Expert Investor: Rudi Filapek-Vandyck – Finding truly great, long-term businesses

Bryce Leske: [00:01:28] 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? [00:01:42][14.4]

Alec Renehan: [00:01:43] Very. I'm very good. Bryce looking forward to this episode a lot. We've just gone through ASX reporting season and we've got an expert here to help us make sense of it all. And then towards the back end of the interview, we're going to talk about finding truly great long term businesses, the true goal of this podcast. Yes. You know, the community. So I think I'm going to get a lot out of this conversation. [00:02:03][20.9]

Bryce Leske: [00:02:04] Likewise. It is our pleasure to welcome Rudy Filapek-Vandyck to the show working really [00:02:10][5.2]

Rudi Filapek-Vandyck: [00:02:15] Thanks for having me, guys, [00:02:16][0.6]

Alec Renehan: [00:02:16] and thanks for coming on. [00:02:17][1.1]

Bryce Leske: [00:02:18] So Rudy is the editor and founder of Fariña, founded back in 2002. And if you recall the episodes we did on reporting season, all of the data and info that we used in that we got from Fareena. So that offer is still available. If you would like to test Rudy's full service for four weeks for free. Just mentioned Equity Mates when you sign up in the box. Anyway, back to Rudy. He successfully built up an online financial services in the Netherlands and has now focused his attention back on Furano, which is a website that provides research on Australian equities. And we're very excited to dig into his great mind and understand a lot more about it. So, Rudy, as I said, welcome to the show. [00:03:00][42.3]

Rudi Filapek-Vandyck: [00:03:01] I hope I brought my mind along. [00:03:02][1.3]

Bryce Leske: [00:03:03] I'm sure you have. [00:03:04][0.7]

Alec Renehan: [00:03:05] So ready. Before we get into all of that, we do like to start these interviews with a bit of a game where we throw out, you know, a topic or an index or something, and we get your thoughts on whether it's overrated or underrated. [00:03:15][10.2]

Rudi Filapek-Vandyck: [00:03:16] OK, I'll let you know now. I'm terrible at timing. [00:03:18][2.2]

Alec Renehan: [00:03:19] That's all right. So Bryce [00:03:20][0.8]

Rudi Filapek-Vandyck: [00:03:22] Oh, sorry. I'm all right. [00:03:23][0.9]

Alec Renehan: [00:03:25] So we'll kick-off. We just got a few today, but we'll start with index investing. Overrated or underrated? Underrated. And was that most [00:03:33][8.5]

Rudi Filapek-Vandyck: [00:03:34] investors will find that very, very difficult to continuously outperform the index on a consistent basis. In particular, applies to professional fund managers. I hope we're all aware, well aware about that, that nobody talks about it. But we are aware of that that famous bet that Warren Buffett took on with the fund manager, basically with hedge funds and said, like, you might be able to beat the index, but not after fees. And he won that bet. Yeah. And that basically goes for the oil industry, basically. So the big message to everyone who has had a good year this year is that enjoy it while it lasts. I mean, the share market is sometimes very accommodative and it can be very unaccommodating with other times. And that's just how it works. I mean, the share market basically is this beast that allows us to do whatever we do. And other times it won't allow anything. [00:04:28][54.0]

Alec Renehan: [00:04:30] So enjoy it while it lasts. A bit of an ominous tone to start this interview. [00:04:33][3.4]

Bryce Leske: [00:04:34] Overrated or underrated, the Australian residential property market. [00:04:38][3.9]

Rudi Filapek-Vandyck: [00:04:39] Oh, that's a good one. Probably overrated. But Australia has a very particular environment, a very particular set of dynamics. And that has in particular over the past two decades, also has served everyone quite well in property. But I think the whole property thing is very much overhyped and the industry itself wants to overhype it, of course. And I mean, in this particular period, look, one of the things I mean, they they do not report a lot of data, which doesn't doesn't off the cost Ren. And if you if you lend your ear to the right type of of expert to the market, you know, there's a lot of people who actually don't make money out of property. I mean, if you have to take into account the money you spend on upgrading your house, the inflation that that should take into account as well, and the fact that maybe you spend a lot of hours on doing it yourself, then often you're kidding yourself as an investment. But anyway, I mean, we are very good at kidding ourselves, we humans. And I think I think property is one of those is one of those ways in which you can you can see that. But globally, there are plenty of times, plenty of markets where people actually lose money. I mean, I remember about 15 years ago, I, I read a study about at that time about the Swiss property market, and that ended more for two decades. Wow. At that time. So people were not that keen in putting their money in property there unless they wanted to live in one. But that investment was absolutely not not interested because it didn't move right. If it doesn't move for two decades, nobody's interested. [00:06:20][101.4]

Alec Renehan: [00:06:21] Yeah, it's interesting. Yeah. The last one now is an asset class that definitely has been moving over. The last few years are overrated or underrated Bitcoin overall. And why is that? [00:06:34][12.7]

Rudi Filapek-Vandyck: [00:06:34] I think people misunderstand what Bitcoin will stand and misunderstand what will happen in the future. Everyone who buys it as a as a entry system asset is going to be surprised when what happens when when the system actually fights back. And you will see now that central banks globally at some point will will introduce their own currency, let's call them like that. And that basically will mean that there will be no place for Bitcoin. And there are two reasons for that. One is, of course, when central bankers launch like an EU or even Australian dollar, etc., those will be official and those will be the ones that everyone uses basically from business to governments to taxpayers, you name it. So who's going to use Bitcoin then? The other element, of course, is that central bankers who are working on those currencies are very much focused on the stability of those currencies, which is the reason why they were polsby be launched locally, domestically first, and then test them out for a while, find ways to keep them stable and then connect them internationally. The big question mark, which I always had for Bitcoin, is how can an asset and they call the currency. But it's actually an asset that goes from zero to 20000, back to 4000, back to 10000, 6000 to 12000. How can that be used as a stable means of exchange for anything other than speculation? And that will be the downfall of Bitcoin? [00:08:06][91.9]

Bryce Leske: [00:08:07] Well, I'm long bitcoin, so [00:08:09][1.1]

Alec Renehan: [00:08:11] I do want to have the argument. [00:08:13][1.2]

Bryce Leske: [00:08:13] No, no, it's purely a hedge. It's a hedge. Yeah, yeah, yeah. Not not a lot longer. That's for sure. Security before we get into, as Alec said, Covid reporting season and then unpacking the search for long term successful businesses, we always love to get the story of our guests first investment. So how about we start there? Are you able to share the story of your first investment and perhaps any major lessons that you've learned from it that are still carried through today? [00:08:42][28.9]

Rudi Filapek-Vandyck: [00:08:43] I think this is going to be my first surprise of the day. I think everyone who pays attention to detail will notice I'm missing a piece of my finger. [00:08:49][6.3]

Bryce Leske: [00:08:50] I did notice that. [00:08:50][0.5]

Rudi Filapek-Vandyck: [00:08:50] And that's basically the story of my first investment. I lost my finger in an accident. I was nine years old. The first lesson learned insurance companies don't want to pay out. So I ultimately got a very small payout and that was money I could only access after I became 21 and I was nine at the time. So my first investment went into some kind of a banking product which gave me at the time fifteen percent interest. [00:09:16][25.3]

Alec Renehan: [00:09:17] must be nice, [00:09:18][0.6]

Rudi Filapek-Vandyck: [00:09:20] which even me being ten years old or so, 11 years old, obviously, whatever, I thought that was quite, quite a cool interest. But obviously, it took me, took me many, many, many more years to realize that that was actually a good thing. But it gives you an inside. But this is the 80s. I mean, how high inflation was, how my bond yields were and how high the interest was that if you put your money in the bank. Hmm. And obviously times have changed dramatically and those were not good times for the sharemarket. By the way, in that environment, shares don't really don't really thrive. [00:09:50][30.6]

Alec Renehan: [00:09:51] Yeah, well, who would put your money in shares when you can get 15 percent in the bank? [00:09:54][3.2]

Rudi Filapek-Vandyck: [00:09:56] But you have to realize that if you get 50 percent in the bank probably means that inflation is 13 or 14 percent as well. So you're not actually on that basis actually not making money. It's just another one way we delude ourselves. Yeah. [00:10:08][12.7]

Alec Renehan: [00:10:11] So from there to now, you've obviously had a long career, you know, studying financial markets and companies and all of that. Have you developed a personal investing philosophy? [00:10:22][10.9]

Rudi Filapek-Vandyck: [00:10:22] I think so, yes. By the way, thanks for giving away my age. The suggestion people can do, [00:10:28][5.5]

Bryce Leske: [00:10:28] as you said, nine years old in the eighties, [00:10:30][1.6]

Rudi Filapek-Vandyck: [00:10:34] that was in the 70s. I see. It was only lying about my age, the philosophy. Yes, I've actually I've actually learned by doing this that quality is in the end what what gets you through through times, through tough times and the good times. I'm certain we will talk about it a little bit more in later topics. But it's also one of the things I think is very difficult for investors, because if you listen to the commentary and you read things about investing in share market, everyone has a different definition about quality. I mean, not it it's it's one of those words that just being used. Yeah, everyone has quality by default, nothing becomes quality. Yeah. So that's the difficulty, number one. And number two is that everyone is always interested in very much focused on what's happening in the immediate well that's happening now. And then the eternal question comes. Rudy, if it's such a good stock, how come the share price is falling and that's the always delightful question, you go like well and then you start talking about not everything is intelligent that happens in the share market and all of that. And then people look at you and they go, like, what's he talking about? And I'm still talking about the share market, but yes or no. So that's the difficulty. But my analysis, my research has led me to reemphasizing and actually really, really focus on quality. And I'm trying to get that message across to investors as well. [00:11:57][82.6]

Alec Renehan: [00:11:58] So we'll hold off on asking what your definition of quality is until we get to that part of the conversation. So if people want to know, they're going to have to keep listening. [00:12:05][7.7]

Rudi Filapek-Vandyck: [00:12:07] Well, maybe I should tell people what is not quality. Sure. So see, Telstra share price that peaked in 1999 and today is is about 70 percent lower. See, that's not quality. Yeah. And AMP share price that I think for memory in nineteen ninety like that or 2000 as well. At 21 22 Dollars today it's one dollar something that's not quality. So it's easy to point out what isn't and people are always surprised. How do you know. I just look a long time. Right. A good company appreciates in time. It doesn't, it doesn't fall by 70 percent. [00:12:44][37.2]

Bryce Leske: [00:12:44] So before we do dig in further, let's just take a step back and chat about Arena, because some of the stuff you're doing there is awesome. But I think I'm particularly interested in the why behind Fiorina sort of really aligns with what we're trying to do at Equity Mates. And, you know, we were discussing Off-Air about the innovative process that you're going through and that sort of stuff. So why did you start, Fareena, and sort of what is your philosophy and what does it offer? [00:13:09][24.6]

Rudi Filapek-Vandyck: [00:13:10] First of all, there's a personal reason I build a new service in the Netherlands, but I'm actually born in Belgium. So I I migrated to the Netherlands, published my own newspapers. Then I started chasing criminals [00:13:24][14.6]

Alec Renehan: [00:13:27] as a as a journalist. So I can't catch a private investigator. [00:13:34][7.3]

Rudi Filapek-Vandyck: [00:13:35] I make the world better. Stop, stop, stop, start with some action. And I ultimately I ultimately was I was lucky enough that at the very early stages of this is this might be very difficult for you guys to to to comprehend. But in the mid 90s, the Internet was pretty much very new and hidden for most of most large part of the population. And I was I saw the potential. I was interested. I got the opportunity to build a new service, the first one in the Netherlands on the Internet and the debt. Obviously, I thought that was a quite great chance to do it. And after five years, I thought I'd build it out until the number three player in the country. And then I decided to do something else. So I moved to Australia. [00:14:19][44.1]

Bryce Leske: [00:14:21] He didnt want to go for number one. [00:14:21][0.8]

Rudi Filapek-Vandyck: [00:14:22] And I thought I thought of my daughter. And the irony was that in Australia the recession was officially it wasn't. But in practice it was after the Nasdaq meltdown, nothing much happened here for a while. And in that period, I found myself here as an experienced finance journalist and nobody was waiting for me. So I had a few, let's call them corporate accidents with people trying to do stuff. And it didn't really work out. And then I decided, you know what, just come out and I'm not going to wait for anymore. I'm just going to do something myself. So I saw that from the arena at that point in time and there's a little bit of a Robin Hood feel to it. But that was Nederlands when I did the new service. One of the things I picked up in those days, the big American firms were coming to Europe and issuing research on European stocks. Every time the guys like Merrill Lynch would have opened research all up, credit downgraded had a big impact on stock prices. I mean, could be up seven percent on a day or whatever coming to Australia. I notice all these stock stockbrokers. You were exchanging research among themselves and keeping it to themselves and for their customers. So I thought, like, oh, that's a bit I mean, that's let's make that transparent. So I made sure I had my finger in the merry go round loop and I started doing The Australian Baucau, which basically gave investors insight in what those stockbrokers were telling their customers. And that then ultimately became the whole website, the whole service. I just built it out. Then the GFC came along. And upon that point we were simply communicating what the experts were saying, all of that. But then the GFC came along and all those experts, were staring like a deer in the light, not knowing what to do. And I thought, I have no business anymore. I had to jump into the limelight and starting to tell investors what they should do first thing, sell your banks. Right. And I was one of the first one of the only one of the few in Australia who actually said, sell your banks. Everyone said, but everyone else says it's OK. I know it's not going to be OK and I sold off my cell to Banks was the first big call. The other one was selling energy stocks when oil went to 130 Dollars in May or June 2008. Again, one of the very few who who saw what was coming. See, those are those points where you realized that up until that point if you read enough, you know that stuff up until that point, every time the oil price doubles in a very short timespan, you get an economic recession because economies can't cope with that. Yet in 2008, it happens. And absolutely nobody was talking about the recession. And I thought, like, who's crazy here? Is it me or is it the market? It turns out it was the market because we did get the recession. Not just that when oil prices kept on going up, nobody was talking about the recession. All right. So I made a little bit of a name in 2008 with her with making those calls. And they and luckily, they got some covid coverage and the likes of just waiting and stuff like that. I used the GFC to to dig deeper into research. And my research then led me to the conclusion that not all stocks are equal and some stocks in the GFC did not drop by 50, 60, 70 percent. And all of our stocks did well. And so I tried to figure out like, what is the difference? Why does one stock drop by 80 percent or the business goes out of business, whatever the other ones are just I mean, pretend like nothing happened. And from that came the concept I developed, which I call all weather stocks, and we'll talk about it later. But that's basically my first realization that not all stocks are equal and some stocks are a lot better than other stocks and and a lot more quality there then. And those stocks you can trust essentially. And from that onwards, I guess one of the things that has happened since is that while a lot of investors were very skeptical when I started writing in that way within a year. Right. I mean, not all stocks are equal. Well, let me tell you something new. But I guess a decade later, many, many investors have now caught up with the fact that I was right. My research has had some validity to it. I'm very proud of the fact that a lot of investors now have portfolios where half of their portfolios of positive value with stocks that they would otherwise not even looked at. Yeah, and I mean, I get on a regular basis, I get messages of emails and they say, like me, without you, really, I would have never thought about these stocks. And now they go like and you've like you've changed my whole view on the share market. [00:19:10][288.6]

Alec Renehan: [00:19:12] So this is probably a good point to remind people that if they want a month free, all go to Federated Dotcom and make sure you say that Equity Mates sent you and you'll get a month free. [00:19:24][12.5]

Rudi Filapek-Vandyck: [00:19:24] That's true. I have to do it manually, though. But if you say Equity Mates, you get [00:19:27][3.0]

Alec Renehan: [00:19:28] flooded during the GFC. So you want to you want to have your finger on that pulse. Saigon sign up. But one thing that we particularly like about Florina is your coverage of reporting season and we're keen to unpack some of that and, you know, learn from some of your insights there. But I guess if we do this sequentially, it covid hit a little bit before then. And we've seen a pretty unbelievable six months both in the crash to March and then the recovery since. So I guess if we maybe start General, what have your biggest takeaways been during this Covid period? [00:20:02][34.1]

Rudi Filapek-Vandyck: [00:20:03] It's probably good to point out here that in 2019, the two reporting seasons in the major policy are February and in August. And we have companies in between. But people usually don't pay attention to those or not too much. In 2019, we had probably the worst reporting season in Australia Post GFC. So to my conclusion and maybe good to explain to people as well, everyone always has a different view of how they look at reporting season and the price action reporting season doesn't always tell you the story. As a matter of fact, it usually doesn't. The way we look at the reporting season is you have you have expectations that are being put forward by the analysts and then the company comes out. And then how does that relate to the expectations? Because one of the things I've learned by doing F.A.A. and this is the funny thing as well, you asked me earlier, why did I start up in the arena? Know, the funny thing is that I've since gone through my own journey in analyzing and researching the share market, and I'm using it with the same tools that I developed for investors online from the arena. So when I want to analyze the reporting season, I use the same data that are available on the website. And that's I mean, it's there for me in this downfall for other people. So what I've learned over the years of doing this, the outcome from the reporting season is very much in. How will the businesses decide to announce in that month how that impacts on the the forecasts put forward by analysts? So everyone is always critical about this and all the always wrong. And that's true and always late, which is also true and always biased. It's probably also true. But the fact is. When they change their forecasts, that is the guidelines for the share price, so it's not that difficult to understand or to predict which stocks are going to be higher in three months time, which is going to be lower. Westmead, for example, disappointing Augusts share price hasn't moved since now, and that's for that particular reason. Now, other stocks have done better and cheapies is more than likely is higher. Right. And that's on that simple metrics. That's how it works. And it doesn't mean that the company that comes out with a 250 per cent growth, for example, has done better than expected. That's the element that investors have to catch up on. You also have to ask if a company goes back to 50 percent, it might have missed expectations and the share price simply comes under pressure, whether that's a bad thing in itself, because if it keeps on going at that face, the share price will take care of itself. So that's the long and the short of it. Coming back to your question, we had the worst reporting seasons, February and in particular August in 2019. Well, whereby one of the predictions we made at Efferent Arena is if your typical dividend investor start getting worried, be afraid. You know, we could tell that because we were paying attention to what was happening in the reporting season and we could we could tell that most businesses could hardly meet expectations and they would really have to put everything. They had to meet expectations. And you can sort of see the cracks starting to appear. So, I mean, typically for Australian companies, the last thing they will do is cut dividends tonight, but not exactly in the middle. But it started happening basically. And you will find, for example, after August last year in 2019, the cyclicals, the energy companies and the banks started cutting that evidence. And then, of course, you get the pandemic. I mean, and as you can also see from my presentation as well, Australia has been much heavier hit than internationally, and that is because of the combination of the very bad reporting seasons in 2019. So they're basically holding on with everything they have and they can't really do it. And then, of course, more bad news means they just have to cut their dividends and much more in a much more heavy handed way than otherwise. It would have been the case. So, you see, if you pay attention or you see those things coming. Right. And I remember when I gave presentations post reporting season in 2019, many people got really quiet when I say it because they all thought, like, I own these stocks, I need my dividends now. I need my franking credits. And I was saying, well, you've got to be hit then. I mean, it's happening. So then obviously the pandemic hits and it's really it's a big hit. But then August we just had is on those metrics, probably the best reporting season we had in Australia since since the GFC. So you go from worse to bad of not actually all the way around. You go from the worst to the best. And that is again, because analysts who are analyzing those companies from the outside. They have no idea how much a company can do from the inside to lower their costs. And that was basically the big surprise. I mean, companies were able to lower their costs much further than analysts from the outside thought they could. And those were the deals were surprises in a way mean profits, sometimes still down by half, but they were expected to be down by 60 percent or 70. So they did actually perform better. The other element that's also typical about the share market and one of the reasons why I personally wasn't that worried about sell downs in August, everyone was going, oh, we're going to get sold out because I'm looking. Going to look bad? No, because obviously by August will realize that probably March, April was just a bottom and we're all looking forward to recovery. And so we are going to give a lot of companies the benefit of the recovery, basically, because, yeah, it's bad now, but they're going to do better. And I mean, as long as they're not called Sydney Airport or all the other ones were thinking like, oh, they actually do. And then, of course, the retailers with a big surprise in August because we had no idea how much people were going to spend while locked up in their rooms. And it turns out a lot. I'm not buying new sofas. All of a sudden, those were the big surprises. I mean, the big question mark, of course, then becomes how swift, how gradual, how quickly is that recovery going to happen? And is that already priced in stocks? And the other thing was, is, yes, those retailers and some of those technology stocks have really got all their demands propped up and coming in condensed form much quicker to them. But is that representative of what? Well, there's actually going to stay with them. And those are the question marks that need to be. But they won't be answered until February next year. All right. And in the meantime, we do now get out of season reports. And I'm particularly interested in the likes of zero technology, one Aristocrat Leisure and the banks. I mean, let's let's see what the banks come up with, apart from potentially not being a dividend again. [00:27:01][417.3]

Bryce Leske: [00:27:01] Yeah, I've always thought that the next reporting season is actually going to be the one to watch out for because there were too many unknowns going into this reporting season. That to your point, analysts probably couldn't understand how far companies can push themselves. The impact of stimulus was still being felt, further stimulus to come through. Now, we've kind of had the Victoria thing as well. I think more light will be shone on companies that are really battling in the next reporting season. [00:27:27][25.9]

Rudi Filapek-Vandyck: [00:27:28] It might actually that we have to wait until August next year together because we you see the government today, again, trying to do all. It may well be that we only get a true picture by by August next year. And of course, between now and then, the big question mark will be the vaccine. I mean, if we have one, it will make a tremendous change. If you don't have one to understand the other way [00:27:49][20.9]

Bryce Leske: [00:27:49] round it while it lasts. [00:27:50][0.7]

Alec Renehan: [00:27:52] You mentioned there that August was actually a surprisingly good reporting season and that it's not because companies were growing, per say, but it's because they beat expectations. So let's throw some specific names out there. What were some of the companies that you think you know can be labeled the biggest winners? Maybe some, you know, beat expectations by the most? [00:28:13][20.5]

Rudi Filapek-Vandyck: [00:28:14] Let me put aside tideline, because one thing I didn't mention earlier, and this is something that again came to the fore this reporting season, I think this is very, very important for investors who like to know what is actually happening in Australia. While this was the last one, while this was the best reporting season post GFC, it did not show up in the top 50. And paying close attention to the reporting season is year in, year out. This has now become a theme, I would say, at least since 2016, if not 2015. So we are not talking about a One-Off, we are talking about off year. [00:28:54][39.9]

Alec Renehan: [00:28:55] So for almost five years, the top 50 ASX companies have not so not beaten expectations the best. [00:29:01][6.7]

Rudi Filapek-Vandyck: [00:29:02] They're basically pulling down the numbers. [00:29:03][1.3]

Alec Renehan: [00:29:03] Yeah, right. Okay. [00:29:04][0.6]

Rudi Filapek-Vandyck: [00:29:05] So the numbers would look better if it wasn't for the top 50. [00:29:08][3.2]

Alec Renehan: [00:29:08] Yeah, right. [00:29:08][0.3]

Rudi Filapek-Vandyck: [00:29:09] And to make things worse, the top 50 also includes the likes of CSL who has met. I mean, these guys are actually among the very good performers. Yeah. So it gets even worse for the ones who done [00:29:22][12.2]

Alec Renehan: [00:29:22] before doing a name and shame the worst of the top 50. [00:29:25][2.9]

Rudi Filapek-Vandyck: [00:29:26] Very, very easy to do. It's you have to think about the banks. Yeah. And you have to think about in this case, not BHP and Rio, because for and for Fortescue, not because iron ore has really kept them up. But Santos. Woodside, absolutely. I mean, dogs and I mean can't catch a fly night even if they wanted to. The ones that don't perform Center Group, for example, Uniondale or Dom Westfield, although the shopping centers Australasia big property firms big. All owners, very, very questionable performances from insurance companies, Suncorp, IAG, QBE, QBE is no longer top fifty, but used to be there. So plenty Ren, plenty [00:30:08][42.0]

Alec Renehan: [00:30:08] property banks, resources there. That's what Australians, [00:30:11][3.1]

Rudi Filapek-Vandyck: [00:30:13] but in particular the energy sector, in particular the energy sector. I mean, in Australia, the best performing sector by far over the past two decades has been health care. [00:30:22][9.2]

Alec Renehan: [00:30:23] Buy now, pay later. No, no, [00:30:24][1.5]

Rudi Filapek-Vandyck: [00:30:25] that's that's only very recently. But over the longer term, it's health care. Absolutely shoots a lot out here. Right. And that's because we have some of the really, really fantastic companies in Australia. The worst sector by far has been the energy sector by far, but absolutely by far. Right. At one stage, Santos seemed destined for 20 Dollars. I mean, it went to for Woodside people people always surprised, you know, what the price of which Woodside peaked 73 Dollars. You know when that was in May 2008, right? Well, today, it's not even 20 Dollars. I know. I mean, it has hardly made a comeback until half of that of the chapter. Yeah. So you can you can tell and those are I mean, those those are the big ones. I mean, Origin Energy. I mean, it hasn't performed and those are mentioned. That's a lot of money went lost in those stocks. [00:31:18][52.3]

Alec Renehan: [00:31:18] I've been banging on a little bit recently about an equal weighted ASX 200 index ETF. And this seems to just be making my case even stronger, that if a market cap way to ETF has those big names, you know, more weighted. Yeah. Then that's that's not good news at all. We need an equal weighted one. [00:31:36][18.4]

Rudi Filapek-Vandyck: [00:31:37] It's true. But it will all it will all depend on whether the banks perform or not. And you will find that in Australia, the banks still such big importance that the market weighted will be to equal weighted when the banks are in favor again. Yeah. And vice versa. So you really have to see it in that that coalition. That's why you always have to pay attention to the details when you see those things from the U.S., a lot of research from the U.S. doesn't necessarily apply to Australia. Yeah. For example, a very, very easy one where people often go wrong is the small caps in the U.S. by far, but the large caps, all else being equal over over a longer period of time. The average return in the U.S. for small caps would be 15 per cent a year on average, which is quite high until you realize that what they call small caps in the U.S. would be are just under the top 50 stocks like RBA group and Westmeath and stuff. Those are they're small cap stocks. [00:32:37][60.3]

Alec Renehan: [00:32:38] Yeah, there was a there was two weeks where we did back to back. We interviewed an Australian small cap manager and then a US small cap manager and the market cap they're talking about and the companies that they're talking about completely different. Yes. [00:32:48][10.6]

Rudi Filapek-Vandyck: [00:32:50] The sweet spot in Australia is also one of those little switchable in Australia is between in the top 100 is between position number 51 and 100. Yeah. So those 50 just outside top 50, that's the sweet spot in Australia. And you realize those are the stocks that are the small caps in the U.S.. Yeah. And there is a correlation there. Yeah. And those are the stocks. If you think about Australia comes out of that cochlear comes up that they used to be top 50. They just grow out of that gradually, but they they come out of the top 50 Afterpay touch comes out of that corp. Yeah. They don't stay there. They just grow out of it. Yeah. Just make sure that you don't victim and the on only way down. [00:33:28][38.3]

Alec Renehan: [00:33:30] We talked about some of the negative ones, but you know, we want to be positive because there were some good performers. Absolutely. Absolutely. Before we move on to the next section, what will one or two that really caught your eye that surprised on the upside? [00:33:41][11.0]

Rudi Filapek-Vandyck: [00:33:41] Let me answer this in a general sense first. And this is also why I always said the narrative of the share market is wrong now, because I focus very much on quality. So I run a portfolio which has a shot at face value, a lot of stocks that people would not consider buying. So they are stocks trading on elevated P ratios, which people go, oh, but it's supposed to be expensive. I always say they're not expensive at all. I mean, but for five years now, I see those stocks usually outperforming expectations in reporting season and being rewarded for it after reporting season. The only periods when that doesn't happen is when the gap between the top end of the market and bottom of the market as has extended so much that it's like there's like a limit to how far the elastic band can go. And that happens in August 2019 and it happened in August 2018 as well, by the way. And then we got we got a lot more it sort of happened this year as well. But in a little bit in a lesser sense, we were basically talking about on the on the quality side, we're talking about companies like CSL. We're talking like, oh, Yaqoob, Gosnells, the type of company. And in the tech space, we're talking about companies like a like an Algerian, Apon and Asiel, although Zulu hasn't bought it. And Altium actually did disappoint. But it happened absolutely did not disappoint. But I named these names because with the exception of now in August, the previous February or the previous August, actually performed and continued performing. And that has been a trend which I have witnessed pretty much every year. I mean, I remember very well in February 2018 goes with all those stocks got sort of like sold off a little bit before February because everyone thought like, oh, they're all too expensive. And then in February, they all rallied by seven, eight, nine, 10 percent on the day. Yeah. And obviously at that point in time, I was very happy with myself and I stayed stayed loyal to the theme. It also shows you that a price action doesn't always tell you the story. Yeah, it's a narrative that sometimes just permeates to the market and there's no other validity to it than everyone gets cautious. So this year, what we've seen this year is that the companies that have performed really well in reporting season and CSL was one of them, for example, they haven't necessarily and reequip and haven't necessarily been rewarded for it because coming out of Augusts, the market again concluded. But the distance between the winners and the and the and the laggards is again, elastic band is we have to narrow this. Yeah. So those stocks didn't really get. And in the U.S., of course, we had the big technology companies all of a sudden needed to come down when share prices double in a matter of days. You know, it's not normal, like let's just keep it to that. And so September was very much a month in which the top of the Nasdaq had to come down. That weighs on on stocks like, for example, in Japan here, although they performed really well, they did really well with their result. But market expectations probably a little bit bloated. Plus, Nasdaq sells off to those stocks have to come off again to to everyone's surprise, September hasn't really begun. The cyclicals and the banks, because it's sort of like a mirror of 2018, like first it's the it's the outperformance. They have to pull back a little bit because it's a little bit too hot under the collar, but if it develops into a weakness for the weaker ones there. So as a value investor, you get punished twice. That is the frustration of a lot of value investors, by the way. [00:37:19][217.7]

Alec Renehan: [00:37:20] So already we're keen to get stuck into this conversation of quality, but before we do, we're looking through a presentation that you put together and there was one thing that really caught our eye. You mentioned a grand debate between the fund managers, Magellan and Platinum. Can you tell us what this grand debate is all about and where these two fund managers are butting heads? [00:37:40][19.3]

Rudi Filapek-Vandyck: [00:37:40] I'm going to give a little bit of insight in my age here. I still remember when everyone thought that Kerr Neilson, that Platinum Asset Management was was like a demigod, the local Warren Buffett. Right. Today, nobody's paying attention to platinum anymore. And that in itself shows us all that this time is different. It's very much obliged. I mean, thinks things are constantly moving. And I mean, to go short on the theme, I always explain. And I thought that was that's one of the themes I put at the back of my presentation because I thought I'd catch everyone's attention. And this is if you want to know where things are going from here. Well, there's basically two very polarized scenarios from here. Of course, we could we could potentially talk about this for days, but in a very short time frame that we have here, the reason why Magellan is one of the top fund managers in the world now and basically blows everyone out of the water in Australia is not because he's smarter than God is because he's on the right side of the pendulum in this particular point in time. And what do I mean by that? Is that 85 percent of the fund managers in Australia, not necessarily globally, but definitely in Australia, are value managers, which basically means they buy into the narrative that as long as you buy them cheaply, you should be doing OK. They ignore a few things by doing that. And one of them is, is that that strategy works as long as conditions are normal, normal, normal in the way that we knew them in the 80s, 90s and the first 10 years of this millennium, they're no longer normal. And then all of a sudden that strategy doesn't work anymore. To my surprise, I always thought that a smart people worked in finance, but I've now found out that many people are not that smart and they just stick by the narrative basically. And a lot of people actually got caught in that narrative and can't get out of it. So they can't change. And I do realize and you guys are much younger than I am, but I do realize that one of the reasons why I can do what I'm doing is because I haven't been doing this for 40 years. And I can always imagine that if I had been doing this for 40 years, how difficult it had been for me to change with the changing times. I wrote my first book in 2015, which I published, and I thought at the time that I needed to be quick because I saw the times changing and you see it happening. And I thought, if I'm not going to be quick because I want to finance will jump on this. And to my surprise, nobody jumped on that. Very, very few did. So I thought it was very obvious to see that things were going to change and that would have an impact on the share market and how our investing works. In the very short summary, we push interest rates to all time lows. We push as much money, liquidity in the system as we can. We beat down inflation until there's no inflation left and we have to basically fighting deflation. So we're creating an incredible leverage in the system. And the system is itself very fragile and we have much shorter cycles. And economic growth overall is at I wouldn't call All-Time Low, but it's very low. If you combine all of that, that means that value investing all of a sudden has a very hard time. And why is that is because if you do research in the shower and that's one of the things I've been emphasizing, all I can do that because I wasn't born here. I have no I mean, I can say anything I like about Australian companies and because I'm independent as well, but I always tell people, listen, you know, that the majority of companies that listed they're not good companies. Yeah. And in particular in Australia, not one of the services that Australia had is that a lot of companies had a duopoly or monopoly for a very long time. That's a very good reason for for very subpar company to make good returns for shareholders. Yeah, they're basically protected now, but since those duopolies and oligopolies and monopolies have diluted all of a sudden doesn't work anymore. And you see those companies that used to be great Australians, I mean, and but also that what they have done nothing over the past two decades. So that's your value investing. Mediocre companies that have to adjust are being challenged that and can't do it anymore, basically. Now, that's not the only story to this very important factor is inflation, bond yields and interest rates. So what a platinum and a whole cohort of of value investors are counting on is that all the stimulus we're putting now through economies at some stage are going to trigger inflation. It's going to push bond yields higher. It's going to force central banks to raise interest rates instead of continuously lower them. And that all else being equal will favor those companies that haven't performed thus far. The. Insurance companies, the banks, the credit providers, the building companies, the resources companies include energy companies, so it's almost like a Mackall pendulum, but if it does swing, it will be incredibly savage. I've experienced the second half of 2016. It was savage Ren. My portfolio went down by 20 percent virtually overnight, and the rest of the market went up by 20 percent. So the difference is really, really savage. I mean, you're looking at your portfolio and you go like, yeah, all right. So we've had that, too. And it was savage at that time because I was convinced I was right and the market wasn't. And unfortunately, in the moment, there's nothing you can do about it. 12 months later. I was right, by the way, and the market wasn't. But if it happens again, so it can be very savage. So you have to be careful in extrapolating the technology revolutions that are happening because they will be hit if that happens. Having said so, I don't think it's imminent, to be honest. And I know people talking about it, but I don't think it's imminent. So the Grand Bay, this is the current situation where we find ourselves low interest rates, low growth, low inflation, a lot of stimulus and basically no investments from from companies and you name it. Is that going to persist for longer? And I basically think the answer is yes. [00:43:39][358.6]

Alec Renehan: [00:43:40] So you fall on the highest ideals and Magellan side and I'm [00:43:43][2.8]

Rudi Filapek-Vandyck: [00:43:43] on the Hamajima and you have to realize that that is the reason why he's doing so well. I mean, he's not convinced, like the value investors that that this is temporary. Right. And if you think about it, just just to add to that argument, once you build so much debt in the system and you make money as cheap as it is, people are going to use it. I mean, like put 12 kids in the room and put some put some sugary stuff in the middle. I mean, no matter how well they're I think there are or whether behaved ultimately that the candy will get eaten here. And that is the same with the cheap, cheap money and lots of debt. On some calculations, percentage of zombie companies around the world is approaching 17 percent. So that means there's a little bit more than one in five zombie companies or companies who do not generate enough cash to pay to pay the interest on their loan for three years. Yeah, it's absolutely scary stuff, but it makes you wonder how do we ever get out of this funk? [00:44:46][63.5]

Alec Renehan: [00:44:47] Yeah, it really does. And I feel that's probably a whole other podcast. Let's go from zombie companies to the opposite end of the market and talk about quality, because, you know, that really is the name of this game. That's how, you know, the Warren Buffett and all of that of the world have have made their money. They've found a few very small number of companies and held them for a very long time. You, in an email that you wrote to your former subscribers, wrote that a study that was done found that of all the share market gains since 1926, it can be explained by as little as four percent of the best performing stocks driving those declines. And, you know, people living through 2020 can think about a few companies driving share market returns, the Apples, Amazons, Alphabet's of the world. If such a small number of companies drive so much of the returns, then the question really becomes, how do you find those companies? And I guess that that ties into what we were talking about earlier. How do you think about quality and what is quality to you? [00:45:46][59.1]

Rudi Filapek-Vandyck: [00:45:47] Yeah, so I started defining quality as companies that that's why I call them all weather stocks. I mean, companies that can perform for shareholders, irrespective of whether whether interest rates go up or down or the currency go up or down. And I mean, there's not to say that those companies sometimes can't have a bad year or we didn't put in perspective. I mean, but they will perform over time. My definition is that a good company. Unless there's like a like a meteor coming to Earth or whatever, doesn't report like 50 percent drop in profits or anything on lines, that's that's not that's not quality. And if you start looking into the deeper elements of that, then you will find there's not too many comments around. It can actually say that. All right. I think from memory, my my selection of all weather stocks in Australia, I don't think it has ever been more than 20 and even 20 years. Polybius probably a little bit of a bit of a stretch. We're not talking about a lot of companies, but what I think is equally important here is that those companies never trade on cheap multiples. OK, so you won't find them on the multiple of welfare. And there's almost by definition, if they are that multiple, it means that they're not a good company. B, they're not discovered yet, which is very unlikely. So and this is one of the reasons why I started challenging the narrative that that that is in the SHAMARKO all the time. You see in my research, what didn't make sense to me is that maybe we're talking years and years and years ago, CSL was always trading on the multiple that's called 30, 28, whatever. Yeah. And then people would say, look, you can buy that night and then other people would call defensive. And I thought, look, how can be defense depends on the IP. And then a year later, the share price was up 30 percent or so. And you go like, OK, one off line. But a year later it was again up 20 percent. There you go. Like, well, something doesn't match up here, Ren, because the stocks that are supposedly cheap there just became cheaper or they have like one good year or whatever. And the stocks that you possibly can buy and they look like really good companies to me. Then they perform and they are the ones who continuously make make their inroads in the index as well. CSL, I predicted years in advance is going to be the number one stock in the index and you see it happening, it coming. And to my surprise, nobody owned it. Now, if you go back four or five years, nobody owned it. Yeah, everyone would call it knock on by that. Once the IP you can look. And what's your problem? [00:48:25][158.5]

Alec Renehan: [00:48:26] Well, even this reporting season, the articles written about CSL were like, it's an unbelievable company. It's got such a long pipeline. Its investments in R&D are paying off, but it's too expensive. And it's like, well, that's the only negative thing you can say about it. [00:48:39][13.5]

Rudi Filapek-Vandyck: [00:48:40] Exactly. But to give you an example of of what very much adds to the to the quality Weinbach, because by analyzing CSL, I learned a lot from what actually makes good, because I think CSL is probably the number one company we have in Australia. I mean, on many accounts, nine and very, very easy measure I've developed over the years is this is negative in Australia that Australian companies can't go overseas. I mean, this sucker that basically I say, well, in general terms, that's correct, because most Australian companies are not good companies. So if they go overseas, they just get men put put back in their box. But the good companies do. Have they succeed overseas? Yeah. And you shouldn't look for them in the CSL, the cochlear. So estimates there are no one in the market globally. I mean, they have competition on in many markets every single day. I mean, the fact that they can keep their position there and these guys are market leaders in their field gives you an indication how I mean, how much what is a quality stock here? Well, Australian investors also underestimate is that those companies like CSL, for example, spends close to a billion dollars every year on research and development. One billion dollars. Yeah, they could if they decided they could pay out in dividends. Yeah, but they don't do that. And every year they spend that, that's about between 10 and 12 percent of their revenue on research and development. If you read international studies, Ren, that's what those companies do. Yeah. The ones who stay on top for longer and sometimes for decades, there's no guarantees because you still have to generate a return and you still to create new products and have success and stuff like that. But that's the step that you can't skip. Yeah, and I mentioned AMPE and Telstra earlier. These guys did spend any anything near that and they just paid out to shareholders and just kept hobbling along as long as they could. And ultimately the share price deflates instead of going up. Right. And I think the fact that you make consistent investments year in, year out and after a while obviously you become experts in what you do with that money and you start generating a product portfolio that continuously innovates and continues to innovate again and again, because at the end of day, it's about finding growth. I mean, growth is not something you growth. You can have it, but. The good business leader looks forward and things like, well, hold this growth can be taken for granted, you have to find additional growth. And if you look at the history, for example, of of of of CSL. I mean, the fact that at one stage they added the Sakiewicz business, which is the divide, was meant in another growth engine to two, already a fantastic business. Yeah. So it's about finding growth and keeping that keeping that pendulum going, because I think there are examples of companies that that once upon a time were leaders and lost their way. It's possible. But what I've learned is that because valuation is something that's very, very short term focused, you happily pay over for for quality business because you can trust it's a quality business. The share price will take care of itself. [00:52:04][203.9]

Alec Renehan: [00:52:04] And they say the same thing about Amazon. You know, like all through its growth story, it traded at a pay of 60. And so many people were shot at just because of its valuation. That just kept going. [00:52:14][10.0]

Rudi Filapek-Vandyck: [00:52:15] Exactly. Exactly. I mean, and it's nothing as easy. And that's what they do. Of course, nothing is going shore the stock that looks bloated. And then and then obviously you lose your pants. [00:52:25][10.5]

Alec Renehan: [00:52:26] Yeah. Yeah. [00:52:26][0.7]

Rudi Filapek-Vandyck: [00:52:27] Afterpay Goodman Group. [00:52:30][2.8]

Alec Renehan: [00:52:31] I will you know if I sign of a good Australian company as it goes overseas and it succeeds. Well, Afterpay, as I would say, is yet to be seen if it's going to succeed. But you might be right. Bryce. [00:52:40][9.5]

Bryce Leske: [00:52:41] Yes. So ready to close out the convo and quality. You have mentioned a couple of indicators as to what a poor quality company looks like, which I think is equally as important is understanding what a good quality company looks like. I mean, any more considerations or red flags that we should think about when I guess trying to avoid these poor quality companies? [00:53:03][22.3]

Rudi Filapek-Vandyck: [00:53:04] I recently read a book which is good to Great, which is a book which was published in 2001, mind you. And to my astonishment, there were quite a few things that came to the fore from the book where you go like it's so easy to recognize those things. Yeah, because that book tells the readers the difference between a great company and a mediocre company is they have access to the same information. They just respond to it differently. And yet in the book, there are clear examples of businesses that basically refuse to change because one of them used as an example. You can't you can't argue with 80 years of success. So they kept doing what worked for 80 years and then 10 years later, they were out of business. Yeah, it's come to the fact that you can recognize from the onset how is a business responding to challenges and if they just bunker in and hope for the best, that's not a great strategy. So that you already know. I mean, look at the PC down on Telstra all the time. But but I follow Telstra for two decades now. These guys have had have bought businesses in the U.S.. Yeah. And two or three years later, you hear nothing about them anymore. They've closed down, they've sold it or whatever. So obviously nothing works. Yeah. If you try to distance yourself from the fact that you own the shares and you're dependent on the on the, on their, on their payout twice a year, you should be able to just sit on your sofa at home and think like, well, that's not a good business. Yeah. When you buy stuff it should add to growth, not disappear in the ether and nobody talks about it anymore. That just one of the things, the other thing which was very much to the fore in the U.S. and it is very much an idea. There is the it's whether you have a so-called very famous CEO who Glamour's CEO, who basically takes all the attention to himself and acts for his own bank account, not necessarily in shareholders interests. Australia has many companies, I believe, that are being run for the major shareholder, not so much for the minority shareholders. Harvey Norman Crown. There's a few other ones, too. I mean, NewsCorp. I never go anywhere near those companies because I know I'll be third rank citizen. I mean, even with my small stake in particular, I mean, again, it is also when you have the choice between am I going to invest in the business or am I going to please the shareholders in the short term and just pay out a little bit more? Again, one of the conclusions of August this year was Australian companies choose the second option. Yeah. While arguably they should go for the first because a lot of businesses are challenged. Yeah. If you don't keep the cash to yourself and you can explain to shareholders that, guys, this is a crisis, we need the money, we need to invest, we need to reinvent the business, then you will never be able to. But it also means you will always be a mediocre business. It will never be great. And I think those are things that everyone from so far can can can analyze and can see. [00:56:10][186.4]

Alec Renehan: [00:56:11] I know we're running short on time, but my ears perked up when you said those three businesses, Harvey Norman, Crown and News Corp, who all have their owners and their founders as major shareholders. And that seems to cut against, you know, what you often hear. In the smaller end of the market, where businesses that have owner operators that are large shareholders and are running the company is often a good sign where on the growth scale does it change from being a really good sign to being really bad? [00:56:39][28.4]

Rudi Filapek-Vandyck: [00:56:40] I'm not so sure whether it's a global scale. I think it's the way and that's why you have to watch how those businesses are being managed. Yeah, go to good grades. For example, we spoke about investments earlier. Also says that when businesses steer away from their core competency, that's not that's a warning sign. That's not good here. Harvey Norman, for example, that if you shareholder's money to to buy into dairies and our funds, fancy staff here, that's not stuff that should be. If he wants to do that, you should do it with his own money. Yeah, not with the shareholders money. See, those are warning signals and he's often seated with smaller companies as well. If a board is only there to just just be filled up with yes men and always say yes to the to the guy who runs the business, that's not a great board. Yeah. That's also, again, that's a warning signal again. And some of those businesses have that type of boards. Yeah. It's now coming to the fore again with Crown, for example. I mean, everyone is just borrowing to the major shareholder. I mean, that's not a great business. Yeah. Like the great businesses. I'm pretty certain they have men who don't at all fights over a certain investment needs to be made or not, you know, and that's what makes a great business. The other ones don't. Yeah. [00:57:57][76.9]

Alec Renehan: [00:57:58] So, Rudy, we've taken over an hour of your time and we want to say thank you for coming on. I think it's been a great conversation. And I'm sure if Bryce didn't have the stopwatch over here, we could have gone down a number of rabbit hole. So I think we'll have to get you on another time and we can go down some of those rabbit holes in due course. But before we do, we do like to finish with the same final three questions so we'll get stuck into them. But just a reminder for people, if an arena can't tell Rudy that Equity Mates that you get a month free, how could you not after this conversation, the final three questions, the first one we like to ask, do you have any must read books? [00:58:37][38.9]

Rudi Filapek-Vandyck: [00:58:38] Oh, yes, I have all this. I'll leave the list for you guys here. You can use them afterwards. [00:58:42][4.1]

Alec Renehan: [00:58:43] Will you include them in our show notes for the site as well. [00:58:46][2.9]

Rudi Filapek-Vandyck: [00:58:46] if I just go very quickly to them for typical investment books, I think everyone should start with a random walk down Wall Street by Burton Malkiel quite book. It also explains to you that technical analyst doesn't work. And we go a little bit more left field now, reminiscences of a stock operator. I had been the fair, very classic. The more you know about the share market yourself, the more you appreciate the book. It's one of those books that you can you can we read through your career and every time get more out of it. Then there is confusion, the confusion. This, which is one of the first books about the Amsterdam Stock Exchange, which was the first one in the world. That one you can you can probably just download you can probably find on the Internet and download it. There's no copyright on that one anymore. And what I found interesting by that one is how much it resembles today. I mean, people are people. I mean, we go short, we spread rumors. Well I mean, we all do stupid things. Then there was Australian author Michael Kemp, who wrote a book on common sense, which from two years ago, he basically goes hundreds of pages explaining why things don't work, including places and all of that. Then then, there was James Montu, who wrote the little book on Behavioral Investing. Very good to figure out why we make the same mistakes we always make because we're human. And the American book I picked One Dividend's Still Doesn't Lie by. Kelly writes, It's particularly good because it's a U.S. book. And it emphasized the importance of of dividends from a U.S. perspective. And they pay a lot less than the middle here. And then finally, and I'm a little bit biased here, because I do know Danielle Ecuyer and I know she was on this program for a while and and share publicity is definitely something that investors can for the simple reason that it doesn't do what a lot of people do and try to go like you have to do. You have to analyze the balance sheet and all of that. Yeah, you don't. And then there's a few books that I think I think you shouldn't you shouldn't stick to just investment books. So I would I would add good to Great by Jim Collins just to show you what a good business looks like. Then there is the trick by William Leith. Essentially journalists who interview successful people and try to find out what made them successful. Dollars thinking fast and slow. But Daniel Kahneman. Absolutely, I found you fascinating. Then there was The Ascent of Money by Niall Ferguson and finally, Liar's Poker by Michael Lewis, if you want to know what the eighties look like. Yeah, and and there's many other books for Michael Lewis was quite happily lived on the list here. [01:01:23][156.5]

Alec Renehan: [01:01:23] And so we've got that list. We'll include that in the show notes so people can check. Them all out. The second question we like to ask now, aside from right, what's your go-to source for investing in financial information? [01:01:34][10.7]

Rudi Filapek-Vandyck: [01:01:35] Oh, that's a good one. I'm privileged here. I have access to a hell of a lot of research, but global research and eat as much as I can. And I've particularly in the first 10 years in Australia, I read as much as I could. I also thought I need to because I'm the editor. And if I'm telling people what's going to happen, I need to know a few things. And so I basically read everything I can get my hands on from what is actually happening in credit markets to what liquidity does to where there's inflation going. How do you value a modern day technology company in all world that I don't think there are just any services in particular out there that give me that information. Well, I tend to do I do subscribe to a few services every once a while that give me a complete different perspective, two completely different things than that I'm looking at. And that's just sometimes to give me a different perspective on things. But in general terms, I mean, I can't get past everything, really. [01:02:35][59.9]

Alec Renehan: [01:02:37] Fair enough. Final question. If you you know, you think back to your early days when you were earning 15 percent interest in the bank, what advice would you have your younger self investing yourself? [01:02:47][10.7]

Rudi Filapek-Vandyck: [01:02:48] Don't give up just because things are not working out in the moment. If you keep on investing in yourself, you will get there where you want to come, where you want to be. And I think that's essentially what what has happened in my life. I mean, I would have never imagined when I was nine that I would end up in a studio with two guys in Sydney and three decades later talking about talking, talking about the Australian share market. The funny thing is, when I arrived in Australia in the year 2000 year, I knew five Australian companies. Five and 10 years later, I was telling people why they were doing things wrong, investing in the share market. And that's how quickly you can make your evolution by investing in yourself. And in my case, by spending an inordinate amount of of time in reading and reading up on things and challenging challenging the narrative as well, not just accepting that line because it's cheap. It's going to be a good investment. Turns out often it's not already. [01:03:49][61.0]

Bryce Leske: [01:03:49] It's been awesome having you on the show. You are on Twitter as well. So I suggest that our audience follow you for some UP-TO-DATE insight from the work that you're doing, but also head across to find a Ren dot com for more in-depth analysis of some of the stuff that we've been talking about today. So really appreciate you coming on. And I'm sure it won't be the last time Alex got a lot of things to do. But yeah, again, thanks for your time. Much appreciated. [01:04:13][24.1]

Rudi Filapek-Vandyck: [01:04:14] My pleasure, guys. Thanks very much. [01:04:14][0.0]

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