of the US market, which obviously have a lot of interest in them, particularly now with zero emission trading. I'm looking at Seeking Alpha. I don't know whether you guys have heard of it. Good websites. Yeah, very good website. That's not to say that everybody on it is good, but you will find after a period of time when you read it, the what is the worthwhile commentary on stocks and what isn't, because obviously some of them are just selling their services. So you need to sift through what is out there. The Wall Street Journal, I highly recommend that I picked up a couple of good stocks through reading that paper just over the last month because of articles that they wrote on particular stocks that I thought I thought made sense and I jumped in. There are other websites, but CNBC, Bloomberg, etc. But those are probably my go to ones initially. There's only so much you can read, and I sometimes think that too much information is not necessarily good for you. [00:45:39][82.5]

Bryce: [00:45:39] What about the source of information for the cocoa market? [00:45:42][2.4]

Speaker 3: [00:45:45] That's a top secret. That's bad. Yeah, well that's. Yeah, that's good. Yeah. [00:45:51][5.5]

Alec: [00:45:54] You're going to say a. Massive uptick in people trading very obscure commodities. Now, Robert, the last question to ran out this interview, if you think back to your younger self when you were in WA and investing in your first mining stock, what advice would you give your younger self? [00:46:13][19.1]

Robert: [00:46:14] Save more money and invest early? Look, at the end of the day, one of my biggest regrets was that I didn't put more money aside to invest. Do your research think that that's very, very important? Look, if you get in early compound interest, takes care of everything else. And that's really the gist of what investing is all about. Pick a good quality stock that you say has got growth. Understanding, of course, that, you know, the stocks that were the top 10, say, 20 years ago aren't necessarily the top 10 now. So you've got to be mindful that you have to be quick on your feet and realise what has reached the end of its lifetime value and move on Apple, Google. All of these stocks didn't exist when I first started in my investing journey. But now look at where they are. Amazon was a perfect example. So I think do your research, keep your eyes open, look at what's trending in lifestyle and what's going on around us, because technology is becoming an increasing part of what we're doing. And we've seen that even with this covid-19 work from Home Zoon. There's a stop that just went through the roof. Yeah, there's plenty of examples of this that if you really think about it and think of how it's impacting your life and then go around and say, well, what is there a stock out there that can make this demand [00:47:35][81.4]

Bryce: [00:47:37] great pieces of solid advice that we've certainly tried to instil on the show over the last number of years. So it's great to hear you share that as well. So, Robert, we very much appreciate your time today. If any of our listeners want to find out more, head to Atauro dotcom and you can find out all the information that there is to to know about Atauro in their office. So, as I said, appreciate your time. And we look forward to catching up in December to see if [00:48:03][26.8]

Speaker 3: [00:48:05] I'm Dollars was about to say that myself. I'm going to speak to David. [00:48:11][6.2]

Robert: [00:48:14] Thanks, guys. I really appreciate you having me on the show. [00:48:16][2.5]

Alec: [00:48:17] No worries, Robert. Thank you. Cheers. [00:48:19][1.6]

Speaker 5: [00:48:19] Thanks for listening to Equity Mates investing podcast production of Equity Mates Media. Please remember that everything you hear in Equity Mates investment podcast is general advice. Only the content has been prepared without knowing your personal objectives, specific financial circumstances or goals. The host of Equity Mates Investment Podcast may maintain positions in the companies discussed before considering any investment. Please read the product disclosure statement and consider speaking to a licenced financial professional. [00:48:19][0.0]

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